Brief Context
Context The DPIIT-led committee has released a working paper titled ‘One Nation, One License, One Payment: Balancing AI Innovation and Copyright’. About The DPIIT-led committee has recommended a “hybrid model” of compensation for use of copyrighted content in AI training. If implemented, India would become the only country to prescribe a statutory licensing regime for AI developers, with royalty rates prescribed by a government-appointed committee.
Source Content
Syllabus: GS2/Governance; GS3/Artificial Intelligence
Context
- The DPIIT-led committee has released a working paper titled ‘One Nation, One License, One Payment: Balancing AI Innovation and Copyright’.
About
- The DPIIT-led committee has recommended a “hybrid model” of compensation for use of copyrighted content in AI training.
- If implemented, India would become the only country to prescribe a statutory licensing regime for AI developers, with royalty rates prescribed by a government-appointed committee.
Its Key Features
- Aim: To protect the rights of IP holders (by having a compensatory model) and at the same time ensuring mandatory licensed access to quality datasets for AI developers.
- Mandatory Blanket Licence: All AI developers will be required to obtain a statutory blanket licence to use all lawfully accessed copyright-protected works for training AI systems.
- Statutory Remuneration Right for Creators: Creators and copyright holders will receive royalties mandated by law, instead of individually negotiated licensing deals.
- Creation of CRCAT (Copyright Royalties Collective for AI Training): A new umbrella body designated under the Copyright Act, 1957 will:
- Collect royalties from AI developers.
- Distribute them among classes of copyright holders.
- Act as a centralised facilitator for the blanket licence.
- The Centre will constitute a committee to determine the royalty rate.
- It will consist of senior government officers, senior legal experts, financial or economic experts, and technical experts with expertise in emerging technologies.
- A CRCAT member from and AI developers’ representative will also be part of the committee.
- Royalty Rates: The panel will set royalty rates, while ensuring that they are fair, predictable, and transparent.
- It will also review and adjust rates every 3 years, to reflect technological and market developments.
- Legal Relief: The rates set by the rate setting committee may be challenged before the court and would be subject to judicial review.
- Rejection of Voluntary Licensing: The committee rejects private, voluntary licensing agreements (e.g., OpenAI–AP deal) due to:
- High transaction costs,
- Unequal bargaining power,
- Risk of big companies monopolising licensing,
- Inadequate access to diverse training data.
- Prerequisite of Lawful Access: AI companies cannot bypass paywalls or technological protection measures using the mandatory licence. They must have lawful access to data.
- Retroactive Payments: It suggests retroactive payment of royalties in cases where copyrighted data has already been ingested into AI systems and also lays a framework for establishing burden of proof in related lawsuits.
Need for Such Model
- Infringement of Copyright Act: The AI training involves multiple acts of reproduction from downloading and storing works to generating temporary copies that raise clear infringement questions under India’s Copyright Act.
- Compensation to Copyright Holders: AI companies have non-discriminatory access to copyrighted work, there is a need that all copyright holders are compensated in an equitable way.
- Growing Scepticism: It comes amid growing scepticism of news publishers in several jurisdictions over concerns of copyrighted material being used for training foundational models, without permission or payment.
- Court Cases: Infringement has led to court cases where publishers have mounted a legal challenge against OpenAI over the unlawful utilisation of copyrighted material.
- Commercialised Use by AI Developers: Many AI Developers have built AI Systems which are commercially successful and generate huge revenues.
- In order to ensure fairness and accountability, such AI Developers must be required to pay royalties to copyright owners for past usage of their works.
Concerns Raised by Industry
- Concerns are being raised over the royalty rates fixed by a government-appointed panel.
- Companies argue that they should be allowed to discuss mutually beneficial licensing rates among themselves.
- It could lead to slowdown in AI development which ultimately harms India’s ambitions to build and scale indigenous AI capabilities.
- The implementation must be fair and scale-dependent; otherwise, it risks becoming an entry barrier for startups and further strengthening incumbents.
Conclusion
- It comes in the wake of soaring AI adoption, mushrooming AI startups and conflicts over the use of copyrighted content by AI developers.
- The government argues that a licensing framework allows domestic AI firms access to rich, copyright-protected datasets, reduces barriers to innovation and aligns with India’s broader goal of building sovereign AI capabilities.
Source: IE