On 10 July 2014, the Court of Justice of the European Union ("CJEU") handed down its judgment in the dispute between Apple Inc v Deutsches Patent- und Markenamt (German Patent and Trade mark Office) (C-421/13). The CJEU answered four questions ruling that a representation, by a design alone without indicating the size or proportions, of the layout of a retail store may be registered as a trade mark, provided that the sign is capable of distinguishing the services of the applicant for registration from those of other undertakings.

Business Impact

  • The design of a layout of a retail store may be registered as a Community trade mark ("CTM") provided an applicant can establish that the sign is capable of distinguishing its services from those of other undertakings.
  • Protection is already afforded to such designs in the US, so in principle, this decision allows similar protection in the EU.
  • The decision is good news for global businesses, and especially franchises, which rely on a consistent brand value in many locations, seeking to prevent copycat businesses from taking advantage of their reputations via replication of their store layouts and designs.

Background

In 2010, Apple registered a 3D mark at the United States Patent and Trademark Office, consisting of the following design representation of its flagship store:

Click here to view image.

When Apple subsequently sought to extend this trade mark internationally, under the Madrid Agreement, the German Trade Mark Office refused on the ground that the depiction of the space devoted of the sale of Apple's goods was simply a representation of an essential aspect of Apple's business. It was unlikely that consumers would associate the sign with the commercial origin of the products and further, the sign was not sufficiently distinguishable from the stores of other providers of electronic products.

On appeal, the Bundespatentgericht (German Federal Patent Court) held that the design of the store was distinctive from the usual layout of retail stores in that electronic sector, but referred the following questions to the CJEU:

  1. Is Article 2 of Directive 2008/95 EC (the "Directive") to be interpreted as meaning that the possibility of protection for the ‘packaging of goods’ also extends to the presentation of the establishment in which a service is provided?
  2. Are Articles 2 and 3(1) of the Directive to be interpreted as meaning that a sign representing the presentation of the establishment in which a service is provided is capable of being registered as a trade mark?
  3. Is Article 2 of the Directive to be interpreted as meaning that the requirement for graphic representability is satisfied by a representation by a design alone or with such additions as a description of the layout or indications of the absolute dimensions in metres or of relative dimensions with indications as to proportions?
  4. Is Article 2 of the Directive to be interpreted as meaning that the scale of the protection afforded by a trade mark for retail services also extends to the goods produced by the retailer itself?

Judgment of the CJEU

The CJEU examined the first three questions together, by evaluating whether a design of a retail layout fulfilled the requirements of Articles 2 and 3(1) of the Directive.

Article 2 of the Directive

  1. Is it a sign capable of graphic representation?

The CJEU held that it was absolutely plain from the wording of Article 2 that designs are capable of graphic representation. It followed that a representation which depicts the layout of a retail store by means of an integral collection of lines, curves and shapes, may constitute a trade mark provided that it is capable of distinguishing the products or services from one undertaking from those of other undertakings. It was not relevant that the design lacked any descriptions, sizes or proportions.

  1. Is the sign capable of distinguishing the goods or services of one undertaking from those of other undertakings?

The CJEU held that a design of the layout of a retail store is capable of distinguishing the products or services of one undertaking from those of another. In this context it was relevant whether the depicted layout departed significantly from the norm or customs of the economic sector concerned.

Article 3(1) of the Directive:

Is the sign distinctive enough to be capable of registration?

The distinctive character of the sign had to be assessed by reference, first, to the goods or services in question and, second, the perception of the average consumer of the category of goods or services in question, who is reasonably well informed and reasonably observant and circumspect. This assessment is to be carried out by competent national authorities using the same assessment criteria that apply to other signs.

The fourth question referred was declared inadmissible on the ground that the interpretation of Union law sought bore no relation to the facts or purpose of the main proceedings.

One of the main issues that was framed in this case was whether services intended to induce the consumer to purchase products can constitute ‘services’ within the meaning of Article 2 of the Directive. In this regard, the CJEU held that trade mark protection extends to all services as envisaged under the Nice Agreement, so long as these services do not form an integral part of the offer for sale of those goods. Certain services, such as those referred to in Apple’s application, which consist of carrying out, in such stores, demonstrations by means of seminars of the products that are displayed there, can themselves constitute remunerated services falling within the concept of ‘services’.