Generative artificial intelligence (“AI”) made a major pop-culture splash earlier this year with the explosion of Chat-GPT. The capabilities of these AI tools to generate content such as text, images, music, and code, is now widely recognized and many startup businesses are offering services powered by third-party AI tools. However, there is significant uncertainty surrounding intellectual property (“IP”) in AI, generally and in particular, for service providers who offer AI-related services to their customers.
As is often the case with rapidly changing technology, the law is lagging significantly behind AI when it comes to IP ownership and rights over the outputs generated by AI tools. In Canada, current IP laws do not explicitly address the question of whether AI-generated outputs are eligible for IP protection, and if so, who owns them. The existing legal framework is based on the assumption that there is a human author or inventor behind every IP-protected work or invention. However, this assumption may not hold true for works or inventions created entirely or partially by AI, with limited (or no) human intervention or guidance. In those cases, how IP laws apply and who, if anyone, owns the outputs generated by AI is a rapidly developing area of the law, but early indications are that these outputs may be difficult to protect1.
This uncertainty creates risks for service providers who are capitalizing on the opportunity to offer new, tailored AI-related services to their customers. For example, a service provider may use a generative AI tool to create content for a customer, or may allow the customer to use the generative AI tool directly. In these scenarios, the service provider and the customer may have different expectations regarding the IP ownership and rights over the AI-generated outputs. Typically, these differing expectations are addressed through a well-drafted services agreement. However, existing services agreements may not be suitable or adequate to address the uncertainty and challenges created by the involvement of AI in the service offering.
Key considerations for AI services agreements:
Novel considerations will apply to AI-related services agreements. For example, some of the key aspects to consider include:
- Whether the service provider will create the outputs for the customer, or allow the customer to use the AI tool or model, directly, to create the outputs themself.
- The source and ownership of the data used to train the generative AI tool or model and whether the data contains any third-party IP rights or personal information (i.e. is the data publicly available, licensed, owned by the service provider or the customer, etc.).
- What, if any, IP ownership or other rights the customer will have over the AI tool, itself.
- The IP ownership and rights over the outputs generated by the AI tool. For example, who (if anyone) will own the outputs, and what (if any) warranties, indemnities, or licenses will the service provider grant to the customer regarding the outputs.
- The limitations and liabilities of the service provider and the customer regarding the use of the generative AI tool or model, and the outputs generated by it. For example, whether the service provider or the customer will be responsible for any IP infringement or privacy breach arising from the use of the generative AI tool or the outputs.
The immense potential of AI creates a substantial opportunity for service providers who can carefully and successfully navigate the uncertainty of this developing area of the law, and leverage the benefits that their new and unique AI tools can offer. Given the rapidly evolving nature of AI technology and IP law, it will be important for service providers and customers in the AI sector to regularly adapt their agreements to avoid major missteps and capitalize on the promise of AI.
If you have questions about or need any assistance with respect to this topic, please reach out to any member of Siskinds’ Intellectual Property Group, or the author Jaime Holroyd.
1 See, for example: U.S. Copyright Office registration decision on “Zarya of the Dawn” (February 21, 2023) and U.S. Court of Appeals for the Federal Circuit decision in Thaler v. Vidal (August 5, 2022).