Legal implications of embracing new technologies

By Jeremy Aron, below, Client Legal Director, The Legal Director (TLD)

As Steve Jobs famously said, “Innovation distinguishes between a leader and a follower.” Successful businesses are leaders in their fields and their focus on innovation, in part by adopting new technologies, can be key to maintaining that leadership.

The difficulty for those businesses wishing to embrace groundbreaking technology is that laws and regulations take time to catch up and this inevitably causes uncertainty. On the one hand, there will be the realisation that using new technology could give an early-mover advantage and be hugely lucrative. On the other hand, the cost of either having to disengage from the technology or comply with the regulatory framework when laws and regulations do finally appear, could be prohibitively expensive.

Calls for artificial intelligence (AI) and e-bike regulation are currently unanswered. AI is (perhaps) in a category of its own because of the perceived potential existential concerns. Moving forward, lawmakers and regulators need to get to grips with the challenges presented by technological innovation much more rapidly. For those grappling with the decision to deploy a new technology in their business, the legal uncertainty is an unwelcome additional burden.

If your business is contemplating taking that bold step towards utilising or embracing a new technology, here are some recommended actions:

  • Go in with your eyes wide open – read up as broadly as possible on the technology whether it is articles or forums on the internet. If it is possible to speak with other businesses you know that are already using the technology, then take that opportunity;
  • If your business is a member of a representative industry body or trade association, seek confidential informal guidance about the technology from any experts available within that body or trade association;
  • Conduct a risk assessment with senior members of staff about the perceived pros and cons of the technology on your business. If you are already aware of any pitfalls or vulnerabilities, make sure you think through these very carefully.

Of particular importance is a diligent and thorough review of the licensing terms for the technology.  A General Counsel can help here, reviewing terms through the commercial lens of your business. As well as ensuring you are provided with the usual licensee protections (such as against the technology infringing the rights of others), the technology provider should be the one to assume responsibility for the technology complying with both current and future laws and regulations.

It is reasonable to impose the risk on the technology provider as it will be easier for them to insure against this risk than you. You may come up against some resistance from the technology provider here, but you should hold firm. Your rationale is that if the provider will not stand behind its new technology, then why would you make that significant investment?

SME Publications/ SME XPO 2024

Jeremy Aron is a Client Legal Director for TLD (The Legal Director) and provides General Counsel services to SMEs in the science, technology, and innovation space on a part-time, retained basis

SME Publications/ SME XPO 2024