Without intellectual property (IP), you are replaceable.... If your business has no IP, you are replaceable. By any of your competitors. How much of your potential patent, trademark, copyright, and trade secret rights (the 4 main categories of IP) have you realized? This article is the definitive visual guide for understanding IP and your tech company. It provides a strategic roadmap for… READ MORE -> © 2024 Wood Phillips

Your employees’ use of AI in developing your company’s products or services puts your company’s intellectual property rights at risk. According to a Salesforce Nov. 2023 survey: 55% of all employees have used unapproved generative AI tools at work, and 40% of all workplace generative AI users have used banned tools at work. But when your employees leverage generative AI—with and in particular without permission—as part of your company’s research and development or marketing processes, they put your company at risk by: A. Jeopardizing your company’s patent and trade secret rights through: 1. Public disclosure of your company’s proprietary information. All prompts your employees type in to a generative AI and all output that is generated may potentially be deemed public disclosures. This potentially destroys any proprietary rights you might have over the information and also potentially invalidates any IP rights over any innovations you may have developed based on it. 2. Loss of ownership of your company’s patent rights. Your employees’ use of generative AI in R&D inherently leaves your company subject to subsequent challenges that your inventive process did not have the requisite “significant contributions” from a human being to be eligible for a patent. B. Putting your company at risk of third-party copyright and other IP infringement claims. Your employees’ use of AI to generate text, images, music, etc. inherently puts your company at risk of third-party copyright and other infringement claims based on the AI’s use of copyrighted works to train its models. Mitigating against these risks—and against spiraling litigation costs spent countering such ownership, invalidity, and third-party infringement challenges—from the start will help you sidestep such future landmines. © 2024 Wood Phillips

If your business owns no IP, you are replaceable by any of your competitors. And without implementing AI successfully, you will be replaced. In the U.S., your business will be subject to greater regulatory scrutiny if it involves the use of AI in a “sensitive domain,” including financial systems, healthcare, housing, education, and employment issues (see visual guide below). Employee displacement, and even the displacement of entire professions, by generative AI will be perhaps the greatest societal issue of our times. As such, AI-related issues will inevitably comprise a disproportionate share of litigation in the coming years. The use of AI gives rise to various types of AI legal risk, including: IP infringement claims, including: claims against the output of your AI, e.g.: copyright infringement right of publicity (via deepfakes) claims against your application of AI, e.g.: patent infringement trade secret misappropriation “algorithmic discrimination” claims, including for your use of any AI in automated employment decision tools data privacy violations, including: lack of sufficient protection of data collected from your AI customers unauthorized sale of your AI customers’ data unauthorized data mining to train your AI models fraudulent and negligent misrepresentation claims against the output of your generative AI, including: deepfakes AI “hallucinations” misuse of your AI for terrorism (including bio and nuclear), cyberattacks, attacks on financial systems, etc. Your primary defense against a claim directed against your business’s use of AI will be fundamentally an issue of compliance with and/or whether you have taken “reasonable measures” with respect to: existing principles of IP and technology law, existing applicable regulatory regimes, and most importantly the AI-specific legal and regulatory regimes that various national and state governments will develop in the coming months and years. Your business’s ability to set up effective company policies and negotiate the AI terms in your contracts in compliance with applicable laws and regulations—not just as they currently are but where they are headed—will define the scope of your potential liability for AI legal risk in the future. Wood Phillips provides intellectual property and artificial intelligence audits for your business, assessing areas of potential improvement for your policies, procedures, and contracting on these issues. We provide counsel for all the ways that IP and AI issues can and will impact your business. © 2024 Wood Phillips