The legal consequences of using AI — and the safest way to do it
Implement clear AI governance policies covering IP ownership, privacy compliance, data protection, and bias mitigation to mitigate legal risks.
Establish AI governance frameworks that address IP ownership, privacy compliance, data protection, bias mitigation, and employee training.
Summary
AI regulations are still emerging, with the EU AI Act leading the way and nearly 20 U.S. states enacting AI legislation while the White House publishes a policy wishlist to keep the federal environment light.
The article argues that AI does not create new legal risks but accelerates familiar ones such as intellectual property, privacy, contracts, consumer protection, discrimination, and liability.
U.S. Copyright Office guidance states that purely AI‑generated works lack protection unless a human author contributes substantially, while USPTO guidelines allow patentability if a human conceived the idea but used AI to realize it.
Privacy concerns are highlighted by GDPR, CCPA, and PIPEDA, and the article cites Italy’s temporary ban of ChatGPT over data‑collection worries.
The piece also references high‑profile lawsuits—Disney vs. Google, the New York Times vs. OpenAI and Microsoft, and indie artists suing Google’s Lyria 3—that center on alleged copyright infringement by generative AI.
The nine risk areas identified include IP, advertising misinformation, privacy, data protection, employment fairness, and more, each requiring specific questions and controls.
The article concludes that organizations should adopt clear AI governance policies to manage these risks across the organization.
Key changes
- EU AI Act establishes stricter compliance requirements for AI systems.
- Nearly 20 U.S. states have enacted AI legislation, while the White House policy wishlist aims to keep federal regulation light.
- IP risk: U.S. Copyright Office says purely AI‑generated works are not protected unless a human contributes substantially.
- IP risk: USPTO guidelines allow patentability if a human conceived the idea but used AI to realize it.
- Privacy risk: GDPR, CCPA, and PIPEDA require transparent, lawful use of personal data, and Italy banned ChatGPT over GDPR concerns.
- Advertising risk: AI hallucinations can produce misinformation, leading to reputational damage and potential liability.
- Data‑protection risk: Employees using unapproved AI tools may inadvertently expose trade secrets or client data.
- Employment risk: AI may influence hiring decisions, raising fairness and discrimination concerns.