Contractual Restrictions and Generative AI

It is important to distinguish the AI platform itself from its outputs, such as text, code, images or data. Some providers prohibit the use of their platform to develop a competing tool. Others go further and also prohibit the use of generated outputs for that purpose. This distinction is significant when a business intends to incorporate those outputs into its products, services or projects.

Approaches vary from one provider to another. Some limit restrictions to direct competitors, while others extend them to any AI technology, even if it is not competitive. This lack of consistency increases the risk of differing interpretations and disputes.

Before entering into an agreement, organizations should therefore carefully assess which uses are prohibited, whether the restrictions apply to the platform, the generated outputs, or both, and whether their intended commercial uses are expressly permitted.

When it comes to generative AI, precise contractual drafting is essential. It enables providers to protect their intellectual property rights while giving users the flexibility they need to fully benefit from AI-generated outputs.

If you are considering acquiring a generative AI solution, do not hesitate to contact our business law and privacy team for guidance.