Protecting distinctiveness with 'layout marks'

Retailing in the UK
is changing at an
ever-faster pace and clients involved in the sector are prepared to spend significant sums on fit-out costs to achieve a distinctive look which they will be keen to protect.

Sometime ago, we were approached by an optician’s who had adopted an unusual layout for their retail practice in that they had configured their stock cabinets in a specific manner
and chosen a particular colour combination. They became aware that another optician some two kilometres away, in an adjoining suburb, had replicated their look and were aggrieved they stood little chance of interrupting their competitor, who stressed that their trading name and style were very different and, moreover, contended there was “no right to a shop design”.

A recent case in the European Court of Justice (ECJ) might just be a game changer in this respect and also highlights the importance of addressing contractually the ownership of shop design and layout created for retailers, consultants and architects.

Trade marks

The case concerns Apple and their success in convincing the ECJ to follow the United States courts in accepting the concept of a new type of registered trade mark, namely the layout of a retail store, which had not previously been registrable in key EU markets.

Apple are renowned for taking a serious approach to design, not just of their products, but also of their flagship stores in creating a ‘unique retail experience’. As internet shopping grows in importance, more retailers are likely to want to follow Apple and others, such as Nike with their sports shops and indeed Audi with their virtual car showrooms, are likely to wish to protect their creativity and distinctiveness.

Apple identified features of its stores in a detailed description referencing a combination
of ‘panelling, lighting units, cantilevered shelving, video screens and other details of their fit out’ as crucial in demonstrating distinctiveness.

Having succeeded in registering the trade mark in
the United States based on distinctiveness through use,
they then filed an international application under the Madrid protocol in 18 national jurisdictions.

While protection was
granted in Spain, Italy and Poland,
it was refused in several other countries, resulting in Apple’s decision to go to the ECJ.

The court considered it
to be “absolutely plain” that designs are capable of graphic representations and that a retail store layout, if when sufficiently distinctive in character, can constitute a trade mark.

Moreover, it is the design which is registrable and as such it may be scalable, so it is the look rather than the dimensions which are protected, recognising that retail stores take on many shapes and sizes depending
on the sites available on the
high street.

Environmental elements

But the devil is in the detail of the decision. While the layout of the retail store is registrable as a trade mark, the court made much of the fact that there were services relating to the goods which did not form part of the offer for sale, i.e. Apple staff demonstrating products and running seminars to prospective customers.

Consequently, while a 3D trade mark consisting of the shape of a retail store is now registrable as a trade mark under the ECJ directive, the ‘layout mark’ appears equally concerned with the interrelation of the different elements of the environment, as much as a particular shape, so maybe the opticians might still have some difficulty in protecting their cabinet designs. SJ

POCKET NOTES

For a practitioner, it is now important to be alert to the possibility of protections. Consequently, discuss with your client whether they believe they are creating a ‘unique retail experience’ for which they seek protection. Consider the possibility of trade mark registration but before doing so:

• identify the creator of the design;

• if a third party designer has been used ensure your client takes formal assignment of the designs;

• if an employee has created the designs then ensure the contract of employment has been appropriately drafted or take a formal assignment; and,

• consider whether the rights should be held by a holding company or the trading company depending upon the client’s long-term plans.

Jonathan T R Silverman is a commercial partner with Silverman Sherliker