4 January 2022
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Emerging technology has changed the nature of goods and services, including the manner of their distribution, the way they are marketed and promoted, and how they are searched for, evaluated and consumed.
Technologies such as artificial intelligence (AI), 3D printing, and blockchain have disrupted almost all sectors of trade. They have transformed the customer experience, changed purchasing behaviour, and optimised supply chains.
An important issue for brands
All businesses understand that technology boosts productivity, efficiency and profits. But the timely adoption of latest technologies can be challenging.
To produce goods with advanced features, pull off seamless customer relationship management, and implement effective content and digital marketing strategies, the right balance of latest technology, creativity, social media visibility, and effective IP advice is required.
To stay relevant and ensure survival, it is key for businesses to keep adding new features to their products using latest technology. So how can IP counsel ensure these innovating brands and businesses have adequate protection and clearance?
Advising a business that introduces a product that is one of its kind not only in terms of quality, but functionality as well, poses challenges
Attention to detail and deep understanding of the nature of the product as well as basic economics of the business’s underlying revenue model enables an IP counsel to deliver effective strategic advice on IP protection.
Detailed discussions with the client help in understanding the product and business and frequently lead to figuring out the potential issues that need attention.
“THE BOTTOM LINE IS THAT IP COUNSEL NEED TO BE TECHNOLOGICALLY COMPETENT IF THEY WISH TO BE EFFECTIVE.” – MANISHA SINGH, LEXORBIS
For example, if a company group comes up with an AI-powered app to support its logistics business, it is vital to understand all the features of the app, before a counsel proceeds to offer legal advice on the protection of IP assets associated with the product.
Another issue concerns the structure of the company in which the business related to the product is housed. Although the right structure depends on future investment plans and tax considerations (the domain of business consultants and taxation lawyers), IP counsels must advise on which group entity would be the best suited to own the IP assets and which territorial jurisdiction would address the IP protection concerns better.
Not every legal system in the world is accommodating enough in protecting IP associated with or supported by new technologies, so making the choice of housing the business in an offshore or onshore entity is not just a tax question, it is equally relevant from IP protection perspective too.
The second consideration relates to the identification of IP assets and the licensing or assignment arrangements with code developers that need to be very clear and robust as far as IP rights are concerned.
A contextual understanding
To draft an agreement that best protects the interests of a business, it is important to understand the nature of the IP involved, the pre-existing materials it has been derived from, the contributions of the parties involved and the nature of their association with each other.
For a counsel, it is hard to comprehend the technology completely, but the contextual understanding of the basic underlying concepts enables lawyers to formulate suitable agreements with developers and the end users.
Open-source (OS) usage is universal these days. Most OS licences are easy to comply with, but an IP counsel needs to closely examine each licence and advise the client on the implementation of the required terms.
Confidentiality is another area where the IP counsel needs to offer advice because there are many jurisdictions that do not provide enough protection to certain IP, such as trade secrets, etc.
When it comes to brand registrations for products such as an app, figuring out the relevant classes and drafting correct specifications is again a challenge when the underlying technology is novel.
Equally difficult is the enforcement of such IP assets because there are hardly any precedents to rely on. The bottom line is that IP counsel need to be technologically competent if they wish to be effective.
New tech for IP
Technology doesn’t help businesses alone—it can prove to be a game-changer for IP counsels, who can use new tools to provide effective and efficient brand protection services.
With AI-powered image recognition software, image and logo trademarks can be compared easily with existing ones, and the manual comparisons that previously took a lot of time and effort can be replaced by a rapid technical solution.
IP counsels can look at adopting and using such software for searches so that the same could be used to review pre-existing images or logos, assess the similarities and make an analysis so that search results are comprehensive.
Since such software is new, its accuracy may be tested first, and the results could be supplemented with manual comparisons.
As AI image recognition technology develops with time and false positives reduce in number, counsels can transition to placing full reliance on software and technology for image comparisons.
This will help businesses to grow safely and invest in the trademarks they choose, without any fear of a potential third-party action objecting to the use or registration of the brand.
Advising businesses that deal in complex goods and services need a multi-lens analysis of the actual, as well as potential, issues surrounding trademark protection. Technological advancements present challenges for well-established legal frameworks. Trademark law is no different.
Adopting new approaches
A century-old jurisprudence often fails to help. In the absence of relevant laws in place, looking for suitable workarounds is tricky.
In such a scenario, identifying grey areas of law, locating a shield cover, adopting new approaches and customising strategies for each client becomes essential.
Sometimes, a favourable law is in place, but practitioners fail to use it to the benefit of their clients, potentially because of lack of case precedent on certain issues.
There is sometimes a need to look beyond the traditional trademark protection because conventional strategies don’t work for companies operating in niche spaces.
An important point that is often overlooked is that the legal concerns of the traditional businesses are also shifting because of the change in distribution channels and factory automation.
Even a clothing business can’t survive today without digitisation of its factories, collaborating with e-commerce platforms and hiring a cloud service provider so that it could be ready with an infrastructure that can cater to the massive online demand for a product which may become a hit overnight.
In such cases, appropriate contractual strategies protecting the brand value are vital. A business selling clothes through its own online portal faces different challenges compared to a business that operates through aggregator or e-commerce websites and uses third-party fulfilment centres for delivery.
The risks of infringement, counterfeiting and brand dilution can be mitigated to a certain extent by well-crafted agreements with third parties involved in the distribution chain. One size surely doesn’t fit all.
Winds of change
The strategies for the protection of conventional word/image trademarks don’t work for 3D or sound marks. This is because the approach to availability searches, pre-filing advisory and post registration enforcement differs in essence and application.
Examining whether 3D marks are valid or not, and how the factual distinctiveness of such marks can be established, are questions we don’t encounter when offering legal advice for protecting conventional marks.
Domain name protection; online grey market monitoring; identification of online infringers; timely IP raids; content licensing work; and IP due diligence in response to the increased risk of infringing content in the digital world are some other areas which have gained traction. IP counsels need to work towards equipping themselves with the skills that could be helpful in these areas.
With the changing dynamics of the trade and service sector, the technological competence of lawyers is crucial.
The awareness and understanding of technology offer an incremental benefit not only to patent attorneys but also to trademark attorneys. We, as IP professionals, are facing winds of change which are technology-driven and it is time to brace ourselves for adapting to this paradigm shift so that we may help our clients better.
In this exclusive feature, Manisha Singh throws light on the importance of having the right skillset to cater to innovative businesses. The article further elaborates on the need of the hour to embrace and adapt to technology-driven processes to ensure clients adequate IP protection and clearance.
For further information, please contact:
Manisha Singh, Partner, LexOrbis
manisha@lexorbis.com
