Robert Milligan of Bird & Bird explains the opportunities and challenges presented by generative AI for brand creators and owners, and suggests how to mitigate the risks

Whether you like it or not, artificial intelligence (AI) pervades modern society and has done for some time. Think, for example, of virtual personal assistants such as Apple’s Siri, Amazon’s Alexa, Google Assistant and Microsoft’s Cortana. Like any disruptive technology, the rise of AI has brought numerous opportunities and challenges for individuals and businesses. This has never been more true than for generative AI products such as ChatGPT and DALL-E.

This article seeks to summarise some of the main issues posed by these generative AIs to brand creators and owners in the UK and provide ways of mitigating the risks.

Considerations for brand creators

There is an opportunity for businesses and design agencies to harness the power of generative AI to create new names, logos, designs and other brand elements. However, in utilising this technology for brand creation purposes, issues arise with regard to ownership and potential intellectual property (IP) infringement.

At its most basic, to create any new content, the AI model is trained to generate new examples that resemble patterns and characteristics from the AI’s existing dataset. In theory, the output should be entirely novel. However, in practice, the outcome may be similar or identical to the existing dataset.

While the AI system software programmers are likely to be the first owners of any copyright in the AI’s computer program, ownership of the AI-generated content is not straightforward, and the UK courts will likely need to determine the issue. Until then, there can be no certainty for businesses as to the legal ownership of these newly created names or logos in the UK, even where an assignment of the AI-generated content has been obtained from the AI system software programmer.

Use of the AI-generated content in the marketplace may also amount to an infringement of third-party IP. For example, it is entirely feasible that a newly created AI-generated logo is identical or similar to an existing registered trademark to the extent that any use of that new logo amounts to trademark infringement under the UK Trade Marks Act 1994.

As such, businesses need to:

Exercise caution when using AI-generated content for brand creation;

Appreciate that they may never own the IP rights to the brand outright; and

Undertake comprehensive clearance searches before commencing use of the brand in the UK.

Considerations for brand owners

If businesses are to use generative AI to create new brands, existing rights holders should be vigilant and actively monitor the UK marketplace to prevent any infringement of their rights. Brand owners should also ensure that their trademark protection is adequate for their needs.

Marketplace monitoring will also assist brand owners in detecting counterfeit goods, which have been made easier to produce through generative AI. This will mitigate the financial impact on brand owners through lost sales, brand dilution and reputational damage caused by inferior products being placed on the market.

Aside from counterfeiting and infringement, brand owners should be alive to the fact that, as a consumer-facing technology, generative AI can affect a brand’s reputation.

Where the AI’s training dataset contains bias or inaccuracies, misleading or false information may be disseminated to consumers, which could result in widespread reputational damage to the brand, particularly in this age of social media. Equally, malicious persons can utilise generative AI to create and disseminate misleading advertising, phishing attempts, and other fraudulent activities to deceive and tarnish the reputation of a brand.

In addition, brand dilution and confused messaging may occur where the generative AI uses the brand inconsistently with how the brand owner uses it.

As such, brand owners should actively monitor and amend (where required) information about their brand that is in the public domain so it is accurate and up to date, to avoid widespread misinformation.

Comment

While generative AI brings unprecedented opportunities for innovation and creativity, it also poses risks for brand creators and owners.

Creators may never be able to own AI-generated brands outright but, if these brands are adopted, should undertake comprehensive clearance searches before commencing use in the UK.

Existing brand owners should actively monitor the marketplace for infringing use and misinformation, and take appropriate action where necessary.

This article was first published online by Managing IP