CRITICAL ANALYSIS OF THE LEGAL

ISSUES PERTAINING T ARTIFICIAL

INTELLIGENCE

PULKIT GAHLOT(19LLB060)
INDEX:-

1) INTRODUCTION

2) GOVERNMENT THRUST TOWARDS INNOVATION AND DEVELOPMENT

OF AI

3) KEY LEGAL ISSUES

4) THE ROLE OF AI AT BROAD LEVEL

5) GOVERNMENT ISSUES AND LIABILITY OF THE BOARD

6) REGULATION/GOVERNMENT INTERVENTIONS

7) CONCLUSION
INTRODUCTION

Computer devices can imitate human conduct, to a degree, through ‘Artificial intelligence’. 'Man-made
brainpower' (AI) is the dynamic capacity of a machine, which regularly includes the handling of a lot of
information.

The term Artificial Intelligence was coined by Arthur McCarthy, in 1956. Artificial intelligence (AI)
is the ability of a digital computer or computer controlled robot to perform tasks commonly
associated with intelligent beings. The way in which AI affects the legal world is legion.
Globalization has led to the advancement of technology in the legal sector. In countries like U.K and
U.S.A where technological advancement has reached surreal heights, AI is also being used in courts,
“so much so that they are advancing the technology to help judges in decision making”.

India enjoys a characteristic benefit in this field, combined with an undeniable prerequisite given the
populace – India has promptly collectible huge and different information, and furthermore the specialized
capacity to use such information. High speed headways in innovation, extreme commercialization, and
mechanical readiness have added to the powerful circumstance that we have today. In this part the
creators have dissected the latest things in India identifying with 'man-made consciousness', 'AI' and
'enormous information', and have inspected orderly legitimate viewpoints regarding proprietorship,
antitrust, information security, administration and administrative issues.

Government thrust towards innovation and development of AI

The structure for directing AI and its applications is in its undeveloped stages and there is a lot to
cross. It is obvious from the accompanying that the Government is running after making an AI-
accommodating mechanical biological system in India:
a. In 2017, The Ministry of Commerce and Industry set up an AI taskforce which featured
different areas of importance1 for the AI system and the difficulties in embracing AI in India.

b. In 2018, the National Institution for Transforming India (NITI Aayog) 2 was coordinated
to start AI programs and their applications. The Ministry of Electronics and Information
Technology (MeitY) established four panels to foster an approach structure and investigate
issues like utilizing AI, key strategy empowering influences needed across different areas, and
legitimate and moral issues to AI.

c. In January 2020, NITI Aayog suggested that an AI-unequivocal PC system 'AIRAWAT' 3

be set okay with fulfilling the preparing needs of advancement centers, new companies, AI
specialists and students.

Key legal issues

‘With great power comes greater responsibility’ – a proverb which became popular during the
French Revolution, essentially responsible for bringing an accountable and law-abiding form of
Government, has never been more befitting than in the current AI revolution. ‘Accountability’ is
essential to the continuous development of AI and its application. It is hardly possible to think
about the applications of AI without the legal implications.

a. Ownership/protection:
I. Are AI applications to be categorised under copyright law and/or under patent law?
II. Is AI a mere ‘tool’ and therefore the owner of the ‘tool’ should be identified with the
intellectual property generated by such ‘tool’, or the AI application itself is the
creator of the intellectual property in question and therefore should be recognised as
its owner?

With the quick headway in the field of AI and its applications that cover pretty much
every part of our lives, the makers of AI have become mindful of the need to have
responsibility for applications and to secure the freedoms connected with such AI
applications. The AI applications might be ordered into and secured under the
accompanying classes:

1. The Copyright Act, 1957 ('Copyright Act') – Under Section 2 (o) of the Copyright
Act, both the 'source code' and the 'object code' of AI applications are secured as
1
Manufacturing, fintech, healthcare, agriculture, education, retail, aid for differently abled persons, the
environment, national security and public utility services.
2
NITI Aayog is the premier policy ‘think tank’ of India’s Government, providing both directional and policy
inputs. While designing strategic and long-term policies and programmes for the Government of India, NITI
Aayog also provides relevant technical advice to the Centre and States. (Available at: (Hyperlink)
3
AI Research, Analytics and Knowledge Assimilation.
 'abstract works'. The creator of the AI applications, for example the engineer, is viewed
as the proprietor of such AI application, with the exception of when the creator produces
or makes an AI application in the limit of a worker over the span of business. The
Copyright Act likewise allows reasonable use and figuring out.

2. The Patents Act, 1970 ('Patents Act') – Under Section 3(k) of the Patents Act, PC
programs are not patentable in essence. An AI application might be licensed in case it is
connected to a development alongside equipment and it is demonstrated that equipment
is a fundamental part of such innovation alongside the product. For example, Google
LLC documented patent application no. 3023/KOLP/2014 named 'Area History
Filtering' and was in this way allowed a patent after the analyst mentioned criticisms
under Section 3(k) of the Patents Act. Because of the complaint, the candidate
demonstrated that the cases were not identified with PC programs yet a processing
gadget, which upgrade its specialized impact.

3. Trade secrets – In India, the plan, thought and design of an AI application might
be ensured as a 'Trade secret' dependent on its inclination and circulation through
agreements or under law of misdeeds.

4. Licence arrangements – Access to AI applications can be conceded via permit

arrangements by the proprietors of such AI applications. Such permit arrangements are
comprehensively isolated into two classes: elite licenses; and non-select licenses. The
Copyright Act perceives the idea of 'selective licence'.23 Under the Copyright Act, an
elite licensee partakes in the privileges contained in the copyright of a work which is
much the same as that of the proprietor and incorporates the option to arraign, protect
and uphold the protected innovation freedoms.

Responsibility for property made by AI applications – Under the Copyright Act, copyright
remains alive in the creator provided that the creator 'is a characteristic individual, a person,
and not a fake person'4 and that for the motivations behind enrollment of a copyright,
subtleties of just a characteristic individual might be given as the creator of a work. The
'apparatus' utilized for creating licensed innovation is thought about just as a machine (for
example fake individual) and consequently isn't considered as the 'proprietor' of such
licensed innovation.

The utilization of AI applications has expanded with the headway of AI and AI applications
are utilized for creating licensed innovation dependent on 'insight'. This brings about the
discussion that the licensed innovation privileges in AI-created work ought to be allocated
to the 'man-made intelligence applications'. The hole between the current laws and the

4
Rupendra Kashyap v. Jiwan Publishing House Pvt. Ltd (1996(38) DRJ 81).
 headway in AI might go about as an impediment in the age of new work. Hence, there
emerges a need to survey the current laws to stay aware of the headway in the field of AI
and its employments.

b. Anti-trust/competition laws:
I. Whether or not collusion through AI applications are anti-competitive under
Competition Law?

Competing enterprises have sometimes resorted to coordinate their production and

pricing activities to mimic a monopoly, for increasing their collective and individual
profits by restricting market output and raising the market price. Because of such
unequivocal or implicit arrangement, the Competition Act forbids hostile to cutthroat
agreements.5 Anti-serious arrangements incorporate any understanding that
'straightforwardly or by implication decides buy or deal prices 6 or straightforwardly or in
a roundabout way brings about bid fixing or deceitful bidding'.7

The law the way things are doesn't accommodate the utilization of AI applications as a
method for plot among contenders, however it is conceivable that such plans might be
considered to be hostile to serious. For example, if at least two ventures, rather than
concurring on an express value, consent to execute a joint estimating calculation that
directions costs for their sake.

The legitimate system identified with contest law should develop so AI isn't accessible
as a safeguard for undertakings to participate in exercises which are generally restricted.
For instance, the utilization of AI-based evaluating programming by contending
ventures bringing about arrangement among themselves by deciding comparable costs
for their labor and products.

c. Board of directors/governance:
i. What is the impact of AI in the decision-making process at board level?
ii. What is the role of AI in corporate governance?

The role of AI at broad level

Inclusion of AI in corporate administration might be seen at two levels. In the first place, usage
of AI by the Board for its dynamic, and furthermore, use of AI for subbing at least one chiefs or
maybe even the whole Board.

5
The Competition Act, 2002 (Act No. 12 of 2003), s. 3(1)
6
The Competition Act, 2002 (Act No. 12 of 2003), s. 3(3)(a).
7
The Competition Act, 2002 (Act No. 12 of 2003), s. 3(3)(d).
A chief is depended with the obligation of practicing free judgment, acting in sincerely, not
including themselves in irreconcilable circumstance circumstances, and not appointing its office.
It would follow that AI might be utilized at board level by the chiefs, as long as the 'obligations'
are steadfastly released. Replacement of a chief by an AI is by and by not visualized under the
Companies Legislation. The current Companies Legislation obviously specifies that main
'people' will be chosen as directors.
In different wards, AI has been utilized by organizations to direct everyday business. A Hong
Kong-based funding firm proposed the utilization of VITAL – an AI program fit for making
speculation proposals in the Biotechnology area – to the Board. VITAL has been made an
eyewitness sitting on the Board, and substantiation by VITAL in all venture choices was made
mandatory.8 Similarly, a California-based programming organization runs all its corporate
choices through an AI device, which gives its recommendations.9
Accordingly, under the present legitimate system in India, the Board might utilize AI application
evaluations in settling on an educated choice while releasing its obligations. Likewise, it should
be guaranteed that calculations being referred to answer the prerequisites of law. Computer based
intelligence devices can give the organization an upper hand and can be utilized to do jobs
including due constancy and other regulatory work for the Board, however it can't attempt the
choices of a chief on the Board.
Governance issues and liability of the Board
The Board is enabled to take all choices in regard of the organization, but to the degree reduced
by arrangements of the Companies Legislation and by the constituent records. Man-made
intelligence might be utilized to examine client socioeconomics, break down inner
correspondence of workers to channel organization information from spillage, inspecting on the
web news to bring up contenders of the organization, track capital designation, etc.
Nonetheless, the Board should be outfitted to manage the conquering difficulties introduced by
the utilization of AI and be prepared to resolve the different issues, including lawful concerns, go
to proper lengths in taking care of the execution of AI and the emerging administration issues.
Such issues include: information protection; network safety; one-sided programming in AI; and
absence of straightforwardness on the working of the AI.
Throughout exercise of forces by the chiefs, the obligations cast on the chiefs as examined
above, should be satisfied. Certain conventions ought to be created and followed to guarantee
that the legitimate prerequisites are not straightforwardly or by implication compromised in the
pretense of utilizing AI. Prior to the authority dispatch of any AI application, the Board ought to
attempt the alpha and beta testing to lessen item disappointment hazard.

8
Ibid.
9
Martin Petrin, “Corporate Management in the age of AI” 3 UCL Working paper series (2019).
Disappointment with respect to the Board to address the ramifications emerging out of the
utilization of AI might result in corrective liability. In the developing administrative
assumptions, a pass in administration can have genuine ramifications including reputational
harm, fall in stock cost, and lawful activities. Further, where individual information is involved,
chiefs can be made responsible for the inability to give wellbeing measures to information
assurance under the Information Technology Act. Further, go-betweens, for example, common
assets or resource the board organizations need to outline extra strategies or report digital
assaults just as incorporate measures that they have taken to counter and relieve such risks.

Regulations/ government interventions

One of the committee reports10 has thought whether AI represents a danger to mankind. It was
believed that in the present status, AI applications are smart machines for explicit errands as it
were. It expressed that 'regardless of whether a machine with higher insight is created, there is
not any justification to accept that it would be keen on overwhelming the world because of
absence of intent'. If machines with higher knowledge are created, the methods of controlling
those machines ought to likewise be created in equal.

In 2020, NITI Aayog, strategy think tank about the Government of India, had given two draft
reports for the motivations behind conversation with partners regarding the matter of foundation
of an oversight body and implementation of capable AI standards.

It was additionally proposed that the oversight body will be a profoundly participatory warning
body which will interface with existing controllers across areas and give committed assets to
drive each order. It was expressed that innovation effectively mixes across different advances
and should not be seen in storehouse.

Albeit the drafts are neither comprehensive nor last, they do mirror the goal of the public
authority regarding way of guideline of AI and its utilization by private and public substances.

CONCLUSION

As is clear from the previous, there is a dire need to foster a legitimate system explicit to AI. The
accompanying ideas are made on the premise that the job of AI is set to turn out to be
significantly more significant at all levels:

a. Foster an information vault where anonymised individual information and other significant
information can be put away, pooled together, and made open dependent on distinguished
boundaries.

10
Ministry of Electronics and Information Technology, “Committee D on cyber security, safety, legal and
ethical issues” (2018).
b. Audit of existing laws. Existing laws should be assessed to stay aware of the progression in
the field of AI and its different applications.

c. Order of exceptional enactments identified with AI.

i. The AI authoritative structure ought to characterize expansive boundaries for the

different partners which incorporate designers and clients, and ought to have adequate space to
advance dependent on partner necessities. Such administrative structure ought to be empowering
in character and permit advancement. Every partner gathering ought to be needed to plan their
inward projects and conventions taking into account the authoritative structure.

ii. With a view to empower advancement, the administrative system ought to have set up an
instrument to recognize blunder of judgment (where the individual is blameless) and mistake of
purpose (where there is a component of mens rea).

Taking into account that the progressions in AI are happening at a worldwide level, India should
look to upgrade its investment in different AI projects in co-appointment with global bodies. A
genuine model is the nearby working of the World Health Organization (WHO) with The
Ministry of Health and Family Welfare, Government of India to offer specialized help for AI
drives as per its obligation to end tuberculosis by 2025.