In this update, we detail the key legislative developments in the second quarter of 2021 related to artificial intelligence (“AI”), the Internet of Things (“IoT”), connected and automated vehicles (“CAVs”), and federal privacy legislation. As we recently covered on May 12, President Biden signed an Executive Order to strengthen the federal government’s ability to respond to and prevent cybersecurity threats, including by removing obstacles to sharing threat information between private sector entities and federal agencies and modernizing federal systems. On the hill, lawmakers have introduced a number of proposals to regulate AI, IoT, CAVs, and privacy.
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European Commission Proposes New Artificial Intelligence Regulation
In April 2021, the European Commission released its proposed Regulation Laying Down Harmonized Rules on Artificial Intelligence (the “Regulation”), which would establish rules on the development, placing on the market, and use of artificial intelligence systems (“AI systems”) across the EU. The proposal, comprising 85 articles and nine annexes, is part of a wider package of Commission initiatives aimed at positioning the EU as a world leader in trustworthy and ethical AI and technological innovation.
The Commission’s objectives with the Regulation are twofold: to promote the development of AI technologies and harness their potential benefits, while also protecting individuals against potential threats to their health, safety, and fundamental rights posed by AI systems. To that end, the Commission proposal focuses primarily on AI systems identified as “high-risk,” but also prohibits three AI practices and imposes transparency obligations on providers of certain non-high-risk AI systems as well. Notably, it would impose significant administrative costs on high-risk AI systems of around 10 percent of the underlying value, based on compliance, oversight, and verification costs. This blog highlights several key aspects of the proposal.
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UK Court Rules on Copyright over Software Developed Whilst Working at Home
In Penhallurick v MD5 Ltd [2021] EWHC 293 (IPEC) the Court held that the copyright in various literary works relating to software Mr. Penhallurick created during his tenure with former employer MD5 belonged to MD5. The Court found that the works were created in the course of Mr. Penhallurick’s employment with the result that MD5 was deemed the owner of the works (under the Copyright, Designs and Patents Act 1988), despite the fact that some of the work was done from Mr. Penhallurick’s home, outside normal office hours and using his own computer.
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Strategic Technology Transactions in Europe – Considerations for U.S. and Global Companies
Over the last year we have seen increasing interest from our global client base in investing in strategic, transformational technology transactions with European counterparties. These transactions often facilitate access to key technologies, geographies and, of course, data. In this note we set out 6 key points to keep in mind when planning, negotiating and executing these types of transactions across Europe.
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AI Update: USPTO Releases Report on Growth of Artificial Intelligence Applications
The USPTO issued a Report in October 2020 titled Inventing AI: Tracing the diffusion of artificial intelligence with U.S. patents, along with supplementary material that describes the methodology and scope of patent related data used in the Report. Following a first report also issued in October 2020 that pertains to AI and IP
AI Update: The Future of AI Policy in the UK
On January 6, 2021, the UK’s AI Council (an independent government advisory body) published its AI Roadmap (“Roadmap”). In addition to calling for a Public Interest Data Bill to ‘protect against automation and collective harms’, the Roadmap acknowledges the need to counteract public suspicion of AI and makes 16 recommendations, based on three main pillars, to guide the UK Government’s AI strategy.
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AI Update: European Commission Conducts Open Consultation on the European Health Data Space Initiative
On December 23, 2020, the European Commission (the “Commission”) published its inception impact assessment (“Inception Impact Assessment”) of policy options for establishing a European Health Data Space (“EHDS”). The Inception Impact Assessment is open for consultation until February 3, 2021, encouraging “citizens and stakeholders” to “provide views on the Commission’s understanding of the current situation, problem and possible solutions”.
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AI Update: UK Parliament Research Briefing on AI in the UK Healthcare System
On 18 January 2021, the UK Parliamentary Office of Science and Technology (“POST”)* published its AI and Healthcare Research Briefing about the use of artificial intelligence (“AI”) in the UK healthcare system (the “Briefing”). The Briefing considers the potential impacts of AI on the cost and quality of healthcare, and the challenges posed by the wider adoption of AI, including safety, privacy and health inequalities.
The Briefing summarises the different possible applications of AI in healthcare settings, which raises unique considerations for healthcare providers. It notes that AI, developed through machine learning algorithms, is not yet widely used within the NHS, but some AI products are at various stages of trial and evaluation. The areas of healthcare identified by the Briefing as having the potential for AI to be incorporated include (among others): interpretation of medical imaging, planning patients’ treatment, and patient-facing applications such as voice assistants, smartphone apps and wearable devices.
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AI Update: The Council of Europe Publishes Feasibility Study on Developing a Legal Instrument for Ethical AI
On 17 December 2020, the Council of Europe’s* Ad hoc Committee on Artificial Intelligence (CAHAI) published a Feasibility Study (the “Study”) on Artificial Intelligence (AI) legal standards. The Study examines the feasibility and potential elements of a legal framework for the development and deployment of AI, based on the Council of Europe’s human rights standards. Its main conclusion is that current regulations do not suffice in creating the necessary legal certainty, trust, and level playing field needed to guide the development of AI. Accordingly, it proposes the development of a new legal framework for AI consisting of both binding and non-binding Council of Europe instruments.
The Study recognizes the major opportunities of AI systems to promote societal development and human rights. Alongside these opportunities, it also identifies the risks that AI could endanger rights protected by the European Convention on Human Rights (ECHR), as well as democracy and the rule of law. Examples of the risks to human rights cited in the Study include AI systems that undermine the right to equality and non-discrimination by perpetuating biases and stereotypes (e.g., in employment), and AI-driven surveillance and tracking applications that jeopardise individuals’ right to freedom of assembly and expression.
AI Update: Provisions in the National Defense Authorization Act Signal the Importance of AI to American Competitiveness
The newly enacted National Defense Authorization Act (“NDAA”) contains important provisions regarding the development and deployment of artificial intelligence (“AI”) and machine learning technologies, many of which build upon previous legislation introduced in the 116th Congress. The most substantial federal U.S. legislation on AI to date, these provisions will have significant implications in the national security sector and beyond. The measures in the NDAA will coordinate a national strategy on research, development, and deployment of AI, guiding investment and aligning priorities for its use.
President Trump had vetoed the NDAA after its initial passage in December, but the $740 billion NDAA became law over the objection of President Trump’s veto with a rare New Year’s Day Senate vote, 81-13. The House voted to override President Trump’s veto on December 28, on a 322-87 vote.
This post highlights some of the key AI provisions included in the NDAA.
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