Posted on 30 Oct 2014
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A "distinctive" retail store layout can be registered as a trade mark, says CJEU.

Traditionally a trade mark has consisted of words, slogans & letters with the possibilities extending to the shape of goods or packaging. The potential to trade mark three dimensional ("3D") goods is not novel, for example, the triangular shape of "Toblerone" chocolate bars has been registered as a 3D trade mark. 

Apple Inc. ("Apple") has recently benefitted from a landmark decision of the Court of Justice of the European Union ("CJEU") to establish a 3D trade mark as capable of protecting the design of a retail store in the European Union ("EU"). Apple successfully registered the layout of its flagship store with the United States Patent and Trademark Office in 2010. A similar approach has been taken by other US brands, such as Pizza Hut and Shell. The representation was described by Apple as 'the distinctive design and layout of a retail store'. This departs from previous Community Trade Marks ("CTMs") for store layouts as it relies on lines and shapes in addition to colours. 

Apple sought to replicate the protection afforded by means of its US registration by extending the trade mark internationally. Within the EU, the German Patent and Trade Mark Office refused to grant the application on the basis that the layout of the Apple store was not sufficiently distinguishable from other businesses that also provided electronic products. 

Apple appealed to the Federal Patent Court of Germany, the "Bundespatentgericht", which recognised that certain features of the store were distinctive in design.  However the Court also sought a preliminary ruling from the CJEU focusing particularly on whether the presentation of an establishment could be registered as a trade mark. In response, the CJEU reiterated the three requirements to register a trade mark, namely that it should be a sign that is capable of graphic representation and "…of distinguishing the 'goods' or 'services' of one undertaking from those of other undertakings." The CJEU recognised that the representation, by design alone of the layout of a retail store, may be registered as a trade mark for services, providing it is "distinctive" and not merely descriptive of the goods and services. 

In recent years, fake Apple stores have become a common feature in China and in 2011, the Chinese authorities uncovered 22 imitation Apple shops in one Chinese city alone.  This decision may offer Apple another weapon to combat these "copycat" stores, depending on the location of these stores. 

The decision of the CJEU broadens opportunities for other businesses whose layouts are an integral aspect of their overall brand identity.  Notably, Apple is a design focused operation and the layout of its store has been designed to be distinctive amongst similar service providers. Trade marks offer a more desirable form of right for businesses to protect store layouts, given the potentially limitless renewals available – in theory offering rights holders protection in perpetuity. 

The Bundespatentgericht is yet to give its final decision as to whether the layout of the Apple store can be registered as a trade mark (and Apple must still demonstrate that their mark has acquired distinctiveness through use). Nonetheless, the decision suggests a new era for trade marks and companies around the globe who may begin to alter the layouts of their stores in creating a unique and distinctive design. 

The CJEU has demonstrated its willingness to move away from the traditional concept of trade marks and recognised the importance of protecting a range of business' USPs (unique selling points). This decision acknowledges the commercial reality that a consumer experience begins the moment a consumer walks past a retail store. 

However, there may be potential issues if trade marks in store layouts are the subject of dispute. It will be interesting to see how the court approaches the comparison of the trade mark's original use with that of potential infringers and also the concept of proving "genuine use" of the trade mark.  No doubt IP lawyers will therefore watch the first "litmus test" case brought in relation to this type of trade mark with particular interest.  

This CJEU decision has highlighted an opportunity for further trade mark protection, particularly for larger franchisors who will be eager to increase protection around their 'business format'. As the landscape changes, businesses should consider whether the layout of their stores may be capable of further trade mark protection. This may also be an appropriate time for businesses to consider whether their businesses are fully protected by trade marks and any other intellectual property rights available. 

Given the competitive retail market, we recommend that businesses seek specialist advice to ensure that they have explored all appropriate avenues by which to protect their intellectual property rights. 

For further information on the issues raised in this article, please contact Rehman Noormohamed, (Partner) at rehman.noormohamed@michelmores.com  or David Thompson (Associate) at david.thompson@michelmores.com