Imagine a world where machines can write books, design virtual fashion, and create entire marketing campaigns. This is not science fiction – it is our current reality. As new technologies emerge, companies are pushing the boundaries of digital content creation. However, these technological advancements come with a new set of legal challenges, and trademark law is no exception.
Trademark holders now face the daunting task of safeguarding their intellectual property in an era where generative artificial intelligence (“AI”) is able to easily replicate or mimic existing trademarks in its output. Additionally, the emergence of non-fungible tokens (“NFTs”) has further complicated the landscape, with trademarks being turned into virtual assets without prior approval of the trademark holder.
This article will guide you through the impact of these technologies on trademark rights, offering insights on how to protect your trademarks and navigate the challenges of the digital age.
When ai-generated content meets trademark infringement
When examining the intersection of generative AI and intellectual property, the primary focus often centres on copyright and patents. However, generative AI also has significant implications for trademark rights and potential trademark infringement. A trademark – be it a word, phrase, logo or even a shape – distinguishes the goods or services of one company from those of another. Adidas, for instance, has trademarked its iconic three-stripe logo for use associated with, among others, sports apparel and footwear. Consumers know that sports apparel and footwear with the three-stripe logo comes from Adidas, and Adidas can prevent unauthorized use by third parties.
AI is nowadays increasingly used to generate various types of content, including images, texts, and videos. Consider this scenario: a company instructs an AI program to create a catchy marketing slogan for the launch of a new sports drink, resulting in “Just Do It With PowerDrink”. The company then uses this slogan in its social media. However, "Just Do It" is a well-known registered trademark of Nike, and using this sign for advertising a new sports drink could confuse consumers into thinking the product is associated with Nike. This would constitute trademark infringement. Blaming the AI program for generating the slogan would not be a valid defence. It is the company that has committed the infringing act by using the trademark “Just Do It” commercially. Indeed, it is the company that has actively chosen to create a slogan with the “Just Do It” trademark and to use this slogan in its own commercial communication to promote its sports drink.
NFTs and trademark disputes
Although different in nature and purpose from AI, a parallel can be drawn to the recent debate surrounding NFTs and trademarks. NFTs are digital assets with unique identifiers recorded on a blockchain, representing real-world items such as artwork, music and handbags. They can be created from virtually any work and are bought and sold online, often using cryptocurrency.
A high-profile case emerged in January 2022, when Hermès sued artist Mason Rothschild in the United States over the unauthorized use of its Birkin-trademark. Rothschild had created the “MetaBirkins”, an NFT collection featuring digital handbags that depicted Birkin bags covered in colourful faux fur.
Rothschild defended his actions by invoking artistic freedom, arguing that the virtual handbags served as a form of “absurdist commentary on luxury goods”. However, the court disagreed, ruling that the MetaBirkins were not protected as artistic expressions but rather as consumer products. The MetaBirkins could cause confusion as to whether the project was affiliated with Hermès, particularly as the brand itself might venture into creating digital artworks in the future. This case sets a legal precedent that the protection of trademarks on physical goods can extend to digital assets, reinforcing the protection of trademark rights in the digital domain.
Safeguarding trademarks in the digital domain
It is clear that companies cannot freely navigate the digital realm to create content without considering the implications of trademark law. Trademark holders are entitled to take legal action against a company that uses an identical or a confusingly similar sign through AI-generated content, particularly when the sign is used in the course of trade for identical or similar goods or services. Trademark law does not differentiate between a sign created directly by a person or one created by software following written directions from a person. What matters is who undertakes the commercial use of the sign.
When it comes to protecting trademarks in the virtual space, as in the case of NFTs, trademark holders must take additional steps to secure their rights. For example, Nike has updated its trademark portfolio by filing applications to register its marks for virtual shoes and clothing. European IP offices have taken the position that virtual goods (such as NFTs or goods in the metaverse) are not classified in the same class as corresponding physical goods. Rather, they are always classified in class 9, along with other digital and/or downloadable goods (typically software, for example). To take the example of handbags: Hermès has registered trademarks for (physical) handbags in class 18. If Hermès wants 100% certainty that its trademarks also protect virtual handbags, it should register its “downloadable virtual handbags” in class 9 as well. Our personal view is that physical handbags should be considered to be similar to their virtual counterparts, so that trademark holders do not need to register the virtual counterparts to obtain protection, but it is a matter of much debate.
To conclude, companies planning to engage in the metaverse or other virtual spaces should consider filing new trademark applications or update existing ones to cover virtual goods and services. This ensures comprehensive protection against potential infringements in these emerging markets.
For companies using AI to create content or exploring the virtual space for commercial activities, the key takeaway is simple: always double-check your content for potential trademark infringements before using it in marketing, advertising, or sales.
This article was written by Tiffany Perna and Lisbeth Depypere, with the valued assistance of AI. It is part of the series “AI and intellectual property rights”, written by the IP lawyers at CMS in Belgium
