VR Legal Developments Shot Down a Peg After EUIPO Trademark Denial
Virtual reality (VR) developments over the past few years have sparked legal wonder, with many questions still lingering. How does the law apply in virtual communities? The European Union Intellectual Property Office’s recent decision sheds some light on the legal criteria of trademarks in VR.
Intellectual property rights in virtual reality (VR) have been shot by the European Union Intellectual Property Office (EUIPO). Virtual reality consists of a computer-generated simulation of a three-dimensional image or environment that can be interacted with in a seemingly real or physical way by a person using special electronic equipment, according to the Oxford Languages. VR has not fully won over the nation. While some believe virtual communities are the next big thing to take over the globe, others are not so easily convinced. For example, Meta is one of the global leaders in information technology and innovation, and still, their VR headsets decreased in sales by the end of 2022. EUIPO’s recent denial of intellectual property rights to a virtual gun may bring the odds in favor of skeptics.
It has long been suspected by legal scholars that it would be troublesome to use well-known marks in VR under the UK Trade Marks Act of 1994. But the question of lesser-known marks has remained unclear as regional trademark protections are difficult to apply in VR. According to the Court of Justice of the European Union, trademarks must “serve to identify the goods or services for which registration is sought as originating from a particular undertaking and thus distinguishing the goods or services from those of other undertakings.” This requires a look at both the perception of distinctiveness in light of the goods and services applicable, and from the perception of the relevant public.
The EUIPO’s Fourth Board of Appeal (the Board) recently denied an application for trademark rights over a virtual gun by Colt CZ Group SE (Colt), finding that the relevant public in VR is the general public. The Board rejected Colts’ assertion that the relevant public would include a narrow group of persons with wider knowledge of weapons. Colt, a Czech holding company, owns Colts Manufacturing Company, LLC, a well-known American gun manufacturer. Colt registered with EUIPO for trademark rights over a virtual gun branded with “CZ BREN 2” which Colt thought would identify it with “relevant consumers.” On appeal of the initial examiner’s decision, who found that the proposed trademark did not meet the requisite distinctive character, the Board held in favor of the examiner.
This decision provides some guidance, but also opens up more questions around how to distinguish a relevant audience in VR and what this case would have looked like with a brand identifiable to the general public. So far, there is no way to narrow down a specific demographic of consumers in VR when meeting intellectual property requirements. To no surprise, the 25-34 year-old age range makes up 35% of VR engagement, closely followed by 16-24 year-olds with 34%. Industries expected to be disrupted the most by VR include healthcare and medical devices, education, and workforce development and training. Only time can tell how much these statistics will hold true in years to come as caselaw progresses VR legal development and if they will influence ways to identify relevant consumers in VR.
Additionally, the question remains how lesser-known businesses could be affected by this decision. For example, suppose a niche company with a cult following of experts in its field sues for intellectual property infringement when products identical to theirs are used in VR. They have an identifiable mark to an entirety of those in a specific field. This may seem like it should be enough to configure a relevant audience in court. But without the knowledge of who is using the products in VR, the case is harder to make. Are they out of luck? The EUIPO suggests yes.