The Legal Issues to Consider When Adopting AI

So you want your company to begin using artificial intelligence. Before rushing to adopt AI, consider the potential risks including legal issues around data protection, intellectual property, and liability. Through a strategic risk management framework, businesses can mitigate major compliance risks and uphold customer trust while taking advantage of recent AI advancements.

Check your training data

First, assess whether the data used to train your AI model complies with applicable laws such as India’s 2023 Digital Personal Data Protection Bill and the European Union’s General Data Protection Regulation, which address data ownership, consent, and compliance. A timely legal review that determines whether collected data may be used lawfully for machine-learning purposes can prevent regulatory and legal headaches later.

That legal assessment involves a deep dive into your company’s existing terms of service, privacy policy statements, and other customer-facing contractual terms to determine what permissions, if any, have been obtained from a customer or user. The next step is to determine whether such permissions will suffice for training an AI model. If not, additional customer notification or consent likely will be required.

Different types of data bring different issues of consent and liability. For example, consider whether your data is personally identifiable information, synthetic content (typically generated by another AI system), or someone else’s intellectual property. Data minimization—using only what you need—is a good principle to apply at this stage.

Pay careful attention to how you obtained the data. OpenAI has been sued for scraping personal data to train its algorithms. And, as explained below, data-scraping can raise questions of copyright infringement. In addition, U.S. civil action laws can apply because scraping could violate a website’s terms of service. U.S. security-focused laws such as the Computer Fraud and Abuse Act arguably might be applied outside the country’s territory in order to prosecute foreign entities that have allegedly stolen data from secure systems.

Watch for intellectual property issues

The New York Times recently sued OpenAI for using the newspaper’s content for training purposes, basing its arguments on claims of copyright infringement and trademark dilution. The lawsuit holds an important lesson for all companies dealing in AI development: Be careful about using copyrighted content for training models, particularly when it’s feasible to license such content from the owner. Apple and other companies have considered licensing options, which likely will emerge as the best way to mitigate potential copyright infringement claims.

To reduce concerns about copyright, Microsoft has offered to stand behind the outputs of its AI assistants, promising to defend customers against any potential copyright infringement claims. Such intellectual property protections could become the industry…