On 21 July 2025, the Hangzhou Intermediate People’s Court issued a second‑instance judgment in the “George Patton” trademark infringement and unfair competition case. The court overturned the first‑instance decision, confirmed that the challenged acts constituted trademark infringement and unfair competition, and awarded damages of CNY 1 million. As the first reported case of trademark infringement involving a metaverse environment, the decision has been widely discussed for its implications for intellectual property (IP) protection in virtual spaces. This article provides a professional analysis from the perspectives of trademark use, similarity of goods, likelihood of confusion and applicable law.

1  Case background and key issues

Background:

 Xuanwo Automotive owns the registered “George Patton” trademark. It discovered that Qiobataifeng, without permission, co‑branded with Tencent and inserted a “George Patton” vehicle model bearing the mark into the game Peace Elite. The vehicle was marketed as part of a joint promotion. Xuanwo sued, arguing that these acts infringed its trademark and constituted unfair competition.

Issues:

The core questions were whether the defendant’s conduct in the game infringed the “George Patton” mark; whether a virtual vehicle in a video game is “similar goods” to real vehicles; and whether the conduct would confuse consumers.

2  Determining trademark infringement: penetrating form to assess substance

2.1  Substantive trademark use

Article 48 of China’s Trademark Law defines trademark use as affixing a mark to goods or packaging, or using it in advertising and other business contexts, for the purpose of identifying the source of goods or services. In this case the defendant authorised a third party to embed the “George Patton” mark and a detailed vehicle model in an online game. Although the game offered no physical car for sale, the mark was prominently displayed through in‑game design and marketing. Players were exposed to the mark in a commercial context, forming an association between the mark and a specific origin. This went beyond artistic expression and satisfied the essential requirement of trademark use.

2.2  Crossing classification boundaries

Traditionally the similarity of goods is assessed by reference to the classification table. Here the virtual vehicle falls within Class 9 (game software), while real vehicles belong to Class 12. The court adopted a functional‑consumer‑brand analysis to look beyond the mechanical classification:

• Functional substitution. The virtual vehicle performs similar transportation functions as a real car within the game.

• Consumer association. Gameplay may influence real‑world purchasing decisions; virtual experience can spur interest in the physical product.
  

• Brand extension. Marketing phrases such as “officially licensed” and “faithfully reproduced” emphasised continuity between the virtual and real products.

By applying these criteria, the court held that the defendant’s cross‑category use infringed the mark.

3  Assessing similarity of goods: a three‑dimensional reconstruction

3.1  Functional overlap

In the game, the virtual car allows players to drive quickly and compete, replicating the look, interior and engine sound of the real “George Patton” vehicle. This digital replication makes the virtual vehicle a realistic extension of the physical product rather than mere artistic content.

3.2  Sales channels and overlapping customers

Real vehicles are sold through dealers; the virtual vehicle was distributed via game downloads. Surveys showed substantial overlap: 32 % of Peace Elite players said that exposure to the brand in the game increased their interest in the real car, and 15 % admitted that the virtual driving experience influenced their purchase decisions. The court viewed the virtual product as an effective marketing channel for the real brand.

3.3  Likelihood of confusion

Empirical evidence showed that 68 % of respondents believed that “George Patton” had officially cooperated with the game, and 41 % believed Tencent had obtained a licence. The defendant’s marketing emphasised the co‑branding and placed “George Patton” alongside luxury marques such as Maserati and Tesla, blurring the distinction between virtual and real products.

4  Applicable law: combining trademark and unfair competition rules

4.1  Synergy of laws

The court relied on Article 57 of the Trademark Law to stop the unauthorised use of the mark and Article 6 of the Anti‑Unfair Competition Law to address misleading promotion. This dual approach blocked both the direct misuse of the mark and the deceptive marketing conduct.

4.2  Balancing proportionality

The defendant argued that its conduct was artistic expression. The court rejected this, noting that the licence covered the vehicle’s name, logo and design and that the defendants had monetised the in‑game vehicle and associated events. The award of CNY 1 million compensated the plaintiff’s loss and served as a deterrent.

5  Industry impact and institutional insights

5.1  Refining metaverse trademark rules

The case establishes a judicial standard for treating virtual goods as similar to physical goods when they exhibit functional substitution, consumer association and brand extension. Companies should consider registering their core marks in relevant “virtual” classes to build a defensive portfolio.

5.2  Clarifying platform responsibilities

Although the platform (Tencent) was not a defendant, the judgment underscores platform obligations under Article 38 of the E‑Commerce Law to review the trademark use of vendors. Platforms should implement mechanisms to verify that virtual goods have proper trademark licences.

5.3  Updating consumer protection

By introducing consumer survey evidence, the court acknowledged that players’ perceptions in virtual environments are relevant. Future cases may develop metaverse‑specific confusion tests using virtual reality simulations to gauge consumer understanding.

6  Outlook: challenges in metaverse IP protection

6.1  Cross‑border protection

Metaverse platforms are global, while trademark rights are territorial. If “George Patton” is not registered abroad, its protection in a transnational virtual world may be limited. International cooperation through instruments such as a future WIPO digital treaty may be needed.

6.2  NFT implications

Although not at issue here, non‑fungible tokens (NFTs) may transform the way virtual goods are traded. If a virtual vehicle is tokenised and sold as a digital asset, trademark use may be characterised differently, requiring new legal rules.

6.3  AI‑generated content

As artificial intelligence tools generate virtual objects, questions arise about liability when AI creates infringing models. Legislators may need to clarify the obligations of developers and platforms to prevent infringing AI‑generated content.

Conclusion

The George Patton case marks a milestone in adapting trademark law to the metaverse. By examining substantive trademark use, reconstructing the concept of similar goods and combining multiple legal tools, the court provided a model for protecting intellectual property in virtual reality. As the metaverse evolves, authorities will need to refine legal frameworks to balance innovation with rights protection, ensuring that brands can thrive in both virtual and physical realms.