Three-Dimensional Trademarks And Flagship Stores: The European Court Of Justice’S Position

In a judgment rendered on 10 July 2014(1), the European Court of Justice (the "Court") confirmed that the protection conferred by a trademark could extend to the interior design of a store, in this case the flagship store of the company, Apple. This Court judgment should be highlighted in that it opens the way for a revival of three-dimensional trademarks and offers new perspectives to undertakings whose sales outlets reflect the brand image of the products and services offered by those undertakings in the eyes of the public. Questions remain pending, however, and close attention should be given to the practical consequences of this judgment.

After having obtained registration of the trademark with the United States Patent and Trademark Office in 2010, Apple sought to extend, by way of the international trademark, the protection of the interior architecture of its flagship store in several countries, including Germany, the Benelux countries and France.

The services associated with this three-dimensional trademark fall under Class 35 and are designated as "Retail store services featuring computers, computer software, computer peripherals, mobile phones, consumer electronics and related accessories, and demonstration of products relating thereto."

In January 2013, the German Patent and Trademark Office refused to register the extension of this three-dimensional trademark to German territory arguing that the representation of space intended for the sale of products of an undertaking would be nothing other than the representation of an essential aspect of that undertaking's business and that if consumers could perceive that the space was designed as an indication of the quality and price bracket of the products, they would not see the design as an indication of the origin of the products. The German Office added that in this particular case, the design of Apple's flagship store was not sufficiently distinguishable from the stores of other providers of electronic products. Similarly, the Benelux Office for Intellectual Property issued a provisional refusal of protection for Apple's three-dimensional trademark.

Apple appealed the German decision before the German Patent Federal Court (Bundespatentgericht) and, believing that the dispute would require preliminary questions to be asked on the subject of the interpretation to be given to Articles 2 ("Signs capable of constituting a trademark") and 3 ("Grounds for refusal or invalidity"), of paragraph 1 of the Directive 2008/95/EC of 22 October 2008, the Bundespatentgericht referred four preliminary questions to the Court.

The Court responded to the first three preliminary questions posed by the national court as a whole and declared the fourth question inadmissible.

Thus the Court declared that the articles mentioned above of Directive 2008/95/EC "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 consisting in services relating to those goods but which do not form an integral part of the offer for sale thereof, provided that the sign is capable of distinguishing the services of the applicant for registration from those of other undertakings and that registration is not precluded by any of the grounds for refusal set out in that directive".

The impetus of the Court for development of a new class of three-dimensional trademarks alongside those which more classically protect the packaging or form of a product (such as the Coca-Cola bottle or the Toblerone chocolate bar) is clear. This judgment allows undertakings from now on to consider another mode of protection for the layout of their sales outlets in addition to an action for unfair competition which requires proof of the harm suffered - sometimes hard to demonstrate - and in addition to the protection by the author's right which could prove uncertain. This aspect of the judgment of 10 July 2014 is to be welcomed.

Obviously, if the representation of the layout of a flagship store of an undertaking can constitute a sign which is likely to be protected as a trademark, this sign should be sufficiently distinctive to allow the average consumer to relate the products and services concerned to a given undertaking, thereby providing the trademark with its function of "guarantee of origin". According to the Court, this function is fulfilled when the layout depicted departs significantly from the norm or customs of the economic sector concerned. The assessment in concreto will naturally fall within the competence of the national offices of trademarks and of the Office for Harmonisation in the Internal Market. The Court again stresses that the assessment criteria should be identical to those used for other signs (word signs and complex signs).

In practice, however, it is questionable whether many interior designs of stores would qualify for trademark protection, particularly those layouts intending not to distinguish the products but the services of an undertaking. Indeed the scope of services which could be identified by such trademarks remains unclear. According to the Court, the services covered by these three-dimensional trademarks must correspond to services relating to the products marketed in the sales outlet without forming an integral part of the sale thereof.

Still, apart from the after-sales services offered to consumers, it may be unrealistic to separate the sale and the offer for sale of products from related services which are offered simultaneously by the undertaking but which maintain the purpose of the sale of products to consumers in the flagship store. In the case at hand, the services that Apple refers to in its application for a three-dimensional trademark consist of carrying out demonstrations of its products to the public by means of seminars. These demonstrations are intended only to induce the consumer to buy the products displayed and Apple products used at these seminars are in fact the ones that enable the public to identify the origin of the services. In this respect, the distinction made by the Court is debatable.

It remains to be seen what the impact of this judgment will be on business life and the type of interior design that will be protected as a three-dimensional trademark. Heated discussions are expected on the distinctive character or lack of distinctive character of these three-dimensional trademarks for the products and services concerned.

To date, we are awaiting the decision of the Bundespatentgericht which must now decide on the distinctive character of the trademark application from Apple in light of the judgment of the Court. Following this judgment of 10 July 2014, the Benelux Office for Intellectual Property withdrew its provisional refusal to register Apple's trademark and has indicated that the protection of the trademark was granted for all the services referred to in the application for Belgium, the Netherlands and Luxembourg.

(1) CJEU (3rd Chamber), 10 July 2014, C-421/13, Apple Inc. c/ Deutsches Patent und Markenamt