Intellectual Property (IP) and Artificial Intelligence (AI) Under New York Law

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Artificial Intelligence (AI) has revolutionized industries worldwide, prompting businesses in New York to embrace AI technologies for innovation and efficiency. However, as AI systems generate new inventions, works, and processes, they raise critical questions about intellectual property (IP) rights. New York, as a global hub for technology and commerce, offers a unique legal framework for addressing these challenges. This article explores the interplay between AI and IP under New York law, emphasizing its implications for businesses and creators.

Ownership of AI-Generated Works

One of the most pressing issues is determining who owns the rights to works or inventions created by AI systems. Under U.S. copyright law, which applies in New York, authorship is traditionally limited to human creators. AI-generated works may not qualify for copyright protection if there is insufficient human involvement. Businesses must navigate this gap by:

  • Ensuring human oversight and creative input in the development of AI-generated works.
  • Drafting clear contracts with developers or users of AI systems to define ownership and usage rights.

Protecting AI Innovations

AI-driven innovations, including algorithms, software, and processes, can be protected under existing IP frameworks:

  1. Patents: Patent protection is available for AI inventions, provided they meet criteria for novelty, non-obviousness, and usefulness. In New York, businesses must ensure detailed and precise patent applications to avoid disputes.
  2. Trade Secrets: Proprietary AI algorithms and datasets can be safeguarded as trade secrets under New York’s adoption of the Uniform Trade Secrets Act. Companies should implement robust confidentiality agreements and security measures to maintain trade secret status.
  3. Copyrights: Software underlying AI systems is eligible for copyright protection. Businesses must register copyrights promptly to establish legal rights in case of disputes.

Contractual Considerations

New York law emphasizes the importance of contracts in defining IP rights related to AI. Key considerations include:

  • Ownership Agreements: Clearly specifying who owns AI-generated works or inventions in contracts with developers, employees, or contractors.
  • Licensing Terms: Defining how AI technologies and their outputs can be used, modified, or distributed.
  • Joint Development: Addressing ownership and profit-sharing in collaborative AI projects.

Liability for IP Infringement

Businesses in New York deploying AI systems must remain vigilant about potential IP infringement risks, such as:

  • Using datasets without proper authorization, which may lead to copyright or trademark violations.
  • Creating AI outputs that inadvertently infringe on existing IP rights.

Legal audits and due diligence are essential to mitigate these risks.

New York’s Role in IP Disputes

New York courts play a pivotal role in resolving IP disputes involving AI due to the state’s prominence in technology and business. Key trends include:

  • Case Precedents: New York’s courts are likely to influence the evolving interpretation of IP laws as applied to AI.
  • Jurisdictional Challenges: Businesses operating across states or internationally must address conflicts between New York law and other legal frameworks.

Future Implications and Recommendations

As AI continues to evolve, New York businesses should adopt proactive measures to safeguard their IP interests:

  1. Stay Informed: Monitor legal developments at both the state and federal levels, including potential legislative updates addressing AI and IP.
  2. Develop Policies: Implement internal IP policies tailored to the unique challenges of AI.
  3. Seek Expertise: Engage IP attorneys experienced in both AI and New York law to navigate complex legal landscapes.

Conclusion

The intersection of AI and intellectual property law presents unique opportunities and challenges for New York businesses. By understanding the current legal framework and adopting strategic measures, businesses can protect their innovations while navigating the evolving legal terrain. As New York continues to lead in technological advancements, it will play a crucial role in shaping the future of AI and IP law.

 

 

Alexander Paykin, Esq., Managing Director of The Law Office of Alexander Paykin, P.C., based out of New York, focused his practice in real estate and commercial litigation and complex transactions. His firm also provides technology and finance consultancy services to its clients, including other law firms throughout the US.  With a background spanning multiple countries and businesses in finance and IT, Paykin brings a unique perspective to his legal practice.  His firm is modeled as a high-tech, client-centered practice, focusing on efficient service delivery in litigation and complex transactions related to business, commerce, finance, and real estate. He also operates a real estate brokerage and a real estate holding company.  Mr. Paykin regularly teaches continuing legal education courses and has been published in prestigious legal journals. His writings cover topics such as mutual insurer demutualization, the business judgment rule, law practice management, and the use of artificial intelligence in modern law practice.
Mr. Paykin sits on multiple professional committees and the boards of three 501c3 non-profits, as well as a condominium board.
Connect with Alexander Paykin on social media:
Twitter/X: @Paykinlaw

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