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

MoFo Tech Law Summit – Responsible Tech: Policy Becomes Practice

AI Dynamics: Regulatory Landscape and Industry Insights

Introducing the MoFo Tech Law Summit – Innovation Under Regulation

The EU is ramping up strict and tort product liability for faulty AI and software. The current revision of the Product Liability Directive 85/374/EEC includes AI, software, and even digital services in the IoT space in the scope of “products” that fall under strict product liability. The revision expands the scope of potentially liable parties to include certain fulfillment service providers and online marketplaces. The revised Product Liability Directive will allow consumers to seek compensation from non-EU manufacturers’ representatives. Alarmingly, the draft removes the liability cap for strict liability that currently applies. The revision includes some procedural changes: It introduces a form of discovery, whereby liable companies will be required to disclose evidence that a claimant will need to prove their case in court. Furthermore, there is a shift in the burden of proof where the claimant may, due to high technical and scientific complexity, only be required to demonstrate a likelihood that the damage was caused by the product. The parallel draft of an AI Liability Directive aims at applying the same standards (in particular the shift in the burden of proof) to product liability under national tort laws.This post is a part of a series on trends in the artificial intelligence space for 2023, authored by MoFo lawyers.

Kristina has more than 20 years of experience advising clients across many industries, including the software, internet, mobility, media, and consumer electronics industries, with a particular focus o

Kristina Ehle

Kristina Ehle has more than 20 years of experience advising clients across many industries, including the software, internet, mobility, media, and consumer electronics industries, with a particular focus on technology-driven and IP-heavy transactions.

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Counsel

Stephan is counsel at Morrison Foerster’s German office in Berlin. He focuses on advising major German and international clients with regard to drafting and negotiating complex technology-related agreements and on matters concerning cloud computing, software, e/m-commerce, digital media, intellectual property rights, consumer rights, electronic communication, big data and cyber security requirements.

Stephan Kreß

Stephan is counsel at Morrison Foerster’s German office in Berlin. As a member of the technology transactions group, he focuses on advising major German and international clients with regard to drafting and negotiating complex technology-related agreements and on matters concerning cloud computing, software, e/m-commerce, digital media, intellectual property rights, consumer rights, electronic communication, big data and cyber security requirements.

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AI Trends for 2023 - Increasing Product Liability for AI and Software in the EU

In the Public Eye: USPTO Issues Report on AI

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The EU is ramping up strict and tort product liability for faulty AI and software. The current revision of the Product Liability Directive 85/374/EEC includes AI, software, and even digital services in the IoT space in the scope of “products” that fall under strict product liability. The revision expands the scope of potentially liable parties to include certain fulfillment service providers and online marketplaces. The revised Product Liability Directive will allow consumers to seek compensation from non-EU manufacturers’ representatives

AI Trends for 2023 - Increasing Product Liability for AI and Software in the EU

While the AI industry has continued to attract venture capital and produce exits in 2022, headwinds in the venture capital and broader capital markets have, as compared to 2021, resulted in a decrease in the number of venture capital financings and exits, as well as a decrease in the total amount raised by AI companies in such financings and achieved by AI companies in such exits. According to PitchBook, AI companies have raised only $59.3 billion year-to-date through Q3 2022 across 4,554 financings, representing a 13.1% decrease year over year, although the industry appears to be poised to exceed the total deal value and deal count numbers set in 2020 ($65 billion raised across 5,543 financing transactions). By contrast, in 2021, AI companies raised $118.9 billion across 7,078 financings.CBInsights reports similar trends on the financing side of the marketplace, with only $8.3 billion invested in AI companies in Q3 2022, the lowest quarterly amount raised since Q3 2020 and a 31% drop from Q2 2022 (mirroring a general trend in the venture industry), including a 39% quarter-over-quarter drop in mega-round funding and a 59% drop in Silicon Valley AI funding.With respect to exits (buyouts, acquisitions and public offerings), PitchBook reports that, in contrast to exits in 2021 which totaled nearly $250 billion, AI company exits through Q3 2022 total less than $50 billion, with only $1.9 billion in disclosed value in Q3 2022, down from $15 billion in Q2 2022. Increased costs in capital across the marketplace, as well as significant challenges in the IPO marketplace, have contributed to making both financings and exits more challenging for AI companies and technology companies in general, a trend that is expected to continue through the remainder of Q4 2022 and into 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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Co-Chair of Emerging Companies + Venture Capital Practice

Jim has extensive experience representing private and public companies and investors in significant business transactions from formation through liquidity. His practice focuses on mergers and acquisitions, venture capital financings, and emerging company counseling. His clients span a broad range of industries, with a concentration in life science and technology companies.

Jim Krenn

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Of Counsel

Andrew Dixon is a corporate Of Counsel in the firm's San Diego office.

Andrew P Dixon

Andrew Dixon

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AI Trends for 2023 - AI Industry Faces Continued Headwinds In 2023

AI Trends For 2022 - Export Control/CFIUS

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While the AI industry has continued to attract venture capital and produce exits in 2022, headwinds in the venture capital and broader capital markets have, as compared to 2021, resulted in a decrease in the number of venture capital financings and exits, as well as a decrease in the total amount raised by AI companies in such financings and achieved by AI companies in such exits. 


AI Trends for 2023 - AI Industry Faces Continued Headwinds In 2023

On October 3, 2022, the United States Supreme Court granted certiorari in Gonzalez v. Google LLC, No. 21-1333, to address the scope of Section 230 of the Communications Decency Act. The Court will consider whether Section 230(c)(1) immunizes website operators and other online service providers when they use algorithms to recommend content to users, specifically terrorism-related videos posted on YouTube by other users of the video-sharing service.  Section 230(c)(1) is famously concise, having been referred to as the “the twenty-six words that created the internet.” It says simply “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” Since its passage over 25 years ago, courts across the country have often construed the law to provide broad immunity to online service providers that host user-generated content. Section 230 has facilitated the growth of the modern interactive Web, by protecting companies that host user-generated content from potential liability. But the law has come under intense scrutiny in recent years, with both courts and legislatures chipping away at this important safe harbor.Read our <a href="https://www.mofo.com/resources/insights/221007supreme-court-to-address-section-230-for-first-time">client alert.</a>

L.W. v. Snap Inc.,  675 F. Supp. 3d 1087 

Wamai v. Industrial Bank of Korea , 2021 WL 3038402 

In re Maxus Energy Corp.

In re Energy Future Holdings Corp.

James Paul McCartney v. Sony/ATV Publishing LLC

NFL Enterprises LLC v. EchoStar Satellite LLC

VOOM HD Holdings LLC v. EchoStar Satellite LLC

Change Healthcare Operations, LLC v WebMD Health Corp. 2017 WL 6610411  

Register.com, Inc. v. Verio, Inc.

Komag, Inc. v. Asahi Glass Co. Ltd.

Asante Techs. Inc. v. PMC–Sierra, Inc.

Biovail Corp. v. S.A.C. Capital Mgmt. 2009 WL 2844404 

Multi–Faceted Investigation of University Grants

Confidential International Arbitrations

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Alex advises on all aspects of complex commercial litigation in federal and state trial and appellate courts and in arbitration. He has represented U.S. and international clients in actions involving 

J. Lawrence

J. Alexander Lawrence

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.

Aaron Rubin

Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

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Associate

Dillon Kraus is an associate in Morrison Foerster’s Privacy + Data Security, Investigations + White Collar Defense, and Commercial Litigation + Trial groups and is based in the firm’s New York office.

Dillon Kraus

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Supreme Court to Address Section 230 for First Time

California Supreme Court Clarifies Standards for Whistleblower Claims Under California Labor Code Section 1102.5

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On October 3, 2022, the United States Supreme Court granted certiorari in Gonzalez v. Google LLC, No. 21-1333, to address the scope of Section 230 of the Communications Decency Act. The Court will consider whether Section 230(c)(1) immunizes website operators and other online service providers when they use algorithms to recommend content to users, specifically terrorism-related videos posted on YouTube by other users of the video-sharing service.  

Supreme Court to Address Section 230 for First Time

The Federal Circuit made headlines when it <a href="https://cafc.uscourts.gov/opinions-orders/21-2347.OPINION.8-5-2022_1988142.pdf">affirmed</a> the U.S. District Court for the Eastern District of Virginia’s <a href="https://www.dwt.com/-/media/files/blogs/artificial-intelligence-law-advisor/2021/09/thaler-v-hirshfeld-decision.pdf">holding</a> that an artificial intelligence (AI) cannot qualify as an “inventor” under the Patent Act – only (human) “individuals” can. The patent application at the heart of the case listed a single inventor with the given name “DABUS” and the family name “(Invention generated by artificial intelligence).” The district court had granted the motion for summary judgment of the United States Patent and Trademark Office (USPTO) after the applicant and assignee of the patent application, Stephen Thaler, challenged the <a href="https://www.uspto.gov/sites/default/files/documents/16524350_22apr2020.pdf?utm_campaign=subscriptioncenter&utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=">USPTO’s denial of his petition</a> and requested reconsideration of the Office’s dismissal of his patent application for failure to identify each inventor by his or her legal name. While the Federal Circuit opinion is important, we anticipate the real-life upshot of its holding will be minimal. As the court said, “we are not confronted today with the question of whether inventions made by human beings with the assistance of AI are eligible for patent protection,” and yet that is the question that is most relevant today. (Thaler v. Vidal, 2021-2347, <a href="http://cafc.uscourts.gov/opinions-orders/21-2347.OPINION.8-5-2022_1988142.pdf">2022 WL 3130863</a> (Fed. Cir. Aug. 5, 2022) at 10.)The CaseThaler v. Vidal hinged on a straightforward question of statutory interpretation. Under the Leahy-Smith America Invents Act (AIA), to be accepted, patent applications must include the name of the inventor(s) of the relevant invention along with an oath from such inventor(s) claiming the invention as their own. The AIA in turn defines “inventor” as “the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.” 35 U.S.C. § 100(f) (emphasis added). The AIA does not define “individual.”In the application, Thaler listed only “<a href="https://en.wikipedia.org/wiki/DABUS">DABUS</a>” (Device for the Autonomous Bootstrapping of Unified Sentience) as the inventor, claiming the invention was entirely created by the AI. The issue came down to whether an AI like DABUS could be the “individual … who invented [ ] the subject matter of the invention.”As previewed, the important questions for businesses that use AI to create potentially patentable inventions are not, and likely will not be for some time, whether an AI can be the inventor but instead how much assistance (human) inventors may receive from an AI, and at what stages, before the humans are no longer considered to have conceived the invention and therefore are not the “inventors” – and Thaler v. Vidal provides no guidance with respect to those questions, which remain very much alive. Answering these questions may require refining or even redrawing the line between a true inventor who “contributes to the conception of the invention,” In re Hardee, 223 USPQ 1122, 1123 (Comm’r Pat. 1984)., and a non-inventor who merely has “general knowledge regarding the anticipated [results].” Bd. of Educ. ex rel. Bd. of Trustees of Fla. State Univ. v. Am. Bioscience Inc., 333 F.3d 1330, 1340 (Fed. Cir. 2003). In the latter case, the determination of inventorship may hinge upon the extent to which the AI may be characterized as a tool used by a human, rather than an independent intelligence. Given the exponential rise of use of AI in research and development, it may only be a matter of time before courts are faced with these questions.

Federal Circuit Agrees with the USPTO on Inventors: Only Human, After All

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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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Federal Circuit Agrees with the USPTO on Inventors: Only Human, After All

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The Federal Circuit made headlines when it affirmed the U.S. District Court for the Eastern District of Virginia’s holding that an artificial intelligence (AI) cannot qualify as an “inventor” under the Patent Act – only (human) “individuals” can. 

AI and machine learning technologies remain a focus of the U.S. government’s national security apparatus. AI is a key sector in the Unites States’ race against China to remain at the forefront in the development and deployment of emerging technologies, and a concern for its potential to be deployed for surveillance and repression.  The national security concerns manifest themselves across a number of regulatory regimes, most prominently export controls—the transfer of items and technology to non-U.S. entities—and CFIUS—an interagency committee to review the national security effect of foreign investments in U.S. businesses.  Since 2018, the U.S. government has identified AI and attendant software and technology as emerging technology areas for which additional export controls are necessary, but the Commerce Department has yet to issue significant new rules identifying such controls, except for a narrow rule addressing AI software for geospatial imagery analysis.  In the absence of such rules, however, companies should not assume the U.S. government is not concerned about the lawful or unlawful acquisition or transfer of their AI technology outside the United States.  Indeed, companies in the AI space must consider the implications of foreign investment in their business, as well as cross-border partnerships and technical licensing arrangements, especially if such activities are with partners in countries of particular concern to the U.S. government, like China and Russia.  <p style="box-sizing: inherit;margin-top: 0px;margin-right: 0px;margin-bottom: 1.25rem;margin-left: 0px;padding-top: 0px;padding-right: 0px;padding-bottom: 0px;padding-left: 0px;font-size: 1.0625rem;line-height: 1.6;text-rendering: optimizelegibility;font-variant-numeric: normal;font-variant-east-asian: normal;color: rgb(82, 83, 87);hyphens: manual;overflow-wrap: normal;">This post is a part of a series on trends in the artificial intelligence space for 2022, authored by MoFo lawyers.<div> </div>

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Charles Capito is a partner in both Morrison Foerster’s National Security and Government Contracts + Public Procurement practices.
In the National Security space, he has significant experience couns

Charles L. Capito

Charles Capito

AI Trends For 2022 - Export Control/CFIUS

AI and machine learning technologies remain a focus of the U.S. government’s national security apparatus. AI is a key sector in the Unites States’ race against 

Over the past few years, companies have piloted efforts to use augmented reality and digital twin technology to reduce development time and operating costs, speed up time to market, and enhance product or service development.  A digital twin is a virtual replication of a real-world object or process, like a jet or a factory manufacturing process.  Combined with augmented reality, companies have used these models to cut car and plane development time by years and to maximize production efficiencies by testing various changes virtually before implementing a final plan.  Use of this technology has been hampered by the lack of integrated tools for developing digital twin models, but tools are improving and the International Organization for Standardization (ISO) and other groups are developing standards and frameworks to promote more uniform development and application.  In 2022 and the future, expect to see continued adoption of this technology for simulation and prediction models that include the overlay of data with virtual models of physical objects and processes.<p style="box-sizing: inherit;margin-top: 0px;margin-right: 0px;margin-bottom: 1.25rem;margin-left: 0px;padding-top: 0px;padding-right: 0px;padding-bottom: 0px;padding-left: 0px;font-size: 1.0625rem;line-height: 1.6;text-rendering: optimizelegibility;font-variant-numeric: normal;font-variant-east-asian: normal;color: rgb(82, 83, 87);hyphens: manual;overflow-wrap: normal;">This post is a part of a series on trends in the artificial intelligence space for 2022, authored by MoFo lawyers.<div> </div>

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AI Trends For 2022 - Augmented Reality and Digital Twin Technology

AI Trends For 2022 - Augmented Reality and Digital Twin Technology