India: Protection Of Trademarks In The Age Of Artificial Intelligence

Mondaq

Creative outputs once limited to human ingenuity—like brand names, logos, and marketing content—are now increasingly generated by AI tools. This shift has revolutionized branding, offering unprecedented efficiency and innovation. However, it has also raised complex legal concerns regarding intellectual property (IP) rights, particularly trademarks.

Intellectual property in AI is a complex area that requires careful consideration of existing laws and regulations. This blog explores the intersection of AI and trademarks, deep-diving into the challenges posed by AI-generated content in protecting brand identities. Learn about the mechanisms through which trademarks shield businesses, examine notable infringement cases, and analyse how jurisdictions like India leverage legal frameworks to navigate this evolving domain.

How is AI-generated Content Infringing Trademarks

Trademarks are essential in protecting businesses’ identity and reputation, ensuring that brands remain distinct and free from unauthorized use. The rise of AI-generated content introduces a new dimension to this dynamic, as automated systems can inadvertently create content and assets that mirror or dilute existing trademarks. For instance, AI may generate brand names or logos that are strikingly similar to existing trademarks, leading to potential cases of infringement or trademark dilution.

Notably, instances like the Walt Disney case underscore the risks associated with the dilution of trademarks by AI. Here, AI-generated content arguably blurs the distinctiveness of Disney’s iconic brand, a challenge that highlights the need for vigilance in the era of AI-driven creativity. Moreover, in India and globally, the existing legal frameworks face significant tests in countering AI-generated counterfeiting and infringement. While traditional IP laws offer mechanisms for protection, their adaptability to address the nuances of AI-driven violations remains under scrutiny. Legal protections for AI-generated logos are essential to safeguard the rights of creators and businesses.

One area of infringement stems from AI’s inability to understand the emotional and legal nuances of brand identity. For example, AI-powered e-commerce platforms like Amazon, through systems such as Alexa or Dash, prioritize efficiency and price over brand recognition.

Keyword advertising on search engines, bolstered by AI and keyword research, is the most prevalent method online e commerce platforms use to enhance their online presence. Keywords can be words, phrases, symbols, or numbers that users input into search engines. For instance, if a company specializes in garments, it ensures that terms like “t-shirt,” “shirts,” and “pants” lead potential customers to its website. There are various keyword advertising platforms that allow advertisers to acquire specific words or phrases to guide searchers toward their products or services.

However, complications arise when a third party uses a registered trademark as a keyword to link to its own website for promotional purposes. This can create confusion among consumers regarding the source, ownership, or origin of the product or service, undermining the fundamental role of a trademark, which is to alleviate uncertainty for potential buyers. Moreover, when a third party purchases a keyword that is a registered trademark, it risks infringing on the trademark rights. Trademark holders often argue that allowing a competitor to use their trademark as a keyword on search engines gives the competitor an unfair advantage over the rightful trademark owner.

The Indian legal framework, including provisions of the Trademarks Act of 1999, recognises doctrines such as “likelihood of confusion” and “imperfect recollection.” However, AI challenges these doctrines with perfect recall and data-driven predictions, bypassing human fallibility. This was evident in cases like Lush v. Amazon (UK), which underscore the global implications of AI infringing upon well-established trademarks by using third party trademarks as key words. Amazon infringed Lush’s trade mark by using it in search engine keyword advertising as well as on Amazon’s own site.

AI-driven Trademark Infringement: The Lush v. Amazon Case

The recent case of Lush v. Amazon underscores the emerging challenges of trademark infringement in the era of artificial intelligence. In this instance, Amazon utilized keyword bidding to acquire the trademark “Lush” on Google’s search engine. When users searched for “Lush,” Google redirected them to Amazon’s website. Moreover, Amazon’s AI-powered product recommendation system suggested alternative products, even when users specifically searched for “Lush” products. The court ruled that Amazon was liable for the infringement.

The court’s ruling against Amazon highlights the potential for AI-driven platforms to inadvertently or intentionally infringe on trademarks. As AI becomes increasingly sophisticated, the risk of such infringements is likely to escalate. This serves as a caution for businesses, emphasizing the necessity for robust intellectual property protection strategies in the digital age.

While the legal framework in India provides remedies for counterfeiting and infringement, there is a pressing need to adapt to scenarios where AI-generated content inadvertently breaches trademark rights. Indian courts may soon have to redefine traditional concepts like “average consumer” to include “artificial consumers” and assess the algorithms driving AI systems. Such adaptation ensures that trademarks remain an effective tool for protecting brand identity in an AI-driven marketplace.

Dilution of Trademark by AI: The Walt Disney Case

The Walt Disney Company’s recent concerns about AI-generated content potentially infringing on its trademarks highlight the growing risks associated with trademark dilution in the age of AI.

In this case, users were using Microsoft’s Bing AI imaging tool to create images of pets in a “Pixar” style. While the intent was harmless, the AI inadvertently generated the Disney-Pixar logo within some images, potentially leading to trademark infringement.

Microsoft Takes Action: Protecting Disney’s Trademark

The Disney case against Microsoft has yet to reach a formal court verdict. Disney has taken a pre-emptive measure to protect its trademarks. The company has requested Microsoft to prevent its AI tool from generating content that infringes on Disney’s trademarks. Microsoft has blocked the term “Disney” from its image generator.

This incident highlights the potential risks of AI-generated content infringing on existing trademarks and the challenges of enforcing intellectual property rights in the age of AI.

Here is how the Disney case underscores these risks:

  • Dilution of Distinctiveness: The proliferation of AI-generated content, including trademarks, can dilute the distinctiveness of existing brands. If AI tools generate numerous logos or brand names similar to established trademarks, it can weaken the association between the original trademark and its source, making it less recognizable and valuable.
  • Challenges in Enforcement: Traditional trademark enforcement methods may need to be revised to address the rapid pace and scale of AI-generated content. Identifying and tracking all instances of trademark infringement can be challenging, especially when AI tools are involved. Furthermore, assigning ownership and liability for AI-generated content can be challenging.

AI systems learn from vast datasets of existing digital content, including images, text, and code. As a result, AI-generated content, such as logos and brand elements, may unintentionally resemble previously existing works, potentially leading to concerns of originality and intellectual property infringement. Intellectual property for AI-created content is a rapidly evolving area with significant implications for businesses and creators.

Safeguarding IP Rights in the AI Era: An Indian Legal Analysis

As AI systems become increasingly sophisticated and capable of generating creative content that rivals human ingenuity, concerns arise regarding the potential for AI-driven infringement of existing IP rights. In the Indian context, where the intellectual property landscape constantly evolves, the intersection of AI and IP rights raises pertinent questions about ownership, liability, and enforcement.

The pervasive influence of e-commerce and digital media has intensified the longstanding issue of counterfeiting, which has posed significant challenges for brand owners, right-holders, governments, and consumers alike. While collaborative efforts involving judicial, police, administrative, and industry measures have mitigated the problem to a certain extent, the rapid pace of technological advancement, particularly with respect to artificial intelligence (AI), has introduced new complexities. AI-powered tools, such as ChatGPT, have the potential to generate counterfeit content, thereby infringing upon the rights of intellectual property owners. This emerging threat necessitates a proactive approach to safeguard IP rights in the age of artificial intelligence.

In the context of AI, there are two primary scenarios where IP infringement can occur:

  1. Knowingly Induced Infringement: In this scenario, a natural person or prompt engineer intentionally provides specific instructions to an AI tool with the knowledge or awareness that such instructions will likely result in infringing someone else’s intellectual property rights. This deliberate misuse of AI technology to create counterfeit or infringing content constitutes a clear violation of IP laws. The user’s intent to infringe must be proven.
  2. Unintentional Infringement: In this scenario, a natural person or prompt engineer provides general or generic instructions to an AI tool without the knowledge or awareness that it could lead to the creation of infringing content. While the outcome may still result in IP infringement, the lack of intent to infringe mitigates the level of culpability. However, this scenario highlights the potential for AI tools to be misused, even unintentionally, and emphasizes the need for careful consideration and ethical guidelines when using such technology.

The Indian IP legal framework would differentiate between these two scenarios based on the intent of the AI user. Regardless of the specific intent, however, the primary legal remedy would be to restrain the generation of infringing content or counterfeits through AI or other means, thereby protecting the IP rights of the owner.

Existing Indian Laws Applicable to AI-generated Works

Indian law offers a framework for addressing IP issues related to AI-generated works, drawing from existing legislation. Trademark law for AI creations may need to be adapted to accommodate the unique nature of AI-generated content.

Indian Penal Code, 1860:

Section 28 of the Indian Penal Code (IPC) defines counterfeiting as any action that makes one thing resemble another with the intent to deceive. This includes, but is not limited to, applying false marks to goods. Sections 479 to 483 of the IPC specifically address the falsification of property marks and the penalties associated with such acts, typically including imprisonment of up to three years, a fine, or both.

Furthermore, the IPC’s provisions on cheating can be applied to cases of AI-generated counterfeiting, particularly when there is intent to deceive and violate the IP rights of the rightful owner. This highlights the potential legal implications of using AI to create counterfeit goods or content.

The Trade Marks Act, 1999:

Section 29 of the Trade Marks Act of 1999 safeguards registered trademarks and prevents unauthorized use, including counterfeiting. The use of a trademark encompasses a range of activities, including affixing it to goods or their packaging, offering goods for sale, stocking goods for sale, importing or exporting goods, or using the trademark in advertising or on business papers.

AI image generation programs create visuals that align with user prompts by leveraging a training database composed of existing images collected from various sources of logos and design elements. There is a risk that new logos, which are based on existing designs, could unintentionally resemble trademarked logos, leading to potential legal complications.

AI-generated trademarks may raise questions of originality and potential infringement. Section 135 (1) of the Act provides remedies like injunctions, damages, and accounts of profits. However, the court may limit damages if the infringer lacked awareness and promptly ceased use (covered in Section 135(3)). Additionally, criminal penalties exist for trademark falsification, including imprisonment and fines (Sections 102 to 104 of the Trade Marks Act, 1999).

Information Technology Act, 2000

The Information Technology Act 2000 provides a legal framework for electronic governance in India. While it does not explicitly address AI-related issues, its broad definitions of “computer” and “intermediary” could potentially be applied to AI-generated content. However, liability for AI-generated infringement would ultimately rest with the human user. Section 45 of the Act imposes a penalty for any violation of the Act not explicitly addressed. This penalty addresses any unforeseen violations and ensures compliance with the Act’s regulations.

Information Technology (Intermediary Guidelines & Digital Media Ethics) Rules, 2021:

The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 provide guidelines for intermediaries, including content moderation and grievance redressal mechanisms. These rules may apply to AI-generated content, particularly in infringement or harmful content cases. Intermediaries must appoint grievance officers to address complaints and resolve issues related to online content, including AI-generated content.

The rapid evolution of AI has opened new avenues for brand creation, but it also poses significant challenges to traditional intellectual property frameworks. In the future, AI systems could be programmed to identify and notify users of potential IP infringements based on the instructions. This could help prevent unintentional infringements. However, a robust legal framework is urgently needed to address complex IP issues arising from AI. A comprehensive approach, including standardized AI practices and governance, is essential to navigate this evolving landscape. While these laws may not be explicitly designed for AI-generated content, they can be adapted to address the unique challenges posed by this emerging technology.

FAQs

1. Can AI-generated brand names and logos be trademarked?

AI-generated brand names and logos can be trademarked if they meet the criteria of distinctiveness, originality, and non-infringement of existing trademarks under applicable laws, including the Trademarks Act of 1999 in India.

2. Who owns the rights to an AI-generated logo?

Ownership of an AI-generated logo typically belongs to the individual or entity that commissioned or directed the AI system unless otherwise specified in an agreement or governed by local intellectual property laws.

3. What challenges exist in trademarking AI-generated content?

Challenges include determining authorship, ensuring originality, avoiding similarity to existing trademarks, and addressing the legal gaps in attributing creative rights to non-human creators. AI trademark law is an emerging field that will shape the future of intellectual property.

4. What are the implications of AI in trademark law?

AI introduces complexities in determining infringement, assessing consumer confusion, and redefining legal concepts like distinctiveness and the “average consumer” in light of algorithmic decision-making. Trademark protection for AI content is crucial to prevent unauthorized use and dilution.

5. How does trademark law handle the originality of AI-generated logos?

Trademark law evaluates originality by ensuring the logo is not deceptively similar to existing trademarks and possesses distinctiveness, even if created by an AI system. Branding and trademark issues with AI content require careful consideration of originality and distinctiveness.

6. What are the key steps for registering a trademark for AI-generated content?

The process involves:

  • Ensuring the content is unique.
  • Conducting a trademark search to avoid conflicts.
  • Filing an application with the relevant authority, such as the Controller General of Patents, Designs, and Trademarks in India.

7. What happens if two AI systems generate similar brand names or logos?

In such cases, disputes may arise, and the matter would likely be resolved under trademark law based on priority of registration or use and the distinctiveness of the marks. Trademark registration for AI-generated content can provide valuable legal protection for businesses.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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