On November 2024, the Spanish Ministry of Culture prepared a Proposal for a Royal Decree to regulate the granting of extended collective licenses for the mass exploitation of works for the development of general-purpose artificial intelligence models (hereinafter, the "Proposal for a RD"). This legislative instrument seeks to adapt the current regulatory framework to the technological impact of Artificial Intelligence (AI), protecting rightsholders while promoting technological innovation.
Regulatory Context
Technological evolution is continuously transforming the way works are created, produced, distributed, and exploited. New business models and stakeholders are also emerging. For instance, the development of AI systems and models often requires large volumes of data and content, many of which are protected by copyright. This presents a major challenge, related to licensing works used in AI development. Obtaining individual permissions for each use of the content employed to train and develop AI is often economically and operationally unfeasible.
For this reason, the European Union published the Directive (EU) 2019/790 of May 17, 2019, which allows Member States to establish mechanisms such as extended collective licensing (Article 12 of the Directive). Through this mechanism, collective management organizations can license the use of copyrighted works, even on behalf of rightsholders who are not represented by them, as long as certain requirements and safeguards are met.
It is also important to note that the use of works to develop general-purpose AI models is often covered by the exception for text and data mining, regulated in Article 4 of Directive (EU) 2019/790 and in Article 67 of the Royal Decree-Law 24/2021 of November 2 in Spain. This creates several issues: rightsholders cannot participate in the revenues generated by AI model providers, nor do they benefit from the commercial exploitation of their works.
Extended Collective Licensing in the Proposal for a RD
Based on Directive (EU) 2019/790, the Spanish Ministry of Culture introduced the Proposal for a RD to develop Article 163 of the Spanish Intellectual Property Law (IPL).
Article 163 of the Spanish IPL regulates non-exclusive authorizations by collective management organisations. Specifically, it outlines how such organisations must issue these authorizations under equitable and non-discriminatory conditions.
The Proposal for a RD aims to expand the scope of this provision to facilitate granting such non-exclusive authorizations (or collective licenses) in the context of AI development, particularly for developing general-purpose AI models.
To achieve this, the Proposal for a RD introduces extended collective licensing mechanisms for these cases. As noted earlier, these mechanisms empower collective management organisations to authorise the use of protected works on behalf of rightsholders not represented by these organisations, under certain requirements:
- Economic and operational challenges: Individual authorizations must pose operational difficulties, rendering the required operation practically unfeasible economically or operationally.
- Representativeness: The organisation must demonstrate that they manage a significant repertoire of protected works through the acquisition of certificates of representation.
- Equal treatment: All rightsholders must be guaranteed equal treatment concerning the terms of the non-exclusive authorization. This means that revenues must be distributed equitably among represented and non-represented rightsholders.
- Opt-out right: Rightsholders can exclude their works from these licenses at any time. This opt out right is also provided for under the text and data mining exception.
- Publicity and transparency: Organisations must inform rightsholders about the use and conditions of the licenses.
Conclusion: Striking a Balance Between Innovation and Cultural Protection
The Proposal for a RD seeks to establish a legal framework that allows the mass use of works for developing general-purpose AI models under certain conditions, fostering research and technological development. At the same time, it aims to protect creators and rightsholders by ensuring they are not excluded from the economic benefits derived from the commercial exploitation of their works.
With this regulation, Spain seeks not only to protect its cultural assets but also to strategically position itself on the global AI map. Balancing innovation with cultural protection could make the country a reference point for technological development and responsible management of intellectual property rights.
Although the Proposal for a RD offers a pragmatic solution to the current technological landscape, it is also necessary to emphasize other important aspects, such as protecting rightsholders concerning their works. In this sense, rightsholders must have equitable access to the economic benefits derived from the commercial exploitation of their works while maintaining reasonable control over their use. The latter could be achieved through safeguards that, in our view, the Proposal for a RD does not fully define.
Consequently, it is not entirely clear whether the Proposal for a RD's approach genuinely strikes a balance between innovation and cultural protection.
The Proposal for a RD has been undergoing a public consultation and hearing period, concluded on December 10, 2024. The next step is to study and evaluate the contributions received.
UPDATE: On January 31, the Spanish Ministry of Culture decided to withdraw this Proposal for a Royal Decree. The Ministry explained in a statement that, after analyzing the contributions received and given the lack of consensus within the cultural sector, it has decided to withdraw the Proposal. A dialogue process is now being initiated with the cultural sector to find the best way to address the challenges of generative AI and protect rightholders.
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