Delhi High Court’s ANI v OpenAI ruling offers a better path on copyright and AI than a training licensing regime

Why in the News?

The Delhi High Court’s ruling in ANI v OpenAI, addressing technological neutrality and the research exemption, offers a framework for copyright and AI. At the same time, there is a growing criticism about the Department for Promotion of Industry and Internal Trade (DPIIT) committee’s proposed AI training licensing regime as potentially harmful to innovation.

What did the Delhi High Court’s ANI v OpenAI ruling establish?

1. Technological neutrality: The ruling applies existing copyright principles to AI training without creating a separate, more restrictive legal category just because the technology involved is new.
2. Research exemption: The ruling recognises a research exemption relevant to how AI systems process copyrighted content during training, rather than treating every instance of AI training on copyrighted material as infringement by default.

How is the DPIIT new hybrid licensing system (One Nation – One License – One Payment) different from the Delhi High Court (ANI v OpenAI) judgment?

1. DPIIT Proposal: AI seeks to bring in a statutory licensing mechanism that requires companies to pay compensation (royalties) to content creators through a centralized government system.
2. Delhi High Court verdict: The court in its latest order refused to impose any strict or prior licensing norms, stating that AI training can be considered ‘fair dealing’ (under research purposes).

Why does the proposed licensing regime as a step backward?

1. Compliance burden: A mandatory AI training licensing regime would require AI developers to negotiate and pay for licenses before training on copyrighted content, raising the cost of building AI systems in India.
2. Innovation chilling effect: Smaller AI developers and startups, unable to absorb licensing costs at the scale large technology companies can, would face a higher barrier to entry than the court’s technological neutrality approach imposes.
3. Inconsistency with the ruling: A DPIIT-driven licensing regime would move policy in a more restrictive direction than the judiciary’s own reading of technological neutrality and the research exemption, creating a mismatch between executive rule making and judicial precedent.

Conclusion

The Delhi High Court’s ANI v OpenAI ruling offers a workable copyright and AI framework built on existing legal principles rather than new restrictions. DPIIT’s proposed licensing regime would discard that workable framework in favour of a compliance heavy structure that risks innovation without a clear corresponding gain for rights holders.

Back2Basics

The Proposed Licensing system by DPIIT:

The Department for Promotion of Industry and Internal Trade (DPIIT) proposed a new hybrid licensing systemin December 2025 called “One Nation – One License – One Payment”. Its main purpose is to strike a balance between creators’ rights and technological innovation on the use of copyrighted content for artificial intelligence (AI) training.

The important aspects and provisions of this proposed policy are as follows:

Mandatory Blanket License

1. Data usage rights: AI developers can use any copyrighted content that is legally accessible (for example, freely available online) to train their models without seeking separate permission. [1, 2]
2. No Opt-Out: Content creators or organizations do not have the right to opt-out of having their content used for AI training.

Royalty Structure

1. Payment after commercialization: AI developers do not have to pay any fees upfront. Royalties apply only after the AI ​​tool or product starts generating revenue commercially.
2. Centralized Body: The government will set up a non-profit centralized nodal agency called “Copyright Royalties Collective for AI Training” (CRCAT) to collect royalties and distribute them to copyright holders .
3. Pricing: Royalty rates are determined independently by a special expert committee appointed by the government

Department for Promotion of Industry and Internal Trade (DPIIT)

1. It is a Union government department under the Ministry of Commerce and Industry.
2. It is responsible for industrial policy, including the committee that proposed the AI training licensing regime referenced here.

PYQ Relevance

[UPSC 2024] What is the present world scenario of intellectual property rights with respect to life materials? Although India is second in the world to file patents, still only a few have been commercialized. Explain the reasons behind this less commercialization.

Linkage: The PYQ examines India’s intellectual property rights framework and the balance between protection of intellectual property and innovation. The article discusses whether India’s copyright framework should promote AI innovation through existing legal principles or impose a mandatory licensing regime. It highlights the broader challenge of designing an IPR regime that protects creators without discouraging technological innovation.