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The Top 10 Overlooked Legal Issues with AI

Beyond the headlines: Discover the hidden legal traps in AI tools that could cost your company millions.

Created byJames Gatto
BeginnerUpdated Apr 15, 2026
The Top 10 Overlooked Legal Issues with AI

What You'll Learn

check_circleIdentify the legal risks associated with training AI on public and proprietary data.
check_circleAnalyze the limitations of AI-generated content regarding copyright and patent protection.
check_circleEvaluate the necessity of vendor diligence and indemnity clauses when adopting AI tools.
check_circleApply best practices for developing a comprehensive, company-specific AI usage policy.

About This Course

Artificial intelligence is moving faster than most compliance programs—and many organizations are exposed in ways they don’t even realize. From AI note-takers and code generators to webscraping and model training, today’s most common tools raise complex legal questions that often fall outside traditional risk frameworks.

This 1-hour CLE program breaks down the ten most frequently overlooked legal issues surrounding AI use in business and legal practice. We’ll examine when so-called “AI laws” apply to ordinary software features, how existing laws (privacy, IP, consumer protection, contract, and trade secrets) apply to AI tools, and the hidden risks of using public data for training. The session will also address ownership and IP protection of AI-generated outputs, liability exposure for infringing content, indemnification gaps, and the compliance challenges posed by AI recorders and automated coding tools.

Attendees will leave with a practical understanding of where AI risk is most likely to arise—and what must be included in an effective AI governance policy to mitigate exposure before problems surface.

Ideal for attorneys advising businesses, in-house counsel, compliance professionals, and law firm leaders navigating the expanding legal footprint of AI.

What You Will Learn:

By the end of this course, you will be able to navigate the complex AI legal landscape by understanding these top 10 overlooked issues:

  1. Trade Secret Leakage: The hidden dangers of employees inputting proprietary company code and data into public LLMs.
  2. Liability for "Hallucinations": Who is legally responsible for defamation, breach of contract, or financial loss caused by an AI's automated errors?
  3. Algorithmic Bias & Discrimination: Covert violations of employment, lending, and housing laws through automated decision-making.
  4. Open-Source Contamination: The legal risks of utilizing AI models trained on open-source code with restrictive licensing terms.
  5. Vendor Indemnification Traps: Decoding third-party AI software contracts and figuring out who actually pays when the AI gets sued.
  6. Attorney-Client Privilege Breaches: How the careless use of generative AI tools can inadvertently waive legal privileges and confidentiality.
  7. Antitrust & Algorithmic Collusion: The emerging risk of AI pricing tools inadvertently engaging in illegal price-fixing.
  8. Right of Publicity: Navigating the legal gray areas of AI mimicking voices, likenesses, and individual styles without consent.
  9. Data Scraping vs. Terms of Service: The legal friction between web scraping for AI training data and violating website user agreements (Breach of Contract).
  10. Cross-Border Compliance: The looming conflict between local AI innovations and international frameworks like the EU AI Act and global privacy laws.

Your Instructor

James Gatto
James Gatto

Partner | Co-Leader, Artificial Intelligence Industry Team and Co-Leader, Blockchain and Fintech Team | Sheppard Mullin Richter & Hampton LLP

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Jim Gatto provides strategic advice on intellectual property, regulatory and transactional matters relating to disruptive technologies and business models. He is co-leader of the firm’s Artificial Intelligence team and its Blockchain and Fintech Team. A decades-long thought leader in the areas of AI, robotics, blockchain, fintech, interactive entertainment, and open source, he brings deep understanding of business, technology and the law to the advice he provides to clients. Jim advises on all aspects of intellectual property strategy, licensing and enforcement, technology transactions and agreements, and tech-related regulatory issues such as securities, gambling and anti-money laundering (AML). Jim teaches a class on AI legal issues at George Mason Law School.

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Frequently Asked Questions

We are a registered provider with 327+ associations and regulatory bodies worldwide. We operate across 29 global markets including Canada, the US, Australia, and the UK. Every course page clearly displays its specific accreditations. Upon completion, you receive a professional certificate that can be validated online. Our certificates include all necessary accreditation details, credit hours, and completion dates, and are formatted specifically to meet the submission requirements of most global regulatory bodies.

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