For corporate lawyers, the AI era presents new legal risks and compliance requirements

As AI reshapes industries and organisations, there has to be a multifaceted legal landscape that demands a comprehensive understanding of AI's legal implications, legal risks and ensuring compliance.

As Artificial Intelligence continues to advance at breakneck pace, it presents both opportunities and challenges for businesses in India and abroad. Managing legal risk and ensuring compliance in the realm of AI becomes important in this context. This would, in turn, require a deep understanding of the intricate legal landscape.

The Indian government has recognised the need for responsible AI development and has taken steps to establish a regulatory framework. The Ministry of Electronics and Information Technology (MeitY) has constituted several committees and issued reports on Cyber Security, Safety, Legal and Ethical Issues that encompass various ethical and legal considerations.

While specific legislation governing AI is still being developed, these reports such as one published by Committee D on February 2021, and the “Approach Document for India Part 1 – Principles for Responsible AI” by NITI Aayog, serves as a vital foundation for senior management to understand the responsible implementation of AI systems.

Nevertheless, there are four primary points on legal risk to be considered by legal counsel and organisations in the space of AI, Intellectual Property Rights and Data Protection. These are big changes that lawyers will confront sooner, rather than later.

Data Protection and Privacy: AI relies heavily on data, raising significant concerns about data protection and privacy. The Digital Personal Data Protection Bill, 2019, currently under consideration, holds substantial implications for AI applications. Organisations have to establish robust data protection measures and ensure compliance with the Bill's provisions. Implementing appropriate safeguards and obtaining informed consent are critical components of maintaining data privacy and complying with relevant regulations.

Intellectual Property Rights: The convergence of AI and intellectual property rights presents complex challenges. Questions would arise constantly regarding patentability, copyright, and trade secrets concerning AI-generated content or inventions. Corporate counsel need to closely monitor developments in IP law and understand how AI impacts existing frameworks. Analysing case studies and legal precedents will provide valuable insights into protecting and enforcing IP rights in the context of AI.

Bias and Discrimination: Algorithmic bias poses a significant challenge in AI systems, as they can unintentionally perpetuate biases and discrimination and pose huge legal implications. Corporate counsel can mitigate these risks by working towards developing fair and unbiased AI systems. Staying updated with emerging guidelines or regulations addressing algorithmic bias is crucial to ensuring compliance and avoiding potential legal consequences.

Liability and Accountability: The question of liability and accountability for AI systems presents complex legal challenges. As AI becomes more autonomous, determining who should be held responsible for AI actions requires careful consideration. The concept of "explainable AI" gains prominence, necessitating transparency and accountability in the decision-making processes of AI algorithms. Legal principles and potential regulations are shaping the landscape of AI liability, and lawyers must stay informed to advise organisations effectively.

Additionally, certain steps that may help businesses deal with compliance and legal risks include:

1. Staying updated with MeitY reports/studies/guidelines and actively participating in consultations and discussions related to AI regulations. This will help in shaping the regulatory landscape and ensure that the interests of organisations and individuals are adequately represented.

2. Conducting thorough data protection impact assessments for AI systems, identifying potential risks, implementing privacy-enhancing measures and collaborating with data protection officers and IT teams to ensure compliance with data protection laws and best practices.

3. Developing IP strategies specific to AI technologies, considering issues such as inventorship, ownership, and licensing.

4. Collaborating with technical teams to identify AI-related innovations that may be eligible for IP protection and working closely with IP attorneys to navigate the intricacies of AI-related patent and copyright laws.

5. Collaborating with data scientists and AI developers to implement measures that mitigate bias and discrimination in AI systems. Establishing comprehensive data validation processes, employing diverse datasets, and conducting regular audits to identify and rectify biases.

6. Ensuring transparency in AI decision-making processes and providing avenues for individuals to challenge or seek explanations for AI-driven decisions.

7. Establishing clear contractual agreements with AI system providers, ensuring allocation of liability and accountability in case of AI-related incidents.

8. Staying updated with legal developments and industry standards pertaining to AI liability and collaborating with risk management teams to assess and mitigate potential legal risks associated with AI deployments.

As AI reshapes industries and organisations, there has to be a multifaceted legal landscape that demands a comprehensive understanding of AI's legal implications, legal risks and ensuring compliance. Only an in-depth knowledge of the regulatory framework, data protection and privacy, intellectual property rights, bias mitigation, liability, etc, will help corporate counsel adapt to these changes.

Indian lawyers have to rise to the challenge of effectively guiding organisations through the complexities of AI, thereby enabling them to harness its benefits while maintaining legal and ethical integrity. Implementing the suggested strategies will help organisations navigate the legal complexities of AI and mitigate potential risks effectively. The legal training/ brainstorming for the coming disruption must begin at companies, law firms and law schools without any further delay.

Rodney D. Ryder is Founding and Senior Partner with Scriboard; a full-service law firm with an intellectual property, technology and media law practice. He is the Co-Author of ‘Artificial Intelligence and Law. Challenges Demystified’. Views are personal, and do not represent the stand of this publication.