August 14, 2023 MDG

Navigating the Digital Maze: From Prompts to Outputs: Safeguarding Interests in Generative AI Agreements

Some Thoughts on Generative AI Best Practices…

  • Understand Generative AI:
    • Recognize that generative AI identifies patterns in training data to produce new content based on user prompts.
    • Assess the balance between the vast potential and risks of using generative AI tools.
  • Contractual Clarity:
    • Always ensure your use of a generative AI tool is under a clear agreement. Avoid tools without explicit terms.
    • Consider “enterprise” or “business” versions which might have more favorable terms.
    • Be aware of different service categories, such as plugins or APIs, which might have distinct terms.
  • Rights in Prompts:
    • Confirm who retains ownership rights of prompts submitted to the AI.
    • Be cautious of terms that grant providers rights to use, modify, or distribute prompts, especially if they can use them as training data.
    • Educate employees and contractors about the risks associated with submitting confidential or proprietary data in prompts.
  • Rights in Outputs:
    • Verify ownership rights of the outputs generated by the AI.
    • Ensure providers don’t have undue rights to use, distribute, or modify outputs, especially for valuable intellectual property.
  • Confidentiality Measures:
    • Ascertain if the AI provider is subject to any confidentiality obligations regarding your prompts or outputs.
    • Avoid breaching third-party confidential agreements or privacy laws by inadvertently sharing data with AI providers.
    • Implement a comprehensive generative AI use policy to protect sensitive company information.
  • Indemnities:
    • Understand the indemnification terms. Some providers may offer indemnification against third-party intellectual property claims, while others might not.
    • Be cautious of terms that place broad indemnity obligations on end users.
  • Limitations of Liability:
    • Recognize that many AI providers limit or disclaim liability, especially for indirect damages.
    • Consider enterprise or business account options that might provide more favorable liability terms.
  • Holistic Evaluation:
    • Conduct a comprehensive assessment of both the technical and legal risks associated with generative AI tools.
    • Weigh the benefits against the legal risks, and consider if providers offer more favorable tool versions or contractual terms.

Ed Note: This is not legal advice, I am not a lawyer (hire one!) – Just pointing out areas to investigate. 🙂