Now more than ever, technology is influencing the way we do business, communicate, move through and around the world, access and manage our homes, receive and administer healthcare, make purchases, secure information, and protect our most valuable property. Morrison Foerster keeps pace with this rapidly evolving landscape across our internationally recognized corporate, finance, intellectual property, and litigation practices. MoFo Tech brings together our insights relating to fields such as blockchain and distributed ledger, cloud and as-a-service technologies, driverless cars, drones, fintech, computer hardware and software, the Internet of Things, semiconductors, and telecommunications. The MoFo Tech blog offers real-time, in-depth analyses of the trends and complex issues shaping the global technology industry.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Scott Llewellyn’s practice focuses on complex litigation in federal and state courts around the country, with an emphasis on patent and trade secret disputes. Over the past decade, he has worked on some of the most significant, high–profile IP cases involving technology for televisions, smartphones, and self–driving cars, relying on 40 years of experience with computer hardware and software. Scott also has significant experience with business divorce cases before courts and arbitrators, involving a mix of trade secret, patent, tort, and contract claims relating to technology development and implementation.Scott also has successfully tried general commercial arbitration and agency matters, briefed and argued various appeals in federal appellate court, and tried more than 20 cases for the Denver City Attorney’s office, most of them jury trials.Scott also has an active pro bono practice, having worked on a variety of criminal and immigration appeals, and having represented Colorado criminal defense and mental health organizations in high–profile suits against the state of Colorado for violations of the constitutional rights of defendants.At MoFo, Scott serves on the board of the Morrison & Foerster Foundation. In the broader legal community, he serves on the boards of the Colorado Lawyers Committee and Drop in the Bucket (a charity that builds wells and sanitation systems in sub–Saharan Africa).After law school, Scott clerked for the Honorable Clarence A. Brimmer, District of Wyoming, and the Honorable Diarmuid F. O’Scannlain, Ninth Circuit. He was also previously an adjunct professor at the Georgetown University Law Center.

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Partner

Scott Llewellyn’s practice involves complex litigation before state and federal courts around the country, with an emphasis on patent and trade secret disputes for high-tech companies, to which he brings more than 35 years of experience with computer hardware and software, in particular relating to the processing and transmission of audio, video, voice, and other types of data. Mr. Llewellyn has also tried commercial arbitration and agency matters; briefed and argued various appeals in federal appellate court; and tried more than 20 cases for the Denver city attorney’s office, most of them jury trials.

Scott F. Llewellyn

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MoFo Tech brings together legal insights and in-depth analyses on trends and complex issues shaping the global technology industry, covering fields such as blockchain and distributed ledger, cloud and SaaS technologies, driverless cars, drones, FinTech, computer hardware and software, the IoT, semiconductors, and telecommunications.

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MoFo Tech brings together legal insights and in-depth analyses on trends and complex issues shaping the global technology industry, covering fields such as blockchain and distributed ledger, cloud and SaaS technologies, driverless cars, drones, FinTech, computer hardware and software, the IoT, semiconductors, and telecommunications.

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Current State of the AI VC Financing Market

MoFo Tech Law Summit – Tech and Antitrust: Policy Shifts in the Second Trump Administration

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Cybersecurity is a key risk factor for emerging applications of artificial intelligence to medical devices. Products failing to address security risks may leave themselves vulnerable to cyberattacks. Bad actors target hospitals and healthcare systems, in particular through ransomware, credential harvesting, or device theft. According to an IBM report, the average cost of a healthcare data breach is now $10.1 million per incident, and the healthcare industry suffered the most expensive data breach costs of any industry examined in the report. AI opens the sector to a new potential liability as researchers have shown that AI models can be tricked using falsified medical images. Industry participants should be aware that, while the FDA has generally treated the healthcare sector as victims with respect to cyberattacks, regulators may be adjusting their view. In 2022, the FDA released draft cybersecurity guidance stating that it would withhold premarket clearance or approval of a medical device if cybersecurity is not adequately addressed. To mitigate these risks, companies may consider adversarial training for their AI models. Pre-generating adversarial data to teach the model that this data is manipulated may make the device’s diagnostic tools more robust.﻿This post is a part of a series on trends in the artificial intelligence space for 2023, authored by MoFo lawyers.

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Erin Bosman is chair of MoFo’s Class Actions and Mass Torts Practice Group and is a founder and co-head of the Artificial Intelligence Group. Clients value her business strategy, seeking her comprehensive counsel throughout the product life cycle, especially in high-stakes litigation and product recalls.

Erin M. Bosman

Erin Bosman is chair of MoFo’s Class Actions and Mass Torts Practice Group and is a founder and co-head of the Artificial Intelligence Group. Clients value her business strategy, seeking her comprehensive counsel throughout the product life cycle, especially in high-stakes litigation and product recalls.

Erin Bosman

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Spencer is an associate in the Litigation Department of Morrison Foerster’s New York office.

Spencer N. Migotsky

Spencer Migotsky

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AI Trends for 2023 - AI Diagnostic Tools and Cybersecurity Risk

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Cybersecurity is a key risk factor for emerging applications of artificial intelligence to medical devices. Products failing to address security risks may leave themselves vulnerable to cyberattacks. Bad actors target hospitals and healthcare systems, in particular through ransomware, credential harvesting, or device theft.

 AI Trends for 2023 - AI Diagnostic Tools and Cybersecurity Risk

Both domestically and internationally, in 2023 we expect to see continued government scrutiny and regulation of AI tools and their use.<ul><li>AI Bill of Rights. In October 2022, the White House released the <a href="https://www.whitehouse.gov/wp-content/uploads/2022/10/Blueprint-for-an-AI-Bill-of-Rights.pdf">Blueprint for an AI Bill of Rights: Making Automated Systems Work for the American People</a> (the “Blueprint”). The Blueprint outlines five principles and related practices designed to “support the development of policies and practices that protect civil rights and promote democratic values in the building, deployment, and governance of automated system.” The five principles are: (1) safe and effective systems; (2) algorithmic discrimination protections; (3) data privacy; (4) notice and explanation; and (5) human alternatives, consideration, and fallback. The Blueprint followed on the heels of the White House’s release in September <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/08/readout-of-white-house-listening-session-on-tech-platform-accountability/">of </a><a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/08/readout-of-white-house-listening-session-on-tech-platform-accountability/">six principles for enhancing competition and tech platform accountability</a>.</li><li>Additional Federal Guidance on AI Risk Management. In January 2023, the National Institute of Standards and Technology (NIST) is scheduled to release its <a href="https://www.nist.gov/itl/ai-risk-management-framework">AI Risk Management Framework</a> (the “Framework”) and corresponding Playbook (the “Playbook”) (a draft of the Playbook is available; recordings from the October 2022 workshop where the Framework was discussed can be found <a href="https://www.nist.gov/news-events/events/2022/10/building-nist-ai-risk-management-framework-workshop-3">here</a>). The Framework provides a process for managing AI risks.</li><li>Local Regulation in the United States. In addition to AI-specific laws governing the use of AI in employment decisions in Illinois and Maryland, in November 2021, the New York City Council passed the <a href="https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=4344524&GUID=B051915D-A9AC-451E-81F8-6596032FA3F9">Automated Employment Decision Tool Law</a> (AEDT). While originally scheduled to take effect on January 1, 2023, in response to substantial public comment on <a href="https://rules.cityofnewyork.us/wp-content/uploads/2022/09/DCWP-NOH-AEDTs-1.pdf">the proposed implementing rules</a> and the need to have a second public hearing on them, on December 12, 2022 the New York City Department of Consumer and Worker Protection (“NY-DCWP”) announced that its enforcement of AEDT would be pushed back to April 15, 2023. The AEDT prohibits an employer or employment agency from using an automated employment decision tool (“tool”) to screen a candidate or employee for an employment decision unless (1) the tool is subject to a bias audit within the year prior to its use; (2) a summary of the results of the bias audit and the date the tool was distributed are published on the relevant employer’s or employment agency’s website prior to use of the tool, along with a notice that the tool is being used at least ten days prior to its use; (3) candidates are allowed to request an alternative selection process or accommodation (although an employer or employment agency is not required to provide an alternative selection process); and (4) information about the type of data collected for such tool and the source of data and the relevant employer’s or employment agency’s retention policy are made available to candidates. Given ambiguities in the AEDT, in October 2022 the New York City Department of Consumer and Worker Protection published <a href="https://rules.cityofnewyork.us/wp-content/uploads/2022/09/DCWP-NOH-AEDTs-1.pdf">proposed rules regarding implementation of the AEDT</a>. We may see the first litigation around implementation of the AEDT in 2023.</li><li>EU AI Act. The EU is finalizing the <a href="https://artificialintelligenceact.eu/">AI Act</a>, its first comprehensive regulation of AI systems. The proposed law regulates AI systems based on the AI’s application classification in one of three risk categories. More detail on the AI Act and AI Regulation in Europe can be found <a href="https://www.mofo.com/resources/insights/221005-ai-regulation-in-europe">here</a>.</li></ul>﻿This post is a part of a series on trends in the artificial intelligence space for 2023, authored by MoFo lawyers.

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Tessa J. Schwartz, partner, has extensive experience in complex intellectual property and technology law, copyright law, and patent litigation.

Tessa Schwartz

Tessa Schwartz has an active practice counseling companies on intellectual property and technology transactions issues, and negotiating complex intellectual property and commercial agreements.

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AI Trends for 2023 - Increased Government Scrutiny of AI

In the Public Eye: USPTO Issues Report on AI

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Both domestically and internationally, in 2023 we expect to see continued government scrutiny and regulation of AI tools and their use.    

AI Trends for 2023 - Increased Government Scrutiny of AI 

AI bots will continue to surprise and challenge us in the year ahead, as issues as divergent as the importance of algorithmic transparency in recruiting to student cheating (through use of AI bots to generate reports). Chatbots have been used for some time now in customer support applications and other business use cases. But as AI bots become “smarter,” the legal and ethical issues become more complex and interesting. Both the output of AI bots and the queries raise thorny issues. Take, for example, queries that generate results that can be used for purposes that are unethical or illegal. Or queries of AI bots that generate results that endanger individuals or groups. Determining who is responsible, from both a legal and an ethical perspective, remains an open question that is sure to generate significant debate in the year ahead.﻿This post is a part of a series on trends in the artificial intelligence space for 2023, authored by MoFo lawyers.

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Stephanie assists companies with technology and life sciences transactions, representing both private and public companies, from emerging growth through the Fortune 50. In particular, Stephanie focuses on helping companies that leverage data through technology in structuring their business and commercial transactions.

Stephanie Sharron

Stephanie Sharron is partner in the Palo Alto office and a member of the firm’s Technology Transactions Group. Clients turn to Ms. Sharron for advice on how to leverage data through technology and the related issues that apply to their business models in light of the rapid changes in business, technology and law.

Stephanie Lynn Sharron

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AI Trends for 2023 - AI Bots

Supreme Court Restricts the Extraterritorial Reach of U.S. Patent Law for Exported Goods

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AI bots will continue to surprise and challenge us in the year ahead, as issues as divergent as the importance of algorithmic transparency in recruiting to student cheating (through use of AI bots to generate reports). 

AI Trends for 2023 - AI Bots

Technology companies, researchers, content creators, and lawmakers will continue to grapple with the thorny copyright issues related to artificial intelligence (AI) and algorithmic outputs. In 2023, we expect to see continued litigation and policy discussions regarding the following topics.<ul><li> Authorship of AI algorithm generated works. In 2022, the U.S. Copyright Review Board confirmed that copyright protection only extends to works of human authorship and rejected a copyright registration for an image created entirely by an AI. What has not been answered is how much a human can use AI tools in the creation of a work before that work will no longer be considered a work of a human author.</li><li>Whether the outputs from certain deep learning AI systems can infringe copyrighted works. In the United States, copyright infringement occurs when anyone violates the exclusive rights of the copyright owner. Courts also require the infringement to result from the defendant’s “volitional conduct,” though courts differ in their interpretation of what that means. In 2023, we expect debate regarding whether infringement occurs where outputs of sophisticated deep learning AI systems are attenuated from anyone’s (i.e., a human’s) volitional act.</li><li>Use of copyrighted works as training data for machine learning (ML). ML requires massive amounts of machine training data. Whether courts agree that the use of copyrighted materials as training data qualifies as fair use will be, as was the case with other disruptive technologies, critical to the future of AI innovation.</li></ul>This post is a part of a series on trends in the artificial intelligence space for 2023, authored by MoFo lawyers.

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AI Trends for 2023 - Generative AI in the Spotlight

The Collision of AI’s Machine Learning and Manipulation: Deepfake Litigation Risks to Companies from a Product Liability, Privacy, and Cyber Standpoint

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Technology companies, researchers, content creators, and lawmakers will continue to grapple with the thorny copyright issues related to artificial intelligence (AI) and algorithmic outputs. In 2023, we expect to see continued litigation and policy discussions regarding the following topics.

AI Trends for 2023 - Generative AI in the Spotlight

In September 2022, the U.S. Food & Drug Administration (FDA) released its Clinical Decision Support (CDS) Software Guidance and the final report on the Software Pre-Certification Pilot Program. The new FDA policies move away from prized flexibilities in the previous guidelines governing software products. In the new and final CDS Guidance, FDA modified its interpretation of each of the four criteria in section 520(o)(1)(E) of the Federal Food, Drug, and Cosmetic Act, significantly narrowing what FDA considers exempt from regulatory authority. FDA also released its report, Digital Health Software Precertification (Pre-Cert) Pilot Program: Tailored Total Product Lifecycle Approaches and Key Findings, detailing the results of the pilot program and ultimately shutting down the initiative. FDA originally envisioned the precertification program as a way to adapt regulatory processes originally intended for hardware medical devices to match the faster pace of development and update cycles of software as a medical device, particularly artificial intelligence and machine learning functions. Although FDA reported that the pilot provided key insights and a better understanding of the concepts in the proposed program, it concluded that it lacked statutory authority for the program and that implementing it “would require a legislative change.” At year end, best practices, materials, and potential product risks in the digital health industry are still novel concepts. To ensure successful continued development of these products, medical device manufacturers will need to stay up to date on the evolving standards in this space as we enter 2023.This post is a part of a series on trends in the artificial intelligence space for 2023, authored by MoFo lawyers.

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AI Trends for 2023 - FDA Regulatory

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In September 2022, the U.S. Food & Drug Administration (FDA) released its Clinical Decision Support (CDS) Software Guidance and the final report on the Software Pre-Certification Pilot Program. The new FDA policies move away from prized flexibilities in the previous guidelines governing software products. 

AI Trends for 2023 - FDA Regulatory

The prevalence and power of AI technologies are rapidly expanding, both at the captivating cutting-edge of creative AI models like the DALL-E image generator and the ChatGPT chatbot, and in the increasing pervasiveness of household and industrial applications of AI systems like autonomous vehicles and intelligent virtual assistants.The ascendance of AI technologies continues to be clearly reflected in patent filing trends. Innovators have filed hundreds of thousands of patent applications directed to AI-related inventions in recent years, making AI the fastest-growing major technology area in global patent filings, boasting a 28% average annual growth rate from Q1 2018 to Q1 2022, according to a report by GlobalData. The highest-volume patent filing areas within the AI space have been machine learning (ML) models, speech recognition, image analysis, and natural language processing systems, while other areas seeing rapid AI patenting include autonomous vehicles, robotics, medical devices, laboratory and assay equipment, bioinformatics, chemometrics, drug discovery, diagnostics, and personalized medicine.The United States Patent and Trademark Office (USPTO) has also recognized the increasing importance of patenting in the AI space. In June 2022, the USPTO kicked off its AI and Emerging Technology Partnership, a cooperative effort between the USPTO and the AI community that the USPTO says will “foster and protect innovation in Artificial Intelligence (AI) and Emerging Technologies (ET) and bring those innovations to impact to enhance our country’s economic prosperity and national security and to solve world problems.” Along with this engagement effort, USPTO patent eligibility guidance has continued to assist patent applicants in drafting patent-eligible claims protecting AI and ML inventions.Finally, global patent offices and courts continue to align behind the conclusion that—while patenting AI technologies is critically important—AI systems themselves cannot be named as inventors under existing patent systems. In the U.S., the Federal Circuit held in August that an AI system does not constitute an “individual” under the Leahy-Smith America Invents Act (AIA) and therefore cannot be listed as an inventor on a patent. See Thaler v. Vidal, 43 F.4th 1207 (Fed. Cir. 2022). Left for another day, however, was the more difficult question of “whether inventions made by human beings with the assistance of AI are eligible for patent protection.” Id at 1213.This post is a part of a series on trends in the artificial intelligence space for 2023, authored by MoFo lawyers.

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Jon Bockman is the head of the firm’s Technology Patent Practice. In this capacity, he leads the firm’s prominent group of patent practitioners with degrees in electrical engineering, mechanical engineering, computer science, computer engineering, chemical engineering, biomedical engineering and physics. 

Jonathan Bockman

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Of Counsel

Josh Crawford's practice focuses on domestic patent prosecution, international patent portfolio management, patent infringement and validity determinations, inter partes review proceedings, and IP lit

Joshua A. Crawford

Joshua Crawford

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AI Trends for 2023 - AI Technology Leads Patent Filing Growth

AI Trends For 2022 - AI For Natural Language 

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The prevalence and power of AI technologies are rapidly expanding, both at the captivating cutting-edge of creative AI models like the DALL-E image generator and the ChatGPT chatbot, and in the increasing pervasiveness of household and industrial applications of AI systems like autonomous vehicles and intelligent virtual assistants.



AI Trends for 2023 - AI Technology Leads Patent Filing Growth

AI as applied to manufacturing will continue to trend upward, along with associated product liability concerns. Manufacturers will continue to seek out and implement solutions that integrate tools that use AI (including machine learning) to automate the manufacturing floor. Vendors of these tools may seek to require human oversight of their implementation, as well as engagement by the manufacturer in decision-making relating to use of such tools. As these tools are deployed, expect to see increasing attention focused on the potential safety and product liability issues that could arise from such automation, both in terms of safety of the manufacturing plant itself and the products manufactured in the plant.This post is a part of a series on trends in the artificial intelligence space for 2023, authored by MoFo lawyers.

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AI Trends for 2023 - AI in Automated Manufacturing

AI Trends For 2022 - Augmented Reality and Digital Twin Technology

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AI as applied to manufacturing will continue to trend upward, along with associated product liability concerns. Manufacturers will continue to seek out and implement solutions that integrate tools that use AI (including machine learning) to automate the manufacturing floor. 

AI Trends for 2023 - AI in Automated Manufacturing

Improvements in AI’s image modeling and natural language processing capabilities have opened up new opportunities for content creators in business and artistic fields. Specialized AI models are being used by marketing teams to generate content like blogs, social media posts, emails, advertisements, and other consumer-facing content. AI tools are also being used to process individualized customer data to create personalized content that is more likely to be read and shared by a target audience. Creative professionals are also using AI as a tool to create visual and literary art, such as writing poetry and generating artworks with specified subjects and styles. While human involvement is still needed for many aspects of AI-based content creation, such as inputting prompts and editing AI-generated works, more intelligent models are continuing to chip away at the need for human involvement.As the use of generative AI becomes more widespread, more and more fields will begin to employ AI tools for content creation. With even smarter and more efficient AI models on the horizon, we can expect these trends to continue in 2023.﻿This post is a part of a series on trends in the artificial intelligence space for 2023, authored by MoFo lawyers.

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Anna Yuan’s practice focuses on patent prosecution, IP due diligence, post-grant proceedings, and IP litigation support. 

Anna Yuan

AI Trends for 2023 ‒ Generative AI Continues to Make Content Creation Easier