FREQUENTLY ASKED QUESTIONS

Commercial litigation has traditionally involved business lawsuits for garden-variety negligence, fraud, intellectual property infringement, and statutory and regulatory employment law violations. However,  that legal landscape has been expanding now that businesses have been utilizing artificial intelligence (“AI”). That has brought with it new causes of action, such as those stemming from AI hallucinations in search results that are relied on by businesses  to the infringing utilization of copyrighted material in AI datasets. In short, first came AI, and new lawsuits followed.

Unfortunately, there is little case law in the area of AI. Its advent has happened so quickly that a body of legal precedent has yet to emerge that can elucidate the respective legal rights and responsibilities in this area.

The Nissenbaum Law Group welcomes potential clients seeking legal advice concerning litigation that has or may be filed in which any of the causes of action relate to the use of AI. The following are a series of frequently asked questions (FAQs) in that regard.

FAQ # 1 – What are some important aspects of conducting business involving the use of AI which are prone to generate a lawsuit?

Using AI for internet searches involves the same sort of inquiries that people have made for the last two decades using grouped words and phrases, but instead done in a more conversational mode of inquiry. In other words, AI allows the user to not just ask questions, but also have conversations about them, which can culminate in the AI platform providing finished products that reflect more thoughtfulness and reasoning. This may include such items as research, citation review, editing, drafting, financial data analysis, and so forth.

Currently, the most pressing problem with the AI applications is that they can sometimes hallucinate. In other words,they can literally provide the wrong answer without any indication that the user might be well-served to double-check it for accuracy. To say the least, those errors could easily result in a lawsuit.

FAQ # 2 – What are examples of the different categories of claims that might be engendered by the commercial use of AI?

There are four main categories of activities that might utilize AI in the business context. They are generative AI, predictive ai, automated AI assistants, and machine learning or algorithmic tools. The following are examples of how the use of each might devolve into a lawsuit.

• Generative AI involves tools that create text, documents, images, or code. As stated above, the most obvious lawsuit that might arise from utilizing such a platform would be claims related to incorrect answers that were provided to the user without any indication that they might be wrong.
• Predictive AI is a system that analyzes data to forecast outcomes or trends. An example of a lawsuit that might be engendered by its use would involve a breach of confidentiality stemming from the fact that the user input data which then was utilized to respond to another user’s inquiry regarding the same subject matter. Since Predictive AI tools utilize datasets that stem in part from previous inquiries and responses, that is not so far-fetched.
• Automated AI Assistants are voice or text-based systems that provide answers, suggestions, or process commands. The litigation that might arise from their use could stem from the fact that they are not only speaking, but also listening. Clearly, the infiltration of private spaces by AI tools that are built to quietly gather information from the spoken word can create all sorts of opportunities to breach confidentiality of one sort or another.
• Machine Learning or Algorithmic Tools are AI applications that make decisions, perform analysis, or automate work based on data patterns. These applications gather raw data that often involves financial, personnel, and/or trade secret data that might otherwise have been protected by confidentiality agreements, the attorney client privilege and other such zones of privacy. Importantly, they are often subject to the algorithmic regulation of the country within which they are being used. An example of a lawsuit that might result would be one that would stem from the fact that once the information is provided to the AI application, it is not clear where it will reside; therefore a bad actor might gain access to it. Likewise, improper storage of such information without adequate security safeguards might constitute a violation of the aforementioned algorithmic regulations.

FAQ # 3 –Is there a low cost fix that a business can undertake which will mitigate some of the risk of using AI tools?

One way of mitigating the risk of AI business applications is to have a firm-wide policy encouraging users to disable the functions of AI that come pre-installed on any firm-owned devices. While this might not be feasible in instances involving AI that is integrally built-in to the underlying application, it is a start.

FAQ # 4 – Are there warning signs that should be communicated to all the employees relating to the potential for misuse of AI by outside third parties?

The most obvious example of a business-wide policy that might be helpful in mitigating the potential for harm from the use of AI in interactions involving third parties, such as vendors, customers and consultants would be from applications that record the user’s image and dialogue without their knowledge. We suggest that firms institute a policy of declining to have interactions with those outside of the business who cannot confirm that the interaction will be free of any sort of recording.

COMMERCIAL LITIGATION BASED ON THE USE OF ARTIFICIAL INTELLIGENCE (AI)

The Nissenbaum Law Group welcomes inquiries from businesses and people in the business community relating to potential lawsuits concerning the use of AI. Explore our Internet & Technology Law practice area or our Commercial Litigation practice.