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ARTICLE · 18 JUNE 2024

Indemnification Clauses In Contracts Involving Artificial Intelligence: How Well Is Your Business Protected?

Parsons Behle & Latimer
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The meteoric rise in the use of artificial intelligence (AI) in today's business setting is unprecedented. In addition, the risks associated with AI and its output give rise to heighted concerns of liability.

United StatesTechnology
Christopher Simboli
Christopher Simboli

The meteoric rise in the use of artificial intelligence (AI) in today's business setting is unprecedented. In addition, the risks associated with AI and its output give rise to heighted concerns of liability by businesses using or considering using these emerging technologies.

AI is "trained" on content that could include a third party's intellectual property (IP) and may have been "scraped" from third party websites or obtained from other sources. Further, the output generated by AI may contain or incorporate that third party's IP. If proper licenses and rights are not in place between the AI provider and the content owner, it is possible the AI and its output could infringe the IP rights of the content owner, which often involves the copyright in that content. This in turn could lead to potential legal claims for damages from the content owner for such unauthorized usage. If this occurs, customers of the AI provider are often dragged into these legal proceedings

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