Awareness of Legal Issues

Question 1

What are the key elements of the EU Commission’s AI Liability Directive?

Answer 1

• Provide similar compensation for AI-related claims as for damage incurred by other products
• Address specific characteristics of AI, such as opacity, autonomous behavior, complexity and limited predictability
• Prevent companies from contracting away their liability for the products to which they contribute

Question 2

Name 2 examples of initiatives to reform tort law in the US.

Answer 2

1) State regulations on autonomous vehicles with specific safety standards
2) FTC guidance urging businesses to:
- Be transparent with consumers about AI use and how algorithms work
- Ensure decisions are fair, robust and empirically sound
- Hold themselves accountable for compliance, ethics, fairness and non-discrimination

Question 3

What are the challenges surrounding AI models and data licensing?

Answer 3

• IP rights
• Data licensing terms
• Model licensing and infringement indemnity

Question 4

What are key elements of negotiating IP rights for AI models?

Answer 4

• Defining the licensor’s ownership
• Defining the licensee’s permitted use of the data

Question 5

Data licensing terms are used to regulate which concerns between parties?

Answer 5

• Designating certain model components as trade secrets
• Protecting model components by:
  
  • Limiting the right to use the component(s)
  • Designating AI components as confidential information in the terms and conditions
  • Restricting the use of confidential information
  • Including assignment rights in model evolutions from one party or the other
  • Determining the license and use rights the parties want to establish between the provider and the user for each model component
  • Establishing rights in the terms and conditions
  • Liability and indemnification

Question 6

What are some typical exceptions to the IP infringement indemnity in traditional software or technology licensing agreements?

Answer 6

• Modifications to the software or technology
• Unauthorized combination of the software or technology with other software or technology
• Use of the software or technology beyond the scope authorized in the agreement

Question 7

Why don’t typical exceptions to IP infringement indemnity work well?

Answer 7

Because modifications and combinations occur WITHIN the model.

An AI model:
- Must be trained, which means modifications to the AI model solution
- Must be combined with training data and production data
- May evolve and exceed a predetermined authorized scope over time

Question 8

What should AI model licensees insist upon?

Answer 8

• Minimum performance metrics to ensure that the licensed model provides adequate accuracy, reliability and robustness
• Contractual warranties and indemnities from the licensor to mitigate the risk of underperformance
• Thorough testing and validation, in advance of the license and on an ongoing basis

Answer 9

• Copyright ownership
• Trademark ownership
• Detection and enforcement of IP rights violations
• Data scraping can lead to IP infringement, trade secret misappropriation or unfair competition claims
• Protection of raw data - can be protected if it:
  
  • Meets specific national law conditions for qualifying as a protected work (a literary, artistic, or other type of work).
  • Is part of a database

Question 10

Name a prominent US court ruling on AI.

Answer 10

Thaler v. Vidal determined that ONLY humans can be named as inventors on a patent

Question 11

Name a prominent EU decision on AI.

Answer 11

The European Patent Office (EPO) published two decisions on the refusal of patent applications designating AI as an inventor. The EPO concluded that for the mandatory designation of an inventor for a European patent application the inventor must have a legal personality.