In Mark Zuckerberg’s 2021 letter, he imagined a world where “in the metaverse, you’ll be able to do almost anything you can imagine – get together with friends and family, work, learn, play, shop, create”. Key emphasis on shop.
In October 2024, Nike was granted trademark protection in Canada for virtual goods “for use online and in online virtual worlds”. This is just one example of how brands are preparing for a world where virtual goods are bought and sold in virtual environments.
This blog examines the shop aspect of virtual environments by reviewing three recent trademark decisions on virtual goods and services. One could imagine that an entirely new virtual way of retailing and consuming may require significant changes to trademark law. However, the three decisions I review suggest that existing trademark concepts such as distinctiveness and confusion may be sufficient to adequately grapple with the changing virtual reality.
Sources: PRADA, Burberry, GUCCI.
Prada decision
This U.S. Patent and Trademark Office (USPTO) decision concerns a “trademark troll’s” registration of “PRADA” in relation to virtual goods and services. Along with the GUCCI decision I discuss next, it suggests that owning a trademark in relation to physical goods is sufficient to prevent someone else from registering the trademark for the equivalent virtual goods.
The luxury brand Prada did not have a trademark registration for virtual goods. An opportunistic party unrelated to Prada swooped in and filed an application to register the mark “PRADA” in relation to downloadable virtual goods, retail store services featuring virtual goods, and entertainment services respecting non-downloadable virtual goods. (See this screenshot from the application for full descriptions):
The USPTO refused the application on two grounds: (1) falsely suggesting a connection with PRADA, and (2) causing confusion.
First, the mark consisted of matter that falsely suggested a connection with PRADA. The U.S. Trademark Act section 2(a) prohibits registration of “matter which may . . . falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols.” 15 U.S.C. §1052(a). Since PRADA is so well-known, consumers would presume a connection.
The second ground for refusal was under the U.S. Trademark Act section 2(d), 15 U.S.C. §1052(d) which bars registration of a mark which so resembles a registered mark that it is likely consumers would be confused, mistaken, or deceived as to the commercial source of the goods/services. The USPTO found that the applicant’s PRADA mark was similar to the registered PRADA marks because they both started with “PRADA”. Second, the applicant’s goods and services were “highly related” to the registered goods and services because they were “just virtual versions of the registered goods” [emphasis added].
GUCCI decision
The GUCCI decision contained many similarities to the Prada decision. It was also an application to the USPTO by an unrelated party for a trademark in relation to the same classes of goods described in the Prada application. Unlike the Prada decision, this application was refused solely on the basis of confusion under section 2(d) of the U.S. Trademark Act.
The USPTO compared the similarities between the applicant’s mark and the registered marks. Both marks were identical because they were both “GUCCI”. Since the identical marks were likely “to engender the same connotation and overall commercial impression”, they were confusingly similar.
Next, the USPTO considered the relatedness of the goods and services and found a likelihood of confusion. For services, the USPTO found that GUCCI’s existing registered trademarks were broad enough to encompass the more narrow virtual retail store services in the application. GUCCI’s existing registered trademarks referred to retail store services featuring clothing, jewelry and handbags. From this, the USPTO concluded the applicant’s and registrant’s services were “legally identical”.
As for goods, the USPTO concluded the applicant and the registrant’s listed goods were closely related. The goods listed in the application were identical to those listed under the registrant’s marks. They included footwear, clothing, headwear, eye-wear, handbags, jewelry, and watches. To reach its conclusion, the USPTO relied on evidence that luxury brands, including the registered GUCCI brand, have been selling virtual versions of their physical goods in virtual worlds.
Overall the GUCCI and Prada decisions emphasize that brands may not need to get separate trademarks for the virtual environment because those marks would be confusingly similar to the trademarks they already own in relation to physical goods.
Burberry decision
Finally, I discuss a case from the European Union Intellectual Property Office (EUIPO) that denied registration of Burberry’s classic pattern for virtual goods due to lack of distinctiveness.
A few interesting points come out of this case. First, the application was rejected based on lack of distinctiveness even though Burberry already held the trademark protection for physical goods. Could that suggest a higher standard for virtual goods trademarks? Second, the EUIPO applied the law applicable to three-dimensional marks, suggesting that there’s no fundamental difference in the law for physical and virtual goods.
Burberry attempted to register its famous classic pattern (pictured below) in relation to non-fungible tokens, downloadable virtual goods, and for online entertainment services, including online non-downloadable virtual content.
Source: https://euipo.europa.eu/eSearchCLW/#key/trademark/RFS_20230208_018647205_018647205
The EUIPO applied the distinctive character analysis using the case law on three-dimensional marks related to product appearance. In choosing to apply these principles, the EUIPO noted that the pattern corresponded to the outward appearance of the goods because it was intended to be placed on the goods or cover part of their surface area.
The EUIPO found that consumers’ perceptions for “real-world goods” can be applied to equivalent virtual goods because a “key aspect” of virtual goods is to “emulate core concepts of real-world goods”. This suggests that the EUIPO did not consider virtual goods to be that different from physical goods.
To find that the pattern was not sufficiently distinctive, the EUIPO concluded it was not “markedly different” from patterns commonly used in trade and noted several other retailers with similar patterns used for physical goods. From this, the EUIPO concluded the sign was “devoid of any distinctive character”.
Overall, since this decision applied trademark principles from real-world goods to virtual goods, it suggests that there is no significant distinction (pun-intended) requiring application of different principles. However, the ultimate rejection due to lack of distinctiveness raises some uncertainty regarding their existing trademarks over the pattern and may possibly suggest a higher standard for virtual goods.
Conclusion
In conclusion, none of the decisions represent a departure from existing trademark law and apply the same principles. This suggests that trademark law is already sufficiently flexible to respond to the increase in virtual retail environments.
Sources
See Nike’s trademark filings here: NIKE & Swoosh Design – 2142318; NIKE – 2142333.
U.S. Trademark Application Serial No. 97112054 – PRADA, 29 August 2022.
U.S. Trademark Application Serial No. 97112038 – GUCCI, 30 August 2022.
Mason Hayes & Curran, “Both Burberry and Louis Vuitton Fail to Register Patterns as Trade Marks”, 26 June 2023, link.
Refusal of application for a European Union trade mark, Application No. 018647205 – Burberry, 8 February 2023.
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