Proposal for Copyright Compensation for Artificial Intelligence (AI) Data Training in Malaysia

As Malaysia struggles with challenges presented by the emergence of Artificial Intelligence (AI) in the digital age, there is an increasing need to re-evaluate and potentially revise the country's copyright framework. The Copyright Act 1987 may require adjustments to accommodate the evolving nature of creative works and their production, particularly in the context of AI-generated content, or known as Generative AI. One area of consideration is the implementation of a copyright compensation system which has been successfully adopted in the European Union (EU) and the United States (US) to compensate creators for the use of their works. Hence, this paper explores the feasibility and potential structure of a copyright compensation framework in Malaysia, specifically focusing on compensating rights holders for AI training data used by way of a statutory license and levy system. By examining existing compensation systems in selected jurisdictions including the EU and the US, this paper aims to provide insights into how such a framework could be effectively implemented into the Copyright Act 1987. The paper also argues that a customised copyright compensation framework could offer a practical solution to the challenges posed by AI, ensuring fair compensation for right holders, promoting innovation, and upholding copyright principles in an increasingly interconnected world. This paper will analyse the current provisions of the Copyright Act 1987, and identify gaps and areas that require reform to effectively address the implications of AI-generated content. This paper finds that the Copyright Act 1987 lacks explicit provisions for compensating rights holders for the use of their works in AI training data, leading to potential gaps in legal protection and fair compensation. As such, the paper recommends specific amendments to the Copyright Act 1987 to incorporate these mechanisms to guide the policymakers in providing a copyright compensation framework to rights holders in Malaysia.