AI Gets a Copyright Pass While Privacy Law Survives the SC: The Tech Law Reckoning of 2026

If you are a technology, media, and telecom (TMT) or IP lawyer in India, the jurisprudence of the last few weeks has fundamentally rewritten your advisory playbook. The Supreme Court has cautiously allowed the Digital Personal Data Protection (DPDP) Act to breathe despite a looming constitutional cloud, while the Delhi High Court just dropped a bombshell ruling that could gut the licensing models of Indian news publishers in the age of Artificial Intelligence.

The Delhi High Court's OpenAI Bombshell: A Judicial Stretch of Section 52?

Let us begin with the most startling development for IP practitioners. In the high-stakes battle between Asian News International (ANI) and OpenAI, the Delhi High Court has held, prima facie, that OpenAI’s scraping and storage of ANI’s copyrighted literary works for training Large Language Models (LLMs) does not amount to infringement.

The Court’s rationale? It shoehorned algorithmic training into Section 52(1)(a) of the Copyright Act, 1957, categorizing it as fair dealing for "private or personal use, including research."

To call the ingestion of billions of copyrighted tokens by a multi-billion-dollar commercial entity "private or personal use" is, frankly, a massive judicial stretch. It treats commercial LLM training as legally indistinguishable from a university student taking notes in a library.

Why this matters for your practice: If this prima facie view crystallizes into final jurisprudence, it effectively kills the nascent AI-copyright licensing market in India. Publishers and content creators have been banking on the threat of infringement to force AI companies to the negotiating table. If scraping is statutorily protected as "research," your media clients have lost their primary leverage. IP litigators must immediately pivot their strategies—perhaps focusing on terms of service violations, technological protection measures (circumvention), or pushing for legislative amendments, because the 1957 Act was never designed to contemplate generative AI.

DPDP Act Survives the Chopping Block: The RTI Conundrum

Meanwhile, at Tilak Marg, the Supreme Court has referred the constitutional challenges against the DPDP Act, 2023, and its Rules to a larger bench. Crucially, however, the Court refused to stay the operation of the Act.

The crux of the challenge lies in the DPDP Act’s controversial amendment to the Right to Information (RTI) Act, 2005. Specifically, the DPDP Act amends Section 8(1)(j) of the RTI Act, removing the crucial "public interest" caveat and creating a blanket exemption for the disclosure of any "personal information."

From a constitutional standpoint, this is a dangerous dilution of democratic transparency. It weaponizes privacy to shield bureaucratic accountability, pitting Article 21 (Privacy) directly against Article 19(1)(a) (Right to Know). The larger bench will have to navigate this constitutional tightrope, determining whether a blanket ban on personal data disclosure under the RTI Act fails the proportionality test established in Puttaswamy.

Why this matters for your practice: The refusal to grant a stay is the only thing corporate lawyers need to care about right now. It means the compliance clock is ticking loudly. You can no longer tell your clients to "wait and see what the Supreme Court does." With the Data Protection Board of India constituted on 13 November 2025, and the hard deadline for full enforcement of core obligations slated for 13 May 2027, data fiduciaries must act immediately.

The Reality of Consent: The APAAR Scheme Precedent

If your clients are still relying on pre-checked boxes or bundled privacy policies, they are walking into a regulatory trap. The Supreme Court made this abundantly clear in its recent treatment of the APAAR Scheme (the automated student ID registry).

The Court directed that the scheme’s consent form must include a mandatory opt-out option, reiterating that the collection, processing, and sharing of student data must strictly comply with the DPDP Act. Consent under the new regime must be free, specific, informed, unconditional, and unambiguous.

Notice the friction here: The DPDP Act fundamentally requires an affirmative "opt-in" mechanism. By mandating an "opt-out" option for APAAR, the Court is acknowledging the practical power dynamics at play (especially between the State and students), ensuring that withdrawal of consent is as frictionless as granting it. Once consent is withdrawn, the Data Fiduciary must cease processing and erase the data unless retention is mandated by another law.

The Road Ahead for Tech Lawyers

We are currently in the eye of the storm. The DPDP Rules (notified in November 2025) require companies to implement data minimization (collecting only essential data), provide clear notices in multiple languages, and establish robust breach notification protocols. With Consent Manager registrations opening in November 2026, a whole new ecosystem of techno-legal intermediaries is about to be born.

For practicing lawyers, the mandate is clear:

1. For IP/Tech Litigators: Prepare for appellate battles over the Delhi HC’s interpretation of Section 52(1)(a). The line between "fair dealing" and "commercial exploitation" in AI training is far from settled.
2. For Corporate Advisors: Audit your clients' data flows immediately. Draft fresh, granular notice-and-consent frameworks. The Supreme Court's refusal to stay the DPDP Act means the May 2027 enforcement deadline is written in stone.

The courts are writing the rules of India's digital economy in real-time. Make sure your practice is keeping pace.