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Generative AI terms of service (B2B and B2C)

Generative artificial intelligence (AI) or machine learning systems can create or manufacture text, videos, images and other novel outputs. The generative AI user will provide inputs, often in the form of natural language prompt text, and the AI will produce the output in response to those inputs. These seemingly intelligent systems are based on complex algorithmic models implemented in software and are trained using large datasets. This terms of service template is specifically designed for this kind of generative AI system provided as a cloud-based or hosted service.

The core service provision and licensing terms are similar to those in our cloud services contracts. The licence is non-exclusive, and may be limited by reference to users, interfaces and/or purposes, as well as being limited in time. The licensing rules include various optional prohibitions - for instance, a prohibition on user-initiated penetration testing or load testing.

The terms of service include an optional service level agreement, covering availability and support-related services levels.

Another optional clause may be included to cover early/beta access - this limits the responsibilities and liabilities of the services provider in relation to early access services and modules.

Some of the key issues for any generative AI system is the approach taken to intellectual property rights in system output. In these template terms of services, there are two options. Under the first option, where customer-supplied data is incorporated into AI creations, the rights in that customer data are licensed to the services provider. If the use of the generative AI system results in supplemental rights, over-and-above those in the customer data, they are owned by the services provider. The rights in AI creations, excluding those in the customer data, are then licensed to the customer. Under the second option, rights in the AI creations are assigned to the customer - although there is of course a carve-out for rights in the underlying technology.

Whilst many of the provision in these AI terms of service are directed primarily at business-to-business arrangements, they also include optional consumer protection provisions - most notably a distance selling clause.

The terms of service template is supplemented by an AI-specific acceptable use policy or AUP, which regulates the content that may be submitted to the service, the purposes for which the service may be used, and the use of generate output. The AUP is primarily concerned with the provider-user relationship rather than the provider-customer relationship, and a distinct AUP can be particularly useful where the user is not (or is not always) the customer.

Some provisions in the AUP are substantial duplicates of those in the main terms of service. Depending upon the nature of the services provided, it may be appropriate to include particular usage rules in the terms of service, AUP, both, or neither.

The template is not suitable for AI systems that are to be installed on customer or user machines; nor is it suitable without material adaptation for use with respect to discriminative or predictive AI systems, or more traditional expert systems.

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Generative AI terms of service (B2B and B2C) contents

Services Order Form

  1. Definitions: definitions.
  2. Term: commencement of term; end of term (indefinite); each services order form creates distinct contract.
  3. AI Services: obligation to provide AI services; grant of licence to use AI services; limitations on use of cloud service; prohibitions on the use of the AI services; security of access credentials (AI services); availability of AI services; availability of AI services and SLA; AI services acceptable use policy; no damaging use of AI services; no excessive use of the AI services; no unlawful use of AI services; monitoring of AI services; no access to platform code; no assignment of 
    Provider
    intellectual property rights in AI services; suspension of AI services for legal non-compliance; suspension of AI services for non-payment.
  4. Early Access: limited responsibility for early access (AI services).
  5. Rights in AI Creations: assignment of intellectual property rights in AI creations to 
    Provider
    ; licence for 
    Customer
    to use AI creations.
  6. Nature of AI Creations: AI creations and third party AI systems; limitation of liability for AI creations.
  7. Customer
    Data:
    licence of
    Customer
    data; licence of
    Customer
    data for AI purposes, with opt-out; licence of 
    Customer
     data for aggregation purposes; warranties relating to
    Customer
    data; waiver of moral rights in
    Customer
    data (AI systems).
  8. Support Services: support services provision (discretionary option); standard of support services; support services in accordance with SLA; suspension of support services.
  9. Scheduled maintenance and Modifications: right to conduct scheduled maintenance and modify (AI services); acknowledgement of modifications by 
    Customer
     (AI services); limitations on right to modify (AI services); notice or prohibition of significant modifications (AI services); notice of modifications generally (AI services); security modifications (AI services); notice of scheduled maintenance (AI services); times for provision of scheduled maintenance; maximum aggregate time for scheduled maintenance (AI services).
  10. Mobile App: mobile App governed by separate terms.
  11. Customer
    obligations:
    human oversight of AI services; reporting of problems (AI services); general second party obligations.
  12. Charges: obligation to pay charges; amounts inclusive or exclusive of VAT; variation of charges.
  13. Payments: payment of charges in advance; interest on late payments.
  14. Distance contracts: cancellation right: distance contracts: cancellation right for consumers; cancellation right for services and digital content; consumer agreement to provision of services; exercise of cancellation right; refund upon services distance contract cancellation; refund method; refund timing for services and digital content.
  15. AI Laws: warranty that AI services not prohibited;
    Provider
     compliance with AI laws;
    Customer
    compliance with AI laws; ensuring personnel knowledge of AI; obligations of
    Provider
     as provider of AI; obligations of 
    Customer
     as deployer of generative AI.
  16. Data protection: compliance with data protection laws; warranty of
    Customer
    's right to disclose personal data (GDPR); details of personal data and purposes of processing by 
    the Provider
     (GDPR); duration of personal data processing by
    Provider
    (GDPR); personal data processed by
    Provider
    on instructions (GDPR); authorised international transfers of personal data (GDPR); informing 
    Customer
     of illegal instructions (GDPR); personal data processed by
    Provider
    as required by law (GDPR); confidentiality obligations on
    Provider
     persons processing personal data (GDPR); security of personal data processed by 
    Provider
     (GDPR); appointment of sub-processor by
    Provider
    (GDPR); authorisation for
    Provider
    to appoint sub-processors (GDPR);
    Provider
     to assist with exercise of data subject rights (GDPR);
    Provider
     to assist with compliance (GDPR); obligation to notify 
    Customer
    of personal data breach (GDPR);
    Provider
     to provide data protection compliance information (GDPR); deletion of personal data by 
    Provider
     (GDPR);
    Provider
     to allow audit (GDPR); changes to data protection law.
  17. Warranties: AI services general warranties; AI services warranty of non-discrimination; AI services intellectual property infringement warranty; breach of AI services infringement warranty;
    Customer
    warranty of authority; exclusion of implied warranties and representations.
  18. Acknowledgements and warranty limitations: no warranty that AI services meet needs; AI services not error free; AI may hallucinate; AI services not entirely secure ; AI services compatibility limitation; no legal etc advice with AI services .
  19. Indemnities: indemnity (flexible, with definition); conditions upon first party indemnity; indemnity (flexible, with definition); conditions upon second party indemnity; limitations of liability vs indemnities.
  20. Limitations and exclusions of liability: caveats to limits of liability (B2B or B2C); interpretation of limits of liability; no liability for force majeure; no liability for loss of profits; no liability for loss of revenue; no liability for loss of opportunities; no liability for loss of data or software; no liability for consequential loss; per event liability cap upon services contract; aggregate liability cap upon services contract (fixed); aggregate liability cap upon services contract.
  21. Force Majeure Event: obligations suspended for force majeure.
  22. Termination: termination without cause (optionally asymmetric, initial term and renewal term); termination by either party without cause (initial term and renewal term); termination upon breach; termination upon insolvency; termination upon non-payment; rights of termination supplemental or exclusive.
  23. Effects of termination: surviving provisions upon termination; termination does not affect accrued rights; charges on termination of contract.
  24. Notices: contractual notices by email (services order form).
  25. Subcontracting: subcontracting permitted.
  26. General: no waiver; severability; asymmetric variation (renewal terms); asymmetric assignment of contractual rights (B2C); no third party rights; entire agreement (with services order form); governing law; exclusive jurisdiction.
  27. Interpretation: statutory references; section headings not affecting interpretation; calendar month meaning; no ejusdem generis.

Schedule 1 (Acceptable Use Policy)

  1. Introduction: definitions for acceptable use policy (generative AI services); parties to policy; agreement to policy by using services; express agreement to policy; services user minimum age under policy.
  2. General usage rules: no damaging use of services; prohibition on excessive resource use; no unlawful use of services or creations; content must comply with provisions of part.
  3. Use of content: use of content in accordance with licence; prohibitions relating to use of services; warranty relating to use of content in accordance with licence.
  4. Moral rights waiver: waiver of moral rights in content.
  5. Unlawful Content: no unlawful user content: general prohibition; no unlawful user content: specific prohibitions; previous complaints and user content.
  6. Prompt Content: no poisonous prompt content; no AI-generated prompt content; no personal data etc in prompt content; no disinformation in prompt content; no use of services to produce creations that breach content rules.
  7. Graphic material: age suitability of user content; no violence, self-harm or suicide depicted in user content; no encouragement of violence, self-harm or suicide; no pornographic user content.
  8. Factual accuracy: content or shared content must be truthful; content or shared content must not risk defamation.
  9. Advice: no professional advice in content or shared content; no use of creations as advice; no negligent advice in content or shared content.
  10. Community standards: shared content appropriate etc; no offensive shared content; no annoying shared content; no hostile communications; no deliberate offense (generative AI); no shared content flooding; no duplicate shared content; categorisation of shared content; appropriate shared content titles; courtesy to service users.
  11. Creations: rights to use creations; prohibitions on use of creations; no representations that creations are human-created; creations to be subject to human review before use; no commitments in relation to creation content.
  12. Marketing and spam: prohibition on marketing activities (generative AI); no spam in user content; sending spam using email addresses; no promotion of marketing schemes (generative AI); avoidance of IP blacklisting.
  13. Regulated businesses: no gambling-related activities (generative AI); no pharmaceutical activities (generative AI); no weapon-related activities (generative AI).
  14. Monitoring: acknowledgement relating to monitoring.
  15. Data mining: no data mining; no identification of natural persons; no extraction of AI system data.
  16. Hyperlinks: no hyperlinks to prohibited content.
  17. Harmful software: no harmful software; no risky software; no backdoors or vulnerabilities in content.

Schedule 2 (SLA)

  1. Introduction to SLA: purpose of AI services SLA; informal definition of uptime (AI services).
  2. Availability: uptime commitment (AI services); measurement of uptime; reporting of uptime measurements.
  3. Service credits: earning service credits (AI services); amount of service credits; application of service credits (AI services); service credits are sole remedy; service credits upon termination (AI services).
  4. Exceptions: list of exceptions to availability commitment.
  5. Helpdesk: helpdesk obligation; purpose of support services helpdesk; access to helpdesk; times of helpdesk availability; all requests for support to go through helpdesk.
  6. Response and resolution: AI services support issue categorisation; allocation of support issue severity categories; support response times; contents of response to support request; support resolution times.
  7. Provision of Support Services: support services to be provided remotely.
  8. Limitations on Support Services: excessive use of hosted services support; support services training and misuse limitations (AI services).
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