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AI and the IP indemnity clause, Part 2

Updated: Oct 6, 2023

An interesting development regarding the indemnity that Microsoft is willing to give customers when it comes to AI-generated content. See https://blogs.microsoft.com/on-the-issues/2023/09/07/copilot-copyright-commitment-ai-legal-concerns/


As customers ask whether they can use Microsoft’s Copilot services and the output they generate without worrying about copyright claims, Microsoft is providing a straightforward answer: yes, and if you are challenged on copyright grounds, it will assume responsibility for the potential legal risks involved.


Of course, it will have caveats to it, but it is nice to see a company raising its head above the parapet.


As AI applications become more and more acceptable for use with some employees adopting them for routine daily work, many businesses will find themselves unprepared for some legal ramifications that come with such use, specifically in areas such as HR, IP, and data privacy. We already see lawyers grappling with these issues with many of them working on drafting acceptable use policies for AI. Yes, a policy is required for compliance purposes, but how many employees will read it let alone follow it?


As many developers begin to use AI applications to test, correct, and develop proprietary software, I believe that the IP boilerplate clause that we use to see in contracts that promise an unlimited worldwide liability for an IP infringement will now be up for debate. Let me know what you think.

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