Artificial Intelligence and Machine Learning

Why is it critical to address AI issues now?

Generative AI is causing companies to reimagine the way they conduct their businesses. Specific regulations addressing the use of AI are now being proposed and enacted in the United States and the European Union respectively, but the use and deployment of AI software is already subject to existing legal and regulatory constraints.

Policymakers are seeking to ensure the protection of individuals and the broader public interest with a particular focus on enforcing civil rights, non-discrimination, fair competition, fiduciary duties, consumer protection, disclosure obligations and other vitally important legal protections.

Companies that adopt AI technology to improve their products and service offerings need to be alert to the potential legal risks and ensure appropriate systems and controls are in place to mitigate any potential harm.

How Dechert can help

Dechert has been at the forefront of AI technology, bridging the gap between technology and existing and forthcoming laws and regulations.

Working seamlessly across our offices in the United States, Europe and Asia, we advise clients across sectors as they leverage AI technology to develop new products and services, execute sophisticated technology transactions, and are involved with high-stakes disputes.

Read more about the sectors we serve and our legal solutions.

Key Contacts

Mark D. Perlow

Partner San Francisco
+1 415 262 4530 mark.perlow@dechert.com
Linda Ann Bartosch

Partner Philadelphia
+1 215 994 2132 lindaann.bartosch@dechert.com
Brenda R. Sharton

Partner Boston
+1 617 728 7113 brenda.sharton@dechert.com

Sectors We Serve

Regulatory requirements arising under the Bank Secrecy Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Financial Crimes Enforcement Network, and the Basel III framework mandate strict compliance requirements for banks and financial institutions contemplating the use of AI, including risk management, capital adequacy and consumer protection.
Financial institutions looking to use AI for a competitive advantage would be prudent to consider this regulatory environment when designing their AI products, use cases and roll outs.
Dechert is a trusted advisor to financial institutions worldwide, with extensive sector experience built upon a century-long heritage of bank representations. Our experience and track record are well chronicled regarding financial technology, anti-money laundering regulations, federal and state bank regulations, systemic stability regulations and bank enforcement and litigation.

Lenders have been using AI tools to target consumer marketing, identify, protect against and resolve fraud and identity theft, make credit decisions, and service portfolios.
There has been increased scrutiny from regulatory agencies looking to ensure that lenders utilizing AI are fully complying with existing legal requirements under the Equal Credit Opportunity Act, the Fair Lending Act, and Fair Credit Reporting Act. For example, the CFPB recently affirmed that federal anti-discrimination laws apply when credit decisions are made by a model using complex algorithms, such as those operating within AI tools.
Dechert is at the forefront of advising bank and non-bank lenders, private equity funds, asset managers, specialty finance companies and marketplace lenders on the incorporation and use of AI in the origination, purchase, sale, servicing and financing of financial assets. We also advise lenders who are structuring loan programs utilizing algorithmic underwriting decisions to determine which customers to lend to and on what terms.

There has been increased attention and scrutiny from key regulatory agencies including the SEC, FINRA and the CFTC, regarding the use of digital, AI and other information technologies in providing investment advice and other investment services. The SEC recently proposed significant new rules that if adopted would regulate conflicts of interest associated with broker-dealers’ and investment advisers’ use of AI in investor interactions.
Through a series of alerts, interpretive guidance and speeches, the regulators also have emphasized the importance of transparency; fulfilling the duty of care when using these technologies; robust processes, controls and risk management; and effective compliance policies and procedures.
Dechert lawyers are recognized as innovators and thought leaders in the legal and regulatory matters that affect asset managers, investment advisers and broker-dealers in the U.S. and globally, often drawing on previous experience in senior regulatory posts and in-house positions and tapping into the knowledge base of one of the legal industry’s largest and highest-ranked financial services practices.

AI technologies and products are being developed at an extraordinary rate, and technology companies need to devise strategies to enhance their market position and protect their assets from unfair competition.
Dechert attorneys focus on our clients’ priorities, delivering strategies to maximize the value of these technologies, drive profitability, make a significant impact in the marketplace, while complying with evolving complex regulations.
We guide AI companies through joint ventures, financings, mergers and acquisitions, and diverse agreements and contracts. When necessary, we defend technology companies in civil and criminal investigations, actions and prosecutions in the U.S. and abroad. We are the “go to” firm defending the largest technology and software companies in numerous litigations, class actions and arbitrations.

AI is revolutionizing life sciences by transforming every aspect of the value chain and global competition is fierce. By applying AI to big data and generative medicine, life sciences companies can create new drug design and protein-based therapeutics, reshape business models, streamline manufacturing, enhance R&D, improve clinical trial data flow and outcomes and foster more personalized engagement with healthcare professionals and patients.
Dechert helps clients navigate the most complex and demanding AI matters. Whether guiding a start-up biotech through its first round of commercially significant funding and securing meaningful IP, executing a strategic acquisition for a large pharmaceutical company, licensing a medical device company’s patent, or winning antitrust, securities or patent disputes, our lawyers approach every matter with the resources of a major international firm and the focus and depth of a life sciences boutique.
With dedicated resources deployed at major life sciences hotbeds across the U.S., Europe and Asia, our global team of lawyers collaborates seamlessly to help clients establish or expand their international presence.

We bridge the gap between emerging technologies and fintech regulations that are slow to adapt, helping companies leverage new AI technology and find market opportunities in an increasingly competitive environment.
Our fintech lawyers work across offices in the United States, Europe and Asia, drawing on decades of experience to advise key players in the biggest global fintech markets.
Clients relying on our solutions range from large financial institutions with operations spanning many countries to entrepreneurial companies launching their businesses in a single jurisdiction.

Legal Solutions

Our knowledge of complex market dynamics and shifting legal backdrops allow us to guide our clients with structuring complex AI transactions across all industries and geographies. Our commercial approach and detailed understanding of the AI industry creates additional value for clients as they complete innovative corporate and finance transactions.
We advise major operators and investors in the high tech, data, telecommunications, energy, defense, and infrastructure industries to develop and implement strategies to manage Committee on Foreign Investment in the United States (“CFIUS”) risks in connection with reviews of companies involved with leading artificial intelligence and machine learning technology.
We also advise asset managers and private equity funds in connection with investment strategies and potential risks arising in connection with the Outbound Investment Review regime announced by the Biden Administration in August 2023 that focuses on investments in artificial intelligence in certain countries of concern.

We continue to see emerging litigation associated with using this remarkable new technology. Companies investing, developing and using AI technology have been the target of actions related to their new products and services. These lawsuits involve data breaches, infringement of patent, trademark, and copyrights, as well as violations of the consumer protection laws, among others. For companies to maintain their position at the technological forefront, they must anticipate litigation risks.
Our team has an in-depth understanding of both the technology driving AI and the related legal, policy and regulatory issues. We’ve built a strong and lengthy record of achieving favorable outcomes — particularly in high-stakes litigation and client-critical government and internal investigations. We regularly defend clients in product liability, consumer fraud, deceptive practice claims and privacy litigation—including hundreds of class actions across the country and around the globe.

AI presents challenges and opportunities for IP professionals and corporations across multiple sectors and jurisdictions. AI-generated creative works which are developing at an extraordinary rate raise questions, such as, who owns the rights to such works and how can these works be protected? Current copyright laws grant rights to human creators, but AI-generated works continue to challenge this status quo, leading to debates over copyright ownership and originality.
AI also impacts patent law, potentially, making it easier to develop new inventions but raising concerns about a flood of new patents applications and questions about inventorship. Recent cases highlight the need for clear guidelines and legal frameworks addressing AI-driven innovation.
Dechert lawyers understand the business models used by our clients and help them make the most of new AI technologies. We deliver extensive expertise on patent, trademark, copyright, trade secret, software, technology, and data privacy issues including lawful data mining. We also provide counseling on entering into arrangements, joint ventures and projects to drive profitability, expand market share and make a significant impact in the marketplace.

One important consideration as companies begin to adopt AI technologies involves the protection of company data. Companies need to implement robust security measures to protect valuable data from unauthorized access, disclosure or alteration. It is also important to monitor and address emerging threats to avoid liability.
Dechert provides seamless, holistic service to clients across the globe, including AI strategic counseling and advice, data privacy and data breach response, deal diligence and the defense of regulatory enforcement actions. We help companies comply with applicable data protection laws and regulations, such as the General Data Protection Regulation (GDPR) in the EU or the California Consumer Privacy Act (CCPA) in the U.S.
Our lawyers are pioneers in this field. We have litigated some of the earliest landmark privacy cases, handled data breach investigations, defended hundreds of regulatory enforcement actions brought by U.S. and global regulators and advised the world’s top companies on the most cutting-edge, sensitive matters.

AI is showing the potential to transform the global marketplace. AI companies are competing aggressively to develop new applications while at the same time looking for collaboration opportunities. These companies as well as those incorporating AI into their business models need to ensure they comply with the antitrust laws in those jurisdictions where they operate.
Our antitrust lawyers guide companies through this difficult environment. Clients turn to us for creative solutions in merger clearance, litigation, investigations and business planning. Our global team delivers cutting-edge strategies and has proven expertise to help ensure successful resolution to even the most complex challenges.
Our top-ranked global team includes lawyers who have held leadership roles at antitrust enforcement agencies as well as in-depth experience with the Federal Trade Commission, Department of Justice, various state attorneys general, the European Commission, and other European enforcement agencies.