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Generative AI: A global guide to key IP considerations
Artificial intelligence (AI) raises many intellectual property (IP) issues.
Global | Publication | 九月 2024
In this horizon scan, we focus on key developments affecting companies operating in the UK, including in light of the recent change in UK government. The key focus areas are:
The new UK government has emphasised that fraud is at the top of its financial crime agenda and we also expect to see a continued focus on international bribery and corruption. Fraud and bribery-related developments include:
The EU Corporate Sustainability Due Diligence Directive (CSDDD) became law on 25 July 2024, with its requirements coming into effect from 2027. As highlighted in our previous horizon scan, CSDDD introduces ESG-related due diligence obligations for certain large EU as well as non-EU companies that generate a certain level of turnover in the EU. Please see our overview here.
CSDDD will require in-scope companies to undertake risk-based human rights and environmental due diligence to identify and assess actual and potential adverse impacts, and (as appropriate) prevent, mitigate, bring to an end and remedy such impacts in their operations and chain of activities. “Chain of activities” is defined to include the company’s upstream supply chain, as well as certain activities of downstream business partners related to the distribution, transport or storage of products.
Separately, the legislative passage of the EU Forced Labour Regulation (FLR) is expected to complete later this year, meaning the FLR would enter into force in 2027. While the FLR does not introduce any additional due diligence obligations beyond those prescribed in CSDDD, it will prohibit products made with forced labour from entry into the EU and will grant powers of investigation and enforcement to the EU Commission and EU Member States. Both laws are likely to impact many UK domiciled companies given their extraterritorial reach and the importance of the EU as an export market.
We expect to see a continued increase in speak up and other internal investigations, as well as increased scrutiny of how investigations are conducted and the role of in-house counsel. Draft SRA guidance (expected to be finalised in Q4) highlights the importance of effective internal investigations, but also the challenges and risks that they present for in-house counsel. These risks include breaching professional duties to act independently, to treat colleagues fairly and with respect, and to act in a way that upholds public trust and confidence in the profession. For more information, please see our article here.
The SFO has signalled that it will seek to incentivise whistleblowers (and those involved in criminality) to come forward, and also said that it will provide updated guidance which sets out how it expects companies to cooperate if any criminality is suspected. While no timeline has been given for this guidance to be published, companies should review their investigations protocols and policies for self-reporting in the meantime against the existing guidance. The US Department of Justice, meanwhile, recently published the Corporate Whistleblowers Awards Pilot Program, which seeks to financially incentivise whistleblowers to report allegations of corporate crime. The program also introduces a presumption of declination if corporates come forward within 120 days of an internal whistleblower report. We have covered this in more detail here.
While it is not clear how the new designation criteria will be applied in practice, it does signal a shift in approach by the UK government as it appears to align more with the approach of recent US secondary sanctions on foreign financial institutions, which can be designated or restricted from accessing the US financial system if it is determined that they support Russia’s military-industrial base.
Following recent FCA outcomes in relation to breaches of requirements imposed by the FCA, regulated firms should be mindful of the wide powers of the FCA and the PRA, including ‘own-initiative requirement powers’ (OIREQs) and voluntary requirements (VREQs). Given the current regulatory focus on use of supervision powers to prevent misconduct and manage risk, we are continuing to see more VREQ invitations and OIREQs with an increasingly wide range of requirements being sought and imposed.
For more detail on the considerations for firms when managing compliance with a VREQ/OIREQ, see our article here.
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Artificial intelligence (AI) raises many intellectual property (IP) issues.
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We are delighted to announce that Al Hounsell, Director of Strategic Innovation & Legal Design based in our Toronto office, has been named 'Innovative Leader of the Year' at the International Legal Technology Association (ILTA) Awards.
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After a lacklustre finish to 2022 when compared to the vintage year for M&A that was 2021, dealmakers expected 2023 to see the market continue to cool in most sectors, in response to the economic headwinds of rising inflation (with its corresponding impact on financing costs), declining market valuations, tightening regulatory scrutiny and increasing geopolitical tensions.
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