Trademark Law Trying to Catch-up With Artificial Intelligence

Artificial intelligence has the potential for a significant impact on our daily lives. This is why it is currently being debated. Although AI has been widely discussed in the media and is being touted as having a revolutionary impact on human life, its immediate impact on our lives is likely to be limited.
AI’s long-term effect on consumer purchasing habits and its knock-on effects on trademark law have often been overlooked. Most commentators concentrate on the effects that AI will have upon patent, copyright, and design law. (Photo: anyaberkut/Getty Images).
Roy Amara, an American futurist researcher, stated that we tend to underestimate the effects of technology over the long term.
Many people overlook the long-term impacts of AI on consumer purchasing patterns and their impact on trademark Search law. Most commentators concentrate on the effects that AI will have upon patent, copyright, and design law.
How we shop for products: This is how it changes over time
In the Victorian era, the fundamental tenets and principles of trademark protection were in place
If law were to be formulated the shop assistant would advise
Customers can choose which product they want to purchase, offering a “filter”.
The relationship between the consumer, the product and themselves was
These are largely unbranded. (Photo: benoitb/Getty images)
Although you might think that purchasing products and services hasn’t changed in the past, that is not true. In fact, the way that we purchase products has changed significantly over the years.
Take into account how products were bought in the nineteenth century, when trademark law was established. This image evokes a Victorian shop with an assistant standing in front a selection of wares stored in glass cabinets. The shop assistant served as a “filter” between a consumer and the product. This was unbranded at the time. The assistant was the only one with knowledge about the products and could often give advice to the customer on which product to purchase.
Oft-forgotten is the long-term impact AI will have on how consumers purchase products and services. This has also led to a negative impact on trademark law.
The modern supermarket is a boon for the consumer.
The decision was made alone, and the benefits were no longer available.
The filter (the assistant in the shop) is between the buyer and
The product was visible because it contained all the available products.
(Photo by George Marks / Getty Images
With the invention of the modern supermarket, the Victorian method of buying products was drastically changed. Now the consumer makes the final decision. There is no filter (the shop assistant) that helps the consumer make a decision. The supermarket was also able to make the consumer aware of all the available products, so he or she could be aware of them all.
With product branding becoming more prominent, the consumer received additional information via brand cues. This could be in form of phonetics, visual or conceptual effects, or both. Modern supermarkets have seen brands take over the role as shop assistants and communicate directly with their customers.
Further, the Internet has changed purchasing habits
The social media revolution brought new forms of influence to the masses.
The “likes,” of family members and friends are important to a consumer
Factors that influence purchasing decisions. (Photo: Elena Brovko/Getty Images).
Internet shopping revolutionized the buying process. The number of products that are available to consumers increased exponentially, and so did their product knowledge. The consumer had complete control over the purchase decision. There was no filter between them and the product.
The social media revolution brought new forms of influence to consumers. “Likes” from family and friends became an important factor in buying decisions. The “likes” feature gained even more importance as celebrities and sports figures entered the picture.
Information that is available to the consumer, and indeed who or what makes the purchasing decision, affects the purchasing process. AI impacts the information consumers have and their buying decisions.
The structure of the purchase process is changing, perhaps, with the advent of AI applications like Amazon Alexa, Google Home and consumer chatbots. These AI assistants include AI personal shopping assistants (Mona, Amazon Dash) as well as AI robot assistants (such as Pepper). The introduction of AI apps has led to the purchasing process returning to the Victorian model in many ways. However, there are important differences.
Internet shopping revolutionized the buying process. The number of products that are available to consumers increased exponentially, and so did their product knowledge. (Photo by AndreyPopov/Getty Images).
AI’s influence over buying decisions
While AI applications may not be used by all consumers, they are becoming more popular. Most consumers will have used an AI application such as Amazon’s product recommendation system. This is where the AI application can act as a filter between the user and the brand. It makes unique recommendations to the customer based on their past purchase decisions.
AI applications can also have significant implications regarding who is “average consumer” in trademark infringement cases and other issues of liability.
Amazon Alexa is an AI application that many consumers are reluctant to give the buying decision. The AI application can access all the information about products and the consumer has no access to it. However, this AI application is similar to a personal buyer. This means that the AI app may be able to delegate all purchasing decisions to the consumer. However, the AI application will base its decision on the previous purchases.
In a Harvard Business Review article published May 2019, Christian Terwiesch (Nicolaj Siggelkow) refers to such a product offering in the same way as an “automatic execution model”. Ajay Agrawal (author), Joshua Gans (author) and Avi Goldfarb (assistant editors in Harvard Business Review, October 2017 referred to the automated execution model as transforming the traditional purchasing model from a “shopping then-shipping” model to a’shipping-thenshopping’ model. Retail is not just responsive to consumer demands anymore. With the advent of AI, “predictive” retail has taken over.
The age of AI has made retail more than “responsive” and “predictive” to consumer demands. With the AI application serving as a filter between consumer and brand, it is now “predictive.” This raises interesting issues regarding concepts of trademark law such as “post sale confusion” and similar. (Photo: AndreyPopov/Getty Images).
The predictive retail model is still very young. These retail models need to be precise enough to avoid the large-scale economic problems that plague fast fashion. The retail model raises questions regarding trademark law concepts such as “post sale confusion” and other similar issues. If a human is not involved in the purchase of a branded item, then it can be confusing at the point that the product arrives, not at its point of sale. Predictive retail, which could be a new kind of post sale confusion, is not intended to affect purchasers but third parties.
Even though consumers may not have delegated purchasing decisions to AI applications, AI can impact the way that consumers view the market, brands, and products. Amazon Alexa for instance, recommends three products per consumer when they are asked to search the internet for a product to purchase. The consumer may not be aware of all the products on the market, and so is presented with a small selection of products to choose from. The AI application is again a filter between consumers and brands.
What does all this have to do trademark law?
The above scenario has major implications for trademark law. Because trademark law is concerned with the buying process, how products can be bought, and the interaction between the consumer, the brand, and the brand,
The information that a consumer has available about the purchasing process and who or what makes the buying decision are key factors in the purchasing process. AI impacts the information consumers have and their buying decisions.
AI in the retail context raises important questions regarding comparative advertising, regulations relating to influencers, and other issues.
Furthermore, trademark law fundamentally relies on concepts of human frailty. What happens when trademark law is stripped of the “human”, and “frailty?”
One of the most fundamental principles of trademark law concerns aspects of human frailty. These aspects of trademark laws were magnified with supermarket shopping. But, due to the smaller product choices, or at the very least, reduced brand and product choice, consumers have, they will likely become less relevant.
AI applications can also have significant implications in terms of who is “average consumer” when it comes to trademark infringement cases and other issues of liability. What happens if an AI application buys a product without any human interaction? Who, or more importantly, who is the average consumer, and who is liable for a purchase that leads to trademark infringement.
Case law on trademark infringement and AI
Although we don’t know of any cases that directly addressed the issue of AI or liability in trademark infringement, there are a few cases from the past decade that could have been applied to this new technology.
The Louis Vuitton decision in L’Oreal v eBay, which dealt with the question of keyword advertising, and the automatic selection keywords in Google AdWords, held that Google was not liable for trademark infringement if they did not take an active role in the keyword-advertising system. L’Oreal and eBay, which dealt with counterfeit goods sold on eBay’s marketplace, held that eBay is not liable for trademark infringing unless they knew about it. Similar reasoning was applied in the Coty-v Amazon case. Therefore, it would appear that an AI application provider would not be held liable if they had adequate take down procedures similar to those described in Google and eBay.
If the AI provider is involved in more infringing activities, however, two cases suggest that they could be held responsible. Lush Ltd v Amazon.co.uk Ltd before the United Kingdom High Court held that Amazon was liable for trademark infringement. Links to Amazon.co.uk Ltd’s website were triggered by links that did not contain the referenced branded product. Thus, the consumer could not determine if the products being sold were the property of the brand owners. The Federal German Court heard a number of cases concerning Ortlieb Sportartikel GmbH. They held Amazon liable for ads on Amazon.de that were activated by the search term “Ortlieb”. This was based on its inclusion in product descriptions, as well as past consumer behavior. AI applications are a key component of this. The courts argued that the consumers would have been “conditioned” to believe that Ortlieb and Ortlieb products would be sold. Markus Rouvinen’s IP Kat blog speculated that such logic could apply to online product listing advertisements (PLAs), where the search provider triggers ads based based on past searches. This is similar in nature to past consumer purchasing behaviour, one of the major drivers of AI-based purchasing decisions and suggestions.

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