AI Dynamics: Regulatory Landscape and Industry Insights

On November 19, 2024, Morrison Foerster's Tokyo office hosted a conference on AI Dynamics: Regulatory and Industry Insights.

Takayuki Sako, Deputy Director, Digital Economy Division, Ministry of Economy, Trade and Industry (METI) shared his vision for Japan's commitment to fostering an environment conducive to AI adoption-and the integration of AI into society.

MoFo partners Joe Gratz and Justin Haan followed Mr. Sako with an overview on the state of AI development and current issues.

Key Takeaways from the Panel Discussions

Legal and Regulatory Developments Impacting the AI Industry

Timothy Chen Koizumi Saulsbury, co-chair of MoFo's Global Intellectual Property Group, led an in-depth dialogue about legal and regulatory developments in Japan, the United States, and the EU. He was joined by Takayuki Sako (METI), Kyoko Yoshinaga, (Project Associate Professor, Graduate School of Media and Governance, Keio University), Joe Gratz (IP Litigation partner, Morrison Foerster), and Chie Yakura (IP Litigation partner, Morrison Foerster). The discussion highlighted business challenges presented by the global regulatory patchwork, litigation trends, and potential paths toward harmonization.

Factors Driving AI Company Growth and Investment

Seth Graham, a partner in MoFo's Technology Transactions Group, led the AI Investment panel. He shared the stage with Yuto Saeki (Executive Specialist, Global Investment Incubation, Digital Garage), Kenji Hosokawa (General Counsel, Fund Management Division, MUFG Innovation Partners), and Jonathan Duckles (Managing Director of RiverVest Venture Partners), and Hunter Reed (Partner, Deputy General Counsel, and Head of Fund Transactions, SoftBank Investment Advisers). The panel discussed factors facilitating the growth of the AI startup ecosystem in Japan, how regulations affect investor decisions, which factors businesses use to evaluate AI companies (and risk mitigation strategies they implement), and the importance of incubators and government support to a thriving AI industry.

AI Use Cases in Life Sciences

Yuka Teraguchi, a MoFo IP Litigation partner, hosted the panel on AI use cases in the Life Sciences. She was joined by Akira Shibata (Country Manager, Japan, Weights & Biases), Tatsuki Araki (Head of Healthy Living, Social Solution Business Unit, Fujitsu), and Aya Eguchi (Technology Transactions Partner, Morrison Foerster). The panel highlighted the increasing collaboration between tech companies and traditional pharma and biotech firms, leading to new partnerships and associated legal complexities, particularly around IP ownership and AI-created drugs. In diagnostics, concerns were raised about accountability for AI misdiagnoses and privacy issues related to patient data. Companies looking to leverage AI should focus on regulatory and risk management, as well as IP protection, ensuring proper documentation, and consideration of human interaction in AI development.

Conclusion

The AI Dynamics: Regulatory and Industry Insights program provided invaluable insights and sparked meaningful discussions amongst the over 75 attendees, which included legal, business, and investment professionals from Japanese companies operating in the technology, financial services, life sciences, and consulting industries.

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