Last updated: August 1, 2025
GENERAL PART
1. Scope of Application; Conclusion of the Agreement
1.1 These general terms and conditions (“GTC”) govern the provision of services related to the development of task-specific machine learning models (“ML Models”) provided by Distil Labs GmbH, Julie-Wolfthorn-Straße 1, 10115 Berlin (“Distil Labs”) to the customer (“Customer”; Distil Labs and Customer hereinafter together the “Parties” and individually each a “Party”).
1.2 The Services of Distil Labs are directed exclusively at business customers (Unternehmer) within the meaning of Sec. 14 German Civil Code (Bürgerliches Gesetzbuch, BGB). Distil Labs may require the Customer to provide sufficient proof of its status as business customer prior to the conclusion of the agreement.
1.3 The agreement is concluded with the inclusion of these GTC and – as the case may be any additional license terms – when the Customer registers and sets up an account (“Distil Labs Account”) via the Distil Labs website (the GTC together with any additional license terms, the “Agreement”).
1.4 This Agreement applies to all services, including future services, as agreed herein and provided by Distil Labs in connection with development or modifications of ML Models and, to the extent agreed, related support services to the Customer (“Service”).
1.5 Conflicting or additional contractual conditions of the Customer shall only apply if Distil Labs expressly confirms them in writing.
2. Customer Obligations relating to the Distil Labs Account
2.1 Upon conclusion of the Agreement, the Customer shall provide Distil Labs with all information that Distil Labs reasonably requires in order to provide the Services correctly and completely. The Customer is obliged to inform Distil Labs immediately of any relevant changes.
2.2 If Distil Labs receives a notice or otherwise has reason to believe that the information or documents provided by the Customer are wholly or partially incorrect, incomplete or not up to date, Distil Labs is entitled to request the Customer to remedy the situation immediately. If theCustomer fails to correct or complete the information or document within the set deadline, Distil Labs is entitled to restrict access to the Services and block the Customer until the Customer has fully complied with the request.
2.3 The Customer must keep their log-in information secret and carefully secure access to their Distil Labs Account. The Customer shall take reasonable precautions to prevent unauthorized access to the Distil Labs Account, and to protect the Services from unauthorized use. The Customer is obliged to inform Distil Labs immediately if there are indications that a Distil Labs Account has been misused by a third party. The Customer’s liability for any activity of or interaction with a corrupted account is subject to statutory rules.
3. Scope of the Service
3.1 The Services include in particular the development and licensing of fine-tuned AI models (“Trained Models”) based on open-source ML Models (“Base Model”), against payment of a license fee. The Trained Models will be provided for download by the Customer.
3.2 Distil Labs shall train an open-source ML Model using training data provided by Customer (“Customer Data”, as further specified in Section 5) to develop the Trained Models for a certain use case.
3.3 The Customer is granted a license to the Trained Model in accordance with the selected license terms (“Model License”).
3.4 Distil Labs will perform the Services according to the generally accepted industry practice and will provide the Trained Model “as is” regarding functionality, scope and performance. The Customer is responsible for e.g. the integration of the Trained Model in the customer’s IT infrastructure, the fitness and performance for a specific purpose, the compliance with laws.
3.5 Distil Labs shall not be obliged to any kind ofcustomer support services, including but not limited to the development and provision of updates to the Trained Model, implementation services or other.
4. Distil Labs Intellectual Property
4.1 Distil Labs remains the sole owner of all right, title, and interest in the technology (i) necessary for the training of the Trained Models (“Distil Labs Solution”), and (ii) the Distil Labs website, logo, account, or platform, in each case (i)-(ii) including its underlying software, algorithms, data, and any related intellectual property rights. In case Distil Labs provides any Service free of charge, this does not amount to a waiver of any rights in such Services.
4.2 Except as stated in this Agreement, Distil Labs does not grant the Customer any rights to patents, copyrights, trade secrets, trademarks, or any other rights in respect to the Trained Model.
4.3 The Customer may not misappropriate, reverse-engineer, extract source code, trade secrets, or know-how or otherwise misuse or manipulate the Distil Labs Solution, the Trained Model, the Services or any part thereof.
5. Customer Data; Data quality; customer warranties
5.1 The Customer shall provide the Customer Data to Distil Labs in a quality, format, and time appropriate to commence the Services. In case and for the time of a delay in the provision of the Customer Data, Distil Labs is released from its obligation to perform under this Agreement.
5.2 For the term of this Agreement, Customer grants Distil Labs the non-exclusive right to use, adapt, and reproduce the Customer Data for the performance of its obligations under this Agreement, in particular for use as training data, text and data mining, machine learning or other use related to artificial intelligence technology.
5.3 Customer warrants that:
5.3.1 the Customer Data is complete, accurate, and provided in a structured, machine-readable format;
5.3.2 the Customer holds all rights, licenses, and permissions necessary to use the Customer Data for model training and to grant such rights to the Distil Labs;
5.3.3 Distil Labs’s use of the Customer Data in accordance with this Agreement does not infringe third-party intellectual property rights;
5.3.4 do not include any information relating to an identified or identifiable natural person (including, for the avoidance of doubt, any personal data within the meaning of Art. 4 para. 1 of the EU General Data Protection Regulation); and
5.3.5 is free from viruses, malware, or other harmful components. The Customer is responsible for implementing appropriate safeguards thereto.
5.4 If Customer fails to fulfill its duty to cooperate or provides defective or incomplete Customer Data, and this hinders or delays Distil Labs’s performance, any agreed performance deadlines shall be extended accordingly. Distil Labs shall also be entitled to claim additional reasonable remuneration for any additional efforts caused thereby.
5.5 Distil Labs shall not be liable for any defects in the Trained Model to the extent such defects are attributable to deficient, incomplete, or unlawful Customer Data.
5.6 In case of breach of Sections 5.3 above, Customer shall indemnify Distil Labs from any and all claims of third parties who assert claims against Distil Labs related to Distil Labs’s use of the Customer Data. The provisions of this Section shall apply mutatis mutandis to any liquidated damages (Vertragsstrafen) as well as to any administrative fines (Bußgeld) or penalties imposed by the authorities or by the courts, to the extent that the Customer is responsible for such.
5.7 The Customer acknowledges and agrees that the Customer Data must not contain trade secrets of the Customer, and that Distil Labs cannot and will not guarantee technical and organizational measures within the meaning of section 2 no. 1b) of the German Trade Secret Act (Geschäftsgeheimnisgesetz – GeschGehG) to protect the secrecy of possible trade secrets within the Customer Data.
5.8 Upon termination of the agreement or if requested byCustomer, Distil Labs shall delete the Customer Data relating to a TrainedModel as well as any and all back-up copies thereof from all of its IT Systemsand, upon Customer’s written request, render reasonable proof thereof to Customer.
6. Adherence to AcceptableUse Policy
6.1 Customer shall not use, and encourage or allow any other person or entity to use the Trained Model in prohibited manners, including but not limited to
6.1.1 use of the Trained Model for the purpose of infringing upon or misappropriating the intellectual property rights of Distil Labs or any third party, including but not limited to copyright, trademark, patent, or trade secret rights.
6.1.2 use of the Trained Model in any manner that may expose Distil Labs or any third party to legal liability, financial loss, reputational harm, or personal endangerment;
6.1.3 use of the Trained Model in any manner that may disrupt, disable, overburden, or impair the functioning of the Trained Model or interfere with any other party’s use thereof, including through denial-of-service attacks, spamming, or reverse engineering;
6.1.4 upload to the Trained Model any content that is illegal or immoral and/or such content that serves to incite hatred, hate speech, illicit deep fakes, or fake news, or incites criminal acts or glorifies or trivializes violence, is sexually offensive or pornographic, is capable of seriously endangering children or young people morally or impairing their well-being or may damage the reputation of Distil Labs or any third party;
6.1.5 use of the Trained Model to unlawfully discriminate against or disadvantage individuals based on race, gender, religion, sexual orientation, disability, or other protected characteristics, including through algorithmic bias or automated decision-making;
6.1.6 use of the Trained Model for any fraudulent activities, including but not limited to identity theft or impersonating another person or entity through unauthorized generation of synthetic media such as voice cloning or image/video synthesis (Deep Fakes), providing false information to deceive or mislead others (Fake News), or forgery or falsification of documents;
6.1.7 use of the Trained Model to create or distribute malware, viruses, or other harmful software that may disrupt, damage, or gain unauthorized access to computer systems, networks, or data;
6.1.8 use of the Trained Model in any manner that violates applicable laws, regulations, or governmental orders, including but not limited to export control laws and data protection regulations;
6.1.9 as well as use of the Trained Model in any manner that violates generally accepted ethical standards of conduct, including but not limited to professional codes of ethics, academic integrity principles, or widely recognized standards for responsible innovation and use of artificial intelligence.
6.2 The list of prohibited uses is provided by way of example and should not be considered exhaustive.
7. Limitation of Liability
7.1 In case of Services provided to Customer for free and for paid Services, Distil Labs shall be liable without limitation for damage caused intentionally or by gross negligence.
7.2 In case of paid Services to the Customer, the liability of Distil Labs in the event of a slightly negligent breach of a primary performance obligation or a secondary obligation, the breach of which jeopardizes the achievement of the purpose of the Agreement or the fulfillment of which makes the proper execution of the Agreement possible in the first place and on the observance of which the Customer could rely (“Cardinal Obligation”), shall be limited to damages typical and foreseeable at the time of the conclusion of this Agreement. The Parties agree that the typical and foreseeable damage is usually limited to twice the amount of License Fees owed for one contract year. Distil Labs shall not be liable in the event of a slightly negligent breach of ancillary obligations that are not Cardinal Obligations.
7.3 The foregoing exclusions of liability of this Section 7 shall not affect the liability of Distil Labs for a quality guarantee assumed, for fraudulent intent, for damages arising from injury to life, limb and health, for product defects in accordance with the Product Liability Act and for liability based on the GDPR. A change in the burden of proof to the detriment of the Customer is not associated with this.
7.4 Insofar as the liability according to this Section 7 is excluded or limited, this shall also apply to the personal liability of Distil Labs's employees, representatives and vicarious agents.
7.5 If the Customer suffers damage due to the loss of data, Distil Labs shall not be liable for this insofar as this damage could have been avoided by a regular and complete backup of such data.
7.6 In particular, in the event of disruptions to the technical infrastructure or the Internet connection, Distil Labs shall be released from its obligation to perform. This also applies if Distil Labs is prevented from performing due to force majeure or other circumstances, the elimination of which is not possible or economically reasonable for Distil Labs.
8. Term and Termination
8.1 Unless agreed differently, this Agreement is concluded for a term of one (1) year. Unless either Party terminates the Agreement with a notice period of six (6) weeks to the end of the term, the Agreement auto-renewals for another one (1) year term.
8.2 The right of both Parties to terminate the Agreement for cause remains unaffected.
8.3 Notice of termination must be given in writing.
9. Changes to these GTC
9.1 Distil Labs may change these GTCs during the contract term in compliance with the following procedure, provided that the amendment is reasonable for the Customer, i.e. without significant legal or economic disadvantages, taking into account the interests of the Customer and that there is a valid reason for the amendment. Such a reason exists, in particular, incases of new technical developments or changes in the regulatory environment.
9.2 Distil Labs shall inform the Customer of any changesto these GTCs at least 30 calendar days before the planned entry into force of the changes. The Customer may object to the changes within 30 calendar days from receipt of the notification. If no objection is made and the Customer continues to use the Services after expiry of the objection period, the changes shall be deemed to have been effectively agreed for all Services to be provided from the end of the objection period. In the notification, Distil Labs will inform the Customer of all relevant changes to these GTCs, the objection period and the legal consequences of the expiry of the objection period without exercise of the right of objection. If the Customer objects to the changes, Distil Labs may terminate the Agreement pursuant to Section 1.
10. Final Provisions
10.1 Should individual provisions of the Agreement be or become invalid in whole or in part, this shall not affect the validity of the remaining provisions. Invalid provisions shall be replaced first and foremost by provisions that most closely correspond to the invalid provisions in a legally effective manner. The same applies to any loopholes.
10.2 The exclusive place of jurisdiction for all disputes arising from or in connection with the Agreement shall be Berlin.
10.3 The law of the Federal Republic of Germany shallapply, with the exception of its provisions on the choice of law, which wouldlead to the application of another legal system. The application of the CISG (UN Convention on Agreements for the International Sale of Goods) is excluded.
MODEL LICENSE TERMS: R&D LICENSE
1. Services, Prices and Payment
1.1 The Customer pays a one-time license fee, as indicated in the check-out process, for running of one (1) training process of the selected Base Model using Customer Data (“License Fee”).
1.2 The License Fee shall be due for payment in advance. The Customer shall only be permitted to set off against payment claims of Distil Labs if the Customer’s claims are undisputed or have become res judicata.
2. Model License: R&D License
2.1 Subject to Customer’s payment of the license fee, Distil Labs grants to Customer the Model License (as defined below). For clarification, Distil Labs retains any other rights in its software or know-how, in particular in the codebase needed for the fine-tuning of the Trained Model.
2.2 Subject to the requirements of the Base Model License (cf. Section 2.5 below), Distil Labs transfers to the Customer the perpetual, non-exclusive usage right to the Trained Model for non-commercial purposes of prototyping and research & development. The Parties agree, that commercial purposes include deployment in production externally (to be used by Customer’s customers paid or free of charge) or internally (as a tool for Customer’s employees). The territorial scope of the license is limited to the use within the United States of America and the European Economic Area including all member states of the European Union (“Model License”).
2.3 The Model License for non-commercial purposes of prototyping and research & development shall include (i) the non-exclusive right to permanent or temporary reproduction, in whole or in part, by any means and in any form (e.g. permanent and/or volatile storage on electrical, electromagnetic, optical storage media, such as any type of SDD, HDD, DVD, memory cards, USB sticks), (ii) the non-exclusive right to distribution in any form, media and by any means regardless of whether the distribution is in tangible or intangible form, in particular to transmit the Trained Model via wired and wireless networks (e.g. for download from internet or intranet by wire or wireless means including broadband, cable, fiberglass, WIFI, LTE, 5G, satellite internet, other data networks), and (iii) the non-exclusive right of making available to the public in such a way that members of the public can access it from places and at times of their choice (e.g.by web or mobile app, virtual or augmented reality, cloud storage, cloud hosting, decentralized hosting, non-fungible token, application service providing, software as a service, or cloud computing). The license shall also contain, to the extent necessary for prototyping and research & development, the right to adapt and modify the Trained Model subject to the limitation in Section 2.4 and 2.5 below, to further develop the Trained Model including changes to functions or appearance, adapt to other software versions, to exchange parts of the Trained Model or combine the Trained Model with other results of work and to use the results in the same way as the original Trained Model. Any derived models from the Trained Model shall retain this model license.
2.4 The Customer shall not, without the prior writtenconsent of Distil Labs:
2.4.1 train, fine-tune, re-train, or otherwise modify the Trained Model, unless for purpose of research & development;
2.4.2 use the Trained Model or any part thereof to create derivative models or services that compete with those of Distil Labs;
2.4.3 circumvent any technical restrictions embedded in the Trained Model or Base Model that are designed to enforce usage limitations.
2.5 The Parties acknowledge and agree that the Trained Model is developed from Base Models which are supplied by a third party. Therefore, the Model License is subject to the restrictions resulting from the open-source or any other applicable license of the Base Model (“BaseModelLicense”) and the Customer must use the Trained Model in compliance with the Base Model License. In particular, the Customer must oblige their clients to compliance with the Base Model License in any case of transferring or sub-licensing the rights to or making available in any way the Trained Model. The applicable Base Model License is agreed on in the Training Configuration and will be provided for download. The Customer agrees to indemnify Distil Labs for any and all claims brought by the Base Model provider for violations of the Base Model license.
MODEL LICENSE TERMS: COMMERCIAL LICENSE
1. Services, Prices and Payment
1.1 The Customer pays an annual license fee for a set number of (re-trainings), in each case as indicated in the check-out process, of the selected Base Model using CustomerData (“License Fee”).
1.2 The License Fee is due annually. If the Customer defects on payment of the License Fee for theCommercial License, the Commercial License is terminated and downgraded to the R&D License.
1.3 The License Fee shall be due for payment in advance. The Customer shall only be permitted to set off against payment claims of Distil Labs if the Customer’s claims are undisputed or have become res judicata.
2. Model License: Commercial License
2.1 Subject to Customer’s payment of the annual license fee, Distil Labs grants to Customer the Model License (as defined below). For clarification, Distil Labs retains any other rights in its software or know-how, in particular in the codebase needed for the fine-tuning of the Trained Model.
2.2 Subject to the requirements of any Base Model License (cf. Section 2.5 below), Distil Labs transfers to the Customer the exclusive, commercial usage right to the Trained Model. Unless agreed otherwise with Distil Labs in writing, the Customer is allowed to grant up to twenty (20) commercial sub-licenses to its customers. The territorial scope of the license is limited to the use within the United States ofAmerica and the European Economic Area including all member states of the European Union (“Model License”).
2.3 The Model License shall include (i) the exclusive right to permanent or temporary reproduction, in whole or in part, by any means and in any form (e.g. permanent and/or volatile storage on electrical, electromagnetic, optical storage media, such as any type of SDD, HDD, DVD, memory cards, USB sticks), (ii) the exclusive right to distribution in any form, media and by any means, including the right to rent and loan, regardless of whether the distribution is in tangible or intangible form, in particular to transmit the Trained Model via wired and wireless networks (e.g. for download from internet or intranet by wire or wireless means including broadband, cable, fiberglass, WIFI, LTE, 5G, satellite internet, other data networks), (iii) the exclusive right of making available to the public in such a way that members of the public can access it from places and at times of their choice (e.g. by web or mobile app, virtual or augmented reality, cloud storage, cloud hosting, decentralized hosting, non-fungible token, application service providing, software as a service, or cloud computing). The license shall also contain the right to adapt and modify the Trained Model subject to the limitation in Sections 2.4 and 2.5 below, to adapt the Trained Model to the Customer’s software stack, APIs, or interfaces to the extent necessary for deployment and integration of the Trained Model. Any derived models from the Trained Model shall retain this model license.
2.4 The Customer shall not, without the prior written consent of Distil Labs:
2.4.1 train, fine-tune or re-train the Trained Model;
2.4.2 use the Trained Model or any part thereof to create derivative models or services that compete with those of Distil Labs;
2.4.3 circumvent any technical restrictions embedded in the Trained Model or Base Model that are designed to enforce usage limitations.
2.5 The Parties acknowledge and agree that the Trained Model is developed from Base Models which are supplied by a third party. Therefore, the Model License is subject to the restrictions resulting from the open-source or any other applicable license of the Base Model (“Base Model License”)and the Customer must use the Trained Model in compliance with the Base Model License. In particular, the Customer must oblige their clients to compliance with the Base Model License in any case of transferring or sub-licensing the rights to or making available in any way the Trained Model. The applicable Base Model License is stated in the Training Configuration. The Customer agrees to indemnify Distil Labs for any and all claims brought by the Base Model provider for violations of the Base Model License.
3. Customer Warranty Rights; Customer’s Compliance Responsibility
3.1 The Parties agree that the Customer’s only warranty right is the right to request up to 11 (eleven) re-training processes, i.e. running separate fine-tuning jobs of an ML Model using Customer Data (“Follow-up Re-Trainings”).The right to request any re-training lapses one (1) year after the first training of the ML Model is completed and made available for download. Additional re-training processes beyond the initially agreed number are subject to an extra training fee.
3.2 The Customer acknowledges that Distil Labs currently isnot certified under ISO 27001, SOC 1 or 2 or similar.
3.3 The Customer acknowledges and agrees that it is theirsole responsibility to ensure that their usage of the Trained Model (includingbut not limited to the further distribution of the Trained Model to Customer’sclients) is compliant with any local applicable law and regulation.
