AI will shake up legal field

The Divina Law Office or DivinaLaw marked its 18th anniversary during a crucial point in the local legal industry that faces fundamental shifts with the introduction of artificial intelligence.

DivinaLaw said that the success it has been reaping is shared with those who have been part of the journey.

“This milestone is a testament to the trust and confidence bestowed upon us by our valued clients, whose diverse needs have motivated us to strive for our best,” a DivinaLaw statement said.

Managing Partner Nilo Divina and Partner Jay-r Ipac highlighted the increasing role of AI in the legal processes.

The rapid and global rise last year in the popularity of ChatGPT brought more policymakers and other stakeholders worldwide into the debate on how to maximize innovative uses of artificial intelligence (AI) while managing the different risks associated with it. The Philippines is no exception.

Cognizant of AI’s vast potential to contribute to the national economy, in May 2021 the Department of Trade and Industry launched the country’s AI Roadmap which contains four major dimensions for AI readiness.

A paper that Divina and Ipac submitted to the Asia Business Law Journal said the amendment to the Public Service Act, which now makes the 40-percent foreign equity limitation applicable only to public services that are public utilities — and not to telecoms providers or value-added services providers — will have a profound effect on the introduction of AI in the legal field.

Since the services that data centers may provide do not fall under the public utility classification, data centers may now be fully foreign-owned. Data centers are storage hubs for big data needed for advanced digital requirements such as those for AI.

“Recognizing the perceived threat of mass automation that AI brings, the Philippines recently enacted Republic Act 11927, the Philippine Digital Workforce Competitiveness Act, to prioritize the adoption of digital transformation in education and institutionalize educational reforms in response to the so-called Fourth Industrial Revolution,” according to the law partners.

It also enacted Republic Act 11899, the Second Congressional Commission on Education Act II, to enhance the skills and competitiveness of the Philippine workforce in human and digital technology and innovations.

A law that regulates (although in a very limited sense) the use of AI in the Philippines has been in place but it uses the lens of data privacy or protection.

Having patterned data privacy legislation on the EU model, the Data Privacy Act’s (DPA) implementing rules and regulations (IRR) provide that “no decision with legal effects concerning a data subject shall be made solely [based on] automated processing” without the data subject’s consent.

Regarding rights in an automated decision system, the DPA grants data subjects the right to access information on automated processes where (such automatically processed) data “will, or is likely, to be made as the sole basis for any decision significantly affecting, or will affect, the data subject.”

Guide to data processing

The DPA IRR includes the data subject’s right to be informed of meaningful information about the logic involved, as well as the significance and the envisaged consequences of such processing for the data subject; the existence of automated decision-making and profiling; and the right to access to “information on automated processes where the data will, or is likely to, be made as the sole basis for any decision that significantly affects, or will affect the data subject.”

Additionally, data subjects have the right to object to “automated processing where the personal data will, or is likely, to be made as the sole basis for any decision that significantly affects, or will affect him or her.”

The National Privacy Commission (NPC) also requires the registration of data processing systems that are “likely to pose a risk to the rights and freedoms of data subjects.” Originally, the NPC considered the use of automated decision-making and profiling only in instances where processing is likely to pose a risk to the rights and freedoms of data subjects and therefore is covered by mandatory registration.

Now, automated decision-making and profiling no longer fall under the umbrella term “likely to pose a risk,” but by themselves make it mandatory for a controller to register its data processing systems.

The National Privacy Commission requires the one who controls an AI system to notify the NPC of the same by indicating in the registration record and identifying the data processing system involved in the automated decision-making or profiling operation, regardless of whether such processing “becomes the sole basis of making decisions that would significantly affect the data subject.”

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Tricky IP issues

AI also has implications on copyright protection as under the Intellectual Property Code, only a natural person can create subject matter that can be subject to IP rights.

Hence, “AI-generated works are not copyright protected. For works that are partially AI-generated and partially created by a natural person, only those parts that are created” by the latter are copyrightable.

Under the patent provisions of the IP Code, computer programs per se are not patentable. To be patentable, however, “a claim directed to a computer program should be drafted in a manner wherein the program instructions are cooperatively working with a programmable device.”

In short, it cannot be a computer program or software by itself, rather it must exist and work with hardware. Hence, a claim that otherwise satisfies the elements of patentability, and this requirement using AI may be patentable.