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Tuesday, February 12, 2013

This shop is not a front, it's a trade mark!

Apple registers its 'Apple Store' layout as a trade mark in the United States, but fails to do so in Australia.  In this post by Trade Marks Attorney Dan Wilson, we explore the concept of a trade mark for a store layout and offer some more practical alternative protections.

As has been reported in the news, Apple Inc was recently successful in registering its (arguably) iconic shopfront and store layout as a trade mark in the United States for retail store services. Interestingly, the trade mark does not feature any 'brand' in the traditional sense. There is no wording 'APPLE' and no big shiny Apple logo to be found in the trade mark; just a three-dimensional technical drawing of a glass shopfront and inside various pieces of furniture, namely:
  • a panelled facade consisting of large, opaque rectangular horizontal panels over the top of the glass front, and two narrower opaque panels stacked on either side of the storefront;
  • two parallel rectangular recessed lighting units traversing the length of the store's ceiling;
  • cantilevered shelves below recessed display spaces along the side walls;
  • two parallel lines of rectangular tables in the middle of the store parallel to the walls and extending from the storefront to the back of the store; and
  • multi-tiered shelving part-way along the side walls, and an oblong table with stools located at the back of the store, set below video screens flush mounted on the back wall.

Australian refusal

What has not been widely reported though, is that this trade mark was the subject of an international trade mark application under the Madrid system and Australia was one of the jurisdictions which Apple nominated for protection of its store layout trade mark.

The application was refused trade mark protection in Australia.

Presumably, the trade mark was refused on the grounds outlined in section 41 of the Trade Marks Act 1995 (Cth), that the trade mark was not capable of distinguishing the services covered by the application from the services of other traders.

Apple did not lodge a response to the initial refusal. However, it was an option for Apple to submit evidence of use demonstrating that the trade mark has acquired the necessary capacity to distinguish the services covered by the application.

Trade mark enforcement

If Apple had been granted protection of its trade mark for the layout of its store in Australia, what would the real world implications have been when it came to enforcing the trade mark? The main issue for any allegation of infringement that Apple might have been able to bring (based on an Australian trade mark registration) would have centred around the substantial identity or deceptive similarity of the alleged infringing store layout.

Although issues have never been tested in Australia in relation to a shape trade mark for store layout, given the detail in the trade mark application, anything short of an identical copy (as we saw in China in 2011) would most likely fall short of being considered as substantially identical to the trade mark.

Turing to deceptive similarity, Australian case law is clear that in order to make a finding of deceptive similarity it is necessary to show a real tangible danger of deception or confusion occurring and that the context in which the goods or services are traded is all important. In this light, would it be likely that a finding of deceptively similarity would be made?

In short, even with a registered Australian shape trade mark for a store layout design, which would be difficult to obtain, enforcement of that trade mark may be even more difficult.

Practical alternatives

Apple, and everyone else, has more practical and well-tested alternatives available to it to protect the layout and design, or get-up, of stores in Australia.

If a trader were able to prove that another trader's actions, including but, of course, not limited to, the get-up of its stores, was likely to lead to a consumer being misled or deceived within the meaning of section 18 of schedule 2 of the Consumer and Competition Act 2010 (Cth), that trader would be able to take action against the other trader to cause the cessation of the misleading or deceptive actions.

Alternatively, the tort of passing off has been successfully used to prevent other traders from making misrepresentations by which the goodwill of one trader is used to benefit another with likely damage to the initial trader's business. For example, Clark Rubber was able to prevent another trader from using a similar colour scheme to its own on a shopfront.

The draw back to these remedies, as opposed to an action of trade mark infringement, are the relatively high thresholds of proof that are required. For example, proof of reputation, proof of misrepresentation, and proof of likely damage, must all be demonstrated to succeed in a passing off action.

If Apple could show that the shop was constructed in a kit and the shop qualified as a product, the shop could be registered as a design. Registered designs are a useful way of protecting products whose visual features are new and distinctive, the term for which in Australia extends for ten years.

Scintilla soundbite

Shape trade marks are a legitimate form of IP protection in Australia. There are more than 750 registered Australian shape trade marks and this number is growing all the time. However, when it comes to store design and layout, you may be better off looking to some of the more established legal remedies for protection.

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