The confluence of fashion and artificial intelligence (AI) is reshaping the industry with supply chains getting smarter and creative processes being revamped by generative AI, there's an undeniable allure to these cutting-edge technologies. However, the road to AI integration isn't without its bumps, most notably, the looming threat of legal disputes.

Generative AI, like ChatGPT, has become a beacon of innovation for the fashion industry. It holds the promise of revolutionising areas from demand prediction to virtual modelling, thus showcasing a broader spectrum of sizes and styles. However, with promise comes risk. Brands venturing into AI waters must be conscious of the potential pitfalls, encompassing not only legal but also financial and reputational risks. The stakes are high, and brands must balance their ambition with diligence.

At the heart of the AI conundrum lies intellectual property. For any forward-thinking company, IP is the linchpin of their strategy to remain relevant and competitive. However, it's also the most significant grey area in the AI debate. The dilemma? When an AI system crafts creative content – be it branding, designs, or virtual catwalk images – who truly owns it? Can brands claim ownership, and, more importantly, defend it against infringement claims? These are not mere hypotheticals as courts are currently wrestling with these very issues.

The due diligence imperative

To safeguard themselves, brands must be proactive, not reactive. This starts with due diligence. Brands must scrutinise their AI platforms and involve both technical experts and specialised lawyers when entering into contracts with AI service providers. Such collaborations ensure that brands have a clear understanding of what they're signing up for and any potential risks involved.

Furthermore, beyond just IP, brands must be astute in their evaluation of AI service providers. Questions to consider include:

  • What are the exact services being provided?
  • Are there tangible standards that the provider will be held to?
  • How can the brand ascertain the proper functioning of an AI, especially given the inherent opacity of large language models?
  • Is the provider adhering to ethical and data norms?

These questions are paramount not just for a brand's legal well-being but also to protect its image in an era where reputation can make or break a company.

Disputes are an unfortunate reality of business, but in the AI context, they take on a new dimension. Given the sensitivity around customer data and the proprietary nature of AI systems, court proceedings may not be the best forum for resolution. Mediations have emerged as a preferred method, shielding both customer data and AI workings from the public eye. This approach also has the dual advantage of keeping competitors in the dark and minimising negative media attention.

When disputes arise, contracts often become the central point of reference. This underscores the importance of clearly defining the unique needs of the parties, right from the outset. Brands must ensure their contracts are robust, clear, and tailored to the unique challenges of AI and generic agreements, accordingly, won't suffice in this new frontier.

The marriage of brands with AI is not just inevitable; it's already here. The fashion industry is being reshaped by these technological marvels, offering brands unprecedented opportunities. But as with all disruptive technologies, there are risks. Brands must navigate this new landscape with a mix of ambition and caution, always keeping an eye on the legal compass. By doing so, they can not only harness the power of AI but also ensure they're on the right side of the law.

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