In a marketplace centered on convenience and consumer choice, it is of little wonder that the Internet is poised to completely overtake brick-and-mortar stores as a preferred method of shopping. While physical retailers offer the opportunity to see and test products before purchase, the expediency, virtually inexhaustible product choice, and expansive online presence of practically every major retailer often drive people to shop online. As such, one may think that physical locations are becoming a thing of the past, but they remain, it appears, an important marketing tool in the Internet age of shopping where every competing retailer is at consumers’ fingertips. In fact, Apple Inc., considered a frontrunner in computer innovation and known primarily for its marketing and design techniques, has apparently found an extra foothold in the race against its competitors by innovating in an area most technology manufacturers have yet to tap: store layout.
Apple Inc. opened its first physical location in 2001, and since then has expanded to various locales and countries, featuring both standalone Apple Stores and stores in malls and shopping centers. Apple Stores typically include tables displaying various kinds of Apple products for customers to test and examine, and in addition to selling Apple hardware, also market peripheral products such as cases and cables. They also feature a Genius Bar, a collective of store employees that serve to help customers set up or fix their Apple products. While consumers could certainly purchase computers and music players from physical retailers before, Apple is one of the only major computer manufacturers, which may include Sony, Samsung, HP, Dell, etc. to have its own physical retail location. As fiercely protective of its intellectual property as Apple is known to be, it attempted to get protection for its Apple Store design via a United States trademark registration application in 2010. After being accepted by the U.S. Patent and Trademark Office, Apple turned overseas and filed an International Trademark Application to expand its trademark rights.
The first foreign trademark office to examine the application was the German Trademark Registry, which denied Apple’s application on the grounds that a store layout could not serve as a trademark because it would not be considered by consumers as an indicator of source. Apple appealed the decision of the German examining attorney to the German Federal Patent Court, who referred the case to the Court of Justice of the European Union. In a somewhat surprising twist, the Court of Justice decided that a three-dimensional representation of a store layout may be a valid trademark for both goods and services and may function as a source identifier. The Court emphasized that the store layout must be sufficiently distinctive by departing significantly from the norm or customs in the industry and must serve to distinguish the goods or services of one retailer from those of another to be registrable. The Court likened the store layout to a sign that may advertise and signify the origin of specific goods or services.
The German Federal Patent Court will now reconsider Apple’s trademark registration application in light of the opinion of the Court of Justice. Current opinion is split on whether the application will be allowed to register. Some believe that the store layout as a trademark may be found to lack distinctiveness, which Apple would have to battle with consumer surveys and advertising expenditure records that demonstrate its store layout has acquired secondary meaning in the minds of the consuming public. Others think that the Patent Court is likely to allow Apple’s application to register, especially after the opinion of the Court of Justice and the general uniqueness typically associated with Apple and Apple products and services. The more interesting case, of course, would be the latter, and particularly to what extent this protection could stretch. Could such trademark protection, which has been generally reserved for words, slogans, colors, and designs, pave the way for other companies to gain protection over their store layouts, and even more interesting would be the resulting infringement analysis for confusingly similar marks. Perhaps there may be instances of actual confusion where one walks into the wrong store thinking it was an Apple Store because the infringing store layout also featured a rows of tables and a Genius Bar. Either way, it is evident that intellectual property, even in areas that have been considered to be fairly settled, continues to evolve.