General Court: Trade marks for virtual goods and services to be assessed like trade marks for the real goods and services

The case law on trade marks for virtual products is still developing. The General Court recently added an important decision on the assessment of their distinctive character.

Background

On 1 July 2022, Glashütter Uhrenbetrieb GmbH applied for registration of EU trade mark no. 018727034 for the following sign:

The application covered various goods and services in classes 14, 35 and 41, including:

• ‘Downloadable virtual products, namely […] stopwatches, chronographs, clocks, watches and their accessories for use online or in virtual worlds’ in class 9;
• ‘Retail services offering virtual products, namely stopwatches, chronographs, clocks, watches and their accessories for use online’ in class 35; and
• ‘Entertainment services, namely providing non-downloadable virtual products online, namely stopwatches, chronographs, clocks, watches and their accessories for use in virtual environments’ in class 41.

The examiner at the European Union Intellectual Property Office (‘EUIPO’) rejected the application for goods and services related to virtual products on the ground that the trade mark lacked distinctiveness (Art. 7(1)(b) EUTMR).

The applicant’s appeal to the EUIPO’s Board of Appeal (‘BoA’) was dismissed. The Board found that the sign would evoke the reputation of the German town Glashütte for excellence in the field of watchmaking. This applied also in the context of virtual products.

The applicant appealed to the General Court.

The General Court's Decision

The General Court dismissed the appeal (T-1163/23).

The judges recalled that a trade mark must serve to identify the goods or services in respect of which registration is sought as originating from a particular undertaking and thus to distinguish the goods or services from those of other undertakings.

It is sufficient if an absolute ground for refusal exists for a non-negligible part of the relevant public in a part of the EU (Art. 7(2) EUTMR).

1. Reputation of Glashütte

The applicant disputed the extent of the reputation of Glashütte which the BoA found in the contested decision.

The judges agreed with the BoA that the name Glashütte referred to a German town located near Dresden, famous for the manufacture of high-quality watches and for being the cradle of German watchmaking. This was corroborated by a Wikipedia article on Glashütte cited by the EUIPO’s examiner and relied on by the BoA.

The Court held that these findings constituted well-known facts, i.e. facts which are likely to be known by any person or which may be known from generally accessible sources. The EUIPO/BoA may rely on such facts and need not prove their accuracy. Rather, it is for the applicant to challenge the accuracy in a detailed manner. The EUIPO may submit arguments and evidence before the General Court to demonstrate the accuracy of the well-known facts.

The applicant did not put forward evidence to challenge the well-known facts. To the contrary, the EUIPO referred to several major companies in the luxury watchmaking industry located in Glashütte as well as their websites, which testified to the reputation for high quality watches manufactured in that town. 

2. The relevant public

The applicant asserted that the BoA did not define the exact proportion of the public for whom the name Glashütte symbolised high-quality traditional watchmaking.

The Court dismissed this argument and deemed it sufficient that the Board assessed the distinctive character for the general public, professionals and the specialist public in Germany, who were familiar with the town of Glashütte and interested in virtual goods and services relating to watches, clocks, etc. This part of the public was deemed non-negligible.

3. The public’s perception of virtual goods and services

The Court also upheld the finding that the relevant public transferred the reputation of Glashütte for watchmaking to virtual goods and services.

The judges found that the relevant public would, in principle, perceive virtual goods and services in the same way as the corresponding real goods and services. However, the nature of the goods and services in question is decisive. The public’s perception of the real goods and services can, in principle, be transferred to their virtual counterparts if:

• the virtual goods merely represent real goods, or
• the virtual goods represent or emulate the functions of real goods, or
• the virtual services emulate the functions of real services in the virtual world.

The possibility of such a transfer must be assessed on a case-by-case basis, taking into account the particularity of the virtual goods and services in question.

The judges found that the virtual goods and services in the present case refer to real watchmaking products and their accessories and may thus represent the corresponding real goods and services or emulate their functions. When the relevant public was presented with the virtual goods and services, it would directly perceive the mark as a logical extension of the reputation of the town of Glashütte in traditional watchmaking to virtual products. The trade mark would evoke the same positive feelings regarding quality and authenticity.

4. Graphic stylization

Finally, the graphic stylization of the mark was deemed not to confer distinctiveness on the sign. In order to do that, a graphic stylization has to be capable of leaving an immediate and lasting impression in the memory of the relevant public in a way that enables the latter to distinguish the goods and services from those of other undertakings.

The judges confirmed the BoA’s finding that the fonts were banal and purely decorative without distinctive character.

5. Conclusion on distinctiveness

To establish the absence of distinctive character, the judges deemed sufficient that the mark communicated information about a characteristic of the goods or services relating to its market value. This information does not need to be precise. Rather, it is decisive if the information is of a promotional or advertising nature, which the relevant public would perceive in the first instance as such and not as an indication of the commercial origin.

The judges upheld the BoA’s finding that the sign would be perceived as evoking a heritage of exceptional know-how and a reputation for excellence in the watchmaking industry of Glashütte.

Comment

Considering the statements of the General Court, it seems that many virtual goods and services will be treated the same way as the real ones – at least when assessing absolute grounds for refusal.

The more interesting question is: Does this decision have an impact on the assessment of the similarity of real and virtual goods and services? The EUIPO recently rejected an opposition because it found that retail services for virtual soaps are dissimilar to real soaps (IPKat here).

If the perception of real goods and services can be transferred to virtual goods and services, does it mean that consumers will assume the virtual goods and services to come from the same source as the real ones? If so, would that even be sufficient to find a similarity? This boils down to the question of what the standard for finding a similarity of the goods and services is.

According to the German Supreme Court’s consistent case law, goods or services can only be considered dissimilar if, assuming they are branded with identical signs and that the earlier mark enjoys an increased distinctive character, a likelihood of confusion is excluded from the outset due to the differences between the goods or services (e.g. case I ZR 42/23 at para. 22). Thus, the similarity is assessed from the focal point of the likelihood of confusion. If consumers see a trade mark on an actual watch, shoe or any other real-life product and then see the same trade mark on a virtual watch, shoe etc., will they not assume that the company responsible for the actual goods has started selling virtual goods?

The approach of the German Supreme Court has been rejected repeatedly by the General Court (e.g. case T-165/17 at para. 31), despite the relatively clear wording of Recital 11 EUTMR (emphasis added):

The protection afforded by an EU trade mark, the function of which is in particular to guarantee the trade mark as an indication of origin, should be absolute in the case of identity between the mark and the sign and the goods or services. The protection should apply also in cases of similarity between the mark and the sign and the goods or services. An interpretation should be given for the concept of similarity in relation to the likelihood of confusion. […]

A reference for a preliminary ruling to the Court of Justice of the European Union could bring clarity on these issues. 

 

 

The picture is by Yury Kim and used under the licensing terms of pexels.com.