As the implementation of artificial intelligence (AI) becomes more commonplace in businesses, the potential litigation from it increases. Different states may have different laws regarding AI use, so knowing the regulatory framework around your area is crucial in protecting your business from litigation involving AI.
What are the key things you need to consider?
If your business has started implementing AI in your processes, consider the following:
- Data privacy and security: The Kentucky Consumer Data Protection Act requires businesses to implement reasonable security measures to protect customers’ data. Kentucky businesses must follow data protection laws to avoid litigation.
- Hiring policies: Using AI in hiring, firing, performance evaluations and other HR functions can lead to disputes. The Kentucky Civil Rights Act prohibits companies from discriminating against protected classes. Kentucky businesses must update their HR policies and procedures and ensure their AI systems comply with the law.
- Intellectual Property (IP) protection: AI can present new challenges in IP management. Businesses need to protect AI-generated inventions and proprietary algorithms. The U.S. has several relevant AI laws that companies must consider when using AI.
- Clear contracts regarding AI use: Draft clear and comprehensive AI-related agreements, whether for the company, consumers or suppliers.
As AI evolves, so will the laws that govern it. Your business must use new technologies and navigate the changing rules.
What you can do to mitigate legal risks
The following strategies can be effective measures against AI-related business litigation:
- Implement robust data protection policies
- Audit your AI systems for their potential to discriminate.
- Regularly update and review your company’s IP protection strategies.
- Work with legal counsel to ensure your AI outputs the correct contract language.
As AI continues to evolve and its use continues to widen, the legal risks it poses will accumulate. Staying informed and proactive in complying with the latest laws will help your business avoid costly litigation and minimize risks.