August 11th, 2023
In the era of online entrepreneurship and personal brand building, tools like Generative AI and ChatGPT are reshaping how business is done. However, while these tools offer immense benefits, they come with a host of legal risks. If you are an expert, professional, online educator, or online information entrepreneur, you’ll want to be aware of these potential pitfalls.
Legal Risk #1: Violating Ever-Changing Privacy Laws
The landscape of privacy regulations is constantly evolving. Using Generative AI tools can inadvertently place your business in violation of numerous privacy laws, especially if entering sensitive or protected information.
Legal Risk #2: Inadvertent Trade Secret Disclosure
The confidentiality of trade secrets is their most valuable asset. By inputting proprietary information into tools like ChatGPT, you risk making this confidential data public – voiding its “trade secret” status.
Legal Risk #3: Defamation or Negligence
Depend on ChatGPT outputs? Exercise caution. Generative AI is known for its “hallucinations” or inaccuracies. Being held liable for defamation or negligence based on false AI outputs is a genuine concern.
Legal Risk #4: Copyright Issues
Generative AI presents dual risks regarding copyright. There’s the danger that AI outputs might infringe on others’ copyrighted material. Simultaneously, you might also inadvertently risk protection of your own content. (And worse yet – someone else could actually receive your information as outputs and go seek protection of it before you do.)
Legal Risk #5: Employment Discrimination
Planning on using ChatGPT for candidate assessment? Think twice. These tools are trained on vast data sets, which almost certainly have inherent biases. This use could easily lead to employment discrimination or violations of related laws.
Legal Risk #6: Breaching FTC Truth-in-Advertising Rules
If you’re using generative AI for marketing, remember you’re still bound by truth-in-advertising regulations. It’s essential to ensure that all AI-generated content complies with these rules.
Legal Risk #7: Vicarious Liability for Third-Party Actions
When third-party vendors or contractors use generative AI when delivering services, content, or deliverables to your business or on behalf of your business, their actions could inadvertently introduce vicarious liability risks to your business.
If you’re integrating generative AI tools in your operations, consider these action points:
- ONE: Comply with all applicable privacy laws.
- THREE: Update internal business policies to cover use of generative AI tools.
- FOUR: Update or create disclaimers related to your client work or outputs that involve AI.
- FIVE: Update client service agreements to factor in AI tool outputs.
- SIX: Vet third-party providers, vendors & contractors to minimize vicarious liability.
- SEVEN: Update independent contractor or service agreements accordingly (to either exclude generative AI tools in the delivery of their services to you or on your behalf, or require disclosures or a vetting / review process in instances where such use is approved).
- EIGHT: Educate your team on generative AI and its permitted uses within your business.
- NINE: Stay informed and always prioritize the integrity of your brand (#slowyourroll). Make fully informed and ethical AI decisions on behalf of your business.
- TEN: Rigorously review all AI-generated content. ALWAYS.
The list above doesn’t encompass all the risks tied to the business use of generative AI or ChatGPT. It’s an introduction to the primary concerns you should consider before diving in or to reconsider your approach. If you are already using these tools in business, it’s time to evaluate your policies, disclaimers, and business agreements. For guidance on risk assessments or legal assistance, don’t hesitate to reach out and schedule a consultation. Your business deserves the best protection possible.
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DISCLAIMER: THE INFORMATION PROVIDED IN THIS POST MAY CONTAIN LEGAL INFORMATION, BUT DOES NOT CONSTITUTE LEGAL ADVICE. NO RELATIONSHIP, INCLUDING ATTORNEY-CLIENT RELATIONSHIP, HAS BEEN FORMED AS A RESULT OF THIS POST. YOU ARE ADVISED TO SEEK THE ADVICE OF AN ATTORNEY LICENSED IN YOUR STATE IF YOU HAVE ANY QUESTIONS.
© 2023 Heather Pearce Campbell, The Legal Website Warrior®