Background

The sign was applied for inter alia 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 European Union Intellectual Property Office (EUIPO) rejected the trade mark application for the virtual goods and services, ruling that the mark lacked distinctiveness.

This was upheld by the Board of Appeal, concluding that “Glashütte” would evoke the well-known reputation of the German town Glashütte (near Dresden) associated with luxury watchmaking, even in virtual settings. The applicant then appealed to the General Court.

General Court’s decision

The General Court dismissed the appeal and upheld the Board of Appeal’s decision, confirming the mark’s lack of distinctive character based on the following key points:

1) Recognition of Glashütte’s reputation

The General Court confirmed that a non-negligible part of the German public, especially those interested in watches, knows Glashütte (a town in Saxony near Dresden) renowned for its high-quality watchmaking.

2) Public perception of virtual goods and services

The key question in the case was whether Glashütte’s reputation in traditional watchmaking could be extended to virtual goods and services. The court found this to be true if:

• the virtual goods merely represent real goods; or
• the virtual goods and services represent or emulate the functions of real goods and services.

The possibility of such a transfer must, however, be assessed on a case-by-case basis, considering the specific nature of the virtual products and services in question.

The General Court found that the virtual watches and accessories in this case were clearly related to their real-world equivalents. As a result, consumers would associate the mark with Glashütte’s established reputation rather than perceive it as a distinctive identifier. Therefore, the sign would merely be perceived as promotional information about the quality and authenticity of these goods and services, conveyed by the reference to Glashütte and its reputation in physical watchmaking products.

Implications of the judgment

This judgment marks an important decision, as the General Court confirms that many virtual goods might be, in principle, perceived in the same way as their real-world counterparts. This can be seen as a general rule, at least when assessing absolute grounds for refusal. While each case will have to be assessed individually, this principle is likely to apply broadly to virtual goods.

However, this judgment leaves questions open that continue to be discussed: If consumers associate virtual goods with their real-world equivalents for distinctiveness assessments, should the same logic apply when assessing similarity? Could this lead to an assumption that virtual and physical goods come from the same company?

The answer to these questions and the impact of this decision on the assessment of similarity between virtual and real goods remains uncertain. In a recent EUIPO decision, virtual cosmetics and soaps were deemed dissimilar from their physical counterparts. The EUIPO reasoned that, despite virtual goods mimicking real-world items this would not be sufficient to establish similarity, as there is no established market practice for linking them to their physical equivalents (see our article “Virtual v real: EUIPO draws the line” of 06 November 2024: dycip.com/virtual-real-vinivio-artessence).

This approach could be influenced by the General Court’s ruling. Although the criteria for assessing similarity of goods and services (such as nature, purpose and method of use) are different from those for assessing distinctiveness, the General Court’s reasoning suggests a closer link between the two,when the recognition of real goods/services can be transferred to virtual goods/services.

Case details at a glance

Jurisdiction: European Union
Decision level: General Court
Parties: Glashütter Uhrenbetrieb GmbH v EUIPO
Date: 11 December 2024
Citation: T-1163/23
Link to decision: dycip.com/t-116323