Lupo and Marsh Quoted on IP Challenges, Brand Opportunities in AI Expansion

Michelle said that AI use brings up a number of intellectual property issues, pointing to the recent use of AI-generated models in an advertising campaign featured in Vogue.

Michelle said, “These models look fairly realistic, which raises questions about AI disclaimers: Was the one placed on the Guess ad prominent enough? Does the [disclaimer] go far enough to alert consumers that the clothes and the people may have been digitally altered? The law around these issues is still developing and is in flux.”

Some of that flux was instigated by the recent change in Presidential Administrations.

“Prior to Trump, the Federal Trade Commission had some cutting-edge AI compliance requirements,” Michelle said. “But Trump’s AI action plan indicates that he would like there to be little hindrance or regulation around the burdens of AI development and deployment of AI tools.”

Tony added, “The US is full steam ahead on AI and trying to bring down all barriers.”

Michelle noted the AI use could endanger brands’ IP investments. “There’s an IP ownership risk with AI around copyrightability. What will the brand own if [a piece of their IP] is completely AI-generated? Hypervigilance will be required by brands [to ensure] they’re keeping those IP rights.”

Another area of concern is the rights of publicity and the use of people’s name, image, and likeness (NIL). Michelle said, “When AI is trained on human faces, it’s likely there will be actual models saying that their likeness is the inspiration for an AI model. Brands may be responsible for ensuring the agencies they use are ‘clearing’ those faces [to avoid any infringement], and also will not want to train their AI on the faces of iconic supermodels.”

Regardless, AI use cases continue to grow. Tony described a Milan-based company that employs “30 people to design footwear, and it takes three to five months” to produce a new design prototype.

The company trained its AI on both the brand’s current and past designs, prompting it to create “25 prototype shoes that were dumped in the metaverse to test” in order to gather feedback to guide the next steps in design and production.

Tony said, “AI will not take away all the jobs; you will need people who know what they’re doing. But you’re not going to need the same level or number of people as you did before.”

Tony also noted that AI can potentially boost bottom lines by reducing product returns.

“Probably the number-one expense companies have is the product return, and being able to trim that down with better technology so consumers see what [the product] will look like” can benefit not just apparel but also beauty retailing. “The better the tech and the better the AI, the more likely you’ll reduce some of those [returns-related] expenses,” he said.

Tony added that AI is increasingly being used in sourcing and logistics, as well as accounting and that barriers to AI use, such as high price points, are “way down.” Companies don’t need as deep a “bench” of in-house AI experts as they had previously, he said.

“Companies are using AI to investigate everything from human resources to their design partners,” he said. “There’s nothing more existential for the industry, and for fashion, AI creates a lot of opportunity.”

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