At the Intersection of Technology, Law, and Business
December 26, 2023 - Artificial Intelligence

AI Trends For 2024 - AI: Product or Service? Product Liability in the Age of AI

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

Courts are increasingly being asked: is AI a product or a service? AI companies currently operate within an undefined products liability space. As companies continue to innovate with AI, courts must grapple with complicated questions in cases involving AI technologies.

Traditional product liability cases involve plaintiffs claiming an injury arising from a defective physical product. Purely software offerings, by contrast, are typically deemed “services” not subject to products liability. Like software, the “product” in AI cases is intangible—a software program, an autonomous system, or a decision-making algorithm.

So where does AI fall on the spectrum between products and services?

Courts have not reached a consensus.

Companies are likely to face inconsistent results as courts around the country contend with these distinctions. MoFo continues to monitor these cases and provide updates to support companies navigating the growing pains inherent in emerging industries.