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Are toys which accurately replicate real products equivalent to virtual goods? If so, what do cases about replica toys teach us about how the Courts will assess infringement and the similarity of goods vs their virtual equivalent?
In our latest article in this series, we build on the decision of the EU IPO in Opposition No. B003199946 Vinicio v Initio and assess how historical case law relating to replica toys might be equally applicable to cases relating to virtual goods. In Vinicio v Initio, the owner of the trade mark was trying to show that physical products were similar to the equivalent virtual goods. The latest guidance of the EU IPO requires the parties to produce evidence to support their positions regarding whether real goods and virtual goods are similar.
This approach is consistent with previous decisions relating to replica toys. One of the highest profile cases relating to replica toys is the CJEU case between Adam Opel AG and Autec AG.
In that case, Adam Opel AG had a registration of their logo, which covered both motor cars and toys.
The case was brought against Autec AG who produced remote controlled scale model cars identical to the real cars, including the logo shown above.
I expect Opel’s attorneys were fairly pleased with themselves at the start of the proceedings, given that the mark was identical and Opel had a registration covering both motor cars and toys. The case based on toys seems particularly strong given that the marks and goods are identical so there was no need to show confusion.
However, the CJEU indicated that it was still necessary to show that the use of the mark affected the essential functions of the trade mark, and particularly the essential function guaranteeing consumers the origin of the goods. Autec, supported by the German toy industry, argued that the essential function of the mark was not affected because the replica cars were sold under the marks Cartronic and Autec, so it is obvious to the consumer that the model car did not come from the vehicle manufacturer. This brings us back to the need to provide evidence – the evidence was provided showing that the German toy industry had been producing accurate copies of real products, including the relevant trade marks, for more than 100 years and the German consumers knew that these toys were not associated with the manufacturer or the life size product. Based on guidance from the CJEU and the evidence mentioned above, the German Courts concluded that there was no infringement in relation to toys.
The separate claim that the registration in relation to motor cars was infringed by the use of the mark on toy cars was also unsuccessful – it was not found that motor cars were similar to toy cars, i.e. these goods were dissimilar – it is still possible to successfully take action in relation to dissimilar goods. Still, it was not possible for Opel to convince the Courts that there was any unfair advantage or detriment in the production of accurate toy copies despite the fact that the evidence showed Opel’s mark had a significant reputation.
It was noted at the time of the decision that the evidence was very specific to the German market and it is possible that a different conclusion might have been reached if the same case had been brought in another country.
Where does this leave us in relation to virtual goods?
Most cases to this point concern trade mark owners with registrations of real goods, such as motor cars, trying to enforce those registrations against equivalent virtual products.
It might be assumed that if the trade mark owner has a registration of the virtual product, then infringement is guaranteed, but the Adam Opel case suggests that there might still be points for the alleged infringer to argue.
The facts of this case are very specific, but the case reinforces the importance of evidence, and shows that evidence of activity in the industry may be helpful – so, for example, if a number of companies within a specific industry have acted in such a way such that it can be shown that the public connects the providers of real and virtual goods then other companies in the same market may be able to benefit from that connection even if they have not themselves entered the virtual market. Equally, if the evidence for the industry suggests that there is no connection, then everyone in the industry may struggle to enforce their rights in relation to virtual goods.
Sticking with the example of toy cars, would Autec avoid infringement when selling a virtual toy car if they sold it in a virtual box bearing their Cartronic trade mark?
Are there any essential functions of a trade mark that apply in the virtual world but not the real world?
How should you protect against that if you are the owner of the trade mark, or how can you exploit this issue if you are providing virtual goods?
If you have any queries regarding this topic, or would like assistance creating or implementing an IP strategy, please contact Ian Gill from our team.
Category: Latest Insights | Author: Ian Gill | Published: | Read more
