Artificial intelligence (AI) is poised to be the most important technology today and continues to evolve at an extraordinary speed. We feel it’s reach throughout virtually every industry, and we see its implications from a range of technological, economic, social, and legal standpoints. As AI grows in importance and utility in our everyday lives, technology companies need to catch up to the legal protections from an intellectual property and value perspective.

AI is getting more creative and is currently capable of creating a range of materials. From works of art to picking the ripest fruit for you at the store. Intellectual property (IP) law has yet to catch up with AI’s rapid evolution. The laws surrounding IP were developed to safeguard and regulate human-derived IP. While it is clear that IP derived from AI merits similar safeguards and regulations, at this point, it is difficult to determine the best methods of applying IP law to AI-created content.

Understanding Artificial Intelligence

The first step in understanding the IP-related ramifications of AI is to have a solid grasp of what AI is in addition to its potential applications. The American Bar Association defined AI as, “at its core, a computer that has been programmed to mimic the ‘natural’ intelligence of human beings, such as by learning, reasoning, or making decisions.”

In recent years we have seen AI deployed for a far-reaching number of applications. An AI expert astutely said of the technology, “AI is being deployed in health care and warfare; it’s helping people make music and books; it’s scrutinizing your resumé, judging your creditworthiness, and tweaking the photos you take on your phone. In short, it’s making decisions that affect your life whether you like it or not.”

Intellectual Property Ramifications

According to legal experts, specifically, World Intellectual Property Organization (WIPO) Director General Francis Gurry, says the IP system currently in place exists to foster human innovation and creativity with the goal of establishing “a sustainable economic basis for invention and creation.” Given this framework, AI should be subject to IP protections for technology companies in order to further ensure that AI has a healthy economic climate in which to create content. However, experts note a range of potential issues positioned at the intersection of IP and AI.

From a regulatory perspective, the key issues are:

  • Ensuring transparency and guarding against bias while simultaneously avoiding sacrificing the competitive edge necessary for spurring AI-related innovation and commercial activity
  • Considering the copyright implications when AI creates new works
  • Considering the copyright implications when copyrighted materials are used to teach or train AI systems
  • Forecasting AI’s potential impact on branding and trademark protections
  • Regulating the ways in which AI enforces IP rights, protects inventions, and creates new business models

Experts in technology regulation and technology lawyers speculate that as AI gains traction within IP rights spheres, legal gray areas will begin to develop and spread throughout the ownership rights sector. Specialist technology writer Emma Woollacott notes a key example of this: “Awarding IP rights to AI could lead to the question of whether an AI could then be liable for infringement of other IP owners’ patents, including patents held by other AIs.”

AI’s inherent mutability further complicates this issue. Because AI is essentially a complex web of datasets and algorithms designed to constantly learn and evolve, WIPO postulates that over time a given piece of AI might outgrow its own intellectual property rights. Their ultimate question is, “How do you create property rights in an algorithm that is constantly changing to the extent that your invention is not the same even one year after you have applied for a patent?”

Implications for the Future of Artificial Intelligence and Intellectual Property Law

At present, a cohesive system is still in the works that can effectively govern these potential issues. While a range of entities from AI creators to countries throughout the world are working to develop and implement effective solutions, it is arguable that a thorough globally-minded framework may be necessary for ensuring that AI-derived IP is effectively protected. Technology lawyers are trying to stay ahead of regulations and the need for globally-minded IP solutions. Francis Gurry, Director General of the World Intellectual Property Organization provides key insights.

The WIPO director states that global regulatory frameworks for AI and IP will be increasingly vital in the coming years because they will:

  • Ensure the functional interoperability of IP systems
  • Allow for fair competition in a constructive and positive manner
  • Anticipate impending rivalries as IP becomes a primary battleground for future competition
  • Support capacity building and sharing mechanisms to keep pace with rapid technological evolutions
  • Safeguard against potential exacerbation of existing technological gaps

AI evolves at an increasingly rapid pace on a daily basis. To keep pace, regulatory bodies would do well to begin considering how they can best mitigate impending IP-related regulatory issues. Technology lawyers, both from corporate law and intellectual property law perspectives, are working on compliance in the regulatory environment worldwide and within new Trademark and Patent Office regulations.

Corporate Law Considerations For AI

AI is a powerful tool that will continue to change our lives and the economy. Along with that, AI solutions present significant legal risks if there isn’t a legal foundation and ongoing legal monitoring on various fronts. One of the more important is from a corporate law perspective

Both C-level executives, in-house general counsel, and the board of directors of AI companies are responsible for the monitoring, compliance, and risk management of the AI solution. Directors of companies have a fiduciary duty to their shareholders and to the company, these include the duty of care and the duty of loyalty, which is why they need to work closely with legal counsel in the management of inherent risks presented by AI solutions.

The Shape of a Corporate AI Governance Plan

Leading companies worldwide are developing policy initiatives and regulations regarding the governance of data in the usage of AI. We are seeing the regulatory environment continuing to evolve, with the general counsel of technology leaders in the marketplace addressing AI ethics and governance proactively.

In the meantime, increasing legal requirements and regulations are being developed and enforced. A comprehensive AI governance plan lays a framework that creates trust, accountability, and transparency.

AI Governance Plan should address:

  • How accurately the technology is being used
  • How appropriate is the use of consumer data to inform the AI
  • Compliance with privacy laws
  • Discrimination and bias against consumers based on the personal information collected
  • Periodic testing and auditing throughout the AI utilization lifecycle
  • Remediation strategies
  • Continuous assessments of risk in transactions with regard to AI technology licenses or developments, as well as mergers and acquisitions

From digital music and e-commerce businesses to mobile phone app creators, computer programmers, and web developers, our technology attorneys have counseled a diverse group of companies and talented individuals on intellectual property and technology-specific legal matters. If you are a tech innovator, an experienced technology lawyer can push your business a step ahead of the others.

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Disclaimer: The information in this article is for general information purposes only. Nothing in this article should be taken as legal advice for any individual case or situation. This information is not intended to create and viewing it does not constitute an attorney-client relationship.

About the Author

Jana Gouchev
Jana Gouchev, Esq., Managing Partner

Jana Gouchev is a prominent NYC lawyer on the leading edge of technology deals and complex commercial transactions. Jana delivers cutting-edge legal and commercial insight that propels company growth and drives faster revenue realization by Business Units. She has mastered the art of risk management balanced with business focused legal strategy. Jana's practice is focused on Corporate Law, Data Privacy and Information Security, Tech Law (consulting, SaaS, and AI), Complex Commercial Contracts, Intellectual Property, M&A, and Advertising law. 

Jana comes from Paul Weiss, an AmLaw 50 firm, and has since been outside counsel to some of the world’s most innovative brands, including the New York Times, Citi, Estee Lauder, Hearst, Nissan, and Squarespace, in addition to being key outside counsel to numerous companies. Jana is ranked as a Best Lawyer by the U.S. News and is featured in Forbes, Bloomberg, Modern Lawyer, Inc., and the Business Insider.

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