How virtual goods and NFTs to be classified in trademark applications – the EUIPO’s position

With the development of the Metaverse infrastructure (a virtual space that wants to replicate the real world) and the advent of all sorts of new business opportunities, many companies start to consider trademark protection for the so-called virtual goods and services. They represent NFT ( non-fungible tokens ) blockchain records that can be purchased by consumers in the Metaverse.

For example, Nike has filed trademark applications for virtual clothes and shoes, McDonald’s for virtual food and burgers, etc. The goal is based on such protection no one else to sell similar NFTs using trademarks from the real world. Bear in mind that one trademark is protected only for the goods and services mentioned in its applications and so far virtual goods haven’t been included in the list as a whole.

From that perspective, one important issue has arisen – how such virtual goods or services to be classified under the Nice Classification that does not cover them now. Many Patent Offices have started to receive trademark applications and ask applicants for more clarifications because virtual goods can mean many different things.

In the light of this the EUIPO has issued its current position on that topic, stating the following:

• Virtual goods are proper to Class 9 because they are treated as digital content or images. However, the term virtual goods on its own lack clarity and precision so must be further specified by stating the content to which the virtual goods relate (e.g. downloadable virtual goods, namely, virtual clothing).
• The 12th Edition of the Nice Classification will incorporate the term downloadable digital files authenticated by non-fungible tokens in Class 9. NFTs are treated as unique digital certificates registered in a blockchain, which authenticate digital items but are distinct from those digital items. For the Office, the term non fungible tokens on its own is not acceptable. The type of digital item authenticated by the NFT must be specified.
• Services relating to virtual goods and NFTs will be classified in line with the established principles of classification for services.
• The Office’s approach is set out in the 2023 draft Guidelines on which a range of stakeholders have until 3 October this year to comment.

Acquiescence in case of trademark infringements – an EU Court decision

The European Court has ruled in case C‑466/20 HEITEC AG срещу HEITECH Promotion GmbH which concerns the issue of trademark acquiescence in case of a trademark infringement. The dispute has the following background:

The applicant in the main proceedings, Heitec, is the proprietor of the EU word mark HEITEC, applied for on 18 March 1998, with seniority claimed as from 13 July 1991, and registered on 4 July 2005.

It was entered in the commercial register in 1984 under the name Heitec Industrieplanung GmbH. Its name was changed in 1988 to Heitec GmbH. Since the year 2000, it has been operating under the name of Heitec AG.

Heitech, of which RW is the managing director, was entered in the commercial register on 16 April 2003.

Heitech is the proprietor of a German figurative mark containing the word element ‘heitech promotion’, applied for on 17 September 2002 and registered on 4 February 2003, which it has used since 29 September 2004 at the latest, and of an EU figurative mark containing the word element ‘heitech’, applied for on 6 February 2008 and registered on 20 November 2008, which it has used since 6 May 2009 at the latest.

By letter of 29 November 2004, Heitech contacted the representatives of Heitec to ask whether the latter would agree to conclude a coexistence agreement.

On 7 July 2008 Heitec became aware of Heitech’s application for registration of the EU figurative mark containing the word element ‘heitech’.

By letter of 22 April 2009, Heitec sent Heitech a warning letter regarding the latter’s use of its trade name and the EU trade mark containing the word element ‘heitech’. In its reply of 6 May 2009, Heitech again proposed the conclusion of a coexistence agreement.

On 31 December 2012, the Regional Court, Nuremberg-Fürth, Germany received, by fax, the application initiating proceedings, submitted by Heitec against Heitech and RW. That application was dated 15 December 2012. By decision of 4 January 2013, Heitec was asked to pay an advance on the costs of the proceedings.

On 12 March 2013, that court pointed out to Heitec’s representative that that advance payment had not been made and that the originals of the application initiating proceedings had not been lodged.

By letter of 23 September 2013, Heitec informed Heitech that it refused to conclude a coexistence agreement and proposed to conclude a licence agreement while stating that it had initiated legal proceedings.

By letter of 29 December 2013, Heitec informed Heitech that it was relying on its trade name and that it was the proprietor of the EU trademark HEITEC. It stated that the legal proceedings were pending.

On 30 December 2013, the Regional Court, Nuremberg-Fürth received written submissions from Heitec dated 12 December 2013, together with a cheque for court fees and a new application initiating proceedings bearing the date 4 October 2013.

On 14 January 2014, that court drew Heitec’s attention to the fact that it was also necessary to serve the application initiating proceedings of 15 December 2012, and Heitec was therefore asked to lodge the original documents. Those originals were received by the court on 22 February 2014.

On 24 February 2014, that court alerted Heitec to the fact that the heads of claim in the originals of the application initiating proceedings received on 22 February 2014 were not consistent with the heads of claim in the initiating application submitted on 31 December 2012.

On 16 May 2014, the Regional Court, Nuremberg-Fürth opened the preliminary written procedure and ordered that copies, drawn up by that court, of the initiating application of 15 December 2012 be served on the defendants in the main proceedings. Notice was finally served on 23 May 2014.

By that action, Heitec brought claims based, primarily, on the infringement of the rights conferred by its trade name HEITEC and, in the alternative, on the infringement of its EU trade mark HEITEC. It claimed that Heitech should be ordered to refrain from identifying its company by the trade name HEITECH Promotion GmbH, to refrain from affixing the word elements ‘heitech promotion’ and ‘heitech’ on goods and from marketing or advertising goods or services under those signs, to refrain from using or transferring, for commercial purposes, the website heitech-promotion.de and to agree to the removal of its company name from the commercial register. Heitec also brought claims for information, for a finding of an obligation to pay compensation, for the destruction of goods and for the payment of the costs of sending the warning letter.

The Regional Court, Nuremberg-Fürth ordered Heitech to pay Heitec EUR 1 353.80, plus interest, for the costs of sending the warning letter and rejected the other claims brought by Heitec.

Heitec appealed against the decision of the Regional Court, Nuremberg-Fürth before the Higher Regional Court, Nuremberg, Germany.

The Higher Regional Court, Nuremberg held that Heitec’s action was unfounded on the ground that Heitec was time-barred. In that regard, it noted that Heitech had used its later signs for an uninterrupted period of at least five years and that Heitec had acquiesced in such use, since, although it was aware of that use, it had not taken sufficient measures to stop that use.

According to that court, that court action had not interrupted the period of limitation, since it had been served on Heitech and RW only after five years had elapsed since the warning letter which preceded that action.

Heitec brought an appeal before the referring court.

That court notes that the outcome of the appeal depends on whether Heitec is, pursuant to Paragraph 21(1) and (2) of the Law on trademarks and Article 54(1) and (2) and Article 111(2) of Regulation No 207/2009, time-barred from bringing its claim for an injunction and its ancillary claims.

That court notes that the time-barring of Heitec’s claims relating, in essence, to the use by Heitech of the German trademark of which the latter is the proprietor, is governed by Paragraph 21(1) of the Law on trade marks, read in conjunction with Paragraph 125b(3) of that law, in so far as those claims are based on the EU trade mark of which Heitec is the proprietor.

It states that Paragraph 21(1) of the Law on trade marks transposes into German law the limitation provided for in Article 9 of Directive 2008/95, on the right conferred by trade marks (Article 9(1) of Directive 2008/95) and by other signs – including trade names – used in the course of business (Article 9(2) of Directive 2008/95), to oppose the use of a registered trade mark.

In so far as Heitec opposes the use of the trade name Heitech, the limitation is, according to the findings of the referring court, governed by Paragraph 21(2) of the Law on trademarks. In this regard, that court states that, notwithstanding the fact that the scope of that provision goes beyond that of Directive 2008/95 and is not reflected in Article 54 of Regulation No 207/2009, it must be interpreted on the basis of the interpretation of Paragraph 21(1) of the Law on trade marks which is consistent with that directive.

As regards Heitec’s claims concerning the use by Heitech of the EU trademark of which it is the proprietor, the referring court finds that Articles 54 and 110 and Article 111(2) of Regulation No 207/2009 are relevant.

That court notes that the Oberlandesgericht Nürnberg (Higher Regional Court, Nuremberg) did not err in law in finding that there was ‘use’, within the meaning of Paragraph 21(1) and (2) of the Law on trademarks and Articles 54 and 111 of Regulation No 207/2009, in the present case from 6 May 2009 at the latest and that Heitec had become aware of that by the letter of 6 May 2009 which Heitech had sent it. It is, moreover, common ground that Heitech is not accused of having acted in bad faith.

In the light of those circumstances, it is necessary to determine exactly what constitutes ‘acquiescence’ within the meaning of Article 9 of Directive 2008/95 and Articles 54 and 111 of Regulation No 207/2009.

In that regard, first, it is necessary to clarify whether it is possible to exclude acquiescence not only where an appeal is brought before an administrative authority or a court, but also in the event of the sending of a warning letter. Secondly, it is necessary to determine whether, in the event of court action it is necessary to take as a basis, in order to determine whether that action was initiated before the expiry of the period of limitation, the date on which the document instituting the proceedings was lodged or the date on which that document was received by the defendant. It is necessary, in that context, to clarify whether the fact that the service of that document is delayed through the fault of the proprietor of the earlier mark is relevant in that regard.

It is also necessary to determine whether the time limit applies only to an application for an injunction or also to claims that are ancillary or related to such an application, such as claims for damages, the provision of information and the destruction of goods.

In those circumstances, the Bundesgerichtshof (Federal Court of Justice, Germany) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)      Can acquiescence within the meaning of Article 9(1) and (2) of [Directive 2008/95] and Article 54(1) and (2) and Article 111(2) of Regulation No 207/2009 be excluded not only by means of an administrative or court action, but also through conduct not involving a court or administrative authority?

(2)  If Question 1 is answered in the affirmative:

does the sending of a warning letter, in which the proprietor of the earlier sign, before initiating legal proceedings, requires the proprietor of the later sign to agree to refrain from using the sign, and to enter into an obligation to pay a contractual penalty in the event of an infringement, constitute conduct precluding acquiescence within the meaning of Article 9(1) and (2) of [Directive 2008/95] and Article 54(1) and (2) and Article 111(2) of [Regulation No 207/2009]?

(3)  When seeking judicial redress, is the bringing of the action before the court or the receipt of the action by the defendant decisive for calculating the five-year acquiescence period for the purposes of Article 9(1) and (2) of [Directive 2008/95] and Article 54(1) and (2) and Article 111(2) of [Regulation No 207/2009]? Is it significant in this regard that receipt of the action by the defendant is delayed beyond the expiry of the five-year period through the fault of the proprietor of the earlier trademark?

(4) Does the limitation of rights in accordance with Article 9(1) and (2) of [Directive 2008/95] and Article 54(1) and (2) and Article 111(2) of [Regulation No 207/2009] encompass consequential claims under trade mark law, for example, claims for compensation, provision of information or destruction, as well as prohibitory injunctions?’

The Court’s decision:

1.  Article 9 of Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks and Articles 54, 110 and 111 of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark must be interpreted as meaning that an act, such as a warning letter, by which the proprietor of an earlier mark or other earlier right opposes the use of a later mark without taking the necessary steps to obtain a legally binding solution does not stop acquiescence and, consequently, does not interrupt the period of limitation.

2.  Article 9 of Directive 2008/95 and Articles 54, 110 and 111 of Regulation No 207/2009 must be interpreted to mean that the limitation in consequence of acquiescence referred to in those provisions may not be prevented by the bringing of a court action in which the proprietor of an earlier mark or other earlier right sought a declaration of invalidity of a later mark or opposed the use of that mark, where the application initiating proceedings, although filed before the date of expiry of the period of limitation, did not, owing to a lack of diligence on the part of the applicant, satisfy the requirements of the applicable national law for service and was rectified only after that date for reasons attributable to the applicant.

3.  Article 9 of Directive 2008/95 and Articles 54, 110 and 111 of Regulation No 207/2009 must be interpreted as meaning that, where the proprietor of an earlier mark or other earlier right, within the meaning of those provisions, is time-barred from seeking a declaration of invalidity of a later mark and from opposing the use of that mark, that proprietor is also time-barred from bringing ancillary or related claims, such as claims for damages, the provision of information or the destruction of goods.

Christian Louboutin failed to register its red sole as a trademark in Japan

The popular shoe manufacturer Christian Louboutin is well-known for the attempt to register the red soles of its shoes as a trademark around the world. This creates a lot of disputes either with the local Patent Offices or with competitors.

One such attempt, this time in Japan, was decided by the Japan Patent Office and the result is not encouraging for the company.

Christian Louboutin tried to register the following figurative trademark in class 25:

The Patent Office issued a refusal based on absolute grounds – lack of distinctive character and the fact that this form has an aesthetic purpose because of which consumers are attracted to buy.

Christian Louboutin appealed by submitting evidence for acquired secondary distinctiveness. The main piece of evidence was an online brand awareness survey covering three cities in Japan. According to the survey, in the case of open-ended questions, 43.35% of the respondents recognized the red sole as a Christian Louboutin product. In the case of closed-ended questions, 53.99% reached that conclusion.

Still, the Patent Office wasn’t impressed. The reason was that this survey covered only locations where the company had stores, it didn’t show consumer awareness on a national level.

In addition, the Office considered that such registration could restrict competition because many other shoe manifacturers had used similar appearance for their products.

What is certain in such difficult cases is the need for good preparation. Only one piece of evidence, including a survey, most likely will not be able to solve the matter. An entire strategy and much more support are necessary in order to color trademark applications to be successful in most countries.

Source: Masaki MIKAMI, MARKS IP LAW FIRM.

Tesla filed a trademark lawsuit against similar trade signs in China

The world’s most famous electric vehicle manufacturer TESLA has initiated a lawsuit in China against the local company Sino Drinks Food Company for infringement of trademark TESLA and the following figurative mark:

Sino Drinks Food Company offers beer and liqueur under a similar name TESILIA and a similar figurative sign.

Most likely the grounds for the dispute will be a trademark with reputation and unfair competition because Tesla does not have a registered mark for alcohol in China. As far as it is known this Chinese company has registered about 200 other trademarks that imitate famous signs.

Source: Alice Liang, The Drinks Business.

FIFA won a trademark dispute against PUMA regarding the upcoming World Football Cup in Qatar

The Swiss Federal Supreme Court has ruled on a trademark dispute between FIFA and the German sportswear producer PUMA.

The case concerns the following Swiss trademarks registered by the Puma for classes 18, 25, and 28: “PUMA WORLD CUP QATAR 2022” и “PUMA WORLD CUP 2022”.

FIFA as an organizer of the World Football Cup wasn’t impressed by these registrations and attacked them in an attempt to cancelation. The ground for this, however, wasn’t FIFA’s early registered marks for WORLD CUP QATAR 2022 and WORLD CUP 2022 but the misleading nature of the later marks. According to the World Football Federation, reading the marks, consumers can conclude that Puma is the title sponsor of the event which was not the case.

The Court agreed and upheld these arguments. The parts WORLD CUP QATAR 2022 and WORLD CUP 2022 have a direct and clear message that is associated with the World Football Cup because of which such misleading result is possible.

At the same time, the Court upheld PUMA’s counterclaims that FIFA’s earlier marks were descriptive and not distinctive, however, leaving the door open for proving acquired secondary distinctiveness.

Source: Kluwer Trademark Blog

Superman tried but lost a battle in Japan

One interesting dispute from Japan shows how language perceptions and differences can be crucial for trademark similarity.

In the case at hand, the well-known Japanese inventor Dr. Nakamatsu filed an application for the following trademark in classes 5,9,10,25,28, 35, and 45:

The mark was used for face shields which prevent from Covid-19 spreading.

Against this application, an opposition was filed by Warner Bros. Entertainment Inc. based on early registered word and combined marks for SUPERMAN in classes 25 and 28. According to the company, there was a similarity between both signs from a visual, phonetic, and conceptual point of view which can make consumers to associate the latter mark with the superhero character Superman.

The Patent Office, however, disagreed and dismissed the opposition in its entirety. According to the Office, considering the way how the mark applied is represented, including in katakana characters, there was no conceptual and visual similarity. The Office didn’t find specific meaning in the later mark to associate with the superhero character.

That’s an interesting decision which of course is based on national language specifics and perceptions. If this was a case in Europe or the US, most likely the opposition would be successful because the word M.E.N can be interpreted as MEN which is a plural form of MAN, so there is a solid conceptual and phonetic similarity.

Source: Masaki MIKAMI – Marks IP Law Firm.

JUST EGG cannot be an EU trademark in relation to egg substitute

The Board of Appeal of the EUIPO has ruled in a case where the US company Eat Just, Inc. tried to register a European trademark for JUST EGG in class 29: Plant-based egg substitute; liquid egg substitute; plant-based processed food.

The EUIPO refused registration of the sign based on Article 7(1)(g) EUTMR (misleading character), in conjunction with Article 7(2), EUTMR for all the goods.

According to the Office, the English-speaking part of the European consumers will understand the sign as “merely/only egg”. This comes into conflict with the goods specified in the application which targets an egg substitute. So from that perspective consumers can erroneously assume, based on the meaning of the mark, that the goods under it are not plant-based where they will be such one.

The Board upheld this decision in its entirety.

This case shows clearly how important is for good preparation to be done before filing a trademark application. If there is a conflict between the brand name and the goods or services specified in the application the chances for refusal by the Patent Office will rise significantly.