On July 10, 2014 the Court of Justice of the European Union (CJEU) handed down its judgment following a reference from the German Bundespatentgericht in the Apple Inc. v Deutsches Patent-und Markenamtregistry proceedings.

Decision

In a landmark ruling, the CJEU held that a three-dimensional representation of the layout of a retail store by means of an integral collection of lines, curves and shapes, which does not indicate the size or proportions of the store layout, is in principle capable of registration as a trade mark. This is not only for goods, but also for services, even if those services do not form an integral part of the offer for sale of those goods (for example, demonstrations of the products displayed). Registration will however depend on the requirements of Article 2 (signs capable of being a trade mark) and Article 3 (grounds for refusal or invalidity) of the Trade Marks Directive being satisfied.

The CJEU held that it was absolutely plain from the wording of Article 2 that designs are among the categories of signs capable of graphical representation. It followed that a design which depicts the layout of a retail store is a sign capable of graphic representation. Accordingly it was not necessary for the CJEU to (1) attribute any relevance to the fact that the design did not indicate the size and proportions of the retail store or (2) consider whether the design should be treated in the same way as ‘packaging’ of goods.

Further, the CJEU ruled that a design which depicts the layout of a retail store is capable of distinguishing the goods or services of one undertaking from those of another under Articles 2 and 3 (1)(a). This could be the case where the layout of the store departs significantly from the norm or customs of the economic sector concerned.

However the fact that a design of a layout of a retail store is capable of being a trade mark does not mean that it necessarily has distinctive character for the purposes of Article 3(1)(b). It is not determinative of whether it is descriptive of the characteristics of the goods or services concerned under Article 3(1)(c) or that it de facto satisfies the other requirements of Article 3(1). This is a matter for a national court to decide. It remains to be seen whether the Bundespatentgericht will deem the layout of the Apple store to be sufficiently distinctive and non-descriptive to function as a trade mark.

Implications

The decision is a first in which the design of a retail store has been held to be capable of functioning as a trade mark. It will be welcomed by retailers who have expended significant resources in designing a store so that the layout itself has brand recognition, particularly design-led retailers (such as Apple in this case) and franchisors who require each franchise to have the same ‘look and feel’. It may also encourage retailers to adopt distinctive store layouts in the hope that their investment in such store 'branding' will be protected. However the decision is clear that in order to be protected, the design of the store layout must depart significantly from the norm. It is anticipated that only very bespoke and recognisable store layouts will meet the requisite threshold.

The ruling is particularly important in the UK, where there are no laws of unfair competition and so retailers were, prior to this decision, left with no choice but to seek trade mark protection for particular aspects of the layout of their stores or to bring claims against copy-cats in passing off – neither of which provided retailers with broad protection for the layout of their stores.

It should be noted that although the decision signals that the layout of a retail store is now in principle capable of trade mark registration, it does not give rise to any new principles of law. Rather it illustrates the CJEU’s willingness to recognise new non-traditional signs that denote trade origin as trade marks within the existing legal framework.

It remains to be seen what impact the ruling will have in practice.

Decision: Apple Inc. v Deutsches Patent-und Markenamt