legally-wired

Equipping business leaders to master contracts and legal principles.

[legally-wired @Legally_Wired]

Lessons from Crowdstrike v Delta

The recent spat between Crowdstrike and Delta brings to public eye legal provisions which lawyers heavily negotiate in every contract – Limitation of Liability.
The provision aims to tailor liability of the service providers in various scenarios. This tweet is intended to cover takeaways for service providers.

1.Your limitation of liability provision should be broad enough that it covers all liability under the contract – including your obligations, indemnities and warranties.

https://t.co/WoyJUMdTJd determining the amount of liability that you are willing to take on, you should consider,
a.the fee paid by the client,
b.your insurance coverage under a E&O policy.

3.Your limitation of liability need not necessarily be restricted to monetary limitations.
https://t.co/C63zsehHow is customary to limit your liability to direct losses alone. This would mean losses that are consequential and not direct are not covered.
b.Any losses that occur due to negligence of the client (contributory negligence) should be excluded from liability.

4.Exceptions to the limitation of liability should be tailored for specific instances only. These are business specific and customarily include:
a.fraud,
b.gross negligence, and
c. wilful misconduct.

[legally-wired @Legally_Wired]

@meelonmuskusa 3452839

[legally-wired @Legally_Wired]

Elon Musk suing Open AI (again), throws a spotlight on the often trivialised provision of shareholder documents - ‘Use of Proceeds’ clause.

In defining the use of proceeds when accepting any funding, founders should negotiate for a broad definition of what their business is and also account for projects in the pipeline.

#fundraising #founders #startup

[legally-wired @Legally_Wired]

A new bill introduced in US Congress by Rep. Adam Schiff aims to require AI companies to disclose copyrighted materials used in their generative AI models. The Generative AI Copyright Disclosure Act seeks to ensure transparency and legality in AI training data.

📜🤖 #AIlaw #Copyright #TechNews

[legally-wired @Legally_Wired]

Copyright law just got crazier!

A German publishing house is sued for using drone images of art installations, challenging the “Panorama Freedom” law. This law allows license-free use of public art images from ground level, but not aerial views.

The matter in substance is the same—how does it matter if it's ground level or aerial? This case could redefine drone photography laws in Europe. 📸🚁 #DronePhotography #CopyrightLaw #EU #Art

[legally-wired @Legally_Wired]

Governments that introduce the following policy changes bring about a positive climate for businesses :
1. Subsidies on capital expenditure
2. Entering to free trade agreements with other countries
3. Investing heavily into r&d benefits the private sector in the long run
4. strong ant-trust / anti-monopoly regime

[legally-wired @Legally_Wired]

@Codie_Sanchez Very true. We see this all the time. Ironically, populist regimes who bring in these laws to “protect” the masses end up ruining the economy, causing loss of jobs and pushing the population further into poverty.

[legally-wired @Legally_Wired]

If you're raising funds, it depends on how urgently you need the money. If you're in a hurry, investors typically define a liquidity event and decide who gets paid first. However, if you're patient and maintain good leverage, you can influence how a liquidity event is defined. Regardless, investors will always prioritize their payout. #StartupFunding #LiquidityEvent #InvestorTips

[legally-wired @Legally_Wired]

Meta’s 1.4 Billion settlement with Texas for violation of privacy laws in collecting biometric data underscores the immediate need for corporations to closely evaluate their compliance activities.

#startup #Tech #PrivacyFirst

[legally-wired @Legally_Wired]

Does your business perform data scraping?

Here are 2 interesting facts for you.

1. Most successful claims against data/ web scraping have been when the data in question was behind a paywall/ required login credentials for access (even if anyone could freely make an account)/ restricted access.
2. Publishing or commercialisation of scraped data precludes you from certain exemptions available for fair use of publicly available data.

#developers #technology #legaltalk

[legally-wired @Legally_Wired]

Does technology influence the law or does the law influence growth of technology ?

We advocate the former.

[legally-wired @Legally_Wired]

Does technology influence the law or does the law influence growth of technology ?

We advocate the former.

[Andrew Ng @AndrewYNg]

I continue to be alarmed at the progress of proposed California regulation SB 1047 and the attack it represents on open source and more broadly on AI innovation. As I wrote previously, this proposed law makes a fundamental mistake of regulating AI technology instead of AI applications, and thus would fail to make AI meaningfully safer. I’d like to explain why the specific mechanisms of SB 1047 are so pernicious to open source.

To be clear, there are routes that regulators should pursue to improve safety. For example, I would welcome outlawing nonconsensual deepfake pornography, standardizing watermarking and fingerprinting to identify generated content, and investing more in red teaming and other safety research. Unfortunately, the proposed bill pursues a less beneficial and more harmful path.

SB 1047’s purported goal is to ensure safety of AI models. It puts in place complex reporting requirements for developers who fine-tune models or develop models that cost more than $100 million to train. It is a vague, ambiguous law that imposes significant penalties for violations, creating a huge gray zone in which developers can’t be sure how to avoid breaking the law. This will paralyze many teams.

You can read the latest draft of the law online. I’ve read through it carefully, and I find it ambiguous and very hard to follow.

Developers who try to navigate the law’s complex requirements face what feels like a huge personal risk. It requires that developers submit, under penalty of perjury, a certification of compliance with the requirements of the law. But when the requirements are complex, hard to understand, and can even shift according to the whims of an unelected body (more on this below), how do we ensure we are in compliance?

For example, the certification must include many different sections. One is an analysis of “the nature and magnitude of critical harms … the model might reasonably cause or enable.” But given that even leading AI researchers aren’t sure what harms models might cause or enable, how is a team of developers supposed to figure this out and declare — under penalty of perjury — that they meet this requirement?

Further, some developers will be required to implement “protections to prevent … misuse of, or unsafe post-training modifications of, the covered model and all covered model derivatives … that are appropriate in light of the risks associated with the covered model, including from advanced persistent threats or other sophisticated actors.” Even leading AI researchers don’t agree on how best to “protect” AI models against these supposed risks, or what would be “appropriate.” So how are developers supposed to figure out how to comply with this requirement?

This creates a scary situation for developers. Committing perjury could lead to fines and even jail time. Some developers will have to hire expensive lawyers or consultants to advise them on how to comply with these requirements. (I am not a lawyer and am not giving legal advice, but one way to try to avoid perjury is to show that you are relying on expert advice, to demonstrate that you had no intent to lie.) Others will simply refrain from releasing cutting-edge AI products.

If this law passes, the fear of a trial by a jury — leading to a verdict that can be very unpredictable and with significant penalties in the event of a conviction — will be very real. What if someone releases a model today after taking what they genuinely felt were reasonable safeguards, but a few years later, when views on AI technology might have shifted, some aggressive prosecutor manages to convince a jury that whatever they did was not, in hindsight, “reasonable”?

Reasonableness is ambiguous and its legal interpretation can depend on case law, jury instructions, and common facts, among other things. This makes it very hard to ensure that what a developer does today will be deemed reasonable by a future jury. (For more on this, see Context Fund’s analysis of SB 1047. [URLs in article linked to below.])

One highly placed lawyer in the California government who studied this law carefully told me they found it hard to understand. I invite you to read it and judge for yourself — if you find the requirements clear, you might have a brilliant future as a lawyer!

Adding to the ambiguity, the bill would create a Frontier Model Division (FMD) with a five-person board that has the power to dictate standards to developers. This small board would be a great target for lobbying and regulatory capture. (Bill Gurley has a great video on regulatory capture.) The unelected FMD can levy fees on developers to cover its costs. It can arbitrarily change the computation threshold at which fine-tuning a model becomes subject to its oversight. This can lead to even small teams being required to hire an auditor to check for compliance with an ambiguous safety standard.

These provisions don’t ensure that AI is safe. They create regulatory uncertainty, and more opportunities for vested interests wishing to stifle open-source to lobby for shifts in the requirements that raise the cost of compliance. This would lock out many teams that don’t have a revenue stream — specifically, many open-source contributors — that would let them pay for lobbyists, auditors, and lawyers to help ensure they comply with these ambiguous and unreasonable requirements.

Open source is a wonderful force that is bringing knowledge and tools to many people, and is a key pillar of AI innovation. I am dismayed at the concerted attacks on it. Make no mistake, there is a fight in California right now for the future health of open source. I am committed to doing what I can to preserve open source, but I don’t assume that the pro-open source side will prevail. I hope you will join me in speaking out against SB 1047 and other laws that threaten to stifle open source.

[Original text (with links): https://t.co/whAndl5C2g ]

[legally-wired @Legally_Wired]

Does your business perform data scraping?

Here are 2 interesting facts for you.

1. Most successful claims against data/ web scraping have been when the data in question was behind a paywall/ required login credentials for access (even if anyone could freely make an account)/ restricted access.
2. Publishing or commercialisation of scraped data precludes you from certain exemptions available for fair use of publicly available data.

#developers #technology #legaltalk

[legally-wired @Legally_Wired]

3 tips to build an exit friendly venture.

Business owners that are building with a vision to sell their venture, this tweet is for you.

1. Document, document and document

In advising mid-sized ventures, it’s not uncommon to hear of commercial arrangements that are in play but there is no written document to support or enforce the arrangement. This would send alarm bells ringing for a potential buyer. Well, even Zuckerberg and the Winklevoss twins got into a he-said, she-said court battle for not having documented their arrangement sufficiently.

2. Maintain clear ownership.

This tops the list of priority diligence checks a potential buyer would have for your business. Ownership of stock, IP and other assets speak to the ability of the buyer to get clear and dispute free ownership.

3. Plan your client contracts.

For a buyer, contracts with your clients form the core value of your business. To plan ahead for your exit, include a clause in your customer contracts to allow you to freely assign the agreement when there is a sale. This saves the business from crucial roadblocks during exit.

DM/ comment for more tips.

#founders #businessowners #Startups

[legally-wired @Legally_Wired]

With big-tech coming under increased scrutiny for compliance, there is bound to be a trickle down effect where regulators start examining smaller businesses.

It’s never been more crucial to bring in legal strategy when building your product.

DM/ comment on what you’re building for actionable advice on legal strategy

#entrepreneurs #buildingpublic #Startup

[legally-wired @Legally_Wired]

@davidlovejoyx Ability create opportunities

[legally-wired @Legally_Wired]

@Support lost the blue tick, can you help

[legally-wired @Legally_Wired]

3 tips to build an exit friendly venture.

Business owners that are building with a vision to sell their venture, this tweet is for you.

1. Document, document and document

In advising mid-sized ventures, it’s not uncommon to hear of commercial arrangements that are in play but there is no written document to support or enforce the arrangement. This would send alarm bells ringing for a potential buyer. Well, even Zuckerberg and the Winklevoss twins got into a he-said, she-said court battle for not having documented their arrangement sufficiently.

2. Maintain clear ownership.

This tops the list of priority diligence checks a potential buyer would have for your business. Ownership of stock, IP and other assets speak to the ability of the buyer to get clear and dispute free ownership.

3. Plan your client contracts.

For a buyer, contracts with your clients form the core value of your business. To plan ahead for your exit, include a clause in your customer contracts to allow you to freely assign the agreement when there is a sale. This saves the business from crucial roadblocks during exit.

DM/ comment for more tips.

#founders #businessowners #Startups

[legally-wired @Legally_Wired]

Generative AI is great, but… you have to read the fine print.

Agencies are increasingly embroiled with questions from clients on the ownership of artistic collateral, use of AI tools in the work product and liability for breach of copyright.

Some of these questions are truly in the grey as we wait for some of these legal principles to evolve.

But, in reading the fine print of the ‘Terms of Use’ of these AI tools businesses can develop the operating approach on what they can promise and represent to their clients.

We are building a Terms of Use Reference Guide for widely used AI tools, comment/ DM for any particular AI tool you wish to see in the guide.

#GenerativeAI #startup #businessowners

[legally-wired @Legally_Wired]

Generative AI is great, but… you have to read the fine print.

Agencies are increasingly embroiled with questions from clients on the ownership of artistic collateral, use of AI tools in the work product and liability for breach of copyright.

Some of these questions are truly in the grey as we wait for some of these legal principles to evolve.

But, in reading the fine print of the ‘Terms of Use’ of these AI tools businesses can develop the operating approach on what they can promise and represent to their clients.

We are building a Terms of Use Reference Guide for widely used AI tools, comment/ DM for any particular AI tool you wish to see in the guide.

#GenerativeAI #startup #businessowners