Using AI Technology? Here's Why You NEED A Disclosure!
Are you using AI technology in your business? If so, did you know you need to disclose the use of AI to your clients? You need a legal disclosure to ensure transparency and protect yourself legally. Here is why:
Clarifying AI Technology Usage in Client Work through Legal Disclosures
First, let's talk about what AI technology is. Artificial intelligence (“AI”) is a system that can learn and improve on its own based on data input. It's used in almost every industry including healthcare, finance, education, legal, marketing, photography, and content creation. The world is seeing that AI can be a tool to help you become more efficient and productive, versus halting its abilities due to the fear of the unknown.
Why do you need a legal disclosure when using AI technology for your clients? Well, for starters, it's important to be transparent about the use of AI in your work. Your clients have a right to know that you are not the only contributor to your work and that AI may be used to produce the final products they're paying for. A legal disclosure at its core protects you from any legal issues that may arise from the use of AI. If there's a dispute or lawsuit related to the work produced by an AI system, that disclosure will show that you were transparent about your use of the technology and that the client was aware of it.
What should be included in a legal disclosure? First, it's important to explain how you may use AI technologies. You should be only using AI as a tool to supplement, edit, enhance or find ideas for your work product. AI should not be taking over your entire job. Explaining this to your client will alleviate any confusion or misunderstandings on the client's part about the work you are putting in and the work AI is doing for you.
Additionally, in a work-made-for-hire scenario, the disclosure should also state that while you will assign the copyright over to the client they may need to disclose AI technology contribution if they register the copyright rights. This is super important for you to know upfront so you can inform your client of this in case they ever go to the U.S. Copyright Office and submit an application without making this legal disclosure within their application. They have the right to know that there may be an extra step when they go to register their work product.
Disclosing AI Technology vs. Subcontractor Work
Let's dive into the differences between work-made-for-hire independent contractors and utilizing AI technology as an ‘assistant’. These two concepts may seem similar, but they are actually quite different. When you hire a subcontractor to work on a project, you have a lot of control over the work they produce. You're monitoring their progress and making sure they're meeting your standards. Plus, most subcontractors transfer their copyright rights to you, so you have full ownership of the work they produce. Not to mention, in most cases, they have their own liability insurance to cover their potential errors and omissions.
However, things get a bit more complicated with AI technology. It can be difficult to discern what work was actually produced by you or the robot. You have less control over the output of an AI system, and you're not technically "hiring" it to work for you. This can lead to copyright issues down the line, and it just doesn't feel right ethically to not disclose the use of a robot when giving a product to your clients.
Imagine this: You're working on a project for a client and you decide to use an AI system to speed up the process. The output is great, and the client is thrilled with the final product. However, they later find out that an AI system was used and that they now have to notify the Copyright Office of AI contributions for their copyright registrations. They may feel like they were deceived by you since they were not told about this ahead of time. This could compromise your reputation and damage the trust you've built with your clients. Whereas, if you had used a subcontractor in this situation there would be no extra step regarding notification to the Copyright Office for their copyright registrations (because contractors are humans and that isn’t required per the Copyright Office’s regulations).
There is a clear difference between work-made-for-hire and AI technology. While subcontractors offer more control and ownership of their work, using AI systems can add a level of complexity regarding copyright, legalities, and ethics. The key is to be transparent and communicate with your clients about using AI technology. By doing so, you can build trust and continue to create amazing work.
The good news is that you do not have to write a disclosure to add to your client contracts yourself! We have ready-made disclosures specifically designed for your business that you can easily copy and paste into your client contracts and service contracts. Save time and ensure that you're meeting all the necessary legal requirements by grabbing yours today.
Service providers grab this clause → AI Disclaimer for Service Providers
THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. EVERY SITUATION IS DIFFERENT & IS FACT-SPECIFIC. A proper legal analysis is necessary based on your location and contract. Consult an attorney in your home state for advice regarding your contract or specific legal situation.