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Copyright Giulio Coraggio 2018

AI in the fashion industry unvails new unexpected legal issues

AI fashion legal issues

AI in the fashion industry unvails new unexpected legal issues

The usage of AI in the fashion industry creates new legal issues in terms of copyright ownership and liability as well as GDPR compliance.

This is a blog post initially published on IPTItaly blog from my colleagues Elena Varese, Valentina Mazza and Deborah Paracchini.

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At the beginning of 2018, in our fashion predictions, we put artificial intelligence (“AI”) and its legal issues at the top of the fashion agenda and ‒ yes, no magic sphere needed! ‒ we were actually right.

The growth of artificial intelligence in the fashion industry

Technology had a huge impact on the fashion industry and in the last year all the retail giants took an algorithmic approach to fashion. After Amazon’s Echo Look app which gives feedback or recommendations on your outfits and Zara’s interactive fitting rooms, with mirrors recognizing the clothes that you are wearing and suggesting others to match them based on style, color and mood, also Yoox explored the potential of AI.

On 6 November 2018, the Italian giant of e-commerce launched its first collection, 8 by Yoox, the first fashion collection designed thanks to AI. A software collects images and texts from the posts of a selection of influencers on social networks and articles published in online magazines; then an AI engine puts together predictive indicators on fashion and purchasing trends, sales data from Yoox websites and customer feedbacks to generate a dynamic moodboard on which designers (human this time) will create clothes and accessories.

AI in the fashion industry opens new legal issues

The creation of fashion items based on AI takes the relationship between innovation and creativity to the next level and introduces a set of unanswered legal issues:

  • Who is the owner of AI creations?
  • Can AI infringe intellectual property rights of third parties?
  • Which kind of personal data is collected by AI?
  • Is the derived processing of such personal data subject to data protection regulations?
  • Will artificial intelligence enhance or reduce creativity in the fashion industry?

Who is the copyright holder of fashion AI creations?

Under Italian law, creative works must be original to get copyright protection and traditionally the requirement of originality has been linked to the physical person of the author. In fact, under Section 6 of Italian Copyright Law, “the original entitlement of the acquisition of copyright consists of the creation of the work, as a particular expression of intellectual work” of the author. Therefore, machines and AI seem to be excluded from the notion of authorship.

However, this does not mean that algorithmic artworks cannot afford copyright protection, as long as human choices are involved. In the case of Yoox, the designers physically creating clothes should still be considered the authors but, thinking of a fashion collection entirely designed by AI, what are the legal issues? Could the person who developed the software could enjoy copyright protection for both the software itself and the artwork? Would he be allegedly be held liable in case of infringement of the intellectual property rights of third parties?

Did you collect individuals’ preferences in a GDPR compliant manner?

In such a data-driven system, a fundamental role is played by data related to customers collected from websites and the social media platforms. In fact, from personal data collected the AI fashion tool is able to profile customers, their interests and tastes in order to propose them a tailored service which gives rise to legal issues.

To this end, Yoox ‒ and, generally, each fashion company addressing innovative service to European customers ‒ has to deal with the requirements provided for by the EU General Data Protection Regulation (the “GDPR”) and the deriving national adequacy laws (Read on the topic “Top 5 GDPR changes to remember for your privacy compliance program“). Therefore, they have to consider carefully which kind of data to collect in order to respect the principles and requirements set forth in the GDPR.

For instance, fashion houses shall collect and process ‒ for the time strictly necessary ‒ only personal data required for the purposes of the processing pursuant to the minimization principle provided for in article 5 of the GDPR. Furthermore, when companies process individuals’ personal data, they have to provide them with information and details about the processing of personal data carried on, guaranteeing individuals specific rights and freedoms according to articles 13-21 of the GDPR (such as, for instance, the right to access to data, the right to be forgotten, the right to data portability, etc.).

Lastly, the analysis of data related to individuals’ interests and tastes could entail a profiling activity of the individuals concerned which requires the collection of individuals’ consent (Read on the topic “Top 5 answers on how direct marketing changes with the GDPR“). In addition to the GDPR general principles above, fashion houses shall also consider any specific requirement under the applicable national law.

In light of the above, the use of AI entails a number of legal obligations, but its idea of “cognitive creativity” is extraordinarily innovative and, as Yoox advertisement for the new collection 8 for Yoox says, in this way the service and customer experience are

shaped by data, tailored by you“.

On the same topic, you may read “Can artificial intelligence be the author of copyright protected works?” from Tommaso Fia.

Giulio Coraggio
giulio.coraggio@gmail.com

I am the head of the Italian Technology sector and the global head of the IoT and Gaming and Gambling groups at the world leading law firm DLA Piper. Top global IoT influencer and FinTech lover, finding solutions to what's next for our clients' success.