Machine learning agreements or AI agreements are super new, and actually very interesting. Not much has been written on these agreements, so I thought I would share a few thoughts on the big issues (from the perspective of the AI/machine learning software vendor).

So here goes.

HOW THE AI SYSTEM WORKS AND WHO DOES WHAT MATTERS.

• Everything starts and ends with the answers to this question.
• This will drive what warranties you provide, the IP ownership model and in general the rights and obligations of the parties.
• Example: whose algorithm is being used? Is this a perpetual or term based deal?

WHO OWNS THE MACHINE LEARNING MODEL?

• Usually customers own their input and output data from software programs, but it is not that simple with AI and machine learning agreements.
• Machine learning models are generally viewed as the output from training a learning algorithm. The model will then be applied to the dataset. The model may contain parts of the underlying algorithm within the software, so I don’t think the ownership of the model matters, as much as who has what rights to the model and for how long.
• One way to solve it is to allow the parties to use the machine learning model during the term of the agreement and then have the vendor destroy the model at the end of the agreement. This way, the vendor is free to independently recreate any future machine learning models, and the customer gets the protection from the vendor re-using the model for other customers.

WHAT ABOUT THE UNDERLYING SOFTWARE AND ALGORITHM.

• This one is much easier.
• The vendor brings the software to the party, and it should own any enhancements, modifications or changes to it (and its algorithms).
• All AI and machine learning systems are on top of or embedded in a software program, so the industry standard licensing terms should apply to the underlying software. 

So when you are working on drafting your AI or machine learning agreement, remember that it will not be as simple as a standard software licensing agreement. Dig in, and figure out the issues so that you and your customers know what they can and cannot do with your software and the output.

Resources: 

• Here is an article from the other side, which I think is too simplistic as to who should own what. Link

Disclaimer: This post is for informational and educational purposes only, and is not legal advice. You should hire an attorney if you need legal advice, which should be provided only after review of all relevant facts and applicable law.