In a decision handed down on 10 July 2104, the CJEU ruled that the layout of Apple's stores may be registrable as a trade mark. The decision could be significant not only for retailers but also for the food and beverage sector, particularly businesses operating a franchise model.
Apple obtained a trade mark registration from the United States Patent and Trade Mark Office of a 3D mark consisting of the representation of its flagship stores as shown below:
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Apple sought to extend the US trade mark internationally and that extension was accepted in some jurisdictions but refused in others, including in Germany, where it was refused on the ground that the store layout space was nothing other than the representation of an essential aspect of Apple's business, i.e., the sale of its products. The German Registry considered that while consumers might view the layout of such a retail space as an indication of the quality and price bracket of the products sold, they would not see it as an indication of their commercial origin (which is an essential element of a trade mark registration). It also considered that the layout of the Apple store was not sufficiently distinguishable from the stores of other providers of electronic products. Apple appealed to the Federal Patent Court of Germany which referred certain questions to the CJEU.
Summary of the CJEU's decision
The CJEU ruled in Apple's favour and held:
- A design of the layout of a retail store can be registered as a trade mark provided that the design is capable of distinguishing the services of the trade mark applicant from those of other businesses and that the mark meets the other requirements for registration.
- A design of a retail store is capable of distinguishing the products or services of one business from those of other businesses in circumstances where the design and layout departs significantly from the norm or customs of the business sector concerned.
- Provided the conditions above were satisfied, the CJEU found that a design and layout of flagship stores of a goods manufacturer could be registered not only in respect of the goods themselves but also for services, even where those services do not form an integral part of the offer for sale of those goods. The example of services given in the Apple case included the carrying out of in-store demonstrations of the products on display.
Why this is relevant to the Food and Beverage sector
The CJEU's ruling will be welcomed by brand owners in the food and beverage sector which operate establishments with distinctive layouts which are not purely functional.
The possibility of trade mark protection for distinctive layouts of commercial establishments offers an additional level of protection where brand owners might previously have been forced to rely on the law of passing off to take action against copycat establishments, or on trade mark registrations for just certain aspects of the appearance of a commercial establishment, such as a particular colour when applied to specific surfaces.
The decision will be of particular interest to franchisors in the food and beverage industry, potentially making it easier to take action against a former franchisee who may have de-branded but continues to trade in a copycat establishment.
As this decision has been made by the highest court in the EU it will apply across the EU. However, it is likely to be interpreted differently by the various trade mark registries and local courts and it will be necessary for the layout of the premises to be unique, or to have become distinctive of a particular business over time, in order for it to be capable of registration as a trade mark.
This may lead many already well-established restaurant and bar chains to adopt more standardised interior designs in order to maintain a strong identity in their current layouts (including close monitoring of franchisees' premises) or, like new entrants to the market, to devise new, increasingly innovative layout designs.