Artificial Intelligence

Business Law

Quarles works closely with company founders, executives, directors, general counsel and other company stakeholders in the implementation, risk management and compliance aspects related to the use of AI. We also assist AI-powered companies, or companies where AI is a critical component of their business plan, in finance and capital investment rounds (including representing investors in AI startups), mergers and acquisitions, and other corporate transactions. Our support for AI-related M&A transactions includes negotiation and drafting of data privacy and security-related agreements, as well as agreements that allow for transfer of deidentified or anonymized healthcare data to be used as an asset for AI training/modeling.

Where appropriate, our corporate transactional attorneys have used AI software during the transaction management process to create efficiencies and improvements that benefit our clients and minimize risk in areas such as representations and warranties, due diligence and contract review.

Data Privacy & Security

It is critical for organizations to evaluate and identify how they, their employees and their third-party vendors are using AI technologies. Implementing policies, providing training and updating contract provisions all are important steps to help mitigate the risks associated with the use of AI. Quarles’ IT and data privacy attorneys advise clients on the technology and privacy implications of AI, including data input, contracting and risk management considerations. We provide counsel on an array of matters, such as:

• Counseling on AI risks.
• Counseling on AI governance for development, deployment and decommissioning of AI tools.
• Consent for collection and use of data for training AI.
• Licensing data for training AI.
• Anonymization analysis for data for AI training under various data privacy regimes, including GDPR and various state privacy laws.
• Wearables incorporating AI for consumer experience.
• Draft of AI policies for companies of various sizes.
• Negotiating and drafting contracts for licensing and/or development of AI tools.
• State law developments on use of AI in hiring and employment.

Health & Life Sciences

Our health care team delivers practical, business-oriented counsel focused on allowing our clients to proactively address information technology, privacy and security issues. Our experience includes:

• AI considerations in FDA medical device and wearables.
• Ethical considerations and examination of bias, transparency and unintended outcomes in implementing AI in health care.
• Assessment of practice of medicine, pharmacy, nursing, etc., issues when using AI.
• Assessment of corporate practice of medicine issues.
• Negotiating contractual terms for deployment of AI in the health care space.
• Advising regarding patient/provider consent for data collection and use of AI in treatment.
• Mitigating risk associated with use of AI by payers and providers.
• Tracking development of AI guidance, including National Institute of Standards and Technology (NIST) and U.S. Department of Health and Human Services (HHS) rulemaking for AI in Certified Health IT (HTI-1).
• Development of AI governance and related policies for AI tools to address specific health care regulatory concerns.
• Deidentification analysis for HIPAA data for AI training.

Intellectual Property

For more than a decade, our IP team has persistently partnered with clients to identify AI innovations and related strategic goals. We work side-by-side with our clients to craft customized strategic IP plans using an arsenal of patents, trade secrets and copyrights that are optimally combined to protect those AI innovations and to achieve those strategic goals.

In addition to protecting our clients’ AI innovations, we also counsel our clients on the competitive, infringement and other IP-specific risks associated with adopting and implementing AI in their business. AI can accelerate and improve innovation, at once affording opportunities for early and creative AI adopters and causing existential risks for competitors that fail to embrace AI fast enough.

Our clients include organizations creating and leveraging cutting-edge AI tools, such as research institutions and companies in the health care, big data, bioinformatics, industrial manufacturing and controls, physical and cyber security, consumer products, genetics and navigation industries, among others.

AI strategic counseling

• Educating clients on IP risks associated with AI use, including possible loss of patent rights, loss of trade secret rights, loss of copyright protection, liability for inequitable conduct, and potential patent and copyright infringement.
• Preparing right-to-use and invalidity opinions on patents claiming AI-related inventions.
• Generating state-of-the-art opinions identifying AI IP assets that pose risks to client AI use.
• Collaborating with clients to design around AI-related inventions owned by others.
• Negotiating license deals with AI providers to minimize or eliminate AI use IP risks.

AI protection

• Managing patent portfolios covering AI technologies developed by nationally renowned research institutions in health care and other industries.
• Partnering with clients to understand AI IP goals and to craft client and project-optimized combinations of patents, trade secrets and copyrights designed to achieve those goals.
• Preparing and prosecuting sophisticated patent applications protecting inventions that use AI.
• Employing progressive innovation mining, patent drafting and prosecution strategies developed to secure ownership of AI-related innovations based on current regulations as well as possible and foreseeable regulatory changes.
• Employing progressive and aggressive innovation mining, patent drafting and prosecution strategies developed to directly target and dominate a competitor’s future AI-related innovations.
• Preparing and implementing trade secret protection programs tailored specifically for protecting AI-related innovations.
• Preparing and prosecuting copyright applications protecting work product developed by humans and augmented by AI.

Labor & Employment

AI has the potential to save HR professionals hundreds of working hours so that their focus can remain on managing employees, but AI’s unchecked use could also lead to allegations of discrimination or harassment, so caution and careful assessment is required. We help our clients navigate the risks and benefits of employing AI as an HR partner, including best practices for using AI tools to do a preliminary review of resumes, evaluate interviewees and periodically check in on employee productivity and performance, post-hire. We also help our clients determine when to permit their workforce to use generative AI to increase their productivity without sacrificing the quality of their work. This includes drafting policies regarding AI usage and the investigation and discipline of non-disclosed or otherwise dishonest uses of generative AI.

Litigation & Dispute Resolution

AI technologies offer ways for companies to achieve better outcomes and, as a result, companies are rapidly adopting AI in a myriad of ways to meet business objectives. Our team of highly skilled attorneys is at the forefront of working with clients as they do so to address and reduce risks where possible while paving the way for companies to embrace such evolving technologies.

We work with our clients to explore and develop a business-focused strategy for incorporating AI and for addressing the assignment of liability that may arise, so our clients are well poised to understand and maneuver the risks, better protect themselves and work to assign some predictability in the outcome of AI-related disputes.

Product Liability Litigation

Products big and small, industrial and consumer, are increasingly incorporating AI technology. The use of AI has great potential for improving product safety and promoting efficiency. But it also poses new risks and raises novel questions of liability when personal injury or property damage occurs. Our Product Liability team has the knowledge and experience to manage those risks and rectify any potential liability. Our representative experiences include:

• Implementing front-end strategies to limit product liability and defense costs, including:
  • Allocating liability through contractual indemnities and warranties, releases and assumption-of-risk provisions.
  • Staying abreast of industry standards and best practices.
  • Documenting processes and testing.
  • Drafting product instructions and warnings.
  • Developing training programs.
  • Tracking performance data.
• Representing manufacturers, distributors and lessors in litigation involving AI-powered or AI-assisted products, including vehicles, industrial products and heavy equipment, and industrial processes.