New government strategy aims to position the UK as centre for AI technology innovation

The UK Government set out plans for artificial intelligence (AI) regulation in a white paper released by the Department for Science, Innovation and Technology earlier this year. With the UK “frequently ranked third in the world” across several measures in the Global AI Index, the UK is positioning itself to become a global leader in AI technologies.

The paper sets out a regulatory framework aimed at driving growth, increasing public trust in AI, and strengthening the UK’s position as global leader in AI.

From the perspective of AI innovators including startups and SMEs, increased regulation might be unwelcome news at first, posing potential threats to their agility and freedom to innovate. However, the white paper recognises the need to take a pro-innovation approach that allows UK-based companies to remain competitive in a global market and incentivises overseas AI businesses to establish themselves in the UK.

The paper recognises that although the use and creation of AI is currently regulated through some existing frameworks, such as the MHRA guidance published in 2022 for AI and software used in medical devices, “AI risks arise across, or in the gaps between, existing regulatory remits.”

In light of the pace at which AI technologies are evolving, the government is not yet proposing new legislation, but is setting out a framework including various support and monitoring functions that in time are likely to be formalised.

Support startups and SMEs

Although light on detail at this stage, the proposed framework includes support such as AI testbeds and sandboxes to assist innovators in getting products to market and navigating the regulatory ecosystem, targeted at startups and SMEs in particular. This is in addition to existing tax relief schemes and other support proposed in the UK Government’s digital strategy paper last year.

The pilot sandbox scheme will initially focus on a single industry sector where there is a “high degree of AI investment (…) and appetite for improved collaboration between regulators.” The pilot industry sector has not yet been named, but sectors such as healthcare, fin-tech and automotive seem to be natural candidates, and it will be interesting to see where this initiative is rolled out first.

Impact on IP

Although this paper does not directly deal with intellectual property rights for AI technologies, it emphasises that blanket rules will not be made for specific technologies, sectors or applications of AI. Instead, regulation will focus on “the use of AI rather than the technology itself.” Separate guidance is due to be released this summer from the UKIPO regarding the interaction between copyright and generative AI.

Indeed, the proposals and principles set out in this white paper are likely to have wider implications on AI patenting activity. For example, new regulation may present opportunities to solve new problems in innovative technical ways, for example relating to security, safety and explainability.

In addition, through requirements for greater accountability and transparency, we may see more innovators looking to patent their AI technologies if relying on closed-model software or trade secrets/know-how becomes less viable in this field.

Overall, the white paper appears to be positive news for AI innovators and is unlikely to hinder AI patenting activity in the foreseeable future. We look forward to developments in this area, and in particular to how the UK’s approach will align with the more developed EU AI Act proposal.