CHINA Trends and Developments Contributed by: Dr James Luo and Angie Guo, Lawjay Partners
Proactive brand protection • Register distinctive design elements and trade dress across multiple classes to counter algorith- mic imitation. • Conduct AI training data audits to detect unauthor- ised incorporation of brand assets. • Deploy digital fingerprinting systems for key brand elements to identify algorithmic derivatives. This unified approach allows rights holders to effec- tively address challenges posed by AI-generated infringements while leveraging technological advance- ments to strengthen brand protection. Trademark Use in Virtual Environments: Legal Boundaries in the Metaverse and Digital Commerce Emerging forms of virtual trademark use The convergence of artificial intelligence, blockchain, and immersive technologies has created new fron- tiers for trademark use in digital environments. Current manifestations include: • avatars displaying luxury brand patterns during social or commercial activities in metaverse plat- forms; • NFT artworks incorporating protected design ele- ments through minting and trading processes; and • virtual stores offering digital products bearing established brand identifiers. Legal standards for virtual trademark use The central legal question remains whether such vir- tual applications constitute “trademark use” under Article 48 of China’s Trademark Law, which defines it as applying marks to goods, packaging, documents, advertising, exhibitions, or other commercial activities for source identification purposes. Significantly, the statutory definition contains no geographical or physical limitations. Chinese courts in Beijing and Hangzhou have consistently taken a practical approach, holding that any use of a sign that identifies the source and creates a brand association among relevant consumers qualifies as trademark use. This holds true regardless of whether the envi- ronment is digital or physical.
• the determinative factor remains whether the relevant public would likely experience source confusion. This judicial approach recognises that when AI-gen- erated content closely approximates the commercial impression and distinctive essence of a prior mark, and has sufficient potential to cause consumer confu- sion, it constitutes infringement – regardless of techni- cal differences in the creative process. Strategic enforcement in the algorithmic era To meaningfully address AI-driven trademark infringe- ment, rights holders should adopt a comprehensive enforcement strategy integrating technological and legal approaches. Enhanced evidence collection • Preserve complete digital footprints of the AI gen- eration process, including prompts, parameters, and iterative output variations. • Document systematic replication of distinctive brand elements through algorithmic extraction. • Secure evidence demonstrating intentional target- ing of protected trademark features. Advanced analytical framework • Develop expertise in assessing “commercial impression similarity” beyond traditional element- by-element comparison. • Utilise consumer perception studies and market surveys to substantiate likelihood of confusion in algorithmic imitation cases. • Employ forensic analysis to trace algorithmic inher- itance of distinctive brand features. Platform accountability engagement • Implement tailored notice protocols addressing AI- generated infringement specifics. • Demonstrate platform technical capacity to prevent systematic brand imitation through algorithmic filtering. • Establish patterns of repeat infringement to sup- port claims of contributory liability.
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