Trademarks and Virtual Goods: Registrability Issues

Companies often prefer to use the brand names that have meaning or a strong association with their products. While this approach might offer potential marketing benefits, it is usually not advisable from a trademark law perspective. This practice can lead to weak trademarks that are difficult to protect, or even trademarks that entirely lack distinctive character and, as a result, cannot be registered.

One of the fundamental rules in trademark law is that trademarks that are unable to distinguish the goods and services of one undertaking from those of other undertakings cannot function as trademarks and do not deserve protection. If there are doubts about whether consumers would perceive a brand name as an indicator of commercial origin, its registration is likely to be rejected.

For instance, one would typically not be allowed to register “Parma” for cheese. This is because Parma is a city renowned for its Parmesan cheese and consumers, when confronted with the word “Parma”, would likely think of the city or a special type of cheese rather than a specific cheese brand. But what about “Parma” for virtual cheese? This question, while it might sound unusual, touches on important modern trademark issues.

On 1 July 2022, Glashütter Uhrenbetrieb GmbH, a German watchmaking company, applied to the European Union Intellectual Property Office (EUIPO) for registration of the EU trademark “Glashütte ORIGINAL”. The trademark application covered various goods and services, including downloadable virtual goods, namely watches, clocks, and their accessories, for use online or in online virtual worlds in Class 9, as well as retail services and provision of these virtual goods in Classes 35 and 41.

The EUIPO examiner and the Board of Appeal of the EUIPO both determined that the trademark lacked distinctive character for German consumers. They reasoned that it would evoke the reputation of the town of Glashütte known for its watchmaking industry, even when used in the context of virtual goods and services relating to watches. Subsequently, the company appealed to the General Court, arguing that Glashütte associated with traditional watches, but not with virtual goods or services.

In its decision of 11 December 2024, the General Court upheld the decision of the Board of Appeal of the EUIPO. The court noted that that the relevant public will, in principle, perceive virtual goods and services in the same way as the corresponding actual goods and services. However, it specified that each situation must be assessed on a case-by-case basis, taking into account the nature of the virtual goods and services in question. The court further stated that it did not matter that the company was the proprietor of an identical trademark applied for watches as the EUIPO’s previous decisions cannot give rise to legitimate expectations.

Comment

The Glashütte case is significant because it is the first time the General Court has ruled on the distinctiveness of a trademark in relation to virtual goods and services. The decision makes an important point: real world goods and services should be viewed similarly to virtual goods and services in trademark law. It also serves as a valuable reminder that businesses should strive to use brands that are not closely associated with their products to avoid distinctiveness and registrability issues.