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The Legal Frontiers Of AI In Fashion · The Interline Podcast

• speaker-0: Hey, welcome back to the Interline Podcast. I'm recording today's episode just a few days after we released the Interline's AI Report 2026. And it's coming about a week after I sat down and talked to Aura Karazian, who is the lead economist at RAMP, about the economics of AI. So you might say I have AI on the brain, and you might be right. But the survey data in that same AI report, not to mention the data that comes from The RAMP AI index also tells us that basically everybody in fashion does as well. Whether it's on their mind because they like it or because they hate it, more than 90% of the fashion professionals we've talked to use AI at home and at work. I'd encourage you to go download the AI report for a bit more context on all of that. So while I think we've put together a pretty good picture in the last couple of weeks of the fiscal. Technical, creative, and ethical perspectives fashion has on AI, there's an extra component I wanted us to tackle to help sketch in the last bits of detail, and that's the legal side. If you listen to these shows often enough or read the interline regularly enough, you'll have seen a pretty complicated legal picture emerging across intellectual property, modeling contracts and likenesses, regulations in different regions, the US, the EU, and so on. Provenance, training data, personal data capture, and a whole lot more. Now, obviously a lot of industries are wrestling with all of that and with very similar questions about what it means. But I think fashion is kind of uniquely exposed. It produces a huge volume of visual content, which makes it a prime candidate for generative image workflows. But it also has sky-high return rates. a history of exclusionary casting and a general issue with products not living up to the promises, claims, and commitments that brands make, all of those being challenges that generative content could exacerbate rather than help with. And fashion's also trying to do a lot right now to better understand its customers, to offer them improved personalized experiences across channels and so on. All of which rely on the industry taking in a broader scope and diversity of data, and as a result, expanding its risk surface and exposure. So, on top of the big cross-industry questions about like nurse, fair use, labeling, fashion has legal AI questions that are all of its own. Today, I'm going to try and get through as many of those questions as I can, with the help of somebody pretty well qualified to help me out. That is Tony Lupo. Tony is the chairman of legal firm Aaron Fox Schiff. He's a practicing lawyer who also acts as US general counsel for a roster of global fashion and retail brands, including Diane van Furstenberg, Yves Saint Laurent, Valentino, Fila, Lacoste, Diesel, and Christian Lebutin. Tony is well across all the areas I've just talked about, and plenty more in the US and internationally. So I think you're going to find his perspective useful and maybe surprisingly entertaining given the heavy subjects we're about to get into. You can't see it because this interview show is still audio only for a little while longer, but Tony's also a painter, ⁓ and he has some of his own work hanging up behind him, so you might just find he's more sympathetic, albeit pragmatic, to the artist's arguments than you might expect. Finally, as a quick spoiler, Tony and I barely got through half of what I wanted to tackle in the time we had, so I'm hoping to bring him back on the show soon to pick up the rest. For now though, here's mine and Tony's far-ranging conversation about the legal ramifications of AI for fashion. All right, Tony Lupo, welcome to the Intelligent Podcast. speaker-1: I appreciate it, Ben. Thanks for having me. speaker-0: No at Pleasure soul here. I've been wanting to bring on somebody with your kind of profile for a while, and you have a very complete profile, which is actually kind of the first thing I want to ask you about. So we start every one of these shows, as regular listeners or readers will know, with two things. We try and build a snapshot of what the guests' day to day life looks like, and we ask them to define something that maybe seems simple but can have a bit of a sting in the tail. We'll start with the day to day. So You, weirdly, like a lot of guests recently, seem to have a lot of jobs all rolled into one. ⁓ and correct me if I miss any here. You're so you're the chairman of a legal firm of no small size and scope. You're outside US general counsel for a long list of European luxury houses. You're also in the media business, which is very weird because I've had this for a few concurrent gata guests now, in that you run a you run fashion council. which is both a legal blog for the industry and also a platform that puts you in the interviewer seat, the seat that I'm in today sometimes. And then finally your firm, ⁓ Aaron Fox Schiff, is also advising both brands and hyperscalers on some of the emerging legal frontiers of AI from intellectual property to land use. Walk me through what you're actually doing when you sit down in the morning, because it seems like it could be one of about 10 different things. speaker-1: So I have the best job in the world. You know, I've I've somehow been very lucky or been able to manifest being able to work with clients that ⁓ I wanna work with. And so originally I started working with tech companies and so I I worked with Apple ⁓ at Steve Jobs when he was alive in particular, then did a lot of work with Pixar and so I got into the heavy animation space and then I got into fashion, interesting enough, through jobs, where ⁓ I he he got a call from the the head of a major fashion house and said, I need a lawyer and so jobs recommended me to this guy. And I I don't want to mention the name of the house because it ended up being one of my best clients ever, because everyone that worked there, every CEO was either left or got fired after two years. And so they populated all these other brands and brought me with them. And and as a result, I I now from word of mouth really, I ended up getting a huge amount of the fashion industry coming and and working with me, people leaving and taking me and me being able to keep the existing client as well. ⁓ but that background really has prepared me for the moment of time we're in now with the convergence of AI and and where we are going. and ⁓ we have some startup clients that we've worked with that are going to be able to scale and compete with the big boys in a much faster way than they've ever been able to do before without as much private equity investment. And then some of the bigger houses. and you know I I I also think being Italian really helps, ⁓ because I love I love clothing. I like the the whole style. I like everything. And so big secret I'd probably do this for free if I if I wasn't being speaker-0: Not not not something you want to give away. ⁓ then people then people will press that into service. Fine. So I mean so that it seems like having a dream job is gives you a lot of leeway over what you go after. And and I agree. I think I think it's a very exciting moment here. Now, I've got kind of host prerogative in that I've had the ability to pre-think about a lot of this and ⁓ your expertise is sufficiently broad that I'm gonna basically quiz you on a few different legal frontiers here when it comes to the AI side of things and how it interacts with fashion. ⁓ and for the definition question, I've picked what I think is maybe the easiest way into all of that, ⁓ because it's one that everybody can relate to. Fashion is a very visual industry. Everybody has their own face, their own personality, and their own likeness. And likeness is the word I want to try and get you to pin down. Substituted identity in there, but I need to remember I'm talking to a practicing lawyer, so I should be specific about what the words that I choose. Now, what actually constitutes my likeness or yours? And how valid are the frameworks and the precedents that we already have that have predicted likeness through the eras of film photography, digital photography, publishing, voice recording, and now this entire process of potential appropriation that can run through a closed opaque pipeline of generative AI. Now, you know, I'm not famous enough to worry about a bunch of this, but ⁓ in theory at least, we're now in a situation where someone's face or voice or their acting style or whatever can be ingested as part of AI training runs if they're a big enough name to be in there, or it can be ingested through an end user of a generative workspace directly importing reference material, which could be preexisting photography, candid or otherwise. ⁓ and that means that people's likenesses can end up in final outputs both accidentally and on purpose without much accountability. I'll get to the specifics of modeling contracts and releases in a bit, but in the broadest strokes, I want to ask you if we're ready for what feels like an open season on likeness, legally speaking. speaker-1: So likeness is an interesting term. The term pre AI days, we use a term called persona that's also protected. So it's not even the likeness. So you could go back in time where you had commercials where somebody used ⁓ the persona of Woody Allen, not his likeness, but just that neurotic New Yorker type of persona, and he ended up suing claiming you you took my persona. There's a Bette Midler case as well where they they took a likeness of her ⁓ voice. And so we've had a lot of precedent that we could rely upon for for this. What what's different is how good the replication's gonna be in the future. I did an interview with Michio Kaku, which is a noted physicist, and we were talking about ⁓ where we think the future's gonna be and the singularity and and the like. And he had the position that we're gonna be able to not just up you're you're gonna be able to have tons of video of a grandparent and put everything in there. And if the person's still alive, videotape them all day long so that when he passes, you could have your virtual grandparent in meeting your great grandkids and answering questions and the like. And so he thinks we're gonna go to that type of level. That's that's a whole different thing than we could have ever imagined, right? A real synthetic representation. But it's, it's, it's, it's, it's not real. But if you play with that and where we are now, I know the existing laws get you a long way to it. What but the big issue in many of those cases in access. And the two cases I mentioned before, the Woody Allen and the Bette Midler case, you had a situation where The defendant in that case went to try to get permission and the the artist said no. So that does not look good for a jury. ⁓ you went and then you went around me and tried to create it. This gets a you you're not going for permission anymore. You're just gonna say make a likeness that sounds like Woody Allen. And and so ⁓ that's just not gonna happen. There was another f pretty interesting case that I like to cite. You remember the band Delight? speaker-0: Yes. speaker-1: There was a video game in ⁓ that came out, a Japanese Sega had it, and they created ⁓ this dance dance studio type of game. And they had a character with ⁓ a voluptuous character with red hair, you know, tied and and they asked her after the fact if she would ⁓ do pr promos for it and of course she sued. She ended up losing that case because and into the US and and this is I I know You're going to want to talk about international too. But in it under the US, we had the First Amendment. And they felt that this was transformative enough. And it it it it's a big protection for a lot of artists because nobody creates art originally. Everything is stolen to some degree. And any artist that says that's not the case isn't telling you the truth. Every artist at some point had to borrow from someone else to learn and the like. and and so there's some protections. To come close to something, the the test and the reason copyright lawyers and right of publicity lawyers will always be in business is there's no bright line test. It's did you get too close or not? And if it's transformative enough, it's okay. So if I took ⁓ the likeness of a character I wanted but transformed it enough, then it would be sufficient. If I miss the mark, then it's an infringement. So in this case, that ⁓ the light, they felt that because She did not wear one outfit alone. She wore a bunch of different outfits. She wasn't really known for one particular look. She wasn't able to establish her persona as one thing only. And Sega was able to win. So that's sort of existing law. ⁓ I think what is happening now is so many people are afraid of the deep fakes that are coming out and everything else, especially as they're gonna influence elections. I mean, you could imagine an election coming out where ⁓ the opponent comes out with a a deep fake of somebody doing something ⁓ you know horrendous. And the the candidate can deny it happened and the like, but once once you've viewed that, it's kind of hard to unsee that. So they're trying to put some protections in place for speaker-0: Yeah. And I think y you know, you said an interesting thing there, which is the the sort of seeking permission versus seeking forgiveness afterwards. ⁓ and I think my my impression as a bit of a observer of the way that technology rolls out culturally and within particular industries is that AI especially is in a ask forgiveness mode rather than an ask permission mode, ⁓ at the minute. So it's it's a very glib kind of generalization there, but that does seem to be the way that it's operating. speaker-1: Yeah, you're right. But remember, you're allowed to take something if you transform it enough. Right? Because that is protected. I mean, ⁓ y you look at all the art. I I do a lot of painting. And you can trace the painters, ⁓ you know, where how they evolved from who they took from. So the the question is, did you take enough ⁓ and what's protectable? And remember copyright law is a very narrow thing. It it it's not given a a lot of protection. You don't it's not like a patent that if there's other ways you're doing something, you can stop it. In copyright law, you just you have the First Amendment, you have fair use, you have a number of defenses that are ⁓ brought in to to give leeway to artists that they're not always copying each other. I mean, think about how many songs are are are mimicked. There's there's a certain number of notes. speaker-0: Yeah, absolutely. And so we're gonna stay in the US for this one. We're gonna stay on likeness or something approaching it for this next one. Because now you just talked about the sort of the original persona standard. and I think there's there's basically two it almost seems to me like there's two sort of strata or two classes of citizens when it comes to something like this, which is if you're sufficiently famous and sufficiently known for one look, one style, that kind of thing, as you mentioned, then that's that's one thing. If you fall into the more general class of of people who are not known for wearing one thing, they're not known for standing one type of way or something, ⁓ then you have less of a leg to stand on. And that brings me to the probably the most ⁓ pertent sort of area of likeness and persona here in fashion, which would be modeling, right? speaker-1: Everyone has a publicity right. You, me, John Doe, and the like. So John Doe has just the same right that ⁓ you know a ⁓ a celebrity does. Different for political figures. We can put a pin in that for a second. But everybody does. The difference is what are my damages? No one knows who I am. So they use my persona. What is okay, I you win, but what's the damages? What you know, you take a celebrity or a model and they're gonna say, Well, I would have charged a million dollars for that. What would I charge? Right. There's there you have to have an objective standard of what the mu person would have charged. So everybody has this right. The question is what are your damages to? speaker-0: Fine. Okay. So that takes us to an interesting place for this next question. Because I think there's in in within modeling, you have the big famous you know, people don't index on supermodels as much these days, but you have you have the very famous folks. Then you have the more sort of work-a-day catalogue and editorial kind of modeling, which is the bulk of what people see as shoppers. It's what they see on social media, it's what they see on product detail pages, it's what they see on so on. Like they They might see that there's a model that wears the same thing for one brand and wears it for another brand, but generally they don't know who that person is. And the market value for that person is not conflated, it's not the same as it would be for ⁓ like a celebrity partnership. Fine. So if we then think about the specific case that I wanted to ask you about. So ⁓ this one was tested in the New York Supreme Court, ⁓ and it was a model by the name of Francesca Poojols who sued a value retailer ⁓ called Rainbow. There's a bunch of quirks and allegations around defamation and stuff in this one. ⁓ but it did come out as a bit of a bellwether case, at least in the media, for ⁓ what I'll call like AI extrapolation of existing modeling work, by which I'd mean where a model has done work for a retailer or a brand, so they have been paid under a contract, ⁓ they have had photographs taken, and the brand or the retailer has then allegedly taken those and used those as ⁓ inputs to then generate new images. ⁓ new images of the same person. So in this case, different poses, different settings, different garments, different compositions and things that the model claims they didn't do, they didn't agree to, and they weren't paid for. This isn't the only instance of this, but it's the one that that came to mind. Now if I'm reading a bunch of this right, I think the retailer's defense here is that they believe the model release That was signed granted them the right to alter, transform, and composite the model's likeness for advertising purposes. I haven't looked at that release, presumably you haven't either. So it it's certainly possible there's some specific clauses in this that covered these kinds of AI provisions. ⁓ but it's equally possible that this was just like a boilerplate release ⁓ with really broad wording. And what we're maybe walking into is a era of loose interpretation that could then blow open even further and turn prior consent to photography into like. future facing consent for generative AI. Am I is it a realistic fear? Am I overarching? speaker-1: No, no, I think it's a real fear, but I I'll I'll be frank with you. I would advise every one of my clients, and I've represented some of the supermodels in the world. I d you know, between all my work with Victoria's Secret to every ⁓ to the s smallest brands that, like you said, that are just bringing in day day-to-day ⁓ models, journeyman lawyers, I mean ⁓ journeyman ⁓ models and the like, I tell every one of my clients to make sure they have an agreement that gives you the right to make changes to it. So I want to set the universe up where I think you would agree with me, and most people would agree this is fair. I bring a model in to do a one-day shoot and I pay them for the day. And I tell the model I ⁓ we're gonna shoot a bunch of different outfits on you. And ⁓ I shoot the outfits, but I have a provision that says I get to modify this and change it. So then I go in and I don't like the way a brawl strap is hanging on the person. So I'm gonna use AI to delete it. I don't think anybody would have an issue with that. Then you go to the next step. Okay, I shot for the whole day, but you know that the blue top and the brown I don't like. I'm gonna change it because we have it also in red to a red top. And what I feel that is a very fair and I think it it should be fair under to agreement is that if you're on that shoot for the day and I want to use AI to to shave two or three hours off of your modeling time or whatever, then ⁓ b because I'm gonna be able to replicate and and put you in different backgrounds and the like, then ⁓ there there's no harm, no foul in that whatsoever. Where I think on the other side of the equation is you're done with that day, and now I'm gonna take your picture and perpetuity and use it going forward as I I think that's more problematic. There was a really fascinating case that happened years ago with Tastress Choice. And ⁓ ⁓ you could easily see this happening where ⁓ you had a situation in the US where they were gonna change the whole can and they had a ad campaign going out, they had a face on the can and at the last minute one of the execs said, We don't like it. And so they went forward and they looked at, well, w what what was popular in Canada and they found a a guy that was on the can that looked good and they said, ⁓ let's just use that picture. They put on the can. That model sat on their rights for 10 years and then all of a sudden claims, ⁓ I just saw that, and I want a percentage of every can you've ever sold in the US. So that case went to court. Now, Taster's Choice, this is the lesson to be learned, ⁓ didn't have a very good agreement in Canada with this person, didn't specify territory, didn't specify, you know, term or anything like that. So it was a very weak agreement, but ⁓ They also, because as you can imagine, they had so many different ad campaigns, it was very hard to to be able at the last second to pull that to look at it and to say, Well yeah, that's fine, we're gonna go out with it. That's a lesson for the legal, that they've gotta have be better organized on that and and catch it ahead of time. But many times it's moving so fast it's hard to do that. The case ultimately taste choice won ⁓ at the end of the day, but they weren't able to get an injunctive, they weren't able to get that level of damages and the like. But that's you know, sort of bringing it to where we are today, you have a situation and and I do a lot of work in the film space as well, where I want the right to be able to take a a a model or an actor and digitize them to be able to put them in a a a scene to save me time. The difference is, and this is where I think people need to be the thoughtful, is once that project is done, I don't get the right to the persona after that. Right? And if I paid you for and if I comp' you for the project and not on an hourly basis or something else like that, then I think that's a fair outcome in the middle. Does that make sense? speaker-0: It does it does make sense. I think if I was a brand, or if I was a model, if I put myself on either side of that argument, I would wonder how to define a project for a fashion modeling purpose. You know, y traditionally, let's just say if it was a location shoot, I think it's fairly clear, right? You know, you're like, you want me to you want me to go to Paris, you want me to stand by the Seine, you want me to wear this, I go home afterwards. It's very clear that anything that shows me they're not in Paris is outside the scope of that project. Exactly. I think if you if you think about Kind of like it, let's just think about it like a mass market or a value retailer or something that sells a lot of very similar looking products, that that's not doesn't fall into well-defined collections, doesn't fall into the kinds of clear like editorial campaigns that are globetrotting and everything else. I think it's harder to figure out what constitutes a project then. speaker-1: You you nailed it perfectly. It's on the Warriors to really like a Macy's. A Macy's needs to be tight on their agreement to say, hey, look, for the summer catalog here, you I I I'm shooting you in a number of things, but I have the right to use you in that catalog in anything I want if I want to, you know, synthesize it or make it and it it's really and then the model can negotiate the pricing on that, but they don't get to use them for the winter catalog. Now you also got SAG in there, remember. SAG plays an interesting part because if there's motion footage in there, SAG has a whole set of rules that you can't negotiate around if you're using a SAG model. So speaker-0: Yes. And SAG for our international listeners is a screen actors guild, right? speaker-1: Exactly. And so and if it's used for a certain long period of time then you have to pay it again. But the numbers are there, right? Like you know what your damage is gonna be. speaker-0: So this is this this this one I think ends in a very interesting place which is there's a there's a whole lot of wording to figure out here between what we're speaker-1: But can I throw something more controversial, would I tell my clients? Of course. I would never hire a child model ever again for a basic shot. Like if you have a kid's brand and you have one model that you really want, okay, that's one thing. But kid models are a pain in the ass, right? You have to get permission, you have to get gratification. There's a lot of things you have to go through to protect the company on that. I would only use AI for kids in Sience. I would I'd I'd have a whole playbook where we took different kid models and and the like and and then went forward. Now it's just it's too hard, it's too expensive. You're dealing with parents, you're dealing with a lot of things. And I I just don't think it's worth the squeeze to be bringing in kid models anymore. speaker-0: Fair enough. I think there's ⁓ and I think that we could spend a long time on just that because I think you can you can you can drive a truck through maybe that and sort of say, well, at some point you can extend that logic to other areas and you can also start say, Well, actually, you is kid is is child modeling a pathway to a career? You know, you should shut that side of things down. speaker-1: As a brand, remember, you can't enter an agreement with a minor, right? It's it's voidable by the minor. So there's in order for it not to be, then you gotta get the parent it's it's it's just the the cost of getting that locked down. Yep, it's huge. And in once again, you're in Macy's with you're you're doing a shot and there's the parents and there's two kids dressed in something. It couldn't be any kids, you know what I mean? And ⁓ yeah. speaker-0: Yeah, no, think and think it's interesting because when we fixate on the the fashion industry I think rightly fixates on the ⁓ the overheads of traditional photography, which is you need to get a human model, you need a photographer, you need a stylist, you need a location, you need makeup artists, you need lighting and so on. And generative AI is cheaper and faster. ⁓ I think into that mix you need to throw some of those ⁓ legal headaches and ⁓ and and speaker-1: And some brands some brands will not touch any of that. I don't think Air Maze is gonna play in that space. They're they're they they you have certain brands that are playing to a certain type of audience that they don't care. They're gonna they're gonna do it the old fashioned way. They like the authenticity and their their ⁓ their clients like it. You have other brands, their clients aren't gonna give a crap. Right? And some of them, I mean there's been Plata's latest campaign was all AI based, right? They created this whole beautiful AI ⁓ campaign and and people loved it. Where it was but it was also very clear it was AI. I mean it had ⁓ like human animals and stuff like that. speaker-0: I remember the thing with the giant birds and ⁓ yeah. speaker-1: Right. And you're the brand and you have to always pay attention to what your audience is gonna do. You saw Levi's got in trouble where they tried to use AI models and they use diverse models ⁓ and nailed for that where they thought they were trying to do the right thing by using diverse models. So speaker-0: But yeah, and and I mean I can see the argument. So th their side was, well, we want to show more in the way of representation. And then the counter argument from mm culture rightly is, well, that's it's not real representation. It's it's fake representation. And it doesn't yeah. Okay. We can spend a long time on this, but I do want to re exercise my host prerogative and quiz you on some of the other bits here. So let's move on to fair use, because I think this is an important argument when ⁓ when it comes to AI. Now I'm Gonna you I'm gonna pick up a case that came roaring back into the headlines a couple of weeks ago. So this is the one where a federal judge approved what's apparently the largest class action copyright settlement in American history, ⁓ which was between a large pool of authors of books and Anthropic, the company behind Claude. ⁓ and Anthropic was ordered to pay a combined one point five billion dollars to that pool of people. now the way I've seen a bunch of people choose to interpret this is that, ⁓ An AI company trained its models on copyrighted work that wasn't paid to license, it was slapped for it. And this is some kind of precedent or maybe a punitive market being established for the idea that you can't train on copyrighted models, ⁓ copyrighted material, or it's gonna be prohibitively expensive or risky to do it. It's not the reality. So the actual fair use portion of that case was decided more than a year ago. I think Judge Olsup had ruled in ⁓ l summer of twenty five. Training II models on books was fair use, and it was fair use because of the transformation criterion that you mentioned earlier. and that sort of ended up saying that the actual ingestion of copyrighted works for pre-training was solved. That's not been an issue for twelve months. The actual ⁓ the monetary award here came from damages of up to $150,000 per work. ⁓ and it stemmed from the fact that Anthropic allegedly pirated more than seven million books and kept Those pirated books on its servers. They've also famously bought a lot of books to destructively scan. So that's that's not an issue. Now, correct me if I'm reading any of this wrong, but within the US at least, it seems like what we have here is a precedent being set for just old fashioned piracy, which means, you know, don't steal things and if you do, certainly don't keep them on the books. ⁓ and rather than being a fair use issue, this is this is about record keeping and provenance documentation. speaker-1: Everything else. Yeah. You're you're close because fair use Okay, so fair use normally is supposed to apply when you have a legitimate copy of something. You got a legitimate copy and you did something with it. And there were a number of instances where those were not legitimate copies. They were pirated books. But I will tell you that case settled because Anthropic was trying to get money and they wanted to they wanted to clean this headache up so they could get the money. It had nothing to do. They would have probably won that case if they went the distance. ⁓ certainly on the fair use point with the legitimate copies and the like. But if in and when we're talking about legitimate copies, let's talk about if if a human had the ability to super read and they went on open websites and they read every book and they gleaned something from it and they learned, none of us would argue that ⁓ the fact that they learned how to do something on this or learned a formula or learned the scientific method that That's protectable. That's protected by not just fair use, but also the First Amendment. What the difference is here is and it I I don't know if it's going to be precedent for a lot of because I see other ⁓ LLMs you you know still fighting this, thinking that they're gonna prevail. So those pirated copies, I know that's what it was said. I I I don't have the details on how they were acquired. Because if they were not on if the if they were on ⁓ not a locked portion of the ⁓ somebody's website. If they were actually you could just go and look at them and and pull them and you put them in cash to stream them through. They should have deleted the cash immediately. I think I think there's a path here that this is all protected by fair use. Now if they went, you know, through ⁓ a closed page and they went behind the page and figured out how to get there, then that's a problem. There's a lot of case laws on that. And they will get they will get they'll have a problem with that. So the as you know, a lot of these LLM models, when they started, were just gathering everything. They were eating everything in sight. So there wasn't a lot of method. Now, I I spent a lot of time questioning a lot of my AI clients on let's assume there's an injunction that says you can't use this anymore. Can you reverse engineer that to take it out and still have the L. LM train on it. If you say to your your AI, hey, create me a ⁓ thing that looks like Darth Vader, it has to know what Darth Vader is, right? Mm-hmm. Yep. It's it's so it had to read this, it had to see it somewhere, had to learn what Darth Vader is to do that, and then the test has always been in copyright law. What is the output? There was a very famous case on the Church of Scientology where ⁓ These lawyers made a mistake and they put the Church of Scientology Bible as an attachment to a court pleading and they didn't keep it confidential. Washington Post went down and copied the whole thing, copied a hundred percent of it. So no one could argue that that, you know, you copied the whole Bible, ⁓ that that is not copyright infringement. But the reporter only published a synopse of it. And so the court held, rightly so, that the initial copy Is not ⁓ the issue. The i i it's only what comes out. You need to do the initial copy to be able to read it. You have to look at what comes out. That's no different than what we're talking about here in the AI world. Except that the if we're being honest, the truth is this is gonna devastate an industry, right? This is not like the Washington Times going and copying your Bible ⁓ or a book to then be able to do excerpts on it. ⁓ this is this and I think. Yeah, I I really do think the law is not prepared for this because I think the existing law is probably gonna favor the AI companies in a lot of ways. But the difference being is it's gonna devastate an industry. So I think you're gonna see legislation try to come up to figure out how to plug this to protect it. The example I always give is when when I grew up, I was taught how to do black and white photography. And so I worked in the dark room, I learned how to, you know, dodge and and ⁓ burn. different and along comes digital cameras. And you know, there are no more black and white photographers anymore. That you know, that's a novelty. And you can argue that we destroyed a whole industry from this because of these digital cameras in Photoshop. But if you're asking, was it better for society at the end of the day, I think the answer is yes. Even though we destroyed some, you know, there there's no more Ansel Adams in this. Now You don't have photographers, you have a million ⁓ editors using Photoshop. So people transform to a new type of thing. And ⁓ but but at the end of the day, we lost a whole group of artists that don't exist anymore. I shoot infrared film, you can't even buy it. So speaker-0: I think so I think I think the thing I would put so the difference for me would be, and I I'm gonna approach this as a publisher, right? I'm gonna approach this as somebody who is part of that industry that is ⁓ you know, we we publish a free-to-read open open publication. And we we've taken an at the attitude that we're happy with with scraping stuff because we would we would be cited in answers than not to. ⁓ and we're not big enough to forge any kind of individual agreement with OpenAI or Anthropic or what have you. The difference with the photography thing, I think, is There was still an incentive for people to shoot photos and there was still ⁓ an open market for people to go and then consume those things. ⁓ there was a commercial incentive there as well as the artistic one. I think if the the the bit that I don't think people are quite ready for is if it does end up being the case that the way people interact with the web is through a mediating layer through an LLM or what have you, and that's where they ask the questions, that's where they get the answers. Absent a market for licensing and royalties and ⁓ things like that for for training and content. there's no incentive to keep writing. There's no incentive to keep creating content. There's no incentive like that's that to me is is the difficult part of speaker-1: Yes. No, and and I I'm gonna push you on that a little bit because I agree with you, but the law is not gonna protect you. You're gonna that that's why that's why if society feels that there should be a financial incentive to doing this, then they're gonna have to change the law a little bit to protect that. But I but I would pose the question you're given it was determined that people needed a financial incentive to create works. And so they came up with copyright law. And copyright law now is crazy because it says you have your life to protect it plus 75 years. That's a long, long, long time. Right. But that but but on the protection side for the public on that, you have the First Amendment in the US and fair use saying you don't get everything. I can make a book that's very similar. I mean, Tolkien, how many books have come out like based on all those characters before? Not by name, but elves and doors and everything else. You're you're entitled to a very narrow scope of protection on that. It's not hard to transform certain things in writing, especially. So the balance of the public was that. ⁓ and IP law, patent law, and trademark law is meant to incentivize you to do something, and you get we're gonna reward you with a certain exclusivity period, right? Now, my question for society that I've been struggling with is it took you five years of your life to invest in this and to write it and to do it, everything. But if AI allows you to do it in a month, and you're no longer a writer, but you're an editor, you're like, I have an idea about doors and elves and blah, blah, blah. And I want it to follow this storyline. I like the writing styles of Stephen King and I want, but I don't want it to be infringing. Because you're going to be able to ask the LLM at some point, the AI, I don't want it it to be infringing either. And it's going to be able to come back with texts that probably would be better than any lawyer at some point that can tell you, you know, ⁓ the similarity of the two. And so you no longer put four years in writing this, you put a couple months down. And I get that like I paint all the time. I paint every weekend. And ⁓ on like you use the word artistic side. People are gonna do whatever they want artistically for their meditation, for their soul, no matter what. It's the financial piece where you can't make a living off it that's really gonna be impacted. And so I think people are gonna have to figure out how to make a living in a different manner. speaker-0: Well, I think you're talking about diluting a market in two ways, that you're talking about diluting it on the consumption end, because you can get what was previously the established value of reading a long form article in the New Yorker for argument's sake. You can get a an AI summarisation of it. and is that as good for your purposes? It depends on what you valued from from that. But you're also talking about the ease of creation and the speed and the scale of creation, which then ends up mm driving down the value and the price of the work that you put in ⁓ at the beginning. So y seems like you're exploding this from both sides. And and I agree. It's like this is a big issue to ⁓ for society to us. speaker-1: societal issue. No, because I view that you judge a society based on the art it creates. You look back in history, you're judging society and what type of art and technology, honestly, too, right? Science and tech. And that's how you judge how a society did. And ⁓ we do, you know, we do a lot of work with Elon Musk and and I I follow a lot what he what he talks and he's viewing that you're gonna see content being created bespoke for you. by the AI and and by you're gonna have your iPad or whatever tool you're using and you're gonna be, you know, make me a movie about this. And it's it's gonna go to consumers. And and there's a difference, and and I'm aligned with you that society needs to reward and incentivize artists because that is the value of a society as far as I'm concerned. But I will tell you consumers, especially younger consumers, aren't going to care. My son went to see This virtual Japanese blue haired woman sing. Yes, this isn't a real woman. You don't know anything behind her, but they're paying big money to go to a concert to dress up in Cosme to to watch this. And you're like, okay, there's this younger generation, you know, I I I agree with you, they have to know it's AI or virtual, but I'm not sure they're gonna care enough. I also don't think young people care about their privacy. you know, people say, ⁓ we have to protect them. I think if you told a young person it was gonna take longer to find their friends and deal in it because you had to go through DC, they'd be like speaker-0: I would agree. I would agree with that. speaker-1: There's a difference, like we're of a different generation. this next generation, I'm not sure the values that we we have are gonna translate to that generation. And and if they can get their content created good content, let's just make you know an assumption that it's gonna be good content and it can be done automatically by the tools because of what it's learned. I wanna watch ⁓ Dungeons and Dragons fantasy. Like Lord of the Rings, and it's creating content for you or gaming for you. it we're gonna be in a different place. I mean, th there was an interview, sorry to keep going on this, but there was an interview last week with Elon Musk and The Economist, where he was talking that in 10 years he thinks that AI is gonna be in a position where it's gonna be running most of the time, including his company, making these decisions and the like. And yet there'll be this amazing abundance, he calls it, of ⁓ you know, content and everything we're we're gonna be able to get at a much lower price level. I don't know speaker-0: I'm yeah, I don't know how to feel I am I am I I more of a anyone who listens to the show enough will put me in a cynical bracket from ⁓ that point of view. I don't think history is very kind to the idea that wealth creation spreads out. I think ⁓ people I think history is a provides more evidence that it accrues to the to the wealth holders over time rather than creating abundance. speaker-1: There's no question that there's gonna be ⁓ some multi billionaires and we're gonna lose a lot of our millionaires. I I do think that's gonna happen. What I what what we're we're we're at that point in history where we're gonna s we're we're on the cusp of seeing something that's never been seen before. It's it's a it's an amazing time. speaker-0: Yeah, I think I think that's right. So ⁓ I'm gonna compress a few questions into one here for ⁓ 'cause I'm aware of time. I don't wanna ⁓ c occupy you for the entire day. What's your take on just stepping outside the US for a minute, what's your take on some of the regulations, the legislation around AI, particularly the EU AI Act? speaker-1: So I know like the deep fake we is an area that you've talked about before. I mean I I I I think the deep fake area is one of the most dangerous things we have as humans because ⁓ we have a hard time separating once we've seen this, no matter what we've been told they're like. It will have serious influence on us. So I understand what the EU is trying to do. The difference With the EU and the US is remember the First Amendment is a local ordinance. It only applies in the US. You don't have that in ⁓ other jurisdictions to pre to you know from from a protection standpoint. There's strict liability for defamation in the UK. If you make a statement that is defamatory against the Queen of England or something, it's strict liability. In the US, they're a public figure. You're allowed a lot more latitude on this. And so the EU ⁓ definition is much broader than the US and it goes for also fictional people, not just people that existed. It could be it which which makes sense a little bit. Imagine I'm doing a ⁓ endorsement of a product and I have an AI saying, ⁓ this is my favorite base cream, it reduces my aging. In the US, you ⁓ the FTC also would require in the influencer guidelines that you identify that this is AI. So we have another way of getting at it. But I think what the EU is trying to do is to really make it clear that you have to disclose this because ⁓ people will not be able to tell. And the penalties are pretty substantial. speaker-0: Yeah. No, I think I think that's correct. let's talk about some of the legal implications of some of the kind of consumer-facing technology that fashion brands and retailers are excited about deploying at the moment. Because I think all of them, to some extent or another, they broaden the scope of the sort of data that changes hands between brands and consumers. And as a result, they extend the risk surface, or at least the surface of like risks I should be aware of for a brand. Specifically, and I know these are things you've been thinking about with your clients and so on. I'm thinking about virtual mirrors, virtual try-on, omnichannel. So the need to kind of offer seamless experiences across different channels, physical, online, social, and so on, which requires you to have a customer profile that's portable and consistent between them. And then personalization in advertising and outreach. The way I see it, fashion is collecting a lot more personally identifiable or a ⁓ personally attributable data than it ever has before. And that seems like it's only going to scale up as the industry goes after some of these things as well. What's your take on the kind of risk exposure there and where you think this goes? speaker-1: So fashion companies are looking at using AI tools for every aspect to reduce costs. As you know, ⁓ most fashion clients they have thin margins. And so whatever they can do to help on the margins has been like incredibly helpful. So everything from things you wouldn't think about, like logistics, you know, you you have somebody at your company that who has a history that knows that black dresses are gonna sell better in New York and red dresses are gonna sell better in LA. But with AI now, you're gonna be able to do in an instant to divert those products and looking at it and making predictions on where these products are being sold instead of relying on somebody else. You're gonna look at what your competitors, how many red dresses they have for sale, how many black dresses. And so that's a huge savings and the like. Then you have other companies that ⁓ are gonna have one color dress in their store in all sizes, but not have all the different colors and you're gonna try it on and go in front of a virtual mirror and say, let me see what the purple looks like. ⁓ I like that better. I don't have to have it in stock right there. I'll then say it'll be shipped to your house in two hours or however long it takes. And you'll be able to get it and ⁓ it's gonna save a lot more inventory and waste of products. So those are like positive ⁓ experiences I think for the consumers and for the companies in terms of money they're saving because Wasted inventory, you know, unsold stuff is a problem. And in the EU, you can't even destroy it. Right, true. So that's that's ⁓ that's like underneath. Now the virtual mirrors is I also see it in an advertising standpoint. So I saw I was in New York the other day walking by a storefront and they had a mirror on, and you walked by it and all of a sudden I had a puffer jacket on. And you get to see, I mean, how amazing is that? It put a puffer jacket on me as I walk by. Well, it's capturing my image, clearly, right? It's having then to put a puffer jacket that looks my size. But boy, that that what a great advertisement that was for me, ⁓ and the like. I think omni channeling is going to be the wave of the future if you can get it down and you can get consumers comfortable. So I give an example that imagine I'm at Armani and I buy black jeans in New York and I buy black jeans and and I I'm part of the the the rewards program and using the app and they're able to ⁓ consolidate my data and the like. And then I'm in Denver and I buy white jeans and I return ⁓ And then I, you know, in LA and I buy black jeans. And then I'm walking by the store and ⁓ in New York and I you know, it it reads my phone 'cause if I have my apple but if it doesn't have my apple Macy's used the Apple beacon to do this to say, ⁓ we see you're walking by the store. Come in for a discount. ⁓ but let's let's go the next level. Let's assume my app is open and it says, ⁓ we see, Mr. Lupo, that you're walking by, come in. We have those black jeans you like on on sale. ⁓ would you like a virtual assistant to come and help you? ⁓ I I would like a virtual assistant. So I click on it. So a lot of the problem where things go wrong is letting the customer know and sign into this process because it can be very spooky too. But then I go in and it's following me throughout the store and I go to pick up a pair of white jeans and the RFID code gives a signal. The L ⁓ my virtual assistant now tells me, hey, put those white jeans down. They make your ass look big. You always put them away. So I put ⁓ away. But the black jeans are back there on the left or try these dark blue ones. Companies are going to love that. And I think consumers, once they get comfortable with it, are going to love it as well. If it's done wrong, it's way too creepy for people. But I I think if you had a virtual assistant, you know, that ⁓ or a stylist for lack of a better term, people would go for that. And I have clients that are really investigating this and trying to figure out how to come on the right side of it because they're going to get a lot more sales, consumers are going to be a lot happy, they're not going have the returns and the like. The last area on this is I I don't want to forget about beauty. I I have a lot of beauty clients and so you you have different skin tones and everything else and you're putting on your through these virtual mirrors, including on your phone, what what does this lipstick look like? Well, they gotta get that down close, right? Because you you return a lipstick, thirty percent of products are returned. What what how what do you do with a return lipstick, right? It's it's it's you it's not gonna be used again. You tried it. and the like. So the more I can get more accuracy and use the AI and the data to get that on on face and and tones and the like, ⁓ the the better off I'm gonna be. So that's where I see a lot of companies trying to use AI because one of the biggest expenses they have is returns. And that's not good for society when you can't do anything with it. speaker-0: No, I agree with all that I think and I think you're to your earlier point that there's a generation that doesn't care so much and that will part with personal data and some measure of risk exposure on their own to get that convenience and get that level of service. And then there's a generation that won't and ⁓ and I I think sees that as a different type of bargain. speaker-1: And the brands the brands will know that, right? Like like I said, Air Maze, you know, and other brands are not gonna ever play that. But other brands that are more like adventuresome, the Gucci is really leaning into a lot of this stuff and and you have to know your audience. Are you gonna, you know, piss them off or or are they gonna really lean into it? Diesel's a good one. They have probably the most you know forward thinking AI experience out there. But speaker-0: Yeah, interviewed ⁓ I interviewed the CEO of Monogrid in Italy, the ⁓ the agency that did a bunch of creative stuff with diesel actually. And ⁓ it that that that came up. Uncannily, I literally had an email pop up in the background just then from the company that made my glasses to tell me that my ⁓ personal data had leaked through a logistics partner, which is which is great. Like that that's ⁓ that's that's an evidence of how this works on the other side. I I've got one final question for you, Tony, which is ⁓ like I've I've sat on this for a while and I don't understand it. And I'm hoping you can help me understand it. Now, fashion brands on aggregate are some of the world's most litigious IP holders, right? Brands will go after they'll go after small scale hustlers selling counterfeits in a car park just as readily as they'll go after another multinational brand who might be infringing on their trade dress even slightly. But every single big Closed weights or open weights image or video generation model has been trained on the entire visual history of every fashion brand for the reasons that we already talked about. Product detail page images, campaign photography, so on. Now, most of those models either have very weak guardrails or basically non-existent guardrails. It's trivial to get a Nike product or a Nike looking product or a swoosh in a generative output, even if you don't ask for it, or a Nermez logo, to your point, or a Gucci logo, or what have you. I've I've watched this and I've seen the record the recording industry, ⁓ of the RIA in America go to war with this, the publishing sector, individual authors, artists. Fashion seems to have just sat this out and I don't think I get why. I can see that maybe they're waiting for a market for licensing content to emerge. I can see that maybe they just see it as more distribution and more awareness. ⁓ and they but if I'm a household name brand, why would I turn a blind eye to this? What am I missing? speaker-1: So what's kind of interesting that most people don't appreciate is AI is not going to be that affected by trademark. AI is going to eat copyright. And most fashion brands don't sue on copyright. They sue on trademark. So you create something and it creates something that has the trade dress, the style of the shoe. I can still sue you. I don't it doesn't matter. Right? And and I have a I I have a shoe company I represent in Milan that told me that they have thirty designers that come up with the new colors of their shoe and everything else every year. This guy took his designs from twenty one, twenty two, and twenty three and twenty four, dumped it in and asked the L ⁓ to create what they should be for twenty five. It came up with fifty designs. He had to go back and add different colors and in he he took he he said he was able to get to prototype three months faster than y he would have been able to before. And with a lot less people and expense. And I don't think, you know, whatever whatever the output is, if you come out with something and you make a product based on it, and if it infringes my trademark, I can still go after you. So I think a lot of the brands feel they have a vehicle to attack people. ⁓ and on the copyright side, it's not as strong. speaker-0: Fine. So it's a case it's a case of what am I going to use this output to create? And then that's the artifact. That's the infringing artifact rather than ⁓ than the image itself. Okay. Okay. Tony, thank you for letting me quiz you so many different things today. ⁓ I had about ten other things that we didn't get to. So ⁓ at some point speaker-1: You're not creating content. speaker-0: I would love to have you back on. ⁓ keep ⁓ keep an eye on the emerging landscape here. ⁓ I'd encourage anyone listening to this, check out your fashion council blog and and so on and so forth. ⁓ I've really enjoyed this talk. Thanks for your time. speaker-1: No, I appreciate it. ⁓ we're we're at the cutting edge of of I think a real revolutionary moment for humankind as a whole. And we're we're talking about it with art and the like and that's as I said, that's how you measure society. Thank you. speaker-0: Tony, thank you. And that's the end of my discussion with Tony. I'll keep this brief because this episode went way over. I I think people are still stuck on the idea of fair use when it comes to AI training, because well, I have been, and because for most people, that's the industry's original sin. Like Tony said, you don't get Frontier LLMs like we have them today without ingesting the entire internet permissionless. And decimating several industries in the process and asking for forgiveness later. But the thing I want you to take away from this week's show isn't any kind of fatalism or any kind of advice to just give up on resisting any side of AI or preparing for the legal consequences and ramifications of it. Yes, fair use or fair dealing, if we look at the recent open AI case in India, it seems to be broadly getting decided in the AI lab's favor. But there's still a lot to be decided in other areas. And creatives and companies that don't advocate for themselves and prepare and start updating their legal postures in photography, sustainability communications, personalization, and a host of other frontiers, they do stand a real risk of falling behind the times here. I'm gonna be back next week with both the next edition of the edit, Grace, which is our weekly quickfire news analysis show, comes out on a Tuesday, less than 25 minutes. Great accompaniment for your morning commute. And I'm gonna have something very different on the interview show. It's coming next Thursday. I think you're gonna enjoy all of it. So for now, I'll speak to you again really soon.