Rhonda Dibachi is the CEO of HeyScottie, an AI-enabled automatic pricing engine for outsourced finishing services.
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If you use AI technology to create new intellectual property (IP) for your organization, you need to understand how to protect that IP.
AI-generated content is treated differently, both legally and practically, than human-generated content, and understanding these particulars will make the difference between keeping your AI IP safe and seeing it engulfed by larger AI monsters (sorry—AI machines).
As a tech industry veteran with personal experience in patenting and copyrighting, I am starting to grapple with the complexities and nuances of safeguarding my organization’s AI IP. My company’s main quote-to-cash flow involves AI IP.
The Intellectual Odyssey Of AI Innovation
This article dives into current strategies for keeping your organization’s AI innovations secure, drawing on both personal experience and broader industry practices. I am also indebted to the law firm of O’Melveny and Myers, who know what they’re talking about here. See their client alert: “The Best Way to Protect Your AI-Generated Intellectual Property? Shhh…It’s a Secret.”
If your organization uses AI to improve your design group’s productivity, enhance the performance of your customer service team, or even design a more efficient flow for a business process, read on to learn how to keep the secret sauce of these improvements safe, away from prying eyes and especially away from other AI engines and large language models (LLMs).
The Perils Of AI In The Public Domain: A Critical Oversight
Legally, AI-generated output is treated fundamentally differently than normal human output and even differently than standard software algorithms; this is because current IP laws are designed to protect the products of human creativity and invention.
When a company uses AI to generate a unique thing that has value, it should take steps to protect this IP, just like it would any other type of IP, such as a technical product design, a process flow or a recipe.
And here’s an example of why.
Imagine you’re using an AI system to create a new chip design, and after making sure presentation materials are not publicly available, your head of engineering presents the design and the process that created it at this year’s Big Chip Conference. The presentation caused a stir and was well received, and people praised it in the conference’s online discussion groups. Many attendees post about how cool your process is, describing key aspects of your AI engine.
This information is then scooped up by a search engine the next time it vacuums the internet, and it eventually ends up being embedded in an LLM for everyone to see and use.
This could result in the loss of valuable rights, such as trade secrets and patent rights, because the exclusivity of the IP has been eroded. Bye bye IP.
But of course, you want people to know that your company is tech-savvy and cutting-edge and that you’re using AI, like the bad-ass technogeeks you are, so you can grow your business and retire early. So how do you make sure people know you’re hot stuff—AI-wise—but still keep your AI IP protected?
Can You Patent An AI System Or Output?
You might think patents can help here, but patenting AI-related inventions is challenging in the U.S.
First, you have to show that the AI-related innovation was the product of human invention and not the product of AI itself. Second, much of the innovation in AI concerns the underlying algorithm. However, you generally cannot patent an algorithm on its own, as algorithms are treated as abstract ideas.
For those interested in the details, ask ChatGPT to tell you about the Supreme Court’s Alice framework, where many software-related inventions are labeled as abstract ideas and thus unpatentable. Under Alice, AI IP cannot simply be more efficient than a human to be patentable.
Of course, we’re in the early days, and the courts have yet to grapple with the full scope of the AI/patent playing field. As of today, patent protection for AI IP may not be feasible.
Can Copyright Help Here?
Copyrighting AI IP is also a bit murky today.
So far, the Copyright Office has allowed copyright protection only to the human-generated parts of AI IP systems and has not allowed copyright protection on the AI-generated portions.
For details, check out “Zarya of the Dawn,” a comic book whose illustrations were generated by the AI program Midjourney, which resulted in a copyright dispute.
You can probably use copyright protections for your AI IP, but it’ll only partially cover it and then only the human part. So, keep good records of the human-created parts if you choose that route.
Trade Secrets: To The Rescue!
In this landscape, trade secret law emerges as a more fitting form of protection for AI innovations. Unlike patents and copyrights, trade secret protection hinges on the confidentiality of the information rather than the nature of its creation. This makes it a good way to protect AI-generated content, provided the information is kept secret, and its economic value is linked to not being generally known.
This is a reasonable but limiting answer.
You’ll be able to allow your head of engineering to give that talk at the Big Chip Conference, but she’ll have to be tight-lipped about how the great chip design was created and only respond to deeper queries with a: “If I tell you I’ll have to kill you,” answer. Not as much fun as bragging about it—but a lot safer.
A Prudent But Secretive Way To Protect Your AI IP
The nascent world of AI IP and its legal recognition requires a new type of secrecy, and using trade secret protections is a pragmatic solution. To keep your AI IP secure, be sure to strike a balance between promoting your company’s cutting-edge AI IP and making sure that IP remains protected from the ever-prying eyes of the competition, the world in general, and—worse—the data-hungry web crawlers.
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