Traditionally, trademarks were shortcuts, identifying and distinguished goods in the marketplace in response to a buyer’s needs and self-selected criteria. Trademarks have also protected against human frailty by alleviating confusion, imitation, disparagement and misrepresentation.
Artificial intelligence (“AI”) is altering a consumer’s browsing, selection and purchasing process. I explored this issue while serving on INTA’s Copyright Committee. Along with Christine Strutt of Von Seidels in Cape Town, South Africa and Francine Ward of the Law Office of Francine D. Ward, Palm Desert, California. I co-authored an article entitled Artificial Intelligence Threatens Trademark’s Gatekeeper Role (the “Article”) published in INTA February 9, 2022, Bulletin. Here is a summary of the article.
The Purpose of Trademarks
The Shifting Landscape from Brand Prominence to AI
An AI-aided search online or through a chatbot is likely to replace a brand name product with data-led insights that offer a wider product selection. That’s because the AI curated response takes into account the consumer’s purchasing history of related products, her habits, preferences, age, priorities and previous inputted data. AI may also consider the consumer’s attitude towards consumption, sustainability, responsible manufacturing, diversity and inclusion.
As a result, this search, which may or may not include a trademark, will be predictive rather than responsive, robotic rather than personalized and holistic. And with each search AI will “learn” how to best position a certain product for a specific type of consumer by highlighting or displaying those features in search results more prominently, further diminishing the role that trademarks have played. As the Article points out, “even when a consumer prioritizes ‘brand’ as a selection criteria, the buyer may still encounter alternatives that AI has assessed as being objectively similar on a range of different criteria.”
A traditional retail store presents the browsing consumer with options he or she may not have otherwise considered. But the increased personalization and localization of an AI online search will induce the consumer to use a computer mouse to shop rather than visit a brick and mortar store. For additional insights into how AI is driving brand selection see INTA’s report: AI and the Future of Brands: How will AI Impact Product Selection and the Role of Trademarks for Consumers.
What Will Be the Role of Trademarks in this Changing Marketplace?
With AI driving the purchasing decision, what will be the role of trademarks going forward? Will there still be a need for a single, recognizable symbol approved by the Trademark Office to act as a source identifier?
Trademark Registries and private companies are already using AI to assist with trademark clearance and to predict the likely outcome of infringement matters. See INTA’s Emerging Issues Committee report, Artificial Intelligence Usage In Trademark Clearance and Enforcement. WIPO has launched an AI search engine to make it faster and easier for brands to establish the distinctiveness of a trademark. The engine uses deep machine learning to identify combinations of concepts – such as an apple, an eagle, a tree, a crown, a car, a star – within an image to find similar marks that have previously been registered.
What will determine the infringement analysis if AI-learned decision-making tendencies are used as evidence of confusion or dilution? Will traditional concepts, including “imperfect recollection” and the “average consumer,” be tossed aide? The “average consumer” is a concept used to assess whether two trademarks are confusingly similar. “The consumer who is to be protected from confusion by trademark law is not necessarily the sophisticated buyer who makes careful distinctions, but a hypothetical ‘average consumer.’” See 1 Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 2:22 (5th Ed. 2017). How will consumer confusion be relevant when AI dictates the buying decision based on infinite resources? In addition, why invest in brand protection if a random computer code functions just as well as a brand name, especially when the code can be easily replaced with another linked to the same set of criteria that rank a product.
Trademark practitioners will need to consider these issues as AI continues to grow in importance.
How Will Brands Respond to this New Environment?
Brands will also need to answer a number of questions because, going forward, a distinctive symbol alone registered with the Trademark Office may no longer direct the consumer to the brand at the browsing stage or point of sale. The questions include: how will brands integrate their marketing strategies with AI so that an online search will screen out brands that do not reflect consumer’s needs or values; and how will brands use AI to increase the impact of their trademarks and branding messages?
It is unclear who will benefit from AI tools: brands with greater prominence and broad reach or newer and lesser-known brands. It is also uncertain which brands will learn and begin to profit from the algorithms and data sets underlying AI. In any case, all brands had best understand that AI will increasingly direct consumers on their road to market.