First published in HAPPI Magazine

Why IP matters beyond formulation and design patents, copyrights and trademarks.

Remember when you had to elbow your way through throngs of teenagers with overdrawn eyeliner to find your favorite makeup at your local store? Those days are gone (or soon could be). Now shopping for cosmetics can be done from the comfort of your own smartphone. Artificial intelligence and augmented reality (AI/AR) are revolutionizing the cosmetic buying experience, allowing customers to virtually try on and purchase goods without ever stepping foot in a store.

This exciting innovation, however, may come at a cost: patent infringement.

Cosmetic companies may be familiar with copyrights, trademarks, and patents covering their products, but they may be less familiar with intellectual property surrounding computer technology, especially AI/AR. Before your company adopts an AI/AR app, you need to know these five important things.

#1 Patents Are Valuable Assets

Utility patents are the most common type of patent and cover new and useful inventions. For example, a utility patent could claim a new chemical compound that has SPF properties, the mechanical properties of a new mascara wand, or even a new method by which consumers can virtually try on make-up using their phones.

At a high level, utility patents contain two parts: 1) the written description or specification, which is a quasi-background section that describes the invention and allows a person of ordinary skill in the art to practice the invention; and 2) the claims, which particularly define the scope of the invention. In other words, the claims are almost like property boundaries, whereas the specification is almost like the “overview” section a real-estate agent would write to describe the property.

Patents give their owners the right to stop others from making, using, offering for sale, or selling the claimed invention in the United States. In exchange for this monopoly, the patent owner agrees to fully disclose what the invention is and how it works in its specification and claims. A patent owner is not required to actually sell a product that uses the invention. Instead, the patent owner may choose to license the invention to others or to prevent others from practicing the invention altogether.

To enforce this right, a patent owner can sue for patent infringement. A product infringes a patent when it contains every element within a patent’s claim. A finding of infringement usually forces the infringer to stop making, using, selling, etc., the claimed invention. It may also result in a monetary award for the patent owner. Thus, patents can be valuable assets to any business.

#2 Cosmetic Companies Have Already Been Sued for Infringing AI/AR Patents 

For the past several years, a patent owner, Lennon Image Technologies, LLC, has been suing cosmetic companies for infringing its AI/AR patent. The accused cosmetic companies had launched apps that allowed customers to virtually try on make-up, nail polish, and other cosmetic products. The patent owner argued that the companies’ apps infringed its AI/AR patent, which generally claims “a method of manipulating a customer image corresponding to a customer,” which allows the customer to virtually try on “potential purchase item.” See Lennon Image Technologies, LLC v. Ulta Beauty, Inc. for more information on this patent and these litigations. So far, almost all of these cases have settled before a court has ruled on the merits—i.e., determined whether the cosmetic companies’ apps infringe or whether the Lennon’s patent is valid and enforceable. Many of these apps are still available on the companies’ websites, which could indicate that the parties entered into a licensing agreement to continue using the products.

These cases do not mean that these apps infringe this AI/AR patent because no court had made such a ruling yet. But they do serve a warning to cosmetics companies that they may be accused of infringing AI/AR patents if they adopt similar apps.

#3 The Functionality of the App Matters, and Having Extra Functions Does Not Mean the App May Not Infringe

How the app works will determine whether it infringes a patent, which is why its functionality matters. As briefly discussed above, a product infringes a patent when it contains every element in a claim.

For example, if a patent claimed a chair with four legs, a seat, and a back, then a product containing four legs, a seat, and a back would infringe. A chair that contains three legs, a seat, and no back would not infringe because it is missing claimed elements—here, one leg and the back. Say, however, that you have the grand idea to make a chair with four legs, a seat, a back, and wheels connected to each of the legs. Even though this last chair contains more structure than what is claimed, it would likely still infringe the patent because it contains the claimed elements of four legs, a seat, and a back.

AI/AR apps are exciting and innovative, requiring intricate coding and graphic design. For example, imagine a patent that claims “a method of virtually trying on make-up, comprising a) acquiring a device that has access to a website or application; wherein b) the website or application allows a user to see a picture of the user’s own face; and c) the website or application enables the user to virtually try on a make-up product.” Such a claim is broad and may present complex patent law issues outside the scope of this article. If your app performs a, b, and c, then it would likely infringe the claim. However, your app may not infringe if it allows the user to see a real-time video instead of a picture or focuses on a user’s hands rather than face. Functionality matters because even a minor difference between the app and the claimed invention could be the difference between a finding of infringement and noninfringement.

#4 AI/AR Patents May Cover Cosmetics

Related Apps Without Mentioning Cosmetics

What a patent covers depends on the scope of its claims. During litigation, claim terms are usually given their plain and ordinary meaning. But sometimes claims are drafted in such a way that requires a judge to determine their scope by looking at how their terms are used in the specification, prosecution history, or even looking to outside sources if necessary. Revisiting the chair example: instead, say you make a bedframe with four legs attached to a base and a headboard. The plain and ordinary meaning of “a seat” is “something that can be sat on” and “a back” is “something that can be used as support while sitting.” Although your bedframe product may not have a seat and a back in the traditional sense of a “chair,” the bedframe base is “something that can be sat on” and the headboard is “something that can be used as support while sitting.” Thus, your product could infringe the chair patent, even though the patent does not specifically claim a bedframe.

Applying this idea to the AI/AR context, an app that allows a consumer to try on a cosmetic could infringe a broadly written AI/AR patent even if the patent does not explicitly mention cosmetics. For example, a patent could claim “a method of virtual face painting, comprising a) acquiring a device that has access to a website or application; wherein b) the website or application allows a user to see a picture of the user’s own face; c) the website or application provides virtual paint, pre-set shapes, or stickers; and wherein d) the website or application allows the user to virtually paint on the picture of the user’s face with the virtual paint, pre-set shapes, or stickers.”

Such a claim is clearly intended for clowning around; however, it may cover an app that allows a consumer to virtually try on make-up. The idea of painting a face with virtual paint, pre-set shapes, or stickers is not too different from allowing a consumer to virtually apply different shades of blush, eyeshadow, or lipstick. Therefore, AI/AR patents could potentially cover cosmetic apps even without mentioning a cosmetic product.

#5 Due Diligence May Be More Important Now Than Ever

How do you know whether your app might infringe a patent? You do your due diligence. This may include having a freedom to operate (FTO) search conducted, sometimes also known as a “clearance search.” An FTO can reveal patents, other products, prior art, or competitors that may be similar to your product or the product you wish to develop. In the event the search reveals a patent, it would allow you to take steps to protect yourself from infringing it, including designing your product around the patent claims or obtaining a license to the patent.

These options do not guarantee that your company will not be accused of infringement, but they can mitigate the costs associated with litigation. An FTO can be a defense to willful infringement, which could decrease damages if your product is found to infringe. Licensing a patent may not protect you from litigation completely; however, it can decrease the pool of potential accusers or even distribute litigation costs between parties.

FTOs also can enable offensive strategies. Knowing what patents or prior art exist enables you to challenge the validity or enforceability of the patent in district court or at the United States Patent and Trademark Office.

AI/AR in the cosmetic industry is a growing trend. As the technology continues to evolve, its applications in the cosmetic industry may be limitless. But because cosmetic companies are not tech companies, it is important for them to take extra care when developing apps and uses for AI/AR, expanding their IP resources beyond formulation patents, design patents, copyrights, and trademarks.