By Meg Ramsey & The Fortis Trademark Team

As artificial intelligence tools create more realistic and interactive content, trademark law is entering uncharted territory. A key question is whether AI-generated content can cause consumer confusion, which is the standard test for determining trademark infringement under the Lanham Act. 

What Is “Likelihood of Confusion”? 

Under 15 U.S.C. § 1114(1), trademark infringement occurs when use of a mark is “likely to cause confusion” as to the source, sponsorship, or affiliation of goods or services. While this standard has been tested in traditional contexts, AI is now challenging its boundaries. 

AI and Confusing Content 

Today, tools like image generators, chatbots, and voice clones can produce artificial content that mimics real branding, including: 

• Deepfake ads featuring unauthorized brand spokespeople 

• Fake brand endorsements generated by chat interfaces 

• Virtual merchandise in metaverse environments 

Because this content is so realistic, consumers may believe it’s actually authorized. The risk increases when generated content is shared widely on social media. 

Key Legal Example: Hermès Int’l v. Rothschild, 590 F. Supp. 3d 647 (S.D.N.Y. 2022) 

In Hermès, the court denied a motion to dismiss claims against an artist selling “MetaBirkin” NFTs in a metaverse environment. The court found that it was plausible that consumers could believe the digital bags were affiliated with the luxury brand, despite being created by an unaffiliated artist. The court also found that First Amendment protections in parodies or artistic commentaries would not negate infringement liability because the creator of the “MetaBirkin” bags was explicitly misleading (e.g., it was purposefully not made clear whether the creator of the NFT was Hermès). This logic can extend to any AI-generated media that uses or incorporates a third party’s trademarks without an accompanying statement expressing whether the owner of the trademarks has sanctioned the use thereof, and if not, what the exceptions to such authorization would be. 

What Brand Owners Can Do 

• Monitor AI platforms and user-generated content for misuse 

• Issue takedown notices and clarify brand affiliation 

• Review influencer, marketing, and platform agreements for AI-related clauses 

Stay tuned for Part 2, where we explore how AI can dilute trademarks even when confusion isn’t present.