With more and more companies opening offices and shops in the “Metaverse”, the subject of trade mark protection in the Metaverse has become a heated debate. The EUIPO and national offices have received a significant number of trade mark applications for “virtual goods” and there are now a number of registered trade marks which are being used in the Metaverse.
In July 2022, the EUIPO published guidance on the classification of items relating to “virtual goods and NFTs” (more information on the guidance can be found in our article here).
The Second Board of Appeal of EUIPO has now had to deal with this question for the first time in two recent decisions concerning the trade marks: METAVERSE FOOD (R2357/2022-2) and METAVERSE DRINK (R2356/2022-2). Therefore, the EUIPO now has had to deal with the protection of the term “Metaverse” as a trade mark for physical goods.
Facts and Background
On 11 February 2022, the Polish company Oshee Polska filed EU trade mark applications for:
- METAVERSE FOOD covering pharmaceutical preparations, various nutritional supplements as well as foodstuffs and drinks in classes 5, 29, 30 and 32; and
- METAVERSE DRINK for various drinks in class 32.
The EUIPO rejected both applications on the ground that they lacked the required element of distinctiveness. The applicant appealed the decisions of the EUIPO arguing that the applications did not relate to virtual goods but rather to physical goods. The applicant pointed out that this is crucial for the assessment of the mark's distinctiveness, since the trade mark cannot be applied to virtual goods which cannot be transferred to the real world. The applicant also argued that “Metaverse” is defined strictly as a category in the virtual world and should not be confused with all other online activities. The applicant also made reference to its previous applications for METAVERSE ENERGY – that were registered by the EUIPO for goods in classes 5 and 32. Therefore, the applicant held that such a refusal to register the mark “METAVERSE FOOD” and “METAVERSE DRINK” would be inconsistent with EUIPO's guidelines and practice.
The decisions of the Board of Appeal (the “BoA”)
The BoA dismissed both appeals (METAVERSE DRINK: R2356/2022-2 and METAVERSE FOOD: R2357/2022-2). According to the Board, the EUIPO's expert defined the term METAVERSE as a virtual space and the expression METAVERSE FOOD as a whole “food in a virtual space” (and similarly METAVERSE DRINK as “drink in a virtual space”).
The Board of Appeal further considered “that the virtual world (Metaverse) is not a well-defined and distinct category in the virtual world. Nor is the borderline between the real world and the virtual world clear.” The Board therefore rejected the argument that the Metaverse is limited to a specific virtual world: the Metaverse “is not just avatar, alternative reality and virtual products. The distinction between Metaverse and other forms of online activity is blurred. […] Companies use Metaverse to promote their goods and brands which later translate into increased sales of their goods in the real world.” According to the BoA, the Metaverse is just another version of e-commerce. The BoA concluded that the relevant public will perceive METAVERSE FOOD as an indication that food (in the form of goods in classes 29 and 30) and pharmaceuticals, vitamin preparations or food supplements (class 5) are offered or can be purchased in a virtual space, an information devoid of any distinctive character (the same applies to METAVERSE DRINK).
Companies use the virtual world to promote their physical goods and associated trade marks in order to increase product sales in the real world. The Board referred to various Internet articles to support its finding, including articles on Lindt's first virtual US store where Lindt's chocolate products can be ordered. On that basis, the Board of Appeal found that the marks will be understood as indications that the goods are offered or can be purchased in a virtual space.
Finally, the BoA rejected the argument that the EUIPO had registered other trade marks containing the term “METAVERSE”. The EUIPO held that “there is no uniform practice of the Office” and it also stated that: “a potential error made in other proceedings shall not give rise to the registration of a sign which does not meet the conditions laid down in Article 7 of the EUTMR.” Therefore, an applicant is not granted a right to the registration of a sign that is non-distinctive simply because there may have been a potential error in other proceedings.
According to the decisions of the BoA, trade marks containing the term “Metaverse” cannot be registered for goods and services that can be offered online due to lack of distinctiveness. The problem remains that some trade marks containing the element "Metaverse" have already been registered by the EUIPO for such goods, such as for example “Metaverse” for – among other things - backpacks, school bags and suitcases (class 18). Following the Board of Appeal's reasoning with respect to “METAVERSE FOOD” and METAVERSE DRINK”, the degree of distinctiveness of these marks is questionable.
The stance to be taken by the EUIPO in future cases remains to be seen, but if these decisions are anything to go by, it seems that no entity will be entitled to monopolize the term "METAVERSE” as a trade mark within the EU as such a term is considered to lack distinctiveness.
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