Law in the Marketplace:  “Chatbots – a Danger to Your Business?” 

Published: 3/18/2023 6:53:55 PM

By John Cunningham

For the Monitor

As many readers will know, Chatbots are internet-based digital applications that, among their other capabilities, enable businesses to perform complex research and communications.  Chatbots can create business text, audio, images and video in a fraction of the time and expense otherwise necessary to produce them.

Many experts predict that the emergence of Chatbots will have as great an impact on businesses as the emergence of the internet itself and will enable valuable new business capabilities.  But these experts also predict that Chatbot usage may create major new business risks.  

It is too early to identify the precise nature of these risks.  However, WilmerHale, a major international law firm, has recently published an online essay that provides at least a good first effort at identifying them.  The essay is entitled “The Top 10 Legal and Businesses Risks of Chatbots and Generative AI.”  The link to it is  New Hampshire business owners and their lawyers should study WilmerHale’s essay in its entirety.  However, the key points in the essay can be summarized as follows:

Contracts.  Because of built-in requirements imposed by many Chatbots, the use of fill-in-the-blanks information that businesses obtain from third parties when drafting contracts with the help of Chatbots may seriously breach duties of confidentiality to these parties.

Malware, etc.  Businesses that lack adequate cybersecurity systems may fall victim to malware and cyberscams developed by malicious Chatbot users.

Privacy.  Some Chatbots require business users to disclose confidential information about their businesses, their employees and others as a condition for Chatbot use.  These disclosures may be illegal under the privacy laws of one or more jurisdictions.

Deceptive practices.  If the employees of a business outsource to Chatbots any of their work for their customers or if third parties reasonably believe that a business’s products are entirely human-made, this may violate duties under federal or state deceptive practice laws.

Discrimination.  Chatbots are based on vast digital databases.  Some of the information in these databases reflect serious biases against women, people of color and other protected groups.  Communications developed by businesses with the use of Chatbots may unintentionally reflect these biases.

Denigration.  Malicious users of Chatbots can readily produce floods of human-looking posts that denigrate businesses.  Businesses must monitor online and other publications about themselves, and they must prepare in advance to combat Chatbot-based publications that denigrate them.

Professional ethics.  Ethical rules applicable to lawyers and other professionals generally require that any work these professionals produce for their clients be created by “persons.”  These professionals must ensure that all of their work complies with this requirement.

Government contract requirements.  Rules governing bids for federal and state contracts may effective prohibit Chatbot usage in submitting these bids and in performing government contract work.

Intellectual property law.  As readers will know, intellectual property law governs the production, ownership and use of patents, copyrights, trademarks, and trade secrets.  In late 2022 and early 2023, major lawsuits have been filed alleging that Chatbot usage by business defendants have violated intellectual property laws.

Errors.  Information obtainable by businesses from Chatbots can be seriously erroneous.  No business should assume the correctness of information it receives from Chatbots.  




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