AI » How to Craft An AI Policy to Protect Your Intellectual Property

How to Craft An AI Policy to Protect Your Intellectual Property

AI policy to protect your IP concept, dos and donts checklist

February 28, 2024

The integration of artificial intelligence (AI) tools has revolutionized business operations. AI vastly enhances efficiency and productivity in areas like software development and content generation.

However, AI poses challenges as well, particularly concerning intellectual property (IP) rights. AI tools that process vast amounts of data, some sensitive or proprietary, risk inadvertent public disclosure, potentially impacting patent rights or trade secrets.

This concern is particularly acute in the U.S. due to strict patent laws regarding public disclosures of inventive ideas, and our copyright laws.

Developing a comprehensive AI policy can help manage risks while leveraging benefits. This policy should align with or extend existing open-source software policies, creating protection against IP vulnerabilities.


The risks include:

Loss of Patent or Trade Secret Rights: AI tools can inadvertently disclose inventive concepts and proprietary information, which impacts patentability and trade secret status. This is especially true under stringent U.S. patent laws.

Unintended Data Sharing: AI tools that learn from processed data can unintentionally share sensitive information. This is a practical concern for data confidentiality.

Copyright and Patent Inventorship Issues: AI’s involvement in creative processes introduces complex legal challenges regarding content and innovation ownership. It often leads to legal ambiguities.

Inaccurate Outputs (AI Hallucinations): AI tools can produce misleading information. This has significant implications in critical sectors like healthcare, finance, and legal services.

Bias: Inherent biases in AI, learned from training data or human developers, can lead to discrimination, perpetuate stereotypes, and foster unfair practices.


Corporations should develop comprehensive AI policies to address these risks, including strategies such as:

Avoiding Public Disclosures: Companies should use private AI tool instances to prevent accidental public disclosure of sensitive information.

Negotiating with AI Providers: Clarity of terms with AI providers is essential to align them with your IP protection strategies and data usage rights.

Formal AI Policy Development: Companies should outline acceptable AI tool uses, designate oversight personnel, and conduct regular training to ensure compliance with IP measures.

Data Categorization Based on Risk: Identifying low-risk and high-risk data types can optimize AI tool usage while protecting sensitive information.

Quality Control and Bias Reduction: Investing in diverse, high-quality data sets for training AI tools and conducting regular audits for accuracy and bias are crucial for maintaining ethical standards.


As AI technologies integrate into the corporate sphere, developing a comprehensive AI policy becomes vital. Such policies should tackle immediate AI integration challenges and anticipate future developments.

Proactive management of AI-related risks enables corporations to fully utilize AI technologies, ensuring IP protection and legal compliance.


By Ryan N. Phelan

Ryan N. Phelan is a partner and patent lawyer with the Chicago-based intellectual property boutique law firm Marshall, Gerstein & Borun LLP. [email protected]

This story originally appeared in Today’s General Counsel.

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