Artificial intelligence (“AI”) is an innovative system where computers emulate human intelligence processes. AI technologies have been transforming how companies invent and create products, predict consumer trends and streamline production processes. In the past several years, AI has found a new home in the fashion industry and has been used to execute digital clothing designs, act as a fashion designer and detect consumer trends and counterfeit products. These new applications have yet to stir up much legal controversy, but as AI becomes more commonplace in the fashion industry, future disputes are inevitable.

AI is disrupting the fashion industry through the creation of digital clothes. Unlike typical clothes, digital clothes are intangible and exist only on your computer or phone. People typically download or purchase digital clothes to practice their own digital design skills or to superimpose the clothes onto pictures to post on social media. One of the frontrunners in the digital clothes space is design house The Fabricant, which uses three-dimensional AI technology to produce digital-only garments and often collaborates with brands including Adidas, Under Armour, Puma and Tommy Hilfiger. The Fabricant’s contracts state that The Fabricant is the owner of their creations. However, founder Kerry Murphy says that the company shares the digital versions with the brands, and any failure to do so would cause a loss of credibility in the industry. The Fabricant even gives away its digital clothes for non-commercial use and has encouraged individuals to download their files and experiment with three-dimensional digital fashion themselves. They do this by posting downloads on their website that anyone can access at no cost. The Fabricant’s ability to release new garments on a monthly basis suggests that a subscription model, like those of Netflix and Spotify, could be used for digital fashion. However, similar to music and movies, digital fashion has the potential to be widely copied and resold. If a company wants to charge the public for digital garments, they will have to find a way to prevent customers from copying the files and either reselling them or redistributing them for free, for example, through the use of watermarking.

Another digital design house, Carlings, has been charging customers for their digital clothes and released a digital streetwear collection with items starting around $11. When a customer purchases a Carlings digital garment online, they send in their image to be “digitally tailored” through photo manipulation. In exchange for a customer’s payment, Carlings digitally superimposes the garment onto the customer’s picture to make it appear as though they are wearing it. The company included more unique and extravagant items in their recent collection after their previous experience indicated that customers were more likely to buy flashier items in a digital format than they would in a tangible format. This begs the question of whether these unique designs can be protected under existing copyright law.

Copyright protection extends to original works fixed in a tangible medium of expression. To be an “original work,” it must have been independently created by the author and it must possess a “minimal amount of creativity.” The Supreme Court considered copyright protection of physical clothing items and determined that copyright does not protect the shape, cut or dimensions of a garment, but it does protect the two-dimensional design. See Star Athletica, L.L.C. v. Varsity Brands, 137 S. Ct. 1002, 1013 (2017). Unlike other works protected by copyright, designs incorporated in clothing must be separable from the useful article on which they appear to receive copyright protection. This means that if the design on a piece of clothing is in any way functional or useful, it cannot be protected by copyright. Typically, the general shape of a garment, buttons, zippers, ties, sleeves, or any other functional portion of a clothing item are not protectable, but the two-dimensional design fixed on a clothing item can be if it is an original work of authorship.

However, digital designs may be more comparable to video games, which can receive copyright protection as soon as some sort of creative expression has been fixed in software, video, film or other formats, and do not have to pass the same “usefulness” hurdle as clothing items. Copyright protection in video games can extend to a variety of creative works including the original code, characters and artwork. It has yet to be addressed whether copyright protection extends to digital garments in a two-dimensional manner, as enumerated in Star Athletica, or whether copyright protection of digital garments will be more akin to the protections afforded to three-dimensional video games. This distinction is important considering the more inclusive protections afforded to video games and the more stringent factors required of designs fixed on physical clothes.

This question is becoming more relevant as digital clothes become commonplace in video games. Animal Crossing has included in-game looks designed by Valentino, Marc Jacobs and Anna Sui; Balenciaga is launching their Fall 2021 collection through a videogame called Afterworld: The Age of Tomorrow; and Louis Vuitton offers in-game “skins” for characters in League of Legends. Intellectual property rights in these in-game designs are often held by the creator of the game itself, and any rights given to the creator of the digital garments are typically the subject of a contract. As these collaborations become more common, disputes involving digital clothes are likely to arise.

Additionally, the transfer of a clothing item from physical to digital format introduces a wider range of ownership issues, as the creative work touches more hands (and computers) before reaching completion. In some instances, several agencies may work on a single digital clothing design. To create a digital design, someone must first design a physical garment. After the sample garment is complete, it is sent to a 3D designer, who creates the digital version. A third agency may incorporate the digital version into an animation, and a fourth may combine all these aspects into a digital fashion show, movie or video game. The more changes the design goes through, the more complicated ownership becomes. Essentially, a copyright in what is created could be owned by the designer or their employer, the programmer or their employer, or the purchaser, depending on what agreements are negotiated at the start of the creative process. Without proper licensing agreements, the original designer may risk losing their rights in the IP associated with the design.

Beyond digital clothes, companies have begun applying AI technologies to design physical garments. In 2017, Amazon began utilizing algorithms that can “learn” about styles of fashion from existing imagery and use that information to generate new designs. The technology, created by an Amazon lab in Israel, has the capability to analyze just a few labels along with images and then determine whether a certain look is stylish. At Amazon’s San Francisco lab, Lab126, researchers have developed an algorithm that can examine images and then generate completely new items from scratch using a technology called a “generative adversarial network” (“GAN”), which is composed of two neural networks that work together to “learn” from raw data. GANs can separate different aspects of an image and resynthesize images to create new designs.

While Amazon owns everything that is created in its labs, the possibility for these technologies to be utilized elsewhere raises the question of who owns designs created, in whole or in part, by AI. The U.S. Patent and Trademark Office decided last year that AI machines cannot qualify as an inventor for patent purposes, but this still leaves open the question of copyright protection in AI inventions that require human input. While fashion designs created by AI are not clearly protected under U.S. copyright law, the Compendium of U.S. Copyright Office Practices provides guidance on who can be considered an “author”, stating “[t]he U.S. Copyright Office will register an original work of authorship, provided that the work was created by a human being. . . the Office will refuse to register a claim if it determines that a human being did not create the work.” This language likely precludes a GAN-powered machine from becoming a copyright owner but how much human involvement is required to receive copyright protection and whether the human being involved is a sole or joint owner is yet to be determined.

Even if a designer receives copyright protection, AI has the potential to make it easier to copy protected designs. Competitors or counterfeiters may use AI to collect data, like pictures from social media posts, to search for product characteristics and relate those characteristics to sales value. The competitor may then take those characteristics and incorporate them into their own designs or create exact replicas. However, fashion retailers may be able to detect these counterfeit products by using AI themselves.

As AI becomes more prevalent in the fashion industry, courts will have to analyze the legal implications of AI-created works. Most importantly, who is the fashion designer? What protections are afforded digital designs? As larger brands adopt AI as a tool, will smaller designers be left behind? Alternatively, the Copyright Office may need to contemplate a framework for AI-created works, taking into consideration the application of AI in the fashion industry. Regardless of how this legal landscape develops, Lutzker & Lutzker will keep you updated, and we are available to help you navigate the dynamic world of artificial intelligence as it relates to fashion and beyond.