In a meaningful move, Microsoft has announced that it will pay legal damages on behalf of its customers using the artificial intelligence (AI) products available with their suite of products if they are sued for copyright infringement for the output generated by such systems. This announcement is part of Microsoft’s new policy, called the Copilot Copyright Commitment.

The Copilot Copyright Commitment is an expansion of Microsoft’s existing intellectual property indemnification coverage. This policy aims to give customers confidence in deploying Microsoft’s AI systems without worrying about potential copyright issues. The policy covers damages and legal fees, providing customers with an added layer of protection as generative AI sees rapid adoption across the tech industry.

The Scope of the Commitment

Under the new commitment, Microsoft will pay any legal damages for customers using Copilot, Bing Chat, and other AI services as long as they use built-in guardrails. “Specifically, if a third party sues a commercial customer for copyright infringement for using Microsoft’s Copilots or the output they generate, we will defend the customer and pay the amount of any adverse judgments or settlements that result from the lawsuit, as long as the customer used the guardrails and content filters we have built into our products,” writes Microsoft.

“This move opens up the market,” Ilanah Fhima, professor of intellectual property law at University College London, told The Financial Times. She said the pledge “makes that software more usable as it removes one of the obstacles for businesses if they know that they have that reassurance.”

It is also worth noting that Microsoft will only implement the use of its Copilot Copyright Commitment policy on October 1, 2023. This is after the United States government as well as Microsoft itself published white papers and guidelines on the safe and effective use of AI.

The Implications

With the rise of generative AI, with an annual compound growth of 35.6% year over year, the tech industry has been grappling with questions about properly crediting or licensing copyrighted source material used in training AI models. Legal experts say these thorny copyright issues will likely be decided through future legislation and court cases, some of which are already underway.

Microsoft’s move to offer legal protection is seen as an effort to ease concerns customers might have about using its AI “Copilots” to generate content based on existing work. Generative AI applications scoop up existing content such as art, articles and programming code and use it to generate new material that can simplify or automate a range of tasks.

By assuming responsibility for potential legal risks involved in using its AI products, Microsoft is making a strong statement about its commitment to its customers and the broader tech industry.