The text and data mining opt-out in Article 4(3) CDSMD: Adequate veto right for rightholders or a suffocating blanket for European artificial intelligence innovations?

Abstract By introducing Article 4 in Directive 2019/790 (CDSMD), the European Union legislator intended to both encourage innovation and to provide more legal certainty for text and data mining (TDM) activities. That said, it appears that this provision does not strike a fair balance between the interests of rightholders and Artificial Intelligence (AI) developers. This article argues that Article 4(3) CDSMD does not necessarily strengthen the rightholders’ position whilst potentially hindering the advancement of AI developments in the European Union. It is unclear how the reservation of rights shall be realized in practice. By imposing transparency obligations on AI system providers, the upcoming Artificial Intelligence Act may however allow rightholders to make more effective use of the opt-out mechanism.