Comment: Getting to core of Apple’s trademark law

Shoppers have been waiting a long time to see what lies behind the hoardings of Apple's new Edinburgh store ' will it be based on the showcase New York outlet? Picture: Scott Louden
Shoppers have been waiting a long time to see what lies behind the hoardings of Apple's new Edinburgh store ' will it be based on the showcase New York outlet? Picture: Scott Louden
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APPLE’S bid to protect the swish design of an iconic store could open a whole can of worms, says John MacKenzie

WITH its Fifth Avenue shop being one of the most photographed landmarks in New York, it is easy to understand why Apple may wish to protect this iconic image. Indeed, a US patent was recently granted for the ornamental design of the flagship store – built using only 15 glass panels. Now, the tech giant has turned its eye to the internal layout of all its shops and is pursuing trademark protection for this in the EU.

This course of action is not new for Apple, which was granted a US trademark for shop layouts in 2010. However, the company experienced difficulties when trying to extend protection to Germany, where the application was initially rejected.

The European Trademarks Directive states that to qualify for trademark protection, the application must contain a sign that can be represented graphically. Further, that sign must be capable of distinguishing the goods or services offered by one business from those of competitors. Trademarks must also be registered in relation to a specific category of goods or services. In this case, registration is sought in relation to “retail store services featuring …consumer electronics and … demonstrations of products relating thereto”.

The German regional court held that a shop’s layout could not distinguish the products and services inside from those offered by competitors, it could only reflect their quality. Further, it held that Apple’s layout in particular was not sufficiently distinctive to merit protection. Lastly, it decided that protection cannot be granted for services which only aim at inducing the purchase of goods. Apple appealed the decision at the Federal Patent Court. Although this court considered the shop layout distinctive, it referred four questions to the Court of Justice of the European Union (CJEU) relating to whether the design of a shop floor could be registered as a trademark for services aimed at inducing customers to purchase goods.

The CJEU stated that floor plans are capable of graphic representation even without the inclusion of sizes and proportions. It remarked that a shop floor can, in principle, distinguish the goods and services sold inside from those of other companies. It mentioned that this could be the case where the shop layout “departs significantly from the norm or customs of the economic sector concerned”. Taken together, these statements conclude that a trademark application which depicts the layout of a retail store may qualify for protection provided that it is sufficiently distinctive.

Regarding the application’s reference to retail store services, the CJEU held that protection may be granted provided the services in question do not form an integral part of the offer for sale. Apple’s application was able to satisfy this requirement as it sought protection for services such as product demonstrations and seminars.

The case will now be transferred back to the Federal Patent Court to decide if Apple’s layout is sufficiently unique.

The decision will be significant for design-conscious companies. They will now be able to invest resources producing an internal shop design, safe in the knowledge that trademark protection can be granted if the layout is sufficiently distinctive. The decision also recognises the importance businesses are now placing on brand image, by expanding the scope of trademark protection. UK retailers will no longer have to resort to obtaining trademark protection for a single element of their shop, or to the law of passing-off. Passing-off allows businesses to prevent competitors misleading customers as to the origin of the goods sold by the competitor.

However, in order to succeed, they must be able to prove that their competitor’s actions have damaged, or are likely to damage, their business. Accordingly, this falls short of the broad protection which can now be granted by registering a trademark, although it will be interesting to see how similar a competitor’s floor layout would need to be before a court will find infringement.

It may be that in the upcoming months we will see Apple’s trademark being granted for large, open and well-lit shops containing pine tables and technology. Could we also see protection given to dark layouts, emanating loud music and strong scents, selling beach-style clothing to fashionable teens? Or for a large warehouse, containing kilometres of one-way pedestrian traffic, weaving between Swedish beds and wardrobes? Only time will tell.

• John MacKenzie is a partner with Shepherd and Wedderburn

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