AI, Logos, and Trademark: Navigating Ownership and Liability

The Law

Trademarks come in various forms, often appearing as images (such as the iconic Nike Tick logo/figurative trademark) or catchy phrases (like Nike’s famous “Just Do It” motto/literal trademark). Before a logo obtains trademark registration, it is considered a graphic work under the Copyright, Design, and Patent Act of 1988 (Section 4(1)(a)). This means that from its inception, the logo holds immediate artistic copyright protection (Section 1(1)(c) of the same act). The importance of this point is that copyright is an automatic right bestowed upon creation in England, but a Trademark is a registered right, as it offers further protections to its owners for a specific use, in this case trade, hence the name “trademark”. This distinction between copyright and trademark is crucial to understanding the different levels of protection offered to creators and businesses.

An Example Use Case

Let’s embark on a creative journey and imagine a scenario where you have created a logo (an amazing one, too) for a sportswear company called ‘St. Roid’ using MidJourney on a premium account. This is what we came up with:

Credit: MidJourney/Anonymised Artist

(We then edited Logo 1, to try and gain a further new copyright on it.)

Credit: Anonymised Artist

The issue: The Devil is in the detail

As a starting point whenever using any AI platform, please read its T&Cs before utilising it and creating an image, sounds or other content. This is because each AI platform will grant differing rights to the image you have created through your prompts.

Let’s take a closer look at the scenario using MidJourney (at the time of this article the T&C’s of MidJourney) and the distinct experiences of two types of users: the Paid User (PU) and the Non-Paying User (NPU). Interestingly, both categories come with their own unique ‘Monkey Paw’ predicaments.

Paid User:

Under MidJourney’s terms and conditions, a Paid User (PU) is granted ownership and rights to the image created through prompts. That said, the key issue is that MidJourney reserves the right to use and sublicence the image or content created by the PU in any way it deems fit. Consequently, while the PU retains ownership, they do not possess a complete monopoly over the image compared to if they had created it entirely from scratch. The concern arises from the licensing agreement that MidJourney holds. In the event that someone else creates a similar or identical image on MidJourney (although unlikely, it remains a possibility), or if MidJourney decides to license the intellectual property rights of your logo to third parties, the PU will have limited recourse to prevent the use of their logo by these parties.

–Midjourny Terms of Service (date 2nd June)

Non-paying User:

When an NPU creates an image or logo on MidJourney, they won’t own the image. Therefore, any application to register the IP or enforcing your right to prevent others from using it, is practically impossible.

Liability

The final issue in using an AI Platform, is that they take no responsibility for any issues in the image/content created on its Platform. In the unfortunate event that a third party raises a legal claim, the onus falls upon the Paid User or the Non-Paying User to address the situation. This assumption of responsibility is evident in cases like the ongoing StabilityAI suit (as reported in the Reuters article), highlighting the potential risks involved.

Therefore, even if a PU holds the copyright to a logo, there exists the possibility that the logo may inadvertently infringe upon another person’s copyright due to the underlying modeling techniques used. This is exemplified by the situation with StabilityAI. It underscores the need for users to be cautious and aware of potential copyright infringements that could arise from the AI platform’s algorithms and processes.

What is the problem?

In simple terms, the use of MidJourney to create a logo comes with limitations on full ownership and control over the intellectual property (IP) rights of that logo. This, coupled with the potential liability for copyright infringement, can significantly impact a user’s ability to register the logo as a trademark, enforce it against specific third parties, or even avoid legal action.

The ability to register a logo as a Trademark if you are an NPU, maybe refused under the ground of s5(4) of the Trademark Act 1994, as you do not own the copyright of the logo and your application to register the trademark may be prevented because you have infringed on someone’s copyright (in

this case MidJourney’s). Additionally, the application by an NPU for trademarking the image/logo may be made invalid because the image used is not being used on a good faith basis (i.e., the NPU does not have the IP rights in the logo) when submitting your application to IPO. It’s important to note that the StabilityAI issue can affect both NPUs and PUs, adding an additional layer of concern.

The PU, it is argued, would not have the above problem with s5(4) of the Trademark Act 1994 or giving a statement to good faith. However, a PU faces the risk that the copyright in their logo will not enjoy a monopoly, potentially exposing the PU’s logo to being licensed out to third parties without their control. To address this risk, PUs have the option to negotiate and pay MidJourney to relinquish their rights over the logo. For instance, if Logo 1 is registered, it could be recreated by another MidJourney user or licensed by MidJourney to a third party. In such a case, what would be the point of having a logo (or a registered trademark) that can be exploited by another party? This is why Logo 2 is created, aiming to establish a new copyright that is, at least partly, outside of MidJourney’s license.

Conclusion

To put it bluntly: User beware. Read the T&Cs and do not buy into the social media hype, as the devil is in the details with AI platforms (and also Crypto).

The creation of the two logos serves a purpose: to demonstrate that we, or specifically the anonymised artist, have utilized MidJourney for Logo 1, while also emphasizing that the development of a separate Logo 2 through Photoshop has potentially granted the artist a distinct copyright asset. This separate copyright asset cannot be sublicensed or utilized by MidJourney.

It is worth noting that the greater the distinction between an image and its AI-inspired counterpart, the stronger and more robust the individual copyright claim becomes. By showcasing both logos, we emphasize the importance of establishing a unique and distinguishable identity to strengthen one’s copyright claim over their creative work.

If you have further questions, or require legal brand advice or strategy, please contact either:

Rebecca Roberts or Mansour Mansour.

TL;DR:

· AI platforms like MidJourney and StabilityAI can quickly generate logos and content.

· Trademarks protect logos and phrases used by businesses.

· Copyright automatically protects logos, but trademark registration offers further legal protection.

· AI platform terms and conditions differ in the rights granted to users.

· Paid users of MidJourney may own the logo but have limited control if MidJourney sublicenses it or others create similar logos.

· Non-paying users of MidJourney don’t own the logos they create.

· AI platforms take no responsibility for issues with the content created.

· Using MidJourney may limit ownership and control over intellectual property rights.

· It’s important to read and understand the terms and conditions of AI platforms to avoid potential copyright issues.

· Creating distinct and unique logos strengthens copyright claims.

· Users should be cautious and seek legal advice when dealing with AI platforms and intellectual property.

Additional Info

• News Author:Mansour Mansour | Rebecca Roberts