Could Executives Face Liability from Employee AI Use?

We’ve written before about AI copyright lawsuits and are following how those play out in court. This class of case, brought by copyright holders, alleges copyright infringement by AI developers who feed copyrighted work into an AI’s training data without permission. However, in the future, could we even see end users of generative AI sued for infringement? And at an organizational level, could we see executives face vicarious liability for employee AI use? A recent post on The D&O Diary addresses these questions:

“According to the New York Times and Kadry plaintiffs, the generative AI LLMs that OpenAI and Meta created allegedly pull data from protected sources without permission.  Thus, will executives at companies that rely on genAI responses face vicarious liability allegations from the original content creators?  Notably, many company executives are unaware of how often employees use generative AI or LLMs to complete job-related tasks… according to the court in Eighth Floor Promotions, the ability to supervise and profit from the protected material may be enough to find leadership vicariously liable for infringement.”

Contracts with AI vendors are likely to include indemnity agreements, but those agreements may have damage caps. At this juncture, no cases are pursuing this theory of liability, but it’s worth watching how generative AI copyright cases play out. If plaintiffs win big, other copyright holders may use these cases as a blueprint. If that happens, then plaintiffs’ lawyers are likely to look not only for more copyrights to enforce, but for more targets for litigation.