Tech & Sourcing @ Morgan Lewis

Please join us for the next installment of our Startup & Accelerate webinar series, focusing on key artificial intelligence considerations for emerging companies. In this webinar, partner Michael S. Ryan and of counsel Brian P. Slough will explore important legal and technology issues and questions that startups and emerging companies should consider with respect to the development, licensing, and use of AI technologies.

One of the commonly advertised features of AI is that it is beneficial for automation and increasing productivity. When a company considers improving its productivity and employing an AI tool, it will typically go through a contracting process with the service provider and assess the terms of use and associated risks for the business. But what happens if an employee presses on and starts using an AI tool that was not vetted by the company?

As we continue to see AI steadily and increasingly be incorporated into service offerings, businesses should pay special attention to previously “standard” provisions when contracting for the provision and use of services that incorporate AI. This is especially true considering there may be situations where service providers use AI at some point in the workstream without the recipient even realizing.

In our latest blog post on preparing for the EU’s Digital Operational Resilience Act (DORA), entering into force on January 17, 2025, we take a look at second-level requirements under DORA covering the classification and reporting of major information and communications technology (ICT) related incidents. These requirements will need to be addressed through operational risk management frameworks and contract remediation efforts with technology vendors.

Beginning January 17, 2025, financial entities based in the European Union must have in place processes and policies, and mandatory contract provisions with their third-party technology vendors, that comply with the EU Digital Operational Resilience Act (DORA).

Today, cutting-edge technology and how it is being used garners news coverage, but how companies build these products and get them to their customers is often overlooked. Companies negotiate and contract for the development and manufacture of the products as well as the sometimes complicated logistics necessary to deliver them to customers quickly in an increasingly demanding marketplace.

The widespread technology outage on July 19, 2024 highlighted major potential issues that can arise when service providers rely on technology to provide critical services. The effects of the outage were felt by critical service providers across numerous industries, including airlines, banks, public transit, healthcare, and media. Because we live in a world that is increasingly reliant on technology, if a critical piece of technology fails or introduces a flaw to a system that relies on that particular technology, it can have extreme consequences, as many experienced on July 19.

Telemarketing has long been a favored method for businesses to reach potential clients. However, with the significant evolution of data privacy and consumer protection laws, telemarketing is now intertwined with numerous legal challenges and concerns.

In Part 1 of our series on Text-to-Speech AI Models (TTS Models), we highlighted questions that should be considered from an intellectual property perspective. In this Part 2, we provide a high-level overview of data protection concerns of which to be aware. Given the specific nature of the product source—voice being the core element of input and output data for TTS Models—it is crucial to be mindful of data protection requirements, especially in an era of heightened attention to privacy rights.

Text-to-speech AI models (TTS Models) are rapidly evolving within the broader spectrum of AI solutions, offering tremendous potential for businesses. These models can analyze text and speech as well as generate anything from simple sounds to high-quality, natural-sounding speech, which capability makes TTS models highly appealing for commercial use, including use in connection with virtual assistants, audiobooks, elearning platforms, and customer service functions.