Clone traders

Fit-out contractors, interior designers and architects have long created striking and recognisable premises for clients involved in the leisure industry. Now the role that the design team plays in constructing these spaces could become critical to their clients’ ability to communicate a brand’s identity using that design.

This follows the case of Apple Inc vs Deutsches Patent- und Markenamt in the European Court of Justice this July, which held that Apple’s standard retail store appearance and layout might be protectable as a trademark. The ruling raises interesting issues as to how the design team’s role may change and who actually owns the design that they create.

First, a review of the case itself. In 2010, Apple obtained a US three-dimensional trade mark registration for a colour, graphic representation of its flagship retail stores.

The trade mark was registered in respect of “retail store services featuring computers, computer software, computer peripherals, mobile phones, consumer electronics and related accessories and demonstrations of products relating thereto”.

Apple then applied to extend the trade mark internationally, but in 2013 its application in Germany was refused as the patent authorities said that the depiction of shop layout was nothing more than a representation of an, albeit essential, aspect of Apple’s retail business. Further, it said that consumers would not regard the trade mark as an indication of commercial origin of goods and the store depicted was not sufficientlydistinguishable from other electronic goods stores.

Apple appealed, asking the European Court of Justice whether the layout of a store by its design alone can be registered as a trade mark for services which are aimed at inducing a consumer to purchase goods. Interestingly, Apple also asked whether such an application required anindication of size or proportions, which, of course, is relevant to the changing dimensions of a particular retail unit, bar or hotel lobby for which the design team is producing a design.

Where the designer owns the copyright, it will typically grant the client a licence to use the design. However, it may not be that straightforward

The European Court of Justice (CJEU) has now ruled in Apple’s favour. In a decision which applies to trade mark practice across the EU, the CJEU held:

• A design of this sort is on the face of it registrable as a trade mark
• The mark needs to have distinctive character to be registrable - in other words, it must be capable of distinguishing the applicant’s services from those of other retailers. Does it depart from the norm? In fields where store layouts are very similar, this may be a difficult hurdle to surmount (and this issue was sent back to the German court for a decision in Apple’s case).

Therefore, a design team with a brief to create a distinctive layout will need to keep in mind that the overall appearance, the colours, the shape and arrangement of furniture must be distinctive.

Moreover, often a particular hotel or retailer will work with the same design team in respect of the interiors, creating a layout or series of layouts which are distinctive to that hotel or retailer. As it now appears that this case will help business owners to build and protect their brands, the design team’s role becomes critical to that. But who actually owns the design?

The law in this field has recently been aligned so that now the designer owns both the design and the copyright, depending on the particular situation, unless the appointment between the designer and the client says something different. Where the designer owns the copyright, it will typically grant the client a licence to use the design.

However, it may not be that straightforward, as the client will probably have a significant input into the design of its layout.

• Given the importance that the design team may now have in helping their clients to protect their layouts and build brands, there are some points to keep in mind for design consultants:
• Make sure the contract between the client and the designer makes clear who owns the copyright and/or design
• The appointment should also be clear as to what kind of licence is granted to the client to use the copyright and/or design and what it can be used for
• Ensure that the appointment is clear as to payment of fees for the design and/or copyright.

Áine McCartney is a senior associate in the construction and engineering team, and Mark Owen a partner in the intellectual property team at Taylor Wessing