Brand protection in the age of AI
An apple with a bite taken out. A golden ‘M.’ ‘Just Do It.’ The power of a punchy slogan or well-designed logo to immediately identify a business is immense, tapping into a deep-seated part of our psyche as consumers. A good brand inspires trust, implies integrity and creates emotional connection. It’s also a valuable piece of intellectual property.
A good brand, however, also costs money. Marketing and advertising, graphic design and social media experts: it all adds up, particularly for small businesses where every dollar counts. That is why many businesses are turning to the latest tech toy – generative AI. ChatGPT and other AI tools can create professional-looking branding in seconds for a tiny fraction of the market cost.
Under OpenAI’s terms of use, you own any output generated by ChatGPT or its other applications based on prompts or information you input,[1] meaning you potentially own a piece of intellectual property which can contribute to the value of your business. Logos or slogans created by AI might even qualify to be registered as trade marks.
So what’s the risk?
Trade marks have been used and relied upon for hundreds of years by traders seeking to distinguish the goods or services they offer from those of other businesses. They attract a goodwill value to a business as a recognisable symbol of the products on sale, as well as providing an enforceable means of protection against less scrupulous traders who might seek to sell the same or similar products under a pretence of connection.
Under the Trade Marks Act 2002, to be eligible for registration, a trade mark must:
- Have a distinctive character.[2] It cannot just be a description of goods or services, and
- Not be similar to an existing trade mark for similar goods or services, or otherwise be likely to cause confusion.[3]
Even without registration, a business may have protection under the common law tort of passing off, as well as under provisions of the Fair Trading Act 1986 that prohibit misleading or deceptive conduct and certain conduct concerning trade marks.
OpenAI gives no warranty or representation, however, that the brand it creates will meet trade mark eligibility criteria, or be sufficiently distinctive to you to justify a passing off claim. In fact, its Terms of Use expressly acknowledge that due to the nature of the services provided, outputs may not be unique, and ‘other users may receive similar output.’ This means there is no guarantee that your AI-generated brand will not be the same as or similar enough to someone else’s mark to cause confusion, limiting its value as a trade mark in terms of goodwill and reducing its enforceability against potential fraudsters.
Using generative AI to create a brand might also leave you open to trade mark infringement or passing off claims by existing trade mark owners. OpenAI’s terms expressly state that a user is responsible for their own output, including that it does not violate any applicable laws.
ChatGPT does not run any clearance checks to ensure that the branding that it generates for a user does not use or infringe the intellectual property of any other party.
Generative AI models are trained using large datasets, which may include material created by third parties. The legal implications of that training, and of particular AI-generated outputs, are still developing. Businesses should therefore not assume that AI-generated material is free from third-party intellectual property risks.
No legislative guidance here
New Zealand does not currently have an AI-specific legislative regime. The current government has indicated that it will take a ‘light touch’ approach to regulation and courts will likely follow guidance from overseas. Existing laws, including privacy, consumer protection and intellectual property laws, continue to apply to AI use.
For now, the onus is on you to ensure that your AI-generated branding is sufficiently distinctive and original – not only to provide the goodwill value of a trade mark, but also to protect your business against passing off claims. MBIE has published voluntary guidance for businesses on the responsible use and development of AI. To read this, click here.
To ensure protection against passing off and defence against third party infringement claims, getting our advice will be your safest bet.
[1] https://openai.com/en-GB/policies/terms-of-use/
[2] Trade Marks Act 2002, s18.
[3] s17(a).