Businesses use a variety of sources to get the things needed for business. For many, this includes hiring vendors to handle building websites, apps, automations, marketing tools and software. Historically, these tasks were done by a person, but many of them are shifting to at least partial use of artificial intelligence (AI) to handle coding and other technical aspects of the end product.
The business may assume that it owns everything that it pays for; however, that might not be the case. AI-assisted work can involve using training data, third-party tools, existing code libraries and prompts. Even if the vendor modifies those, the company may not own them.
Any business that has vendors creating code for anything needs to have a solid contract. This should include information about the transfer of ownership for the final deliverables. Without the proper information, the business may face limits when changing, using, selling or enforcing the rights to the produce.
Contract language matters when AI is involved
One of the most important things to include in the contract with the vendor is a detailed definition of the final deliverables. The contract should make it clear if AI or any third-party components were used in the development of the code. This should also include information about whether the business receives full ownership, a license or a right to limited use.
When AI tools are used, there is another issue that may come up. If a vendor uses the same AI-generated framework for multiple clients, it’s possible that a custom product won’t be exclusive. Ultimately, this could lead to claims that AI-assisted code is infringing on intellectual property rights, so that possibility should be covered in the contract.
Contracts that include AI-assisted components should clearly state which party is liable for defense costs, replacement work and other damages if an intellectual property claim is made due to the AI-assisted components.
While AI can help vendors work faster, which will get a company the code or product faster, this isn’t always beneficial. Having a clear contract can reduce the risk of the company facing legal claims down the road because of the product the vendor provided to the company. Working with someone who’s familiar with the evolution of AI in legal matters may be beneficial in these cases.