Perpetual protection for retail design? Apple succeeds before the ECJ

In Apple Inc v Deutsches Patent- und Markenamt (Case C-421/13), the Court of Justice of the European Union (ECJ) has, in a short decision of only 31 paragraphs, and without the need for a detailed opinion of the advocate general, opened the door for retailers to seek trademark protection for the layout of their stores. This circumstance has arisen out of Apple Inc’s application to register a three-dimensional trademark (shown below) consisting of the representation of its flagship stores for certain retail store services.

Apple registered such a representation as a trademark with the US Patent and Trademark Office in 2010. This mark was registered for certain services within Class 35 of the Nice Classification, namely “retail store services featuring computers, computer software, computer peripherals, mobile phones, consumer electronics and related accessories and demonstrations of products relating thereto”. Subsequently, Apple sought to extend its protection under the Madrid Agreement. While some states accepted that extension, others did not and, on January 24 2013, registration was refused by the Deutches patent- und Merkenamt (DPMA). The reasons given by the DPMA (as summarised by the ECJ) were that:

• the depiction was nothing more than a representation of an essential aspect of Apple’s business and consumers would not see this as an indication of a commercial origin of the goods associated with Apple’s store; and
• the retail store in question was not sufficiently distinguishable from the stores of other providers of electronic products.

Apple appealed this decision to the Bundespatentgericht. While that court considered that the layout depicted above did have features that distinguished it from the usual layout of retail stores in the electronic sector, it also considered that Apple’s application raised fundamental questions relating to European trademark law. Correspondingly, the court referred four questions to the ECJ on the interpretation of Articles 2 and 3(1) of the Trademarks Directive (2008/95/EC):

"1. Is Article 2 of Directive [2008/95] 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 Directive [2008/95] 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 trademark?

3. Is Article 2 of Directive [2008/95] 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 Directive [2008/95] to be interpreted as meaning that the scale of the protection afforded by a trademark for retail services also extends to the goods produced by the retailer itself?"

Article 2 and the relevant parts of Article 3(1) of the directive are reproduced below for ease of reference:

"Article 2. A trademark may consist of any signs capable of being represented graphically, particularly words, including personal names, designs, letters, numerals, the shape of goods or of their packaging, provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings."

"Article 3(1). The following shall not be registered or, if registered, shall be liable to be declared invalid:

…

(b) trademarks which are devoid of any distinctive character;

(c) trademarks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, or the time of production of the goods or of rendering of the service, or other characteristics of the goods or services;

(d) trademarks which consist exclusively of signs or indications which have become customary in the current language or in the bona fide and established practices of the trade;

(e) signs which consist exclusively of:

(i) the shape which results from the nature of the goods themselves;

(ii) the shape of goods which is necessary to obtain a technical result;

(iii) the shape which gives substantial value to the goods;"

The ECJ addressed questions 1 to 3 together, deciding that the real question was whether:

“Articles 2 and 3 of the Directive 2008/95 must be interpreted as meaning that the representation, by a design alone, without indicating the size or the proportions, of the layout of a retail store may be registered as a trademark for services which comprise various services aimed at inducing the consumer to purchase the products of the applicant for registration and, if so, whether such a ‘presentation of the establishment in which a service is provided’ may be treated in the same way as ‘packaging’.”

In answer, the ECJ found that:

1. A representation, such as the one in issue, may constitute a trademark provided it is capable of distinguishing the goods and services of one undertaking from another.
2. The layout that corresponds to such a mark may allow the goods or services for which registration is sought to be identified as originating from a particular undertaking.
3. If none of the grounds for exclusion apply, then a sign representing the layout of the flagship store of a manufacturer of goods may lawfully be registered for those goods and for services, so long as those services do not form an integral part of the offer for sale of those goods.

The ECJ did not answer the fourth question as it was considered to be inadmissible (not relevant to the facts of the case).

The direct beneficiary of this decision is of course Apple. As noted above, the Bundespatentgericht has already found that the representation for which Apple seeks protection has features that distinguish the design from the usual layout of retail stores in the electronic sector. It therefore seems likely that, when the case comes back to the Bundespatentgericht, the mark will be registered.

Beyond Apple’s own protection, this decision and the wide publicity that it has been given also seem likely to lead to a multiplicity of applications from retail outlets looking to obtain perpetual protection for the get-up of their stores and to put potential passing-off actions on to a simpler statutory footing (or to at least obtain protection for a layout until fashions change, the layout needs to be re-designed to continue to attract consumers, and it becomes unnecessary for the application to continue to pay the fees associated with that mark). 

Initially this author was rather shocked by this decision and the potential consequences for the scope of trademark protection. However, after further consideration of the questions posed, the author is now of a different view, and with specific reference to the second question, and imagining the appearance of the retail store as the packaging for services provided therein, one can start to see why this ‘packaging’ should not be excluded from protection if it fulfils all of the relevant functions of a trademark.

Robert Lundie Smith, EIP, London