Legal Risks of Using AI – Generated Content in Business

Introduction

Almost all industries are growing their roots in Artificial Intelligence today. From drafting judgements to generating business-related ideas, its speed and efficiency are outperforming humans in almost every respect. But at the same time, it can create serious legal problems if it’s not used carefully. These concerns may include the question of ownership, copyright infringement, defamation, contractual violations and other liabilities. In terms of business, familiarity with the legal framework governing AI has moved from being optional to essential in order to keep your brand safe, protect the confidentiality and avoid losing rights over the intellectual property.

Copyright Entitlement and AI-Generated Business Content

Many businesses have the misconception that they automatically own AI content merely by creating their prompt. The real situation, however, is more complex. The international philosophy offers a different viewpoint in this. In the United States, Australia, the European Union, etc., there is a strong possibility that you won’t receive federal copyright protection for AI-generated material lacking adequate human authorship.  It indicates that the market players could circulate the same, or materially similar content with negligible scope for legal remedy. Moreover, the standard for determining “adequate human authorship” is not procedural; it differs from case to case, specifically the extent and nature of human involvement in selecting, structuring, revising, and presenting the content.

Infringement of Privacy & Data Rights

The engagement of AI with data privacy is another pivotal area to look at. Employees might unintentionally provide confidential data when inputting the data into the AI generative tools. When an AI system accesses personal data without explicit permission or sufficient warning, then it may expose a business to the risk of violating privacy regulations such as the California Consumer Privacy Act or the General Data Protection Regulations (GDPR). In the worst-case scenario, sensitive information may subsequently be found in the answers given to other users, such as competitors in the market.

Determining Accountability for Infringement in AI Outputs:

This involves sharing of responsibility of the AI-generated work between the creators of the AI and the users and companies publishing the products. It poses complicated troubles in the legal environment. The algorithm of AI, although arriving to a specific outcome is confidential as the system seems to have its independence. This complicates finding out who is really liable in case of copyright violation, slander or abuse of information. It is a question that is yet to be answered.

Does AI-Generated Content need Consent to be commercially used?

To use AI safely, the law must be explicit on the responsibility of the person in case of a failure. In other jurisdictions, the requirement regarding consent of the license agreements between the AI platform and other parties, as well as restrictions attached to the underlying training data is obligatory. The possibility of infringement or contractual liability can come in case an entity uses the property without the required authorisation. Thus, the companies should make the appropriate analysis of the corresponding licensing terms and ensure that the production does not include the covered information that belongs to other parties.

What are the privacy regulations as far as AI-created content is concerned?

The privacy regulations are especially critical in ensuring that AI is applied to create content in a safe manner. Companies that apply AI in the management of personal information must ensure that they comply with all the regulations. Otherwise, they may be fined and lose their reputation. Companies must ensure that the training data does not consist of any personal information without their consent, ensure that they keep that data secure and that they are transparent about how they receive and use that data.

They must also be prepared to assist someone who yearns to view, modify or remove their data. When businesses follow these steps, they reduce legal risk, and people are more likely to trust the AI content being produced.

Ethical Implications in the Use of AI for Business Content

The requirement for ethical considerations in AI-generated content is directly proportional to the precision, liability and neutrality. Its main goal is to maintain trust and credibility by avoiding the deceptive content. The ethical frameworks also help in imposing liability by identifying the accountable party. The lawful and reasonable practice also improves respect for intellectual property rights and an undertaking to stay away from communications that are misleading, manipulative, or dishonest. These norms together make up the foundation for long-term AI use in commercial content creation. They restrict possible liability and build trust between businesses and their users.

Managing Legal Risks

As per the report, AI is not recognised as a legal entity in the Indian jurisdiction, which makes its application ineligible to fall under copyright protection. This paper stresses the importance of frequently checking the terms and conditions of AI platforms, getting the right licenses for any copyrighted data, and not adding any illegal or prohibited information. Using the correct AI disclaimers, building up robust internal review processes, and having explicit policies and guidelines will help you avoid a lot of legal trouble. Things such as access limits, non-disclosure agreement and good data security policies help businesses to safeguard private information. The Indian government has also proved that it knows how vital AI is becoming. The Digital India Act and projects operated by NITI Aayog and the Ministry of Electronics and Information Technology are examples of how the government is trying to control the digital world more and more.

These developments offer an optimistic approach for clearer rules in the future.

Real-World Events of AI-linked Data Breaches

The following are some of the instances in various industries that demonstrate ways that AI-enabled devices may be harmful.

Royal Free NHS Trust and DeepMind (2017)

The problem with the Royal Free NHS Trust and DeepMind also led to some concerns regarding the application of AI systems and the management of the personal information of individual persons. DeepMind has created a machine which could potentially identify symptoms of serious kidney damage. This is because it examined the hospital records of more than 1.6 million individuals.

The office of the UK Information Commissioner (ICO) brought a lawsuit against the Royal free NHS trust and alleged that the organization had breached the data privacy laws by utilizing patient data without their consent. By then, the Data protection act of 1998 existed and this was a flagrant violation of the law.

Clearview AI (2020)

Another company known as Clearview AI that produces facial recognition technology was upset due to its use of image scraping.

Clearview AI, a company that creates face recognition software, was angry because of using picture scraping. The process of amassing publicly posted (and, therefore, free) images, which the users post on to the site, is called image scraping (in this instance). Many Faces pics, which are used by Clearview to allow a law enforcement agency to identify individuals by searching for non-consented, publicly available images in an online database. As a result, numerous privacies, consent, data protection, and privacy issues arose, especially with regard to the EU’s General Data Protection Regulation (GDPR).

Along with other European regulators, the Information Commissioner’s Office started investigating the company. The possible breach of the legislation of data protection, including, in particular, the absence of valid consent to the collection and processing of personal data, is mentioned by the authorities.

Conclusion

The fact is that AI offers companies enormous benefits in the form of speed, scale and content creation innovation. But there comes with these good things a mangled strand of legal and moral burdens. Authorship and ownership are undetermined at best in such jurisdictions, where human creative control is little. Accordingly, it is also true that organisations that improperly use personal or sensitive data risk potentially large fines under some regulations, like the General Data Protection Regulation and its local variants. The conversation also points out the uncertainty among people in finding out the liable party for AI-generated material. In the absence of clear accountability, implementation and remedy becomes complex.

Author: Shivani Mishra, in case of any queries please contact/write back to us via email to [email protected] or at IIPRD. 

References

1. The legal implications of using AI-generated content in your business. (n.d.). ETB Law. https://www.etblaw.com/the-legal-implications-of-using-ai-generated-content-in-your-business/?utm
2. Legal exposure in AI-generated content for businesses. (n.d.). Aaron Hall. https://aaronhall.com/legal-exposure-in-ai-generated-content-for-businesses/?utm
3. Legal issues in using AI-generated content for business marketing. (n.d.). Cummings & Cummings Law. https://www.cummings.law/legal-issues-in-using-ai-generated-content-for-business-marketing/?utm
4. AI data breaches and liability: Who’s responsible? (n.d.). The Barrister Group. https://thebarristergroup.co.uk/blog/ai-data-breaches-and-liability-whos-responsible?utm