AI Firms Are Building the Tech - But Skipping the Trademark: The Class 43 Blind Spot

The Office That Just Changed the Rules

The UK Intellectual Property Office does not move quickly. So when it issues a formal practice notice overhauling how examiners assess artificial intelligence inventions, within weeks of the Supreme Court doing the same, the trademark community should pay attention, even if patents are the headline.

The notice, confirmed by Scottish Legal News on 16 July 2026, follows the Supreme Court's unanimous ruling in Emotional Perception AI Limited v Comptroller General of Patents, Designs and Trade Marks [2026] UKSC 3. That judgment abolished the nearly 20-year-old Aerotel four-step test, replacing it with an approach aligned with the European Patent Office. Under the new framework, AI inventors face a lower initial threshold for patentability: simply referencing any hardware feature is enough to clear the first hurdle. The real fight, as Mondaq reported on 20 July, now shifts to demonstrating genuine technical contribution and inventive step at a new "intermediate step" in examination.

The UKIPO has scheduled a live hearing on the original Emotional Perception application for 4 August 2026. That date is the clearest signal yet that the new framework is operational, not merely aspirational.

But here is the brand-protection wrinkle that is being missed.

Patents Move; Trademarks Stall

While AI companies rush to exploit the newly widened patent route, their trademark strategies remain conspicuously thin. Clarivate's Trademark Filing Trends Report 2026, published in May, found that "most major AI companies did not feature among the highest trademark filers, suggesting brand formalisation in the sector is still emerging." That phrase, "still emerging", is doing a great deal of work in a sector that is simultaneously rewriting patent law.

The gap is sharpest in the service classes where AI businesses actually trade. According to AI Business Dispatch analysis of Companies House and IPO data (as of July 2026), Class 43 trademark filings at the UKIPO reached just 363 in Q3 2026, a fall of 82.9% against the prior period. Class 43 covers restaurants, hotels and hospitality services: precisely the territory contested by AI-powered booking, concierge and food-delivery platforms that have proliferated across Britain. Meanwhile, 117 new companies registered under SIC 69.10 (legal activities) in Q3 2026, down 83.4% on the prior period. Strikingly, 99.9% of active SIC 69.10 companies hold no Class 43 trademark whatsoever. Legal-adjacent AI ventures, the very businesses advising clients on compliance, are leaving their own service-class brands entirely unprotected.

This is not a niche concern. It is the central brand-protection paradox of 2026.

What the EUIPO and UKIPO Are Demanding This Year

The regulatory backdrop makes the trademark gap more dangerous, not less. The 2026 EUIPO Guidelines, which entered into force on 1 July 2026, confirm that precision is now mandatory. Generic or vague class specifications are no longer acceptable. Virtual goods must be identified by type; "virtual goods" alone will be refused. For AI and SaaS businesses, this means specifications such as "artificial intelligence as a service", now formally recognised under Class 42 in the 13th edition of the Nice Classification (in force since 1 January 2026), must be drafted with particularity or face objection.

The UKIPO's own reform agenda compounds this. Since April 2026, official fees have risen by roughly 25% across all IP rights, the first trademark fee increase since 1998. World IP Review, reporting just four days ago on the UKIPO's 2026 rankings, noted practitioner frustration with "woeful" pendency times and an acceleration in revocation and cancellation proceedings as brand owners attempt to clear conflicting marks from the register. Filing without a clear strategy is costlier than it has ever been. Failing to file is costlier still.

The UKIPO has also signalled that from September 2026 it will begin exploring AI tools to manage the growing volume of non-traditional trademark applications, covering sounds, gestures and animations, that its current search infrastructure struggles to handle. That overhaul will eventually benefit filers. Right now, it adds uncertainty to an already congested register.

Deepfakes, Scatter-Guns and the Class Gap

Beyond registration mechanics, a broader enforcement problem is taking shape. At the INTA Annual Meeting in London in May 2026, practitioners discussed AI-generated deepfakes at length. Absent a dedicated personality right in UK law, the emerging consensus, reported by World IP Review, was a "scatter-gun approach" to trademark and copyright registrations as the default defensive measure. That counsel carries a sharp implication: if you have not registered, you have nothing to scatter.

The ONS published data yesterday showing that large language models are the most widely used AI technology among UK businesses in June 2026, adopted by 18% of firms with ten or more employees. Yet only 10% of AI-using businesses report deploying the technology extensively. The brand identities attached to these early-stage deployments are, for the most part, unregistered and unprotected.

The AI sector finds itself in an odd position. It has just won a materially easier route to patent protection for its inventions. Its trademark cover, the commercial brand value that actually drives customer recognition, licensing revenue and enforcement leverage, remains mostly absent from the register. Patents protect the machine. Trademarks protect the name people trust. Right now, British AI is building one and ignoring the other.

What Brand Owners Should Do This Week

Review your service-class specification against the Nice Classification 13th edition. If your AI platform touches hospitality, reservations or food delivery, Class 43 belongs in your application. If it provides software or AI-as-a-service, Class 42 is non-negotiable. With the UKIPO's pendency times under strain and fees at their highest in nearly three decades, an unregistered brand is a liability, not merely a gap. Run a clearance check across the live register, TrademarkDashboard's AI look-alike and sound-alike matching is a practical starting point, then instruct a qualified trade mark attorney before the 4 August UKIPO hearing sharpens examination practice further.