AI advances are outpacing legal frameworks on data protection

The legal landscape surrounding artificial intelligence and data protection continues to evolve as technological advances outpace existing regulatory frameworks, particularly in areas like generative AI and trade secret protection.

Key legal challenges in Gen AI: The development of generative artificial intelligence has created several unresolved legal questions that policymakers must address.

• A critical balance must be struck between allowing data access for AI training and protecting creators’ rights
• Questions remain about intellectual property rights for AI-generated content, including who owns the rights to content created using Gen AI tools
• Major tech companies like Google, OpenAI, and Microsoft have taken proactive steps by offering indemnity protection to customers facing copyright challenges

Organizational concerns: Companies implementing AI technologies face several pressing issues related to data protection and liability.

• Business leaders are primarily focused on determining how to extract value from Gen AI while managing associated risks
• Organizations seek clarity on data flow tracking across AI systems and responsibility allocation in case of AI malfunctions
• Recent educational efforts have helped reduce some legal ambiguity around Gen AI implementation

Singapore’s data protection gap: The absence of specific trade secrets legislation in Singapore highlights a significant gap in the country’s legal framework.

• Organizations currently rely on civil claims for breach of confidence when facing data theft
• Many other countries, including Germany, Japan, China, and the US, have enacted dedicated trade secrets laws
• The US International Trade Administration has expressed concerns about the adequacy of Singapore’s current protections

Case study insights: A recent legal case involving Genk Capital illustrates the challenges of prosecuting data theft under current Singapore law.

• The company pursued both civil and criminal cases against a former employee who copied proprietary trading data
• Despite winning the case, the company’s founder found existing legal remedies inadequate, with minimal financial penalties
• The case relied on the Computer Misuse Act, which was not specifically designed for commercial data theft scenarios

Future implications: Singapore’s position as a global business hub may require strengthening its legal framework to better protect trade secrets and intellectual property.

• The absence of specific trade secrets legislation could impact Singapore’s competitiveness as an IP hub
• Small and medium-sized businesses are particularly vulnerable under the current legal framework
• While formal trade secrets laws are lacking, resources like the Trade Secrets Enterprise Guide from IPOS provide some guidance to businesses