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Legal regulations for artificial intelligence (AI)

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AI is a rapidly growing sector in relation to which governments are trying to anticipate the relevant legal aspects that surrounds it. AI is deemed to be a personal property and not a separate legal entity nor an agent. Hamilton Li and Ancia Hussain discuss the aspects surrounding regulating AI.

The use of AI transcends  different regulatory remits and therefore, regulators need to have a grounding in the lawful and appropriate use of personal data and AI systems, and its opportunities and risks. This grounding will help regulators when they need to assess the use of AI in the sector(s) they regulate. It will also help regulators who are using AI as part of their regulatory remit to do so appropriately and lawfully.

Data protection

The UK government is yet to decide what to do with the new technology but it is leaning towards the pro-innovation side. It is most likely that the UK government will try and create not one legislation, but a bespoke approach for each individual industry and their needs.  

The UK regulation is expected to address various aspects of AI, including ethics, accountability, and data protection. The UK government recognizes the potential benefits of AI while also acknowledging the need to mitigate potential risks. It is working towards creating a regulatory framework that promotes responsible AI development and use. 

One key area of focus is ensuring transparency and fairness in AI systems. The regulation will aim to prevent bias and discrimination in AI algorithms and decision making processes. Developers and users of AI will be encouraged to adopt practices that promote fairness and accountability. 

Data protection and privacy are also important considerations. The UK already has data protection laws in place, such as the Data Protection Act 2018 and the General Data Protection Regulation (GDPR). These laws will apply to AI systems as well, requiring compliance with data protection principles and ensuring individuals’ rights are respected.  

UK Regulations

The EU is one of the first to develop regulations for the industry. The EU is currently considering the AI Act and the AI Liability Directive.  

The AI Act will initially label certain categories as permitted AI and prohibited AI. There is speculation that the threshold of permitted AI will eventually ease into all categories of AI technology subject to certain guide lines. The AI Act intertwines with the AI Liability Directive to make it possible for individuals to seek redress from those responsible. 

The EU’s approach to AI regulation focuses on a risk-based approach. High-risk AI systems, such as those used in healthcare, transportation, and critical infrastructure, will be subject to stricter regulations to ensure safety, transparency, and accountability. The regulation emphasizes the importance of human oversight and the need for AI systems to be transparent and explainable. This means that users should be able to understand how AI systems make decisions and have the ability to challenge or appeal those decisions. 

EU Regulations

The Information Commissioner’s Office (ICO) has labeled AI as a priority field and is determined to address the following: 1. Fairness in the use of AI, 2. Dark patterns (these are elements of digital user interface, which are used to take advantage of intrinsic mental biases and lead users towards making restricted decisions), 3. AI as a Service, 4. AI and recommender systems, 5. Biometric data and biometric technologies and 5. Privacy and confidentiality in explainable AI. 

In today’s digital era, the protection of personal data in the realm of AI is of utmost importance. With the increasing reliance on AI and the vast amount of data being collected and processed, there are potential risks that need to be addressed. To safeguard AI data, various legal frameworks and regulations have been established.  

Intellectual Property

AI will have a significant impact in this area of law. In terms of copyright, the key question is the ownership of copyright works created by the AI. Users should make prior agreement in relation to the use of an AI system that may result in new copyright works and this should include terms on ownership, patent rights, assignment and licensing in order to avoid potential litigation.  

In 2020, the UK High Court denied a patent application in relation to a machine-created invention on the basis that an “inventor” must be a natural person and that a machine is not an inventor under the Patents Act 1977. The same issue was heard before the European Patent Office which arrived at the same conclusions with two other applications. To date, the same approach was taken by the US. 

Trade secrets also play a role in protecting AI related intellectual property. Trade secrets refers to confidential information that provides a competitive advantage to a business. In the context of AI, companies may seek to protect their proprietary algorithms, training data, or other confidential information that gives them a technological edge. Implementing robust security measures and non-disclosure agreements can help safeguard trade secrets related to AI.  

Tort Law

This is an area of law to which AI will have the most impact on. First and foremost, we must differentiate autonomous vehicles, such as  robots and other “mobile” AI-enabled systems, from “static” AI systems. 

The landmark case of Rylands v Fletcher (1868) L.R. 3 H.L. 330 will play an essential role when it comes to liability in terms of nuisance and escape.  Nuisance and escape liability are based on interruption with the enjoyment of land. 


Despite these regulations, challenges persist in effectively protecting AI data. The complexity of AI algorithms poses difficulties in ensuring transparency and accountability. There is also the risk of bias or discrimination embedded in AI systems, which further emphasizes the need for robust regulations.  

Since the Exit Day (31st January 2020), the UK-EU withdrawal agreement came into force. This had a serious impact on intellectual property rights, competition law, data protection, commercial law and more. All of these areas of law will be applicable to the AI industry. However, it is important to note that the impact of Brexit on AI regulations is still uncertain and will depend on future negotiations and agreements between the UK and the EU.  

Should you ever need legal advice in these areas of law, please call +44 02030515060  or leave your message with your contact details and one of our specialist will get back to you.   


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