United States: Computer Generated Models: Intellectual Property And Advertising Risks

Last Updated: April 11 2019
Article by Jeffrey H. Greene, Vejay Lalla and Allyson M. Madrid

When you scroll through Instagram or other social media platforms looking for the latest fashion trends, you may no longer be seeing just the Kardashians all the time, but instead new celebrities or influencers that are simply creations of computer-generated imagery, or "CGI." These virtual models are already drawing substantial followers of their own on social media, generating revenue from brand campaigns and even "collaborating" with actual designers, fashion and cosmetic companies. The CGI model known as Shudu, with over 150,000 Instagram followers, describes herself as "the world's first digital supermodel." Shudu, the creation of a British photographer, has appeared in campaigns for Balmain, and Rihanna's beauty company, Fenty Beauty. Taking it a step further, CGI "personality" Lil Miquela's Instagram account portrays a full-blown fictional life, which has generated over 1.5 million followers, a music career and a takeover of the Prada Instagram account during Milan Fashion Week.

Technology will soon allow brands to design their own digital models to reflect their desired image or aesthetic, "hire" models created by someone else, or allow real-life models to create avatars of themselves, capable of appearing in virtual fashion shows anywhere in the world. But before embracing CGI as a marketing tool, it is important for brands and users of CGI models to understand the business and legal pitfalls, in particular when the brand engages third parties to create such CGI models or otherwise licenses CGI from third parties.

Virtual models and influencers may function as trademarks, as works of visual art, as likenesses of real people, or as combinations of all three, raising new issues of intellectual property ownership and protection and implicate right of publicity and/or privacy concerns. CGI models and advertisements featuring them could also be subject to regulatory scrutiny both at the federal and state levels.

Intellectual Property

If a brand regularly uses a particular CGI image, or a CGI model's name to sell its products to the point the CGI image or model begins to be identified with the brand, that image or model may function as a trademark or source identifier, just like a Disney animated character, or the Geico gecko. A CGI model could have its own trademark rights, either directly owned by the brand, or requiring an appropriate license from a CGI model's creator. Moreover, using a CGI model as a trademark entails some risk of infringing another party's trademark rights, even unintentionally without the proper pre-clearance required to ensure that there is no potential for a trademark claim. Such a claim could come either from a CGI model owner that hasn't given the brand the necessary license to use the model, or the owner of an existing trademark that closely resembles the model.

CGI models may also be protected by copyright, which attaches to creative works, including visual works like animations, videos, and photographs, as soon as they are created and fixed in a tangible medium of expression. If a brand uses a CGI model created by a non-employee, it should ensure it has secured the necessary rights, through assignment and/or work for hire agreements to effectuate all rights necessary to use the copyrighted work. Similar to trademark, it is possible a CGI model could infringe the copyright in an existing model (or other character) if it is deemed substantially similar under U.S. Copyright laws.

Right of Publicity

The use of CGI models also raises right of publicity and privacy concerns. In 2014, Lindsey Lohan sued the creators of video game Grand Theft Auto for right of publicity infringement, claiming one of the game's characters' appearance and background resembled her own. Lohan v. Take-Two Interactive Software, 31 N.Y.3d 111 (2018). More recently, the actor who played Carlton on the 1990s sitcom Fresh Prince of Bel-Air is suing the creators of Fortnite for using a dance he made famous on the show in its games. Ribeiro v. Take-Two Interactive Software, Inc. et al, 2:18-cv-10417 (C.D. Cal. Dec. 17, 2018). While there may be defenses to such claims, use of CGI models may give rise to similar risks. At a minimum, brands using CGI models should carefully avoid overt references to well-known people, whether in a CGI model's appearance, name, story, or actions.

Advertising

Finally, advertisements featuring CGI models could be subject to Federal Trade Commission and state AG oversight. Section 5 of the Federal Trade Commission Act prohibits unfair or deceptive advertising, and state attorneys general are also tasked with protecting consumers through similar state legislation. The FTC has taken action against agencies, brands, and influencer networks and even sent warning letters to numerous influencers for failure to disclose whether posts are sponsored; a requirement under the FTC Endorsement and Testimonial Guidelines intended to inform consumers that posts are advertisements. The New York Attorney General recently settled with a company that sold fake accounts and "likes" on social media. In the matter of Investigation of Letitia James in Devumi, Assurance No. 19-008. Although the FTC has said in media interviews that it does not yet have any specific guidelines pertaining to CGI models, failure to disclose that a model is CGI may be construed as a deceptive omission, particularly if it could create false expectations about a products performance, such as with cosmetics or fitness equipment or if a consumer simply does not understand the connection between a brand and such CGI model. Brands will need to consider the same rules of ensuring proper disclosure and terminating non-compliant partners when hiring a third party to create and manage the social communications of a CGI model endorsing its products.

Takeaways

Brands that choose to use CGI models should consider the following:

  • Conducting intellectual property clearance;
  • Obtaining appropriate assignments and licenses, including indemnification for intellectual property and right of publicity liability, or other assurances from the model's creators, and
  • Training and monitoring marketing teams to comply with the FTC Endorsement and Testimonial Guidelines, erring on the side of transparency when in doubt.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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