The relationship between life and technology has been a constant theme throughout history, with healthcare being a significant industry that has seen considerable advancements. The “Digital Revolution” in the health sector is increasing reliance on emerging technology, including Artificial Intelligence (AI). This chapter explores the advancement of technology in healthcare and its link with Intellectual Property Management. It traces the evolution of AI in healthcare and explores the legal and ethical issues surrounding its implementation in smart healthcare systems. The authors assess existing regulatory frameworks and suggest recommendations for integrating AI into healthcare while adhering to ethical standards and legal limitations. They also discuss the process of creative destruction leading to accelerated innovation, particularly in the rapid ramping up of digital health capabilities. The chapter also addresses significant legal and ethical problems in AI-powered healthcare, such as patient privacy, data security, liability, and algorithmic prejudice. The authors propose guidelines for policymakers, healthcare providers, and AI developers to create AI applications that comply with legal standards and uphold ethical principles, promoting trust and safety in smart healthcare systems.