AI and Intellectual Property

Do You Really Own Your App?

Depending on who you listen to, Artificial Intelligence (AI) is either a boon for mankind or, according to Elon Musk, the greatest existential threat we face as a species. It’s the “dangers” of AI that have fulled most regulation currently being discussed, with news reports focusing mainly on the perceived risks for citizens’ fundamental rights and freedoms. However, there are also legal liability concerns for both developers and users of AI inspired applications and tools.

AI and Intellectual Property Issues

In particular, the development and increasing use of generative AI systems – the technology that enables the creation of content on demand – does have significant potential, but also raises significant legal issues. Upcoming regulation has relatively little to say so far about the complex – but highly commercially relevant for many tech start-ups – intellectual property (IP) implications of AI systems. A situation made even more complex by the cross-jurisdictional nature of online data scraping and use, and territorially different intellectual property laws.

AI Ownership and Copyright Issues

A start-up tech firm or an individual who has developed an app using AI may choose to monetise it by placing it on a major player’s platform and it’s important that the developer can say they own the IP in the app. Establishing this if AI has been involved in the development is not as clear cut as you may imagine.

The UK’s position on copyright ownership for AI generated works remains ambiguous, while other jurisdictions such as the USA, Spain, and Germany have clarified theirs, stating that copyright can only exist and be owned by a human being.

Is Your AI System Protected?

Some aspects of Al systems can be protected by patents and copyright, but machine learning systems don’t fit neatly into conventional IP categories. This is in part due to the fact that the real investment and value in developing a generative Al solution goes into the training process, which makes the system inherently much more valuable. However, generative AI relies on the input of large amounts of training data, which may or may not be subject to IP restrictions. Photos and text underlying some of the popular generative AI applications are likely to be copyright protected, but whether the training set as a whole is protected varies depending on the jurisdiction (the European Union for example has a specific database protection right).

Will The Output Infringe Copyright?

The output of a generative AI system will inevitably contain traces of the training input, and these can sometimes be readily identifiable. For example, visual media giant Getty Images filed a case earlier this year in the High Court of Justice in London against Stability AI, alleging that the company copied 12 million images to train its AI model without permission or compensation.

Stability AI and another AI art start-up – Midjourney are also being sued in the US by artists Sarah Andersen, Kelly McKernan, and Karla Ortiz who claim that these organisations infringed their rights by training their AI tools on images scraped from the web without the consent of the original artists.

In the US, “fair use” can be a defence against claims of copyright infringement. The digitisation of copyrighted books for an online library project has been interpreted as “fair use” by US courts but it is not yet clear whether this exception will apply in the context of AI. Most European copyright laws do not recognise “fair use”, so it’s more difficult to justify the use of a third party’s copyrighted works in the input or output of an AI system. If third-party copyright is infringed, it’s the user and the AI developer who would be liable.

Avoiding Costly litigation

To avoid the possibility of costly and potentially business-breaking legal problems, AI developers should ensure they comply with the law when acquiring training data. This could be done through licensing agreements or by sharing revenue generated by the AI tool with the individuals who own the IP of that training data.

Equally, customers of AI tools and apps are increasingly likely to ask providers and developers whether their models were trained with any copyright protected content. To avoid risk to themselves, they will shun generative AI tools that cannot confirm training data was properly licensed from content creators or subject to open-source licenses with which the AI company complied.

Our team of start-up lawyers at Motion Paradox can give AI developers and corporate users of this emerging technology guidance in navigating a largely unregulated landscape. We can ensure your business is protected from legal issues that may damage your company.

How Hiring a Start-up Lawyer in London Can Help Build a Solid Foundation for Your New Business

A start-up lawyer can provide legal assistance and guidance that can help build a solid foundation for your new company and help avoid problems that can arise.

Starting a new business can be an exciting and rewarding journey, but it can also be quite challenging. Many entrepreneurs who start a new business overlook the importance of hiring a start-up lawyer, often due to the perceived expense of so doing. Some start-up owners will explore ways to reduce cost by attempting to create their own contracts using templates available online.  The following are just a few ways that a start-up lawyer in London can help your new company succeed and grow.

Avoid Do-It-Yourself Contracts

Creating your own contract using online or off-the shelf formats may at first seem to be cost-effective but is fraught with risks. Online templates are often overly broad or vague and using these DIY contracts may leave out key provisions, that protect your interests. The DIY contract could prove to be unenforceable while the inclusion or exclusion of terms commonly found in boilerplate templates could unintentionally create potentially damaging legal obligations or liabilities. The limited savings of a DIY contract are quickly outweighed by the time and money you would have to spend if any of these risks become a reality for your fledgling business.

Companies require bespoke contracts and services put in place in order to avoid risk and scale properly. A start-up lawyer can help you draft, revise, and review legally watertight contracts and agreements, to help ensure that your interests are protected. This can include shareholder agreements, employment contracts, vendor agreements and sales contracts.

A Start-up Lawyer Can Help Protect Your Intellectual Property

One of the key areas where a start-up lawyer can provide valuable assistance is in protecting your intellectual property. When starting a new business, it is critical to ensure that your intellectual property is protected. Whether in the form of patents, trademarks or copyrights, a lawyer can help protect your intellectual property and prevent infringement.

Help Your Start-up Comply with Regulations

Building a start-up company also means complying with a wide range of regulations. Navigating all of the regulatory requirements can be quite complex, especially in the technology sector. Advice is helpful to understand the regulations and ensure that you are in compliance. This can help prevent legal issues down the line, such as potential lawsuits, fines, and penalties.

Start-up Lawyers can Provide Solutions to Business Disputes

Unfortunately, disputes among start-up business partners or with other entities can arise. When these disputes occur, it is important to resolve them quickly to ensure that they do not derail the progress of your business. A start-up lawyer can provide valuable assistance in helping to resolve these disputes in a timely and effective manner, while also protecting your interests.

Due Diligence

At some point you may want to raise capital for your start-up. Any potential investor will have many questions about your business prior to investing. A start-up business attorney can help you prepare the requisite corroborating documentation to support each of your responses. Through the due diligence process, they can thoroughly review your company records, identify gaps, and help you understand which warranties and representations can be made, with a view to being transparent without jeopardising the transaction.

Offer General Business Guidance

Finally, a start-up lawyer can offer general business guidance. This can include advice on choosing the right business structure to support on fundraising and investments, and a wide range of other business-related matters in-between. Hiring a start-up lawyer can help you navigate the complex world of business, ensuring that you make informed decisions from the outset that benefit your start-up in the long-term.

The team of London start-up lawyers at Motion Paradox can help build a solid foundation for your new company. We provide all of the above services and more, helping to ensure that your business is protected from legal issues that can arise and also has the solid foundation needed for sustained growth. If you are starting a new business, consider hiring the legal experts at Motion Paradox to help ensure that your business is set up for success from the very start.