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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AI Transparency in Healthcare: Navigating a Changing Regulatory Landscape

Recentive: Federal Circuit’s Patent-Eligibility Guideposts for Machine-Learning Inventions

Japan’s Approach to AI Regulation in 2025

Federal Circuit Clarifies Requirements for Prior Art Under Pre-AIA 35 U.S.C. § 102(e)

AI Agent as a Service in Medtech - Key Considerations for Commercial Contracts

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U.S. state legislatures will continue integrating requirements for profiling and automated decision-making into consumer privacy laws, reflecting the growing impact and influence of AI. All comprehensive state consumer privacy laws that are currently in effect (California, Colorado, Connecticut, and Virginia) and almost all of those entering effect over the next few years (Delaware, Indiana, Montana, Oregon, Tennessee, Texas, and Utah) include concepts of automated decision-making and profiling and place restrictions on such activities.While definitions differ slightly across the U.S. state privacy laws, profiling generally refers to the evaluation of individuals’ personal aspects via the automated processing of their personal information. Most states require covered entities to offer an opt-out from profiling, and most require a data protection assessment for activities posing a “heightened risk of harm” to individuals, such as targeted advertising.California is leading these efforts by creating an independent watchdog, the California Privacy Protection Agency (CPPA), tasked with, inter alia, regulating the use of automated decision-making technology (ADMT). ADMT refers to any system, software, or process that processes personal information and uses computation to make decisions or facilitate human decision-making, including profiling. The CPPA <a href="https://cppa.ca.gov/announcements/2023/20231127.html" target="_blank">recently proposed</a> draft regulations that would require businesses to follow specific notice, opt-out, and access rules regarding their use of ADMT. These landmark regulations are expected to set the stage for other states’ enforcement of ADMT and profiling restrictions.Carson Martinez contributed to authoring this blog post.

AI Trends For 2024 - U.S. State Consumer Privacy Laws’ Focus on Automated Decision-Making and Profiling

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Marijn Storm specializes on the intersection of law and technology, with a focus on cutting-edge technologies, such as (generative) artificial intelligence (AI) and large language models, ethical tech, and biometrics. 

Marijn Storm

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Marian Waldmann Agarwal is a partner in the Privacy + Data Security Group at Morrison Foerster. She also co-leads the firm’s Artificial Intelligence Group and is a member of the global Environmental, Social, and Governance (ESG) Steering Committee.

Marian Waldmann Agarwal

Marian A. Waldmann Agarwal

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AI Trends For 2024 - U.S. State Consumer Privacy Laws’ Focus on Automated Decision-Making and Profiling

Japan: Privacy Updates on Handling Personal Information in the “Digital Market”

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U.S. state legislatures will continue integrating requirements for profiling and automated decision-making into consumer privacy laws, reflecting the growing impact and influence of AI. 

As the use of AI in hiring and employment practices grows, U.S. states are increasingly regulating such use.Currently, Illinois, Maryland, and New York City require employers to inform applicants about, and obtain their consent for, the use of AI during the hiring process. New York City also specifically requires a bias audit for AI tools, the results of which must be published annually. Several other states—including California, Hawaii, Massachusetts, Oklahoma, Pennsylvania, New Jersey, New York, and Vermont Virginia, and Washington and also District of Columbia—are considering similar legislation, signifying a trend towards more regulation of AI in hiring and employment decisions.Outside of specific laws targeted at AI in the employment context, state consumer privacy laws are also relevant to the use of AI in employment. For example, California’s CCPA applies to employee personal information, and almost all state privacy laws require an opt-out for profiling in furtherance of decisions producing legal or significant effects concerning a consumer, including the provision or denial of employment.On a federal level, the Equal Employment Opportunity Commission issued <a href="https://www.eeoc.gov/newsroom/eeoc-releases-new-resource-artificial-intelligence-and-title-vii" target="_blank">guidance</a> in May 2023, emphasizing potential discrimination risks when using AI under the Americans with Disabilities Act and Title VII of the Civil Rights Act. Proposed bills like the 2023 <a href="https://www.congress.gov/bill/118th-congress/house-bill/5628/text" target="_blank">Algorithmic Accountability Act</a>, though not enacted, also suggest a possible move towards national regulation.Given this evolving landscape, state legislatures likely will continue to develop rules around the use of AI in employment.Carson Martinez contributed to authoring this blog post.

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California Privacy Rights Act of 2020 Qualifies for November Ballot

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As the use of AI in hiring and employment practices grows, U.S. states are increasingly regulating such use.

AI Trends For 2024 - U.S. Laws Will Focus on the Use of AI in Hiring

Privacy regulators, including the EU data protection authorities (EU DPAs), are expected to increase their scrutiny of data scraping to train AI algorithms. Data scraping involves the collection of large amounts of publicly available information, which may trigger obligations under privacy laws.While data scraping for AI training has only recently emerged on privacy regulators’ radars, action by the EU DPAs has been robust. In 2022, the Italian DPA <a href="https://www.garanteprivacy.it/home/docweb/-/docweb-display/docweb/9751323" target="_blank">fined</a> Clearview AI €20 million for scraping facial images and generating biometric information, rejecting the company’s claim that its legitimate interests provided a lawful basis for such processing. Subsequently, the <a href="https://www.dpa.gr/el/enimerwtiko/prakseisArxis/epiboli-prostimoy-stin-etaireia-clearview-ai-inc" target="_blank">Greek</a> and French DPAs each also imposed €20 million fines on Clearview AI, and the <a href="https://noyb.eu/sites/default/files/2021-01/545_2020_Anh%C3%B6rung_CVAI_ENG_Redacted.PDF" target="_blank">German</a> and <a href="https://edpb.europa.eu/news/national-news/2023/decision-austrian-sa-against-clearview-ai-infringements-articles-5-6-9-27_en" target="_blank">Austrian</a> DPAs have declared Clearview’s activities illegal.These investigations all focused primarily on the unlawful processing of sensitive data (i.e., biometric information), but the focus of the EU DPAs is anticipated to expand.Examples of the DPAs’ broader focus on data collection for AI training include the French DPA’s October 2023 guidance on the research and development of AI systems, which notes that the re-use of (public) datasets is possible only if the data were lawfully collected and the purpose of re-use is compatible with the initial collection purpose. Most recently, the Italian DPA announced in November 2023 an <a href="https://gpdp.it/home/docweb/-/docweb-display/docweb/9952078" target="_blank">investigation</a> into data scraping practices for AI training, to determine whether adequate measures are implemented to prevent the mass collection of personal information.Scrutiny of data scraping for AI training is not expected to remain limited to the EU. In August 2023, 12 multinational privacy regulators issued a <a href="https://ico.org.uk/media/about-the-ico/documents/4026232/joint-statement-data-scraping-202308.pdf" target="_blank">joint statement</a> cautioning companies that engage in web scraping and companies that publish large amounts of personal information to the web on the privacy risks and legal obligations related to scraping information.Carson Martinez contributed to authoring this blog post.

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Managing Partner, Amsterdam and Brussels

Alex van der Wolk, co-chair of Morrison Foerster’s preeminent Global Privacy & Data Security practice and managing partner of the firm’s Amsterdam and Brussels offices, employs his nearly 20 years of experience to advise global companies on their most complex data strategies and compliance programs governing all aspects of information management. 

With more than a decade of experience, Mr. van der Wolk helps clients develop privacy strategies for digital transformations, industrial IoT, telematics, Big Data, commercial and marketing programs, a

Alex van der Wolk

Alex van der Wolk, co-chair of Morrison Foerster’s preeminent Global Privacy & Data Security practice and managing partner of the firm’s Brussels office, employs his nearly 20 years of experience to advise global companies on their most complex data strategies and compliance programs governing all aspects of information management.

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Associate

Carson Martinez is an associate in the Litigation Department of Morrison Foerster’s Boston office.

Carson Martinez

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Privacy regulators, including the EU data protection authorities (EU DPAs), are expected to increase their scrutiny of data scraping to train AI algorithms. Data scraping involves the collection of large amounts of publicly available information, which may trigger obligations under privacy laws.

AI Trends For 2024 - Privacy Regulators Will Increase Scrutiny of Data Collection for AI Training

EU data protection authorities (DPAs) will likely start enforcing the requirements of the EU AI Act, the world’s first comprehensive AI regulation, despite the Act likely not entering into full force until 2026.The AI Act is designed to apply in addition to the EU General Data Protection Regulation (GDPR), extending the reach of requirements by covering AI systems trained with data that is not subject to GDPR and scenarios where providers don’t qualify as “controllers” under GDPR. Despite these differences, many of the AI Act’s risk management obligations cover the same topics as those in the GDPR, but in a more specific manner. This creates a synergy that enables DPAs to interpret the GDPR in a manner consistent with the requirements of the upcoming AI Act, on topics such as:<ul><li dir="ltr">Impact assessment: The AI Act’s requirement for a risk management system is akin to the GDPR’s data protection impact assessment (DPIA), focusing on preemptive risk identification and mitigation;</li><li>Data governance: The AI Act’s data governance requirements, including the appropriate use of training datasets, aligns with the GDPR’s requirements of fair and lawful use of personal information;</li><li>Human oversight: The AI Act requires ensuring appropriate human oversight, which shows similarities to the (negatively formulated) prohibition on automated decision-making (with limited exceptions) under the GDPR.</li></ul>Recent developments already show that the DPAs are not waiting for the AI Act to enter into force. For example, in July 2023, the French DPA <a href="https://www.cnil.fr/fr/intelligence-artificielle-le-plan-daction-de-la-cnil" target="_blank">stated</a> that it will focus on entities processing personal information to develop, train, or deploy AI systems to ensure these entities have met GDPR requirements, including by carrying out data protection impact assessments, adequately informing individuals, and allowing people to exercise privacy rights. The Spanish DPA recently provided <a href="https://www.aepd.es/en/prensa-y-comunicacion/blog/artificial-intelligence-transparency" target="_blank">guidance</a> on the distinction between “transparency” under the GDPR and the use of the same term in the AI Act, and the Italian DPA is <a href="https://www.garanteprivacy.it/home/docweb/-/docweb-display/docweb/9952078" target="_blank">investigating</a> the online collection of personal information to train AI algorithms.Carson Martinez contributed to authoring this blog post.

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In the Public Eye: USPTO Issues Report on AI

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EU data protection authorities (DPAs) will likely start enforcing the requirements of the EU AI Act, the world’s first comprehensive AI regulation, despite the Act likely not entering into full force until 2026.



AI Trends For 2024 - EU DPAs Will Apply Requirements of the EU AI Act

President Biden’s <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2023/10/30/executive-order-on-the-safe-secure-and-trustworthy-development-and-use-of-artificial-intelligence/" target="_blank" dir="ltr">Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence</a> was issued on November 1, 2023, and has made waves throughout the AI industry. Morrison Foerster has been reviewing the executive order (EO) and considering its impact in several <a href="https://www.mofo.com/capabilities/artificial-intelligence#insights" target="_blank">legal areas</a>.In the patent space, the EO contains several directives that aim to “promote innovation and clarify issues related to AI and inventorship of patentable subject matter.” Specifically, the EO directs the under secretary of commerce for intellectual property and director of the United States Patent and Trademark Office (USPTO) to weigh in on important issues at the intersection of AI and patent law. The following two items, where the USPTO is directed by the EO to provide guidance, stand out for their potential significance to anyone who is involved in patent strategy, prosecution, enforcement, or licensing in the AI space.AI and InventorshipOne of the most debated recent topics in patent law has been the role of AI in the invention process. In the EO, the president directs the USPTO director to weigh in on that matter:[W]ithin 120 days of the date of this order, publish guidance to USPTO patent examiners and applicants addressing inventorship and the use of AI, including generative AI, in the inventive process, including illustrative examples in which AI systems play different roles in inventive processes and how, in each example, inventorship issues ought to be analyzed ... .This solicitation for guidance comes on the heels of last year’s <a href="https://cafc.uscourts.gov/opinions-orders/21-2347.OPINION.8-5-2022_1988142.pdf" target="_blank">Thaler</a> decision, in which the Federal Circuit held that AI systems cannot be named as inventors on patents. However, in that decision, the Federal Circuit made clear that it did not address the more difficult question: “whether inventions made by human beings with the assistance of AI are eligible for patent protection.” The EO pushes the USPTO to provide clarity on that very question: whether and how use of AI in the inventive process impacts inventorship.The legal community will await the USPTO’s input on this matter, and will also continue to monitor any litigation that raises the issue of AI-assisted inventorship. USPTO input and litigation outcomes could both play an important role in shaping the law related to these issues.Patent Eligibility in the AI/ML SpaceThe EO further directs the USPTO to provide guidance to USPTO patent examiners on “other considerations at the intersection of AI and IP,” and specifically suggests that this could include AI patent eligibility guidance:[W]ithin 270 days of the date of this order, issue additional guidance to USPTO patent examiners and applicants to address other considerations at the intersection of AI and IP, which could include, as the USPTO Director deems necessary, updated guidance on patent eligibility to address innovation in AI and critical and emerging technologies ... .The convoluted rules of patent eligibility have vexed applicants, practitioners, and the courts for many years, and <a href="https://www.uspto.gov/patents/laws/examination-policy/subject-matter-eligibility" target="_blank">USPTO eligibility guidance</a> has sought to provide additional clarity over the last five years. So, for practitioners and applicants involved in filing or managing patent applications related to AI, new USPTO eligibility guidance could help to shape claim drafting and amendment strategies for applications in the AI space.This section of the EO might be seen as a gentle nudge to the USPTO towards more favorable patent-eligibility guidelines for AI-driven innovations, given the EO’s stated aim of promoting such innovations. More favorable guidance for AI-based inventions would align with the USPTO’s recent efforts to recognize and bolster patenting in the rapidly evolving AI sector, such as the USPTO’s <a href="https://www.uspto.gov/initiatives/artificial-intelligence/ai-and-emerging-technology-partnership-engagement-and-events" target="_blank">AI and Emerging Technology Partnership</a>, which kicked off in June 2022 and has included a series of meetings exploring AI-related initiatives at the USPTO and IP policy issues relevant to AI. More favorable guidance for AI-based inventions would also align with <a href="https://www.uspto.gov/blog/director/entry/latest-updates-on-artificial-intelligence" target="_blank">comments earlier this year from USPTO Director Kathi Vidal</a>, recognizing that “[o]ne of the USPTO’s top priorities is to ensure that the United States maintains its leadership in innovation, especially in emerging technologies (ET) such as AI.”Looking ForwardFollowing the issuance of the EO, <a href="https://www.commerce.gov/news/press-releases/2023/10/department-commerce-undertake-key-responsibilities-historic-artificial" target="_blank">initial comments from USPTO Director Vidal</a> show that the USPTO is recognizing the importance of the patent questions raised in the EO, and the important role that the USPTO will play in continuing to incentivize innovation in the field of AI:When it comes to artificial intelligence, there is enormous potential for our country, for supporting inclusive and equitable innovation and entrepreneurship, and for solving world problems at speed and scale. But we must move thoughtfully and carefully to mitigate risk and to ensure AI adoption is responsible. The President's executive order strikes that balance, ensuring we incentivize innovation in critical and emerging technologies, including through appropriate intellectual property protections for inventors and creators, while also advancing national security and AI safety.As AI continues to reshape multiple sectors, the new EO underscores the dynamism and complexity of the application of AI to the inventive process and traditional inventorship concepts. In the coming months, we will monitor any issued USPTO guidance and will keep a close watch on any litigation that might set precedents in this arena.

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Tessa J. Schwartz, partner, has extensive experience in complex intellectual property and technology law, copyright law, and patent litigation. Tessa is also the founder and co-chair of the firm’s Artificial Intelligence Group.

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

Anna Yuan

President Biden’s Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence was issued on November 1, 2023, and has made waves throughout the AI industry. Morrison Foerster has been reviewing the executive order (EO) and considering its impact in several legal areas.

AI Executive Order – Patent Issues

Morrison Foerster is pleased to share with our clients and friends the results of our 2023 Tech M&A Survey, published in conjunction with Mergermarket. Mergermarket surveyed 300 dealmakers from around the world in order to gain valuable insights into the future of technology-related M&A.According to the findings:<ul><li>58% of private equity (PE) firms and 38% of corporates expect aggregate tech M&A deal volumes to increase over the next 12 months.</li><li>48% of PE firms and 53% of corporates expect the value of the average tech deal to rise over the coming year.</li><li>25% of respondents point to cybersecurity and 18% point to AI/machine learning as the tech subsectors that offer the best M&A opportunities over the next 12 months.</li><li>91% of PE firms and 61% of corporate respondents expect to make use of minority investments in their tech M&A plans over the next 12 months.</li><li>81% expect antitrust scrutiny of tech M&A to become either somewhat or significantly stricter over the next three years.</li></ul><a href="https://www2.mofo.com/e/323401/231101-mofo-tech-ma-survey-pdf/9c6z3/690241034/h/hTfmI6MGPv0YXKDsUQZq-yySoypdl_apt2yAcc4Hhdg" target="_blank">Read the report</a> to learn more about these and other deal trends.

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AI Trends For 2022 - AI Industry Poised for Successful 2022

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Morrison Foerster is pleased to share with our clients and friends the results of our 2023 Tech M&A Survey, published in conjunction with Mergermarket. Mergermarket surveyed 300 dealmakers from around the world in order to gain valuable insights into the future of technology-related M&A.

What's the Forecast for Tech M&A?

On August 9, 2023, President Biden issued a long-anticipated executive order (EO) to address investments by U.S. persons in companies that engage with certain categories of technology and products located in the People’s Republic of China. Read our <a href="https://www.mofo.com/resources/insights/230810-high-walls-and-small-gardens-outbound-investment?utm_source=publication&utm_medium=email" target="_blank" style="direction: ltr;text-align: left;">client alert.</a><div style="direction: ltr;text-align: left;"></div>

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James Brower is a partner in Morrison Foerster’s Litigation Department, residing in the Washington D.C. office. James has extensive experience advising and representing clients in matters relating to the Committee onForeign Investment in the United States (CFIUS) and other national security-related matters.

James Brower is a partner in Morrison Foerster’s Litigation Department, residing in the Washington D.C. office.

James M. Brower

James Brower

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Brandon L. Van Grack co-chairs Morrison Foerster’s National Security and Crisis Management groups. 

Brandon Van Grack

Brandon Van Grack - National Security Lawyer

Brandon L. Van Grack

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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