Why AI must strengthen – not undermine – luxury

Building a strong brand is at the heart of a luxury business’ success. From the historic Burberry check to the iconic design notes of a Range Rover, our £81bn sector success story is underpinned by our investment in intellectual property. Likewise, luxury brands are at the forefront of adopting new technologies like AI to allow ever more personalised levels of service, and to support their creators by automating background tasks so they can focus on what makes these brands unique. 

Read Walpole's Luxury in the Making study

However, no matter how AI or other technology is deployed, luxury brands are careful to preserve the creative spark of human ingenuity in their businesses. For instance, AI can help us understand a customer’s preferences, but it can’t replace the relationship customers have with salespeople.

Alongside the opportunities, AI creates risks for our sector. AI tools trained on copyright infringing material can be used to replicate intricate proprietary designs or generate brand-inspired images. This use can dilute and negatively impact the public perception and commercial value of brands that have carefully curated and developed these assets – effectively risking eroding an inherent component of our economic value as a sector.

That is why Walpole has taken a keen interest in the Government’s plans to allow AI companies an exception to copyright law for the commercial text and data mining that is integral to the training of their AI models. These plans will allow such companies to train their models on material produced by creative businesses, unless they choose to opt out of text and data mining.

This exception will upend copyright law, which currently operates by default and protects creative works from the moment of their creation. Under the new plans, unless you choose to opt out, your work is fair game. These chances will also distort the emerging licencing market that sees creative industries paid for access to their works. 

We have been raising concerns with ministers and we have produced a detailed response to the consultation, outlining not just our objections but where we think there is room for the Government’s plans to develop, given time and thought.

The first challenge is that the global legal environment is still changing. There are more than 20 cases before the US courts, awaiting a decision. Any one of these might follow the example of the Thomson Reuters case and find in favour of creators, rather than AI companies. Similar situations also exist in China and Hong Kong. If the Government rushes to judgement, it may find its rules out of date by the time they hit the statue book – a situation the EU already finds itself in. 

Likewise, licencing deals are already being agreed between creators and AI companies. These proposals would upend the licensing regime that businesses are developing, harming the AI and creative sectors alike. 

Finally, we do not believe that there is a credible model for the operation of an opt out system. While one may develop, this must happen before the law requires it. Similarly, AI companies must not be the arbiter that the Government relies upon to decide if there is a workable model. 

We are calling on the Government to assert that copyright law is the law and that it will be upheld – rather than watered down. This declaration will give clarity to AI developers about their obligations, and reassure investors for whom the UK’s legal stability and IP framework make it the best place in the world to start a creative business. 

Suffice to say, we will continue to press the Government about these plans, and fight to ensure that your businesses and IP are protected.