The Key Considerations for AI Licensing

Safeguarding Your Interests and Ensuring Compliance

As artificial intelligence (AI) continues to revolutionize industries and reshape the way we work, businesses must consider various aspects of AI licensing to protect their interests and ensure compliance with applicable laws. In this blog post, we will discuss three key considerations in AI licensing: ownership of the learning and outputs, requiring vendors to engage in responsible AI practices, and establishing appropriate service level agreements and legal compliance.

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Ownership of the Learning and Outputs

Ownership of the learning and outputs produced by AI systems is a crucial consideration when entering into an AI licensing agreement. Businesses must clearly define ownership rights to avoid potential disputes and ensure that their intellectual property (IP) is protected.

AI-generated content

Determine who owns the AI-generated content, whether it is the developer, the user, or the AI itself. Establish clear guidelines on ownership rights and attribution to avoid potential disputes.

AI models and algorithms

Clarify the ownership of AI models and algorithms, as well as any improvements or modifications made to these models during the course of the AI system’s usage. Consider whether the licensee has the right to modify or improve the AI models or if the licensor retains exclusive rights to these improvements.

Data ownership

Address the ownership of data used for training the AI system, as well as any data generated during the system’s operation. This includes determining if the data can be shared, sold, or used for other purposes and whether any restrictions apply.

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Requiring Vendors to Engage in Responsible AI Practices

Ensuring that vendors adhere to responsible AI practices is essential for mitigating risks and upholding ethical standards.


Require vendors to provide information about the AI system’s decision-making process, training data, and potential biases. This transparency helps build trust and ensures that users understand how the AI system works and makes decisions.

Fairness and non-discrimination

Vendors should be committed to ensuring that their AI systems are fair and do not discriminate against users based on race, gender, age, or other protected characteristics. This may involve regularly auditing and updating AI models to mitigate potential biases.

Privacy and data protection

Vendors must ensure that their AI systems comply with data privacy regulations and protect users’ personal information. This may involve implementing robust data protection measures, such as encryption and access controls, as well as adhering to data minimization principles.

Establishing Appropriate Service Level Agreements and Legal Compliance

Service level agreements (SLAs) and legal compliance are essential for managing expectations and ensuring that the AI system meets your business needs.


Define the performance metrics, quality standards, and response times that the vendor must meet to ensure the AI system meets your business requirements. This may include uptime guarantees, accuracy levels, and customer support response times.

Legal compliance

Ensure that the AI system complies with applicable laws and regulations, such as data protection laws, industry-specific regulations, and export control laws. This may involve conducting due diligence on the vendor’s compliance practices and working closely with legal experts to navigate the complex regulatory landscape.

Indemnification and liability

Address indemnification and liability clauses in the AI licensing agreement, outlining the responsibilities of each party in case of legal disputes, damages, or breaches of contract.

By carefully considering the ownership of learning and outputs, requiring vendors to engage in responsible AI practices, and establishing appropriate service level agreements and legal compliance, businesses can better protect their interests and ensure the success of their AI initiatives. Working with experienced legal professionals can help businesses navigate the complexities of AI licensing and stay ahead of the ever-evolving legal landscape surrounding AI technology.

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