EU Approves World’s Most Comprehensive AI Law

The EU Council has now approved the AI Act, a law that sets comprehensive rules and regulations regarding the use of Artificial Intelligence Technology.

This law takes a ‘risk-based’ approach to AI, meaning that the law sets out different requirements based on the perceived threat that a technology may pose to society.

The law prohibits uses of AI that are considered “unacceptable” in terms of their risk level, as defined in the act. An example would be applications featuring so-called “social scoring” systems, that rank citizens based on aggregation and analysis of their data, predictive policing and emotional recognition in the workplace and schools.Medical devices, financial services, educational tools and autonomous vehicles that utilise AI are considered high-risk, as they pose a potential risk to the health, safety and rights of the public.

The first draft of the Act was proposed in 2021, long before OpenAI’s November 2022 launch of ChatGPT.  The high profile of this tool prompted the legislation to be modified, creating a special risk category of “General-purpose AI”.

Mathieu Michel, Belgium’s Secretary of State for Digitization made a statement on Tuesday, 21st May 2024 following the announcement by the EU Council:

“The adoption of the AI act is a significant milestone for the European Union. With the AI act, Europe emphasizes the importance of trust, transparency and accountability when dealing with new technologies while at the same time ensuring this fast-changing technology can flourish and boost European innovation.”

  • Mathieu Michel

Of course, while the EU are claiming that the new law will boost innovation, several of the big tech companies (like Amazon and Meta) have expressed concern that the burden of complying with the new requirements will harm innovation. What happens in practice will remain to be seen!

The Act will be fully applicable in just over two years’ time (expected to be sometime in June 2026), though some aspects will apply sooner.

This means there is some time to prepare, but nevertheless due to the complexity of the changes it would be prudent to consider the impact of the Act sooner rather than later!

But what does this mean from an intellectual property perspective? There are several areas to consider:

The Act sets transparency requirements around the use of generative AI, like ChatGPT. This will not be classified as high risk, but the Act clarifies how EU copyright law must be complied with.  Requirements include:

  • Disclosing that content was generated by AI
  • Designing the model to prevent it from generating illegal content
  • Publishing summaries of copyrighted data used for training

These copyright requirements may have a material impact on the way that software tools are designed and used and may increase the complexity of certain product development.

You should assess your technology stack to understand what is going to be covered by the legislation: first, to determine if your tools fall into the Act’s definition of “artificial intelligence” in the first place, and then what the risk category of the tools would be.

Similarly, we recommend reviewing your patent portfolio and your IP monetisation strategy to determine if the new legislation will have any impact on commercial activities and therefore IP value.  If any technology areas are deemed to be in the “unacceptable” or “high” risk categories, there could be an impact on IP licensing revenue, and this would need to be considered when making portfolio maintenance decisions or in making licensing revenue projections.

 

If you want to discuss your IP strategy and how this new Act may affect you, we would be glad to delve into further details with you!

-Gemma Clark

 

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