Key Takeaways
The phrase “interesting recent decision” is sometimes overused, but in a notable decision, the EUIPO recently addressed a novel issue: whether retail services for virtual goods (specifically, "retail services in relation to virtual goods, namely soaps, perfumery, essential oils…for use in virtual reality") are similar to real-world goods of the same kind. In its decision, the EUIPO found that these virtual retail services were dissimilar to their real-world counterparts.
- One of the First of Its Kind: This decision is among the first to address the similarity between virtual goods and their real-world counterparts.
- No Established Market Practice: The EUIPO found no established market practice for retailing virtual goods alongside real-world goods, highlighting the novelty of this area.
- Potential for Different Outcomes: The decision ultimately hinged on a lack of evidence. With stronger arguments and compelling evidence (which should have been available to the applicant), the decision could quite reasonably have gone the other way. However, the EUIPO adopted a safe and cautious approach.
- Evidence is Crucial: Particularly before the EUIPO (where there is often a tendency for more formulaic decisions) parties should provide clear and cogent evidence where addressing novel goods and market practices.
- Binding precedent? The decision sets the stage for future legal battles relating to the virtual marketplace (of which there will inevitably be many). However, given the paucity of evidence provided to the tribunal in this case, it’s unlikely that the decision will serve as any persuasive precedent moving forward.
Traditionally, the EUIPO has held that retail services related to specific goods are similar to those goods themselves. For example, retail services for cosmetics (Class 35) are considered similar to cosmetics (Class 3) because they are complementary, offered in the same places, and target the same public. This is a well-established position.
In this decision, the EUIPO held that “in general terms…
· virtual goods are understood to be non-physical items intended for use in the course of trade in online or virtual environments.
· They may perform various functions: for instance, they may (i) depict real-world goods; (ii) emulate the functions of real-world goods; or (iii) represent objects with no equivalent in the real world.
· These goods entail new technologies that have emerged in the context of the creation and development of virtual environments (e.g. those also referred to as ‘metaverses’ or ‘virtual worlds’)”.
The EUIPO made a point to highlight the fact that the degree of similarity between goods and services generally is a matter of law to be examined by the EUIPO, but that such examination is restricted to well-known facts. In that respect, the EUIPO went on to say that “what does not follow from the evidence or arguments submitted by the parties or is not commonly known should not be speculated on or extensively investigated [by the EUIPO]”. Taking those principles into account, the EUIPO stated that:
“Even if the concept of virtual goods for use online and in virtual environments is not entirely new, these have become more technically feasible and present in the market only recently thanks to rapid technological advances. Given the novelty of the aspects related to these new technologies, it cannot be assumed that a certain market practice has yet been established in this field. Therefore, facts related to virtual goods for use online and in virtual environments cannot be defined as well-known facts. This also applies when the virtual goods are the subject of retail services.”
Importantly, the EUIPO also stated that neither of the parties provided any meaningful legal argument or evidence as to why the respective goods are similar, in particular no argument or evidence to show that it is usual to trade virtual and real world goods through the same distribution channels or to what extent they could target the same relevant public. In the absence of such substantive evidence or cogent line of arguments, the EUIPO held that the virtual retail services were dissimilar to their counterpart real world goods.
The EUIPO’s decision represents a cautious approach. It overlooked the growing trend of pioneering businesses using digital and virtual tools to market their real world products. Had evidence of these practices been filed, the outcome may well have been different, but, the EUIPO was not willing to take that brave step given the dearth of evidence and argument presented to it. This case is yet another one which underscores the importance of presenting clear and comprehensive evidence in disputes at the EUIPO. Moving forward, we would not be surprised to see a conflicting decision in an equivalent case before the EUIPO where the evidence is stronger and the legal arguments better presented. We will continue to watch this space!
A copy of the decision can be found here - Opposition to EUTM no. 18790458
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