In 2004, Iceland Foods Ltd secured registration at the EUIPO for the word mark ICELAND (002673374), and in 2014 for the figurative mark ICELAND (011565736), for various goods and services which included household appliances, food items, beverages, and retail services. In 2016 and 2018, the Applicants, Íslandsstofa (Promote Iceland), the Icelandic Ministry for Foreign Affairs, and SA – Business Iceland, applied to invalidate the registrations at the EUIPO. The invalidations were based on the registrations being descriptive of geographical origin and lacked distinctiveness under Articles 7(1)(b) and 7(1)(c) of the EU Trade Mark Regulation (EUTMR). The Applicants argued that Iceland Foods' EU trade marks for ICELAND prevented companies from Iceland from promoting Icelandic goods and services in other countries. In 2019, the invalidations were upheld at the Cancellation Division, and the registrations were declared invalid. Iceland Foods then appealed the decisions at the Grand Board of Appeal where it was the first time in history for the Grand Board of Appeal to have an oral hearing, however the Appeal was dismissed in 2022. Unsatisfied with the result, Iceland Foods sought from the EU General Court annulment of the decisions issued by the Grand Board of Appeal, and in 2025 the General Court dismissed Iceland Food's actions resulting in the cancellations being upheld. 

The traditional two limb test for registrability of geographical names comes from the case of Windsurfing Chiemsee, which outlined that geographical names cannot be registered if a) it is currently associated in the mind of the relevant class of persons with the category of goods or services in question, or b) it is reasonable to assume that such an association may be established in the future. 

The General Court confirmed that geographical names which could designate the origin of goods, should be available for public use and should not be allowed to be monopolised. The General Court's application of the Windsurfing Chiemsee test arguably went further than earlier case law when assessing the second limb. Rather than requiring that an association be "reasonably assumed", the Court applied a more speculative standard, considering whether an association could potentially arise in the future. For example, it took a wide approach to evaluating the evidence submitted by Iceland Foods and considered that, whilst 'coffee' is not grown in Iceland, it could potentially be processed in the country and could be associated with Iceland in the future. It also went further by treating country names differently as inherently more likely to be recognised as descriptive when compared to other geographical terms. It is therefore unlikely that trade mark applicants in the future would secure registration for country names irrespective of the actual use. 

Following the judgment, and towards the end of 2025, Iceland Foods applied to partially convert its registration into national applications in Spain, Malta, and Portugal. The EUIPO issued a deficiency that the application would not be admissible in Malta because the EU application was rejected on the basis of Article 7 (EUTMR) namely that it was descriptive and lacking distinctiveness in English, as the Grand Board of Appeal found the mark ICELAND to be perceived by the English speaking public to indicate the goods and services came from Iceland. Iceland Foods has since submitted legal arguments against the deficiency, and the conversions remains pending.

More recently in March 2026, Iceland Foods seems to have stepped down from the dispute, and agreed to offer a "rapprochement discount" to Icelandic citizens for use in its Iceland stores, and it appears to have been agreed that the retailer does not need to change its name, but the case does highlight a substantial limitation of achieving trade mark registration for geographical names and particularly country names. For brand owners, the decision means that third parties in the EU can potentially operate stores stocking Icelandic products and call it "Iceland". It is unlikely that Iceland Foods will achieve registration for the mark ICELAND at the EUIPO, as it would have to prove acquired distinctiveness through use in each Member State, which is a high threshold to achieve. 

The validity of current registrations which include the country names may be adversely affected by the decision, and so practitioners should be cautious when devising trade mark strategies for target marks that include geographical names, and particularly exercise caution when it comes to country names.