Many think that robots making deliveries, ‘waitering’ in restaurants or working at hospitals is a long way off. However, breakthroughs in robotics, machine learning and other technologies are making automation a reality in many industries. This will accelerate in upcoming years. Indeed, the smart technologies are forecast to add a whopping $15 trillion to the global economy by 2030. Among their many advantages for businesses are increased, faster output and slashed error rates. They also give employees the time to concentrate on people processes, such as sales and marketing or client relationships.
Everything has a downside, though. The “Factory of the Future” comes with a sizeable raft of legal liabilities and duties you must make it your business to understand and comply with from the word go. Major considerations about automation fall into three areas.
Who’s responsible for smart data?
Who is responsible for data in decision-making by AI is a subject nearly as complex as the AI itself. Artificial intelligence is virtual human intelligence in programmes that think like real people, usually “wired” into robotics and machines. Now in everyday use, AI comes with massive data protection concerns. Who’s responsible for the protection of stored data about users and individuals – the supplier or their client?
Information on employees, suppliers and visitors to a workplace is routinely recorded and stored by automated systems’ cameras, microphones and sensors in huge volumes. The trouble is, much of it is likely to be personal data – and that is subject to very aggressive privacy laws, called GDPR, which you can’t afford not to know about. They demand that if you’re the tech user (or client) you must understand what information is being captured by automation, then put in place robust protection procedures.
You need to ensure that no personal data captured by automation is passed back to your supplier without the permission of everyone involved. The laws on ‘data protection principles’ state that information held on people is held securely and used fairly, lawfully and transparently.
GDPR comes with sizeable penalties for those who break it, including fines in the tens of millions. Ignorance is not a get-out, so avoid unpleasant outcomes by seeing to it that responsibility for compliance is agreed upfront and is known and acknowledge by everyone involved.
And artificial intelligence rules are set to become even tougher. Recently published government proposals on regulating technology will be followed by a full white paper in late 2022. Among many obligations, a nominated person or company must have legal accountability for all AI tools.
What are you licensed for?
Licensing is a copyright issue that covers whether a user fully owns the tech or has simply paid for the right to use it. Incredibly, many businesses don’t know how they stand, then get slapped with an IP infringement claim when they try to sell the IT on or market it as a service. While the machinery might be yours, the crucial software is usually supplied by a vendor under licence. The terms mean that you can run it within certain defined limitations but the supplier remains the owner.
Misunderstanding usually stems from competing expectations and poor communication. Not unreasonably, you will want unique software that puts you ahead of your competition – and you certainly don’t want business rivals to have access to it. Especially a solution that was evolved and upgraded after your business ‘hosted the trial runs’.
Of course, the software developer has ambitions to licence its breakthrough out to as many customers as possible. Innovating custom one-offs for a single client isn’t financially viable, because the costs would be beyond the reach of all but the biggest corporations. However, a multi-use application would be affordable for many more businesses and systems with greater uptake also allow an entire sector to develop and grow evenly. This will benefit more companies quicker – as well as the people they employ and their customers, so far fewer are left behind by fresh technologies.
It all means that there must be agreement right from the outset on whether software is to be developed, priced and supplied as a bespoke platform or under licence. And if it’s the latter, defining what the core software is and clear rules on what bespoke tweaks the customer has sole access to must be established and formally agreed.
Always make it your business to fully understand the legal basis for using any tech and know where it’s stated in every contract. Take the trouble to read the small print and make sure you know the terms exactly, the impact they will have on your business and its operations and what its obligations are.
Health & Safety
People and robots working together can be a dangerous mix, which may unsettle employees, so ensure you take Health & Safety very seriously. Death or serious injury can stem from poor human operation, which itself can be caused by poor knowledge of complex control systems and their safety procedures. Meanwhile, mechanical faults can lead to erratic, dangerous responses, while hurried, careless installation and power surges can also cause serious accidents and lethal electric shocks.
Breaches of recently updated UK sentencing guidelines could lead to fines of more than £10m, among other severe sanctions – such as a £20m penalty in corporate manslaughter cases. Get your H&S advisers to establish safe, compliant set-up and operation of all robotic systems, then communicate all safety policies to all staff and visitors, with regular reminders. Finally, make a record that you have done so.
If you are worried about or don’t fully understand automation, you must get technical advice, legal guidance or both urgently. Prevention is far better than cure when it comes to the hugely expensive, potentially ruinous problems it could trigger. Knowing and forestalling the dangers of AI, automation and robotics will give you peace of mind and the confidence to make the most of the many benefits they could bring your business.
Main image: Fritz Kahn’s Der Mensch Als Industriepalast
James Crayton is Head of Commercial and Luke Jackson is Director in the Commercial and Technology & Digital team at Walker Morris.
August 26, 2022
Automation presents some legal risks you really need to address
by James Crayton and Luke Jackson • Comment, Technology
Everything has a downside, though. The “Factory of the Future” comes with a sizeable raft of legal liabilities and duties you must make it your business to understand and comply with from the word go. Major considerations about automation fall into three areas.
Who’s responsible for smart data?
Who is responsible for data in decision-making by AI is a subject nearly as complex as the AI itself. Artificial intelligence is virtual human intelligence in programmes that think like real people, usually “wired” into robotics and machines. Now in everyday use, AI comes with massive data protection concerns. Who’s responsible for the protection of stored data about users and individuals – the supplier or their client?
Information on employees, suppliers and visitors to a workplace is routinely recorded and stored by automated systems’ cameras, microphones and sensors in huge volumes. The trouble is, much of it is likely to be personal data – and that is subject to very aggressive privacy laws, called GDPR, which you can’t afford not to know about. They demand that if you’re the tech user (or client) you must understand what information is being captured by automation, then put in place robust protection procedures.
You need to ensure that no personal data captured by automation is passed back to your supplier without the permission of everyone involved. The laws on ‘data protection principles’ state that information held on people is held securely and used fairly, lawfully and transparently.
GDPR comes with sizeable penalties for those who break it, including fines in the tens of millions. Ignorance is not a get-out, so avoid unpleasant outcomes by seeing to it that responsibility for compliance is agreed upfront and is known and acknowledge by everyone involved.
And artificial intelligence rules are set to become even tougher. Recently published government proposals on regulating technology will be followed by a full white paper in late 2022. Among many obligations, a nominated person or company must have legal accountability for all AI tools.
What are you licensed for?
Licensing is a copyright issue that covers whether a user fully owns the tech or has simply paid for the right to use it. Incredibly, many businesses don’t know how they stand, then get slapped with an IP infringement claim when they try to sell the IT on or market it as a service. While the machinery might be yours, the crucial software is usually supplied by a vendor under licence. The terms mean that you can run it within certain defined limitations but the supplier remains the owner.
Misunderstanding usually stems from competing expectations and poor communication. Not unreasonably, you will want unique software that puts you ahead of your competition – and you certainly don’t want business rivals to have access to it. Especially a solution that was evolved and upgraded after your business ‘hosted the trial runs’.
Of course, the software developer has ambitions to licence its breakthrough out to as many customers as possible. Innovating custom one-offs for a single client isn’t financially viable, because the costs would be beyond the reach of all but the biggest corporations. However, a multi-use application would be affordable for many more businesses and systems with greater uptake also allow an entire sector to develop and grow evenly. This will benefit more companies quicker – as well as the people they employ and their customers, so far fewer are left behind by fresh technologies.
It all means that there must be agreement right from the outset on whether software is to be developed, priced and supplied as a bespoke platform or under licence. And if it’s the latter, defining what the core software is and clear rules on what bespoke tweaks the customer has sole access to must be established and formally agreed.
Always make it your business to fully understand the legal basis for using any tech and know where it’s stated in every contract. Take the trouble to read the small print and make sure you know the terms exactly, the impact they will have on your business and its operations and what its obligations are.
Health & Safety
People and robots working together can be a dangerous mix, which may unsettle employees, so ensure you take Health & Safety very seriously. Death or serious injury can stem from poor human operation, which itself can be caused by poor knowledge of complex control systems and their safety procedures. Meanwhile, mechanical faults can lead to erratic, dangerous responses, while hurried, careless installation and power surges can also cause serious accidents and lethal electric shocks.
Breaches of recently updated UK sentencing guidelines could lead to fines of more than £10m, among other severe sanctions – such as a £20m penalty in corporate manslaughter cases. Get your H&S advisers to establish safe, compliant set-up and operation of all robotic systems, then communicate all safety policies to all staff and visitors, with regular reminders. Finally, make a record that you have done so.
If you are worried about or don’t fully understand automation, you must get technical advice, legal guidance or both urgently. Prevention is far better than cure when it comes to the hugely expensive, potentially ruinous problems it could trigger. Knowing and forestalling the dangers of AI, automation and robotics will give you peace of mind and the confidence to make the most of the many benefits they could bring your business.
Main image: Fritz Kahn’s Der Mensch Als Industriepalast
James Crayton is Head of Commercial and Luke Jackson is Director in the Commercial and Technology & Digital team at Walker Morris.