Apple’s retail store layouts and trademark protection: a recent decision by the CJEU

The Court of Justice of the European Union (the “CJEU”) recently ruled that the representation of the layout of a retail store may, under certain conditions, be registered as a trademark (judgment of 10 July 2014, Case C‑421/13). The request for a preliminary ruling, made in proceedings between Apple Inc. (“Apple”) and the Deutsches Patent- und Markenamt (i.e. the German Patent and Trademark Office, the “DPMA”), concerned the interpretation of Articles 2 and 3 of Trademarks Directive no. 2008/95/EC (the “Directive”).

Initially, Apple had obtained from the United States Patent and Trademark Office the registration of a three-dimensional trademark consisting of the representation, by a design in colour, of its flagship stores (which can be seen here on the CJEU’s website). The registration was made for services within the meaning of Class 35 of the Nice Agreement, namely for “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 the US trademark internationally under the Madrid Agreement. The extension was however refused by the DPMA on the grounds that the trademark simply corresponded to the representation of an essential aspect of that undertaking’s business, therefore consumers would not see it as an indication of the commercial origin of the services. In addition, according to the DPMA, the store was not sufficiently distinguishable from the stores of other providers of electronic products.

Apple appealed against the DPMA’s decision before the Bundespatentgericht, which decided to stay the proceedings and to refer the issue to the CJEU, basically asking for a preliminary ruling on the possibility to register the stores’ layout as a trademark.

In its decision, the CJEU firstly noted that, in order to be capable of constituting a trademark for the purposes of Article 2 of the Directive, the subject matter of an application for trademark registration must satisfy three conditions, namely it must (1) be a sign, (2) be capable of graphic representation and (3) be capable of distinguishing the “goods” or “services” of one undertaking from those of other undertakings.

The CJEU stated that it was “absolutely plain” that designs were signs capable of graphic representation, and therefore met the requirements under (1) and (2) above. Consequently, it held that, even in absence of any indication as to the size and proportions of the retail store that it depicts, “a representation, such as that at issue in the main proceedings, which depicts the layout of a retail store by means of an integral collection of lines, curves and shapes, may constitute a trademark provided that it is capable of distinguishing the products or services of one undertaking from those of other undertakings”.

In addition, the Court noted that “the representation, by a design, of the layout of a retail store is also capable of distinguishing the products or services of one undertaking from those of other undertakings and, hence, satisfying the third condition” mentioned above. In fact, “it cannot be ruled out that the layout of a retail outlet depicted by such a sign may allow the products or the services for which registration is sought to be identified as originating from a particular undertaking”.

Having clarified the above, the Court highlighted that “the fact that a sign is, in general, capable of constituting a trademark within the meaning of Article 2 of Directive 2008/95 does not mean, however, that the sign necessarily has a distinctive character for the purposes of Article 3(1)(b) of the directive in relation to the products or services for which registration is sought”. In fact, based on Article 3(1)(b) of the Directive, trademarks that are devoid of distinctive character “shall not be registered or, if registered, shall be liable to be declared invalid”.

The distinctive character of the sign shall therefore be assessed, and it shall “be assessed in concreto by reference to, first, the goods or services in question and, second, the perception of the relevant public, namely the average consumer of the category of goods or services in question, who is reasonably well informed and reasonably observant and circumspect”. The assessment criteria applied to a design representing the layout of a retail store should not differ from those used for other types of signs.

It will therefore now be up to the Bundespatentgericht, in front of which the main proceedings will continue, to apply the principles set forth by the CJEU, and state whether the specific design of the Apple stores at issue meet the criteria set forth by the Directive for its registration as a trademark.