Artificial Intelligence Threatens Trademark’s Gatekeeper Role

Traditionally, trademarks acted as gatekeepers identifying and distinguishing goods and services in the marketplace in response to a buyer’s needs and the buyer’s self-selected criteria. Buyers have used trademarks as a shortcut to simplify their product preferences and they rely on trademarks to alleviate confusion, imitation, misrepresentation, and disparagement.

Artificial Intelligence (AI) is altering this landscape. It has diminished the role of trademarks in product and service selection and displaced a trademark’s gatekeeping function by skewing the consumer’s browsing, selecting, and purchasing process. An AI-aided online search uses data-driven insights, replacing brand name products or services from a consumer’s available choices. Where some see AI as providing a richer, more robust experience for consumers, others see AI as a hijacking of the marketplace. Our choices become predictive rather than responsive, robotic rather than personalized and holistic.

AI’s Impact on Product Selection

The first step in today’s online purchasing process is a search, which can occur by inputting the desired word, phrase, or image into a search engine or web portal. The results may or may not include a trademark. If included in the search results, the trademark will typically be one input among many that AI considers.

The AI-curated result is likely to consider the consumer’s habits, preferences, age, priorities, and previously input data. In addition, AI is able to consider, for example, the consumer’s attitude toward consumption, sustainability, responsible manufacturing, and diversity and inclusion.

Moreover, AI can source these inputs indirectly by accessing a consumer’s purchasing history of related products or services and thereby “learn” how to best position a certain product or service for a specific type of consumer. It can assist online sites, platform sellers, and even brick-and-mortar stores in various ways. Tools, such as chatbot sales assistants, can analyze consumer data to decide which products featured on e-commerce sites are available or what certain users prefer, and AI will then highlight or display those features more prominently.

AI can thereby mimic the cognitive processes that underpin trademark principles and can be more objective and consistent when it assesses a wider dataset. Even when a consumer prioritizes brands as a selection criterion, the buyer may still encounter alternatives that AI has assessed as similar and suitable based on a range of different criteria.

Thus, AI, through its curated offerings, coached behavior, and selected datasets, can sort through the context underlying a purchasing decision and offer the consumer a wider product selection. As AI moves more into the mainstream, some even imagine products created as a by-product of experiences and community interactions.

For example, let’s assume you move into a new home and need to replace your couch. An AI lifestyle assistant can analyze your surrounding furniture and, based on your tastes and those in your online community or virtual pinboards, recommend an appropriate choice to complement your décor. Other examples include in-store AI-powered neurotransmitter kiosks that analyze and guide customers’ styling preferences, and personalized beauty regime or makeup recommendations suggested by a face scanning AI-technology along with a suitable product basket ready to order at the click of a button.

Disadvantages of AI

But AI’s downsides are often overlooked. The curated offerings AI furnishes are sometimes inaccurate, overlooking the sensory or experiential aspects of products. Although AI confronts consumers with competing brands, it may also limit the prospect of a consumer discovering different or substitute products or services. A brick-and-mortar retail store presents the consumer with options he or she may not have otherwise considered. But the increased localization, identification, and personalization of AI-driven online shopping may erode the true browsing experience in the traditional sense and restrict purchasing choices.

AI and Trademark Law

The impact and growing use of AI as a driver of purchasing decisions raises a number of important questions in relation to trademarks. What will a trademark’s role be in the future? Will there be a need for a single, recognizable symbol approved by a trademark registry that acts as a source identifier to the consumer?

Trademark registries and private companies are already using AI to assist with trademark clearance and comparison or to predict the likely outcome of infringement matters. If AI-learned decision-making tendencies are to be used as evidence of confusion or dilution, traditional concepts, including “imperfect recollection” and the “average consumer,” may no longer drive the infringement analysis. Will consumer confusion be relevant when AI is making the buying decision based on infinite resources? What elements would be considered when comparing marks or considering the likelihood of confusion? Are visual, aural, and conceptual similarity still the primary considerations?

Moreover, will there be a need to invest in brand protection? To a computer, a random code such as CC##@@NNBH functions just as well as an easily remembered brand name; but the code has the advantage of being easily replaceable with another linked to the same set of criteria ranking a certain product.

In addition, should trademark law now protect brands that a platform unjustifiably excludes from the buying process? And will AI need to be recognized as an “interested person” for alleging confusion?

These and many more questions are sure to engage the interest of brand owners and trademark specialists as AI continues to grow in importance.

How Brands Are Reacting to This New Environment

The ultimate question for brand owners is whether AI will connect brands to consumers or create a chasm between them. Indications are that some brands may not survive the rise of AI, whereas others could use it to secure more brand visibility and form a much deeper relationship with consumers.

Savvy brands now realize that AI curation provides a way to compete and entrench themselves in the buying habits of consumers. Although a distinctive symbol alone may no longer direct the brand’s encounter with the consumer at the stage of browsing or point of sale, those same consumers could use AI to screen out brands that do not reflect their needs or values. AI also creates an opportunity for brand owners to use trademarks and branding elements as stronger messaging tools or with experiences that ultimately inform the consumer’s desire to search for and purchase a particular product or service.

Although only the brave would predict what will happen in this changing environment, certain AI tools may favor brands with greater prominence and broad reach, which could amplify the importance of an identifiable trademark and brand recognition. Alternatively, AI could direct consumer choices according to different, objective criteria based on several consumer inputs benefiting newer and lesser-known products as well as retail transparency and consumer protection.

In any case, the influence of AI on consumer choice and its direct impact on the function, assessment, and value of trademarks means brand owners must understand how different algorithms and platforms collate and analyze data so brands can best navigate this new “road to market.”

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest.

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