AI Bailment Agreements: Safeguarding Hardware and Embedded Models
A Technology Bailment Agreement (TBA) governs the temporary transfer of physical possession of proprietary hardware, advanced silicon, or pre-commercial prototype equipment from the owner (bailor) to a third party (bailee) without transferring title. Unlike general Non-Disclosure Agreements (NDAs) or software evaluations, a bailment creates a distinct legal custody relationship under common law and statutory principles. As hardware increasingly carries high-value intellectual property—including compressed AI models, neural weights, and custom ASICs—organizations must modernize their bailment practices to prevent IP leakage, reverse engineering, and costly legal delays.
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