Artificial Intelligence ("AI") is becoming, and has become, a transformative force in various sectors. The promises of efficiency and innovation are very hard to ignore. Correspondingly, the ownership of AI, products and services developed by AI, and the legal implications of the use of AI have begun to gain ascendance. In India, a country known for its technological advancements, the ownership of AI remains a challenging subject, demanding a nuanced understanding of existing laws and the evolving nature of AI technologies. Without being bogged down in the quagmire of verbose legalese, this article explores, at a high level, the legal framework surrounding the ownership of AI under Indian laws, focusing on intellectual property rights, contractual aspects, and liability.
Intellectual Property Rights
Intellectual property rights ("IPR") play a crucial role in determining ownership and protection in the context of AI.
In India, AI-generated works are, by and large, governed by the Copyright Act, 1957. Under this law, the ownership of an AI-generated work typically rests with its human creator, assuming they have made creative contributions. However, if an AI system generates a work without human intervention, the question of ownership becomes more complex. In such cases, Indian copyright law does not specifically address AI-generated works nor expressly recognises AI systems as capable of holding copyrights. Consequently, determining ownership may depend on the legal interpretation and precedents set by the courts. It is possible that courts may consider the AI system itself as the author and owner of the work. This perspective raises concerns about assigning liability and accountability. Since AI is not considered a juristic person, i.e., unlike a company that is considered to be a juristic person with an independent identity1, ownership is still very much a concept attributed to a person (either natural or juristic) or a collection of people, and not a bundle of code which is functionally independent.
Another aspect of AI ownership is the protection of AI-related inventions. Indian patent law, administered by the Patents Act, 1970, allows for the patenting of inventions that are novel, non-obvious, and have industrial applicability. However, obtaining a patent for AI technologies can be challenging, as the law requires a clear demonstration of human ingenuity and inventive step. AI's inherent ability to generate solutions without direct human intervention can complicate the patenting process, particularly as it relates to the demonstration of human ingenuity.
It is worth mentioning here that, as on date of this article, both the Indian Copyright Office and the Indian Patent Office, in the recent past, have taken a stand that an AI system cannot be an author of a work or an inventor of a patent.
Contractual Agreements
To address the gaps in existing laws, contracts2 play a significant role in determining AI ownership. Parties involved in AI development, such as companies and developers, often execute contracts that explicitly define ownership rights. These contracts typically outline the ownership of AI-generated works, the rights and responsibilities of each party, and the allocation of intellectual property, including the ownership of AI-generated output and potential commercialization opportunities.
Contracts are flexible tools that can be tailored to meet the specific needs of the parties involved. These contracts may establish joint ownership, where the AI system's developers and the company utilizing the AI share the rights and benefits. Alternatively, the contract may allocate exclusive ownership to one party while granting specific rights to others. Clarity in contractual arrangements is crucial to avoiding disputes and ensuring that all parties understand their rights and obligations.
Liability and Accountability
The ownership of AI raises significant concerns regarding liability and accountability for AI-generated actions or decisions. In India, the legal framework currently holds humans accountable for the actions of AI systems they control. This concept is in line with the principles of the Information Technology Act, 2000, which places responsibility on individuals who have authorized, accessed, or controlled the AI system.
However, as AI becomes more autonomous, the question of assigning liability becomes more complex. Indian laws do not explicitly address the liability of AI systems or their owners. Establishing clear guidelines and regulations on liability and accountability is crucial to avoid potential legal and ethical dilemmas. The development of appropriate legal frameworks can strike a balance between encouraging innovation and ensuring responsible use of AI. The threshold question from the point of view of the authors is whether the prevailing framework of a person (either natural or juristic) or a collection of people being necessary to establish ownership, and therefore contractual ability and liability should continue, or whether a new model needs to be evolved.
Challenges and Considerations
Determining AI ownership poses several challenges under Indian laws. One primary concern is the absence of explicit provisions addressing AI ownership. The existing legal framework does not keep pace with the rapid advancements in AI technology, leaving certain aspects of ownership ambiguous. This legal gap may lead to uncertainty, disputes, and potential exploitation of AI-generated outputs.
The question of AI ownership becomes particularly complex in cases where AI systems autonomously create original works without human intervention3. Current laws often attribute authorship to human creators, but AI systems challenge traditional notions of authorship, blurring the lines between human- and machine-generated creations. A clear legal framework is required to address AI's autonomous creations and determine ownership in such scenarios.
Another challenge lies in defining ownership rights when AI systems are trained using large datasets, including proprietary and personal information. Data protection laws, such as the Personal Data Protection Bill, 2019 ("PDPB"), currently under review, seek to regulate the collection, storage, and use of personal data. However, the PDPB primarily focuses on data privacy and consent rather than explicitly addressing ownership of AI models trained on such data.
Furthermore, AI ownership intersects with ethical considerations, including accountability and liability for actions taken by AI. Determining liability in cases where AI systems cause harm or produce biased outcomes is a complex task. Establishing clear ownership structures can help define responsibility and ensure accountability in the event of AI-related incidents.
Conclusion
As this article tries to illustrate, ownership of AI under Indian laws is an evolving field that requires careful consideration. Intellectual property rights and contractual agreements serve as essential tools for determining ownership and protection in the AI domain, as well as establishing liability and accountability. While current laws provide some guidance, the increasing autonomy of AI systems calls for updated regulations to address liability and accountability. By fostering a comprehensive legal framework, India can encourage innovation, protect intellectual property, and ensure responsible use of AI technology in the country.
The authors believe that the established construct of ownership by a "person" will continue to be necessary for some time to enable the development of proper systems to exploit the potential of AI. Such an ownership construct is also necessary to attenuate the consequences of AI by identifying such "person/s" as liable and accountable for the actions of AI. As controls and technology develop to the point where AI can be, for lack of a better word, policed or governed as persons are, a new model will develop which will de-link the person from the intelligence, and thereby usher in a new phase in the evolution of the principles of ownership, rights, responsibilities, powers and duties. Whilst the authors don't think that the "day" to build the new model has come, they do feel that it will be here sooner rather than later.
P.S.: The authors did not use generative AI to write this article but hold out no representation that any follow up may not be AI assisted.
* By Kartik Ganapathy, Founding & Senior Partner, IndusLaw, and Bharadwaj Jaishankar, Partner, IndusLaw. The views expressed in this article are the personal views of the authors, and do not reflect the views of IndusLaw
Footnotes
1. Section 9 of the Companies Act, 2013 declares that upon registration the subscribers become "a body corporate by the name contained in the memorandum, capable of exercising all the functions of an incorporated company under this Act and having perpetual succession, power to acquire, hold and dispose of property, both movable and immovable, tangible and intangible, to contract and to sue and be sued, by the said name".
2. The authors intend contract to have the meaning defined in Section 2(h) of the Indian Contract Act, 1872, i.e., "an agreement enforceable by law".
3. See an article by one of the authors at https://www.financialexpress.com/business/blockchain-generative-ai-and-intellectual-property-rights-an-uneasy-co-existence-3126312/
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