Virtual & Digital Health Digest

This digest covers key virtual and digital health regulatory and public policy developments during March and early April 2026 from the United States, United Kingdom, and European Union.

In this issue, you will find the following:

U.S. News

• Health Care Fraud and Abuse Updates
• FDA Updates
• Provider Reimbursement Updates
• Privacy and Artificial Intelligence (AI) Updates
• Policy Updates

U.S. Featured Content

This month’s edition covers a dynamic landscape at the intersection of health care compliance, technology regulation, and federal policy. On the enforcement front, two notable health care fraud cases, including a Florida pharmacy scheme and a $46 million telemedicine fraud, underscore the government’s continued focus on Medicare abuse. In the regulatory arena, the U.S. Food and Drug Administration (FDA) made headlines by rejecting a deregulatory artificial intelligence (AI) petition from Harrison.ai, reaffirming that premarket review remains essential for AI-powered radiology devices, while simultaneously seeking fresh input on digital health technologies in clinical investigations. Meanwhile, federal health agencies are pushing forward on digital health integration as the Centers for Medicare and Medicaid Services (CMS) launched its Health Tech Ecosystem initiative, introduced the ACCESS model for enhanced digital health reimbursement, and announced the LEAD accountable care model, all while the U.S. Department of Health and Human Services (HHS) restructured its health information technology (IT) offices to sharpen focus on interoperability. On Capitol Hill, lawmakers introduced a wave of AI-related legislation from Sen. Blackburn’s TRUMP AMERICA AI Act to bills addressing AI chatbots in professional services and biodata standardization, signaling that Congress is actively grappling with how to govern artificial intelligence across health care and beyond.

EU and UK News

• Regulatory Updates
• Privacy Updates
• IP Updates
• Product Liability Updates

EU/UK Featured Content

Regulatory activity in the EU and UK over the past month has focused on accelerating the alignment of digital, AI, and life sciences regulatory frameworks, alongside increasing scrutiny of data governance and market readiness for emerging technologies.

At the EU level, work to simplify and streamline EU AI-related legislation has advanced, with the Council of the European Union and European Parliament having adopted their positions on the European Commission’s (EC) Digital Omnibus reforms, and now entering trilogue negotiations on the final text. In parallel, MedTech Europe published its response to the EC consultation on the simplification of the EU AI rules as part of the Digital Omnibus, calling for clearer integration between the AI Act and other sectoral legislation, as well as extended implementation timelines. Separately, the European Data Protection Board (EDPB) and European Data Protection Supervisor (EDPS) issued a joint opinion on the proposed European Biotech Act, emphasizing the need for clearer safeguards, harmonized legal bases for processing clinical data, and strong protections when health and genetic data are used in biotech and AI contexts.

In the UK, developments have focused on the role of AI-enabled innovation within the health care system. A new parliamentary inquiry into personalized medicine and AI will examine ongoing challenges and barriers to National Health Service (NHS) adoption of new technologies, including procurement, digital infrastructure limitations, and system fragmentation. At the same time, the Medicines and Healthcare products Regulatory Agency (MHRA) has secured multi year funding to expand its AI Airlock Program to support the development of more ambitious AI medical devices. These initiatives signal a continued policy commitment to embedding digital and AI driven innovation into health care delivery and to strengthening the regulatory environment required to support safe deployment at scale.

U.S. News

Health Care Fraud And Abuse Updates

Florida Mother-Daughter Duo Convicted of Health Care Fraud. On March 26, 2026, Cindy Justice, owner and president of PureScience Rx, a Florida pharmacy, and her daughter, Ashleigh Davis, operations manager at PureScience Rx, were convicted by a grand jury for health care fraud, payment of illegal kickbacks, and conspiracy to commit other offenses.

The defendant allegedly paid a telemarketing call center to target Medicare beneficiaries and facilitate medically unnecessary prescriptions, including for drugs that were not FDA-approved or supported by medical evidence. In some instances, prescriptions were issued using stolen provider identities. The scheme resulted in Medicare paying more than $4.9 million on the fraudulent claims.

Telemedicine Company Owner Pleads Guilty in $46 Million Medicare Fraud Scheme. On March 27, 2026, Christopher Harwood, owner of telemedicine company TelevisitMD, pleaded guilty to conspiracy to commit health care fraud and wire fraud in connection with a $46.2 million Medicare scheme. 

The defendant allegedly targeted Medicare beneficiaries through aggressive telemarketing practices and paid physicians to approve orders for medically unnecessary orthotic braces and genetic tests without legitimate telehealth encounters or meaningful patient relationships. Harwood and his co-conspirators then sold the signed orders to durable medical equipment suppliers and laboratories, including entities he owned, which billed Medicare for the unnecessary items. Medicare paid approximately $17.9 million on the fraudulent claims, and Harwood personally received more than $10 million.

FDA Updates

FDA Rejects Deregulatory AI Proposal. On April 1, 2026, FDA replied to a petition submitted by Rubrum Advising on behalf of Harrison.ai. In the petition, Harrison.ai requested that FDA partially exempt certain class II radiology computer-aided detection, diagnosis, triage, and notification devices from 510(k) premarket notification requirements when manufacturers met specified conditions, including having prior 510(k) clearances and implementing post-market oversight measures. FDA formally denied the petition, concluding that it did not show that premarket review is unnecessary to assure safety and effectiveness. FDA was not persuaded by the petition’s arguments and rejected the claim that a manufacturer’s prior 510(k) clearance demonstrates “proficiency in processes” that would justify exempting future devices, noting that many other aspects of AI development may not translate across indications, modalities, or device types. FDA also stated the proposal would improperly let manufacturers determine what post-market controls are sufficient “in lieu of FDA review and clearance,” which is “neither consistent with the statute nor in the best interest of public health.” After reviewing public comments and applying the four established factors for Class II exemption, FDA found that the devices still present meaningful risks, that the characteristics necessary for safe and effective performance are not yet well established across all uses, and that changes could materially affect safety, effectiveness, or even classification. FDA acknowledged the petition’s proposals, reiterated its commitment to innovative approaches for digital health regulation, and pointed manufacturers toward Predetermined Change Control Plans as a more appropriate pathway to reduce regulatory burden while maintaining oversight.

Provider Reimbursement Updates

CMS Proposes Telehealth Waivers for New Innovation Center Models. CMS continues to incorporate telehealth waivers in Innovation Center models, emphasizing that such flexibilities can promote continuity of care and support broader access for Medicare beneficiaries. Most recently, CMS proposed incorporating waivers in the Long-term Enhanced ACO Design (LEAD) Model and the Comprehensive Care for Joint Replacement Expanded (CJR-X) Model.

The LEAD Model is a 10-year voluntary ACO model that will launch after the existing ACO model, ACO Realizing Equity, Access, and Community Health (REACH) Model concludes at the end of 2026. According to the recently published Request for Applications (RFA), the LEAD Model will incorporate a “telehealth benefit enhancement” similar to the one included in ACO REACH, in which CMS will waive the rural geographic component of originating site requirements and allow the originating site to include a beneficiary’s home. CMS also will waive the interactive telecommunications system requirement for certain asynchronous dermatology and ophthalmology telehealth services, allowing for digital images to be transmitted to a practitioner and evaluated outside of a real-time interaction.

Additionally, in the fiscal year (FY) 2027 inpatient prospective payment system (IPPS) proposed rule, CMS proposed a nationwide expansion of the CJR Model, which ran from 2016 through 2024. Under the proposed mandatory CJR-X Model, hospitals would be accountable for the cost and quality of care related to lower extremity joint replacement procedures for the period beginning with hospital admission through 90 days post-discharge. Like the CJR Model, CMS proposes that the CJR-X Model will waive the rural geographic component of originating site requirements and allow the originating site to include a beneficiary’s home. Furthermore, CMS proposes to create a new set of HCPCS codes to describe evaluation and management services furnished to CJR-X beneficiaries in their home via telehealth. According to CMS, the telehealth waivers will “maximize the opportunity to improve the quality of care and efficiency for episodes of care in CJR-X.”

In both the LEAD Model RFA and the FY27 IPPS proposed rule, CMS recognized that broad Medicare telehealth waivers are currently in effect, pursuant to the Consolidated Appropriations Act, 2026. But because these waivers are not permanent, CMS concluded that model-specific waivers would “guarantee” telehealth services can continue for model beneficiaries, even if the broad telehealth waivers expire.

Privacy and AI Updates

Information Sought on the Use of Digital Health Technologies in Clinical Investigations. On March 31, 2026, FDA issued a Request for Information (RFI) regarding the use of digital health technologies (DHTs)¹ in clinical investigations for drugs and biological products. The FDA previously issued guidance in this area in 2023, providing recommendations on ways to facilitate the use of DHTs in clinical investigations, including using DHTs to collect data for clinical investigation endpoints (2023 DHT Guidance). In the new RFI, the FDA explains that significant technological advancements have been made since 2023, including in sensors, such as those present in smartwatches and mobile phones, which may be customized for clinical investigations. DHTs are being designed to perform interactive clinical tests of patient functions, such as dynamometers to measure strength, apps to measure coordination and fine motor skills, and accelerometers to measure balance. In light of these developments, the agency is seeking fresh input focused on four specific questions:

• What regulatory challenges do DHT manufacturers, sponsors, or other interested parties face regarding the use of DHTs in clinical investigations of drugs and biological products?
• What opportunities are there for [the FDA’s Center for Drug Evaluation and Research] and [the Center for Biologics Evaluation and Research] to support and facilitate the adoption of DHTs in clinical investigations of drugs and biological products?
• What areas of guidance would support the use of DHTs in clinical investigations?
• What specific DHT-related topics, such as digitally derived endpoints in certain disease areas, would benefit from discussion in a public workshop?

The RFI states that information and comments received in response to these questions will inform the FDA’s development of guidance documents, as well as other FDA activities to support the appropriate use of DHTs in clinical investigations of drugs and biological products.

The deadline for submitting responses to the RFI is June 1, 2026.

Policy Updates

HHS Continues To Prioritize AI and Digital Health Tools Across Agency Activities. HHS continues to prioritize integration of AI and digital health technologies across agencies’ priorities and programming. On April 9, 2026, CMS held “Health Tech Ecosystem: Live! First Wave Launch,” during which the agency highlighted digital health tools from 50 companies that have met the Minimum Viable Product requirements deadline for the Health Tech Ecosystem pledge. One of the agency’s initiatives includes allowing patients to share their medical records with their providers via QR code in an effort to “Kill the Clipboard.”

Additionally, the FDA is soliciting additional information from companies interested in participating in its new Technology-Enabled Meaningful Patient Outcomes pilot for digital health devices, which will likely inform the FDA’s approach to regulating AI. Through the pilot, FDA will exercise “appropriate” enforcement discretion with regard to some medical device regulations so that devices can receive Medicare reimbursement under CMS’ Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) model, which will offer enhanced reimbursement for digital health technologies that improve clinical outcomes. On April 13, 2026, CMS announced the participation of 150 companies in the upcoming launch ACCESS model and extended the deadline for applications until May 15, 2026.

On March 31, 2026, CMS released a Request for Applications for its recently announced Long-term Enhanced ACO Design model, which will launch as a 10-year voluntary model beginning on January 1, 2027. The LEAD model aims to attract more providers, including independent practices and rural providers, to participate in accountable care organizations. According to the RFA, the model will incorporate the use of certified interoperable electronic health records; a telehealth benefit enhancement; and a Tech Enabler Initiative to identify opportunities to enhance patient care navigation, condition management, and connections with community-based services.

Reorganization of the Office of the National Coordinator for Health Information Technology. On March 31, 2026, HHS announced a restructuring of the Office of the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health IT (ASTP/ONC) in an effort to align a “focus on nationwide health IT interoperability and data liquidity.” Under the restructuring, ASTP/ONC will now be the Office of the National Coordinator for Health Information Technology. Additionally, the offices of the HHS Chief Technology Officer (CTO), HHS Chief Artificial Intelligence Officer (CAIO), and HHS Chief Data Officer (CDO) will be moved to the Office of the Chief Information Officer (OCIO). The president’s FY27 budget request would provide $50 million in funding to ONC to prioritize advancing interoperability and coordination between health IT stakeholders, including updating payment policies. Of note, ASTP/ONC was funded at $69 million in FY26.

CMS Delays Prior Authorization Implementation for Two Services Under WISeR Model. On April 6, 2026, CMS filed a notice delaying the implementation of prior authorization for two services under the Wasteful and Inappropriate Service Reduction (WISeR) model, including Deep Brain Stimulation for Essential Tremor and Parkinson’s Disease and Percutaneous Image-Guided Lumbar Decompression for Spinal Stenosis.

On March 27, 2026, a group of 35 House Democrats sent a letter to House Appropriations Labor-Health and Human Services (L-HHS) Subcommittee leadership urging the subcommittee to include language in its upcoming FY27 L-HHS appropriations bill to repeal the WISeR Model and prohibit implementation of other models testing prior authorization in traditional Medicare. The lawmakers also expressed concern about incentives for the model’s contractors to deny care for Medicare beneficiaries.

Senator Marsha Blackburn Releases Discussion Draft of AI Legislative Package. On March 18, 2026, Sen. Marsha Blackburn (R-TN) released a discussion draft of The Republic Unifying Meritocratic Performance Advancing Machine Intelligence by Eliminating Regulatory Interstate Chaos Across American Industry (TRUMP AMERICA AI) Act. According to the press release, the legislation is intended to codify President Trump’s December 2025 AI-related executive order; it does not include broad state preemption, unlike past legislative attempts to implement state preemption. Instead, the TRUMP AMERICA AI Act opts for a narrow preemption of state laws that contradict provisions in the legislation. The legislative package combines several pieces of existing bipartisan legislation sponsored or cosponsored by Sen. Blackburn, including the Kids’ Online Safety Act (KOSA, S. 1748) and the NO FAKES Act (S. 1367).

Congress Considers AI in Health Care and Biotechnology. In March, Members of Congress introduced multiple bills at the intersection of AI, health care, and biotechnology, including the following:

• On March 19, 2026, Reps. Kevin Mullin (D-CA), Debbie Dingell (D-MI), Doris Matsui (D-CA), Darren Soto (D-FL), Rashida Tlaib (D-MI), Jennifer McClellan (D-VA), and Kim Schrier (D-WA) introduced the CHATBOT Act (H.R. 7985), which would prohibit AI chatbots from providing unauthorized professional advice related to “covered professions” in the health care, financial services, legal, accounting, and other industries. The bill would increase liability for AI companies whose chatbots mislead users or provide harmful guidance, including additional enforcement authority under the Federal Trade Commission.
• On March 12, 2026, Sens. Todd Young (R-IN) and Ben Ray Lujan (D-NM) and Reps. Ro Khanna (D-CA) and Jay Obernolte (R-CA) introduced the AI-Ready Bio-Data Standards Act (S. 4069/H.R. 7907). The legislation would direct the National Institute of Standards and Technology to create a national framework for standardizing biological datasets. Additionally, the bill would codify shared priorities of the National Security Commission on Emerging Biotechnology and the Trump administration’s AI Action Plan, including investing in AI-enabled biosecurity and building datasets for genomic sequencing.
• On March 4, 2026, Reps. Obernolte, Khanna, Rich McCormick (R-GA), and Jake Auchincloss (D-MA) introduced the Cloud Labs to Advance Biotechnology (LAB) Act (H.R. 7801), which would direct the National Science Foundation to establish a national network of advanced, cloud-enabled laboratories to generate high-quality biological data through AI.

EU and UK News

Regulatory Updates

UK Government Publishes Explanatory Memorandum on Proposed EU MDR and IVDR Reforms. The UK government’s Department of Health and Social Care has published a memorandum explaining the European Commission’s proposal to amend Regulation (EU) 2017/745 (MDR) and Regulation (EU) 2017/746 (IVDR). The memorandum notes that compliance with the current regulations involves high and often disproportionate compliance costs and delays, in part due to regulatory complexity. It explains that the proposed reforms aim to streamline processes, support innovation, and ensure smoother market functioning. Under the EC’s proposal, certain software-based devices will move to a lower risk class, meaning less stringent standards will apply, and it will become easier for manufacturers to seek authorization to implement planned and regular changes to software. Obligations of manufacturers of AI-based devices, where such devices are classified as high-risk under the EU AI Act, will also be reduced. The memorandum touches on UK aspects of the reforms, noting that the MDR and IVDR will apply in Northern Ireland via the Windsor Framework. It confirms that, currently, CE marked devices will be recognized in Great Britain without additional checks until June 2030 (though indefinite recognition is currently the subject of public consultation, as we have previously reported on).

New UK-U.S. Pharmaceutical Arrangement Includes MedTech. On April 2, 2026, the UK and U.S. finalized the landmark pharmaceutical partnership announced in December, which aims to give NHS patients faster access to innovative medicines while making the UK the first country in the world to secure zero tariff access for its pharmaceutical exports to the U.S. for at least three years. It has been confirmed that no additional U.S. tariffs will apply to UK HealthTech products for at least three years, providing welcome certainty for manufacturers. However, a notable imbalance remains, with HealthTech exports still subject to a 10% tariff, compared with the new zero tariff treatment for pharmaceuticals. Industry groups have stated they will continue to press officials on both sides of the Atlantic to address this discrepancy. Building on this agreement, the MHRA and FDA have also announced a deepening of regulatory cooperation on medical devices, including exploring future mutual recognition mechanisms to reduce duplication, streamline approval pathways, and accelerate access to safe, cutting edge medical technologies for patients in both countries, while maintaining independent, world class safety standards.

Team-NB Publishes Position Paper on Revisions of the EU Medical Devices and In Vitro Diagnostics Regulations. On March 2, 2026, Team-NB (the European association of notified bodies) published a position paper on the EC proposals to amend the MDR and the In Vitro Diagnostic Regulation 2017/746 (see our February 2026 Advisory for details on the proposals). Team-NB supports certain of the proposed measures, including increased digitalization (e.g., electronic documentation and labeling), earlier regulatory dialogue, and measures to support innovation (e.g., regulatory sandboxes for innovative technologies and combined studies). However, it identifies several concerns, in particular, reduced regulatory scrutiny (e.g., extended expiry dates) and implementation challenges in light of multiple ongoing regulatory initiatives. The position paper contributes to the ongoing legislative discussions on the revision of the MDR and IVDR.

Council of the European Union (Council) and European Parliament Each Adopt Their Position on the European Commission Proposal to Simplify the EU AI Rules. The proposal, part of the EU’s Digital Omnibus package, is aimed at simplifying the implementation of harmonized rules on AI under the EU AI Act. Both the EC and the European Parliament propose amendments to streamline various requirements, reduce administrative burdens, and provide more proportionate application of AI rules across EU Member States. Both institutes support the introduction of fixed application dates for high-risk AI tools: December 2, 2027, for standalone high-risk systems and August 2, 2028, for high-risk systems embedded in products subject to EU sectoral legislation. The EC’s position reinstates key compliance safeguards, including mandatory registration of AI systems deemed exempt from high-risk classification and the strict necessity standard for processing sensitive data for bias detection. The Council also requires the EC to issue guidance to support operators of high-risk AI systems in meeting their obligations while minimizing compliance burdens. The European Parliament favors a lighter application of AI Act obligations for products already regulated under sectoral laws (e.g., for medical devices). Interinstitutional negotiations between the European Parliament, the Council, and the European Commission (“trilogue negotiations”) will now commence to agree on the final form of the law.

UK MHRA Expands AI Airlock Program. The MHRA has secured a £3.6 million funding uplift to expand its AI Airlock program, the UK’s first regulatory sandbox for AI as a medical device. Since its launch in 2024, the program has identified several areas where AI medical devices raise new regulatory challenges. Following the completion of its second phase, the Department of Health and Social Care has committed £1.2 million per year over the next three years (2026-2029), allowing the program to move beyond the constraints of annual budgeting. This will enable the program to support more ambitious, longer-term testing models and strengthen the development of sustainable regulatory pathways for future AI medical technologies.

UK Parliament Launches Inquiry Into NHS Personalized Medicine and AI Innovation. The House of Lords Science and Technology Committee has opened an inquiry into innovation in the NHS, using personalized medicine and AI as case studies to understand why the health service struggles to adopt cutting-edge life sciences technologies. The inquiry will examine the scientific and technological foundations of personalized medicine, including developments in genomics, biotechnology, and AI-driven analytics, and will explore the research infrastructure needed to support their development and validation. It will assess gaps between early-stage research, clinical trials, and NHS-wide delivery, including procurement challenges, clinical pathway constraints, interoperability bottlenecks, and the role of regulators and clinical bodies. The committee will also consider whether regulatory and appraisal frameworks are appropriate and proportionate for AI-based and personalized technologies, as well as how NHS structural fragmentation contributes to uneven adoption. In addition, the inquiry will explore issues including the high cost of personalized treatments, the clinical academic workforce, and clinical trials infrastructure needed for rapid implementation across the NHS.

MedTech Europe Publishes Position Paper on the EC’s Proposal to Simplify the EU AI Rules. The position paper was submitted in response to the EC consultation on the Digital Omnibus package. While MedTech Europe supports the European Commission’s objective of improving regulatory coherence and simplifying EU digital legislation, it calls for greater clarity and targeted adjustments to ensure that the framework functions effectively for the medical technology sector. In particular, MedTech Europe calls for: (1) greater alignment with the MDR and the IVDR in relation to risk management, ensuring that AI related obligations do not duplicate or conflict with existing sector specific frameworks; (2) explicit confirmation that investigational devices under the MDR and devices used in performance studies under the IVDR are not considered “placed on the market” or “put into service” under the AI Act, to avoid such devices being subject to AI Act obligations; (3) a harmonized designation pathway for notified bodies, covering both the AI Act and sectoral medical device legislation; and (4) a longer transition period for the application of high-risk AI system obligations, extending the implementation timeline to two years, to allow sufficient time for the development of standards and guidance, and notified body capacity necessary for effective compliance.

UK Government Launches AI Pilots in Barnsley. The UK government has launched two AI pilot schemes in Barnsley, making it the UK’s first “tech town.” The schemes are aimed at improving NHS services and strengthening local AI and digital capacity. The first pilot centers on an £800,000 AI Upskilling Challenge Fund to provide targeted AI training to small- and medium-sized enterprises and residents who may lack digital confidence, with organizations invited to pitch for funding to deliver the training. The second pilot establishes a “Healthcare Living Lab” at Barnsley Hospital NHS Foundation Trust, to trial AI tools designed to cut waiting lists, reduce missed appointments, support clinical decision‑making, and ease administrative pressures on NHS staff. The initiatives are intended to form a blueprint for wider national adoption and are intended to reflect the government’s commitment to ensuring that the benefits of AI reach local communities and key industries across the UK.

Privacy Updates

European Data Protection Board and European Data Protection Supervisor Issue Joint Opinion 3/2026 on the European Commission Proposal for a Biotech Act. While the EDPB and EDPS broadly support the objectives of the EC proposal, they identify significant data protection concerns. In particular, they welcome the introduction of a harmonized legal basis under the General Data Protection Regulation (EU) 2016/679 (GDPR) for processing clinical trial data, which is intended to reduce fragmentation across EU Member States, but call for greater clarity on the scope and application of the legal basis, including more detailed protocol-level documentation, and clearer conditions for the further use of clinical trial data for scientific research.

The EDPB and EDPS also highlight important uncertainties around the allocation of controller roles between sponsors and investigators, and the scope of long-term data retention requirements. They further emphasize that, while regulatory sandboxes may allow for derogations from EU clinical trial requirements, this does not alter the application of existing obligations under the GDPR. The same applies to AI use and biotech data initiatives, which should be accompanied by appropriate safeguards, particularly where health and genetic data are involved. While non-binding, the Joint Opinion is expected to carry significant weight in the legislative negotiations. Find more details on the Joint Opinion in our March 2026 BioSlice Blog.

European Commission Publishes FAQ Guidance on EHDS Regulation Implementation. The EC has published guidance on frequently asked questions on the European Health Data Space (EHDS). The guidance explains that the aims of Regulation (EU) 2025/327 (EHDS Regulation) are to allow patients to have greater control over their health data, ensure secure cross border data sharing, and support health care delivery. The guidance also covers the relationship of the EHDS regulation with other areas of EU law, such as data protection, medical devices, and clinical trials.

IP Updates

EU and UK Copyright and AI Policy Developments. Following the UK government’s consultation on copyright and AI, which we reported on in our January 2025 Digest, the House of Lords Communications and Digital Committee published its report on March 6, 2026, followed by the UK government’s report and impact statement on March 18, 2026. At the EU level, the European Parliament adopted the “Voss Report” on March 10, 2026. Although the copyright and AI landscape remains largely unchanged with no immediate reform to copyright law, there are some notable takeaways:

• Text and data mining exception: The UK government confirmed that a broad commercial text and data mining exception with an opt-out mechanism is no longer its preferred option and intends to gather further evidence before a final position is reached. 
• Licensing models: A licensing-first approach draws consistent support across the EU and the UK, with the Lords Report recommending a model focused on consent and fair remuneration and the Voss Report calling for a sector-based voluntary licensing process. 
• Transparency: The Lords Report proposes a mandatory transparency framework with granular disclosures on training data enforced by a designated regulator. Meanwhile, the Voss Report advocates itemized lists of all copyrighted works used in training, regardless of the place of training. 
• Labeling: There is cross-jurisdictional consensus that AI developers, service providers, and platforms should be legally required to label wholly AI-generated content. 
• Life sciences sector: The UK government expressly referenced the option of a focused exception for science and research to facilitate AI-driven research and accelerate drug discovery. 

The copyright and AI landscape await more definitive policy direction.

Fresh Doubts Over Patentability of AI-related Inventions in the UK. On March 27, 2026, the UK Intellectual Property Office (UKIPO) published an Examination Report in relation to the patent application (GB2583455) that was the subject of the Supreme Court judgment in Emotional Perception AI Limited v. Comptroller General of Patents, Designs and Trade Marks [2026] UKSC 3, as covered in our February 2026 Digest. The report confirms that the UKIPO will fully re-examine patentability, and expressed concerns over the application of the “intermediate step,” particularly in the analysis of “mixed-type inventions.” In its assessment that the invention lacks the necessary technical character and inventive step, the report casts new doubt on the UK’s approach to patentability of AI-related and computer-implemented inventions. The applicant, Emotional Perception AI Limited, has until April 27, 2026 to provide its reply.

Product Liability Updates

UK Government Launches Consultations on New Product Safety Framework and Market Surveillance Rules. The UK government has launched two consultations on reforms to the product safety regime, with a strong emphasis on addressing risks arising from digital and AI‑enabled technologies. The first consultation sets out proposals for a new, modernized product safety framework, designed to ensure regulation keeps pace with increasingly complex digital products and connected devices. It highlights that traditional safety models are no longer adequate for technologies featuring software updates, connectivity, data driven functionality, or AI enabled behavior, and invites views on how the regime should identify and manage novel harms linked to digital features and AI enabled products. The second consultation focuses on strengthening the UK’s market surveillance and enforcement framework, proposing to consolidate dispersed enforcement powers into a single statutory instrument, introduce civil monetary penalties as an alternative to criminal prosecution, and ensure regulators have the tools needed to respond effectively to the challenges of digital supply chains and online marketplaces. Both consultations are open until June 23, 2026, and feedback can be submitted for the new product safety framework and for the market surveillance and enforcement consultation.

Amalia White is employed as a trainee solicitor at Arnold & Porter’s London office. Amalia is not admitted to the practice of law.
Jack Chisem is employed as a paralegal at Arnold & Porter’s London office. Jack is not admitted to the practice of law.

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Newsletter is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.