Trademark Law in The Ai Era: Adapting to A Changing Consumer Landscape
Artificial Intelligence (AI) is dramatically changing how consumers interact with products and services, while creating a host of challenges and opportunities for trademark law. Smart devices being used as intermediaries for our purchases challenges the traditional meanings of brand identification the confusion to the consumer and trademark protection. These changes raise significant questions for trademark owners, practitioners, and trademark offices around the world.
UNDERSTANDING TRADEMARK LAW FUNDAMENTALS
It becomes pertinent to first discuss the core purpose of trademark law before we can discuss the impact that AI has on it. Trademarks were created for identifying the source of goods and services which, in turn, enables a consumer to distinguish the goods and services of competing providers.
Therefore, trademark protection, at its core, is about eliminating confusion for the consumer. In making an evaluation about trademark infringement, courts, and examiners will typically consider:
- Visual, phonetic, and conceptual similarity between marks
- Similarity of goods and services
- Consumer sophistication and degree of care exercised
- Evidence of actual confusion
- Strength of the senior mark
Assessments typically use the “average consumer” as the benchmark for measuring. The ‘average consumer’ is a hypothetical reasonable person with a typical pattern of purchases. This suggests that consumers may not remember the product perfectly and will have varying degrees of attention depending on the product type.
AI’S DISRUPTION OF TRADITIONAL CONSUMER-BRAND RELATIONSHIPS
AI is changing this traditional relationship by putting itself between consumers & brands that follow the traditional approach. Devices and appliances that are smart items at home are simplifying the way of buying the product, at times even taking off the consumers from the decision-making process. Your fridge may know you’re running low on ketchup and order more on your behalf, or your smart speaker may process your request to “order more paper towels.” It will identify your previous orders and do it for you without further input.
This shift presents several challenges for trademark law:
- Redefined Consumer Confusion: When AI makes purchasing decisions, is the relevant perspective for assessing confusion the AI system itself, or the human consumer who established the initial parameters?
- Altered Purchase Process: Emergence of digital assistants that make voice-based purchases raises questions about whether phonetic similarities should be given a greater weight as compared to visual similarities.
- “Brand Washing”: Consumers now also tend to set preferences on their devices that have nothing to do with brand affiliation like the option of the cheapest products available. This disconnects the consumer experience with brand identity entirely.
TRADEMARK LAW IMPLICATIONS OF AI-MEDIATED PURCHASING
Rethinking the “Average Consumer” Standard
An “average consumer”, a founding pillar of analysis for trademark infringement, may be in need of being reconsidered due to AI- mediated purchasing. Unlike humans, AI systems don’t suffer from confusion. They don’t have faulty memory, aren’t prone to initial interest confusion, and they do not vary the level of care they exercise based on the price or importance of the product.
This raises fundamental questions for trademark offices and courts. Should the standard for assessing confusion be based on the algorithmic decision-making processes of AI systems? Or should it remain focused on the human consumer who ultimately benefits from the purchase, even if they’re not directly involved in the transaction?
Voice Commands and Phonetic Similarity
As more voice-based purchasing takes place, the importance of trademark analysis based on phonetic similarity also increases. When assessing trademarks traditionally, visual similarities, phonetic similarities and conceptual similarities are given roughly equal importance. But when consumers engage with brands through the voice command, the phonetic similarities may acquire more importance in judging the likelihood of confusion.
Imagine a consumer who directs her smart assistant, “order Brand X coffee.” If the AI mishears it on account of the phonetic similarity of “Brand X” and “Brand Y,” the consumer gets the wrong item. Trademark offices might have to review or change their practices in examining trademark applications due to phonetic similarity-based confusion.
Post-Purchase Confusion and Contributory Infringement
As point-of-sale confusion becomes a less relevant confusion type in AI-mediated purchasing brand owners may need to focus on post-purchase confusion and contributory infringement theories. Should an AI vendor be liable for helping to infringe a trademark? For instance, if an AI keeps suggesting/purchasing products of a rival firm despite a consumer’s order to buy only “x” brand?
The law around this kind of behaviour is far from being crystallised. It should, however be mentioned that as noted by the Emerging Issues Committee of the International Trademark Association, several experts are of the opinion that these AI providers should be held on the same footing as internet search engines and web providers. However a more nuanced approach may be required to be applied to AI owing to its unique features.
ADAPTING TRADEMARK STRATEGIES FOR THE AI-DRIVEN CONSUMER ERA
Adapting Registration Strategies
Brand owners should consider adapting their trademark registration strategies to account for AI-mediated purchasing. This might include:
- Broader Phonetic Coverage: When filing new trademark applications, think beyond visual distinctiveness. How does your mark sound when spoken? Are there phonetic similarities to competitors that might confuse voice assistants? Consider registering sound-alike variations of your mark to prevent competitors from exploiting voice commerce confusion.
- Strategic Classifications: Ensuring trademark registrations cover not just direct competitors but also related products that might be recommended by AI systems.
- Sound Marks: Considering the registration of sound marks and other non-traditional marks that might be relevant in AI interfaces.
AI-Powered Enforcement Tools
While AI presents challenges to trademark protection, it can also pose as a powerful enforcement tool. The World Intellectual Property Organization (WIPO) has incorporated artificial intelligence (AI) based technology using deep machine learning to identify similar registered marks. This includes trademarks and similar figurative marks. This results in more streamlined search results, saving workforce costs for examiners and practitioners.
“TradeMarker” is another similar initiative that will provide users with search results based on the similarity of content, image/pixel, text, similarity of criterion, and manually input ones. It uses AI to assist in conducting availability searches. These developments make trademark enforcement less expensive and easier for brand owners, big or small. Current systems may not search unregistered references and internet images that have no pending applications or existing registrations.
Consumer Engagement and Brand Positioning Strategy
AI is transforming how people shop, and brand owners need to adapt accordingly. As AI-powered tools like virtual assistants and predictive algorithms increasingly influence buying decisions, brands need to focus on strategies that align with this shift. To stay relevant, brand owners should take advantage of AI so consumers can have personalized shopping experiences tailored to them like offers, recommendations and other dynamic content that resonates with the individual. Brands need to learn the metrics that will help the AI algorithm work for them like historical purchase data, reviews, etc., and ensure that they are default options. Additionally, embracing voice search optimization and AI-friendly advertising can enhance visibility in this tech-driven market.
Building strong emotional connections with consumers is vital in an era where AI may prioritize price over brand loyalty. By using AI insights to foster deeper relationships and improve customer engagement, brands can maintain their identity and quality assurance. Furthermore, monitoring consumer trends—like the demand for convenience through voice recognition technology—will help brands align their offerings with evolving preferences. Strategic partnerships with adjacent industries, such as smart device manufacturers, can also ensure brand visibility in automated purchasing systems.
As we navigate this technological transformation, one thing remains clear: trademarks will continue to serve as vital assets in the digital economy, even as the mechanisms through which they function evolve to meet the challenges and opportunities of artificial intelligence.
Author: Sneha Bharti, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.
