GenAI Contract Provisions

• These are sample provisions only. Revisions or additional provisions may be necessary, depending on your specific agreement.
• Reminder: when incorporating these provisions into your contract, please make the appropriate edits to conform to your contract (e.g., edits to capitalized or defined terms, or section numbers, etc.).    
• For additional information on procurement and contracting relating to Generative Artificial Intelligence, please refer to section 2.4 in Chapter 2 of the Judicial Branch Contracting Manual.

SECTION 1:    GENERATIVE ARTIFICIAL INTELLIGENCE
1.1       DEFINITIONS: the following terms shall be given the meanings shown below:
(a) Artificial Intelligence or AI: technology that enables computers and machines to reason, learn, and act in a way that would typically require human intelligence.
(b) Deliverables: any services, software, goods, and any other items to be delivered or provided by Contractor pursuant to this Agreement.
(c) GenAI Training Data: any content, information, or data that is used to train, tune, test, or validate a GenAI, including text, images, video, audio, code, or similar types of input.
(d) Generated Data: any output, results, content, or other data that is produced by GenAI, including but not limited to text, images, video, audio, code, or similar types of output.
(e) Generative AI (GenAI): an Artificial Intelligence system that can generate derived synthetic content, including text, images, video, audio, code, and data visualizations, that emulates the structure and characteristics of the system’s training data.
(f) Hallucination: Generated Data that is nonsensical, false, or misleading, and is not based on real or existing data, but is instead produced by bias or the GenAI’s extrapolation or creative interpretation of its Gen AI Training Data.
(g) JBE: the California judicial branch entity that is entering into this Agreement.
(h) Materially Impacts: a Material Impact exists when:
(i) the work using GenAI could have a significant, substantial effect on the JBE system’s data integrity, availability, confidentiality, or security, and failure to perform such work in accordance with the contract could cause major disruptions to JBE operations;
(ii) the work using GenAI could have a significant, substantial effect on the JBE’s operations, finances, security, or reputation, and failure to perform such work in accordance with the contract would constitute a high likelihood of damage to the JBE; or
(iii) when failure to conduct work which uses GenAI in accordance with the Agreement would constitute a material breach under the Agreement.
(h) Prompt: any written, spoken, or rendered information provided as a query, command, or other form of input, to any GenAI in connection with this Agreement. For avoidance of doubt, Prompt includes any input automatically detected or created by the GenAI, as well as any derivate works of a Prompt or collection of Prompts.

1.2       GENAI DISCLOSURE OBLIGATIONS:
(a) Disclosure Obligations:  
(i)         Contractor must immediately notify the JBE in writing if Contractor intends to include or provide GenAI in Deliverables; or if Contractor intends to include GenAI in any Deliverable that Materially Impacts:
(A)       functionality of a JBE system (i.e., the work using GenAI could have a significant, substantial effect on the system’s data integrity, availability, confidentiality, or security, and failure to perform such work in accordance with the contract could cause major disruptions to JBE operations);
(B)       risk to the JBE (i.e., the work using GenAI could have a significant, substantial effect on the JBE’s operations, finances, security, or reputation, and failure to perform such work in accordance with the contract would constitute a high likelihood of damage to the JBE); or
(C)       contract performance (i.e., when failure to conduct work which uses GenAI in accordance with the contract would constitute a material breach of contract).    
(ii)        Such notification shall be provided to the JBE designee identified in this Agreement.
(iii)       At the direction of the JBE, Contractor shall discontinue the provision to the JBE of any previously unreported GenAI, including GenAI that results in a Material Impact to the functionality of a JBE system, risk to the JBE, or contract performance, as determined by the JBE.
(iv)       If the use of previously undisclosed GenAI is approved by the JBE, then Contractor will update the description of the Deliverables, and the parties will amend the Agreement accordingly, which may include incorporating the GenAI Special Provisions [see Appendix A below] into the Agreement, at no additional cost to the JBE.
(b) Failure to Disclose or Discontinue GenAI Use: The JBE, at its sole discretion, may consider Contractor’s failure to disclose or discontinue the provision or use of GenAI as described above, to constitute a material breach of Agreement when such failure results in a Material Impact to functionality of a JBE system, risk to the JBE, or Agreement performance. The JBE is entitled to seek any and all remedies available to it under law as a result of such breach, including but not limited to termination of the Agreement for cause.

1.3       CONTRACTOR’S OBLIGATIONS FOR RESPONSIBLE USE:
(a) Contractor shall ensure that it has obtained all necessary consents, permissions, and licenses from data subjects and third parties to use the GenAI for this Agreement. Contractor represents and warrants that it has the appropriate intellectual property rights associated with any GenAI used in the Deliverables.
(b) Contractor shall ensure that the GenAI included, or made available as part of the Deliverables is equitable, non-discriminatory, and reasonably well-designed to avoid harmful, offensive, dangerous, and unlawful impact. Contractor shall be liable for any Hallucination produced by the GenAI that has an adverse impact on Generated Data or a Deliverable.
(c) Contractor shall comply with all applicable laws and regulations in relation to the provision or use of any GenAI in the Deliverables.

1.4       RIGHTS TO STATE GENERATED DATA:
JBE and Contractor agree that Generated Data created from a JBE-provided Prompt is not a derivative work of the GenAI Training Data. Notwithstanding the preceding sentence, in the event a court of competent jurisdiction determines that Generated Data created from a JBE-provided Prompt constitutes a derivative work of the GenAI Training Data, Contractor hereby grants the JBE an unlimited, irrevocable, worldwide, perpetual, royalty-free, non-exclusive right, and license to use, modify, reproduce, perform, release, display, create derivative works from, and disclose the Generated Data.

1.5       CONTRACTOR’S USE OF JBE DATA:
Contractor shall not incorporate any confidential or non-public JBE data into GenAI Training Data and shall not otherwise utilize confidential or non-public JBE data to train, tune, maintain, improve, or develop GenAI, except with the express written authorization from the JBE specifying the confidential or non-public JBE data that may be used along with the acceptable scope of such usage.

APPENDIX A: GENERATIVE AI SPECIAL PROVISIONS
[Instructions: on a case-by-case basis, JBEs should consider including the following sample contract terms for projects involving higher risk GenAI]:

2.1       GENAI ADDITIONAL SECURITY REQUIREMENTS:
Contractor shall allow the JBE reasonable access to the GenAI security logs, latency statistics, and other related GenAI security data that affect this Agreement and JBE Content, at no cost to the JBE. 

2.2       CONFIDENTIALITY OF DATA AND PROMPTS:
Contractor shall protect from unauthorized use and disclosure any Prompts that Contractor provides to any GenAI in connection with this Agreement, as well as any Generated Data that is created based on Contractor provided Prompts.

2.3       RIGHTS IN PROMPTS AND GENERATED CONTENT:
(a)        For the avoidance of doubt and for the purposes of this Agreement: (i) JBE-provided Prompts and Generated Data created from a JBE provided Prompt shall constitute a subset of the JBE’s data, and the JBE owns all rights, title, and interest to such Prompts and Generated Data; and (ii) the JBE shall own all rights, title, and interest to any Prompts or Generated Data developed or produced by the Contractor as Deliverables pursuant to this Agreement.  
(b)        Unless otherwise specified in this Agreement:
(i)         Contractor shall not use, copy, modify, distribute, or disclose any Prompts or Generated Data for any purpose other than performing its obligations under this Agreement, unless expressly authorized by the JBE in writing.
(ii)        For any Contractor-provided Prompts or Generated Data from a Contractor-provided Prompt, Contractor hereby grants the JBE an unlimited, irrevocable, worldwide, perpetual, royalty-free, non-exclusive right and license to use, modify, reproduce, perform, release, display, create derivative works from, and disclose such Prompts and Generated Data.

2.4.      GENAI TRAINING AND GENERATED DATA REVIEW:
(a)        GenAI Training Data Review: Contractor shall track and disclose the quality of the GenAI Training Data used for any GenAI in relation to this Agreement, using suitable metrics and methods to measure the accuracy, relevance, and bias of the data over time. Contractor shall share such metrics and methods, as well as the underlying data, with the JBE upon request by the JBE or at periodic intervals as may be agreed by the JBE and Contractor. The JBE retains the right to audit, review, or investigate the quality of the GenAI Training Data at any time, upon reasonable advance notice from JBE to Contractor.
(b)        Generated Data Review: Contractor shall track and disclose the quality of the Generated Data of any GenAI in relation to this Agreement, using suitable metrics and methods to measure the accuracy, relevance, and bias of the output over time. Contractor shall share such metrics and methods, as well as the underlying output, with the JBE upon request by the JBE or at periodic intervals as agreed by the Parties. The JBE retains the right to audit, review, or investigate the quality of the Generated Data at any time, subject to reasonable advance notice from JBE to Contractor.
(c)        Generated Data Identification: Contractor shall ensure that all Generated Data that materially impacts Deliverables created pursuant to the Agreement contains a digital watermark or other digital identification that clearly identifies that the Generated Data was created by GenAI. Contractor shall comply with all other applicable laws, regulations, and guidelines concerning the identification Generated Data.