Tech & Sourcing @ Morgan Lewis

An ever-increasing number of companies are choosing to use chatbots on their website, in their sales organizations, and to help with customer service. In fact, according to Vantage Market Research, the chatbot market will grow over 23% by 2030. A chatbot can provide a useful tool for consumers who are looking for quick and easy access to information as well as companies looking to provide a high level of attention and service, while allowing its employees to focus on other demands. However, companies should remain aware of and monitor the information the chatbot is sharing.

Although the healthcare industry is often focused on the Health Insurance Portability and Accountability Act (HIPAA) and compliance with its privacy regulations, there are many companies that service HIPAA-regulated entities that are not subject to such HIPAA regulations themselves, such as consumer-directed digital health companies, including those providing healthcare-related or focused mobile applications. Given the complexities of complying with various privacy rules, for those working with the healthcare industry or adjacent industries, evaluating their own and their vendor’s compliance with laws when HIPAA does not apply should be an ongoing process as privacy laws evolve.

There are many basic contracting principles that can help streamline and create a readable and clear contract, including the proper use of defined terms. Consistent with the phrase, a defined term is a word or term, often capitalized or otherwise distinguished from other text throughout the agreement, that is to be read to include the particular meaning given to it in the agreement.

An indemnification provision serves as a contractual remedy to redress a party’s (or third party’s) financial loss suffered as a result of a claim, breach, or some other event or condition set forth in the provision. Indemnification serves as a risk allocation mechanism derived originally from insurance law. Each term—“indemnify,” “defend,” and “hold harmless”—has a distinct and important role in an indemnity clause, so it is important to understand the nuances and differences among the three terms.

The Beijing Internet Court (BIC) recently recognized copyright protection in artificial intelligence (AI) generated images, ruling that the images met the requirements of originality and reflected a human's intellectual property investment. Li v. Liu, Written Civ. Rulings (Beijing Internet Ct. Nov. 27, 2023) (China).

Artificial intelligence (AI) has been rapidly transforming industries and reshaping our daily lives by ushering in unprecedented opportunities for automation—which naturally has come with some challenges. While AI’s potential is immense, the potential ethical, security, and compliance implications should be carefully examined.

It should be no surprise to readers of this blog that questions about artificial intelligence (AI) have been the hot topic for the past six months. We have previously written posts related to AI contracting pointers, updates from the US Copyright Office and the UK government, and transatlantic developments, as well as copyright risks. This month, we are going to continue the trend and raise some additional issues related to AI that are relevant to our tech and sourcing followers.

As part of our Spotlight series, Dennis C. Gucciardo, who counsels medical device manufacturers throughout the product lifecycle in the US Food and Drug Administration (FDA) regulatory context, shares insight into some important considerations when creating, reviewing, and implementing medical device product warranties.

Don Shelkey and Ben Klaber will present a continuing legal education (CLE) webinar on digital health transactions on September 14 at 1:00 pm ET.

The Biden administration issued a long-anticipated executive order on August 9 regarding US outbound investment in select technology and products with national security applications produced by “countries of concern.” Executive Order 14105 (EO) was released in conjunction with a corresponding Advanced Notice of Proposed Rulemaking (ANPRM) from the US Department of the Treasury (Treasury). Both these developments, while not yet effective, are critical to technology companies and investors, and the coming months will reveal the extent of the impact and the direction Treasury takes with its proposed regulations.