Intellectual Property Protection for Store Designs in Germany
Considering the Protectability of Store Designs Pursuant to German IP Law, Following Recent German Case Law
27 June 2019
Retail businesses have lost a considerable number of customers to online shopping and, as a result, have had to reinvent the conventional retail store concept in order to continue to appeal to consumers. Great efforts go into providing consumers with a memorable experience which makes them want to come back for more. Apple, Nike, Louis Vuitton, Nespresso, Prada and many other famous brands around the globe have developed iconic store concepts. The distinct designs aim for consumers to recognise the origin of the brand immediately, before even seeing any products.
The scope of legal protection of store designs was recently considered by the Higher Regional court of Dusseldorf in the context of unfair competition law (OLG Düsseldorf, decision from 22 November 2018, 15 U 74/17 - Gastronomiekonzept). This article will consider the protectability of store designs pursuant to German IP law, namely in respect of the legal regimes governing, trade marks, designs, copyright and unfair competition.
Trade Mark Law
As a retail store's design may function to communicate a certain brand, trade mark law appears to offer a possible regime for store designs.
The most notable case cornered Apple's flag ship store (CJEU, decision from 10 July 2014, C-421/13 - Apple/DPMA). After successfully obtaining trade mark protection in the US and filing for an international registration via WIPO, Apple sought to extend protection to Germany. The German Patent and Trademark Office refused protection of the store concept as a trade mark, holding that the representation of retail store was nothing other than a representation of an essential aspect of that undertaking's commercial services (and not of the goods/services themselves) and that the consumer could not understand a retail store's design as an indication of commercial origin of the goods/services.
During the appeal proceedings before the German Federal Patent Court ("BPatG"), the BPatG was uncertain whether, pursuant to Articles 2 and 3 of the EU Trademark Directive 2008/95, Apple's retail store design could be registered as a trade mark. The submitted depiction of the retail store showed Apple's iconic store front and the view of inside the store, without information in respect of size or proportions.
The BPatG referred the case to the Court of Justice of the European Union ("CJEU"), and asked for a preliminary ruling as to whether a store design can constitute a sign capable of graphical representation and function as an indication of origin for goods and/or services?
The CJEU held that trade mark protection under the Directive is possible in respect of store designs, considering it to be comparable to the packaging of goods. The CJEU also considered the requirement distinctiveness, holding that, to be distinctive, the design must depart significantly from the norm or customs of the sector, applying legal principles developed in the context of three-dimensional shape marks. The CJEU considered that retail store designs, capable of being protected as trade marks, do not need to satisfy more onerous requirements than traditional trade marks (i.e. a prerequisite of distinctiveness), however, it did specify that store designs would need to be "atypical" to acquire protection as a trade mark, setting the bar of trade mark protection for store designs rather high.
Regarding the prerequisite of "graphical representation", the CJEU held that the image above, depicting of the store's interior, without indicating specific size and proportions, would be sufficient for protection as a trade mark. However, recent trade mark reform in [Germany] has substituted this requirement with "representation in the electronic register", relaxing this requirement for non-traditional trade marks (such as three-dimensional marks, olfactory marks and sound marks) by permitting more ways of publishing applications for trade marks in the register, besides from mere two-dimensional drawings.
In Germany, despite the DPMA's concerns with respect to Apple's 'retail store mark' in the US, it appears to be generally possible to secure trade mark protection for a store design. A recent example is a three-dimensional German trade mark registration no. 302015058552 encompassing a "REWE To-Go Store" by the well-known food retailer REWE.
Unfair Competition Law
Pursuant to unfair competition law, store designs can be protected against counterfeit design. This position was confirmed by the recent case "Gastronomiekonzept" as well as by the previous decisions of "Vapiano" (LG Münster, decision from 21 April 2010, 21 O 36/10) and "Subway" (OLG Schleswig, decision from 26 September 2013, 16 U (Kart) 50/13).
In "Gastronomiekonzept", a German fast food chain (Frittenwerk) which specialises in making chips (which translates to "Fritten" in German) claimed that a competitor used the same design elements in its menus, the same store design (including colour theme) and the same word element in the restaurant's logo. The court had to decide whether Section 8 (1), (3) no. 1, Sections 4 no. 3a, 3 German Unfair Competition Act ("UWG") regarding counterfeiting a competitor's products, which causes confusion regarding the origin of those goods or services was applicable to the facts of the case.
The court first acknowledged that store design is a 'work result' covered by the broad notion of protectable subject matter under the UWG. The court found the original Frittenwerk-store concept to be distinguishable and recognisable, and therefore protectable under the applicable provisions of the UWG. In particular, since the distinct arrangement and design would point potential consumers to the origin and the accompanying characteristics of the claimant's store (thus passing the legal threshold of "competitive originality"). The defendant was unable to justify its use by evidencing that the store concept by Frittenwerk was just ordinary and would not be recognised as different from other modern "street food" restaurants.
In addition, for the test of counterfeit and consumer confusion one needs to ask whether the essential (i.e. the protected) elements of the work result were copied since a counterfeit does not necessarily need to be identical or nearly identical to the original. Further, consumer confusion can be caused if the counterfeit appears as a secondary brand or new line of products by the same chain. This can even be the case if the counterfeit store design represents an "Asian"-style instead of the "Italian"-style of the original as ruled in "Vapiano".
Under German law, a store design might also be protectable as a registered design pursuant to Section 1 German Design Act ("DesignG"). Section 1 no. 1 DesignG provides that any design, which is a two-dimensional or three-dimensional appearance of all or part of a product, resulting in particular from the characteristics of the lines, contours, colours, shape, texture or materials of the product itself or its ornamentation and even a complex product, consisting of several building elements (no. 3), can enjoy design protection.
A store's interior layout is usually composed of numerous elements comprising the building structure, furniture, decoration and other design elements, which may raise the fundamental question whether store design shows a sufficient degree of "design unity" to be considered as a uniform "product". However, according to an early decision from 1953, interior design can indeed show such unity (OLG Frankfurt, decision from 23 March 1953, 6 W 636/52). In a similar case, the foregoing was confirmed by the German Federal Supreme Court with respect to furniture ensembles (BGH, decision from 20 September 1974, I ZR 35/73 - Möbelprogramm; BGH, decision from 23 October 1981, I ZR 62/79 - Büromöbelprogramm).
Further, a design needs to be new and have individual character in accordance with Section 2 (1) DesignG, meaning that the overall impression of the design should be clearly different from any pre-existing designs in the same sector, requiring a comparison between a 'new' store design and existing store designs in the same industry sector. For example, designs in the restaurant sector will be different than those in the retail business.
The design database reveals that there have indeed been numerous European store design registrations, showing the exact room layout and product arrangement in a drawing, photography or three-dimensional model.
Store designs may also be protected as a copyright work if it constitutes an original work of authorship under the German Copyright Act (UrhG) regardless whether it is qualified as architecture or applied art (LG München, decision from 4 October 2001, 7 O 3154/01). Similar to design law, the elements of the store design must show a certain degree of unity. In addition, to pass the originality bar the creative achievement must go beyond what is technically necessary (e.g. bridge piers) or usual (e.g. design of a terraced house). Thus, the work is not an original work of authorship if it is the result of mere routine craftsmanship or serves a mere technical purpose.
Pursuant to recent case law, the requirement of originality is relatively low. No particular artistic value is required, although trivial works that are not characterised by any degree of individuality will not be afford protection. Case law determines the degree of individuality by comparing the overall impression of the work with the previously known designs of similar works.
German IP law provides for a variety of possible protection regimes for store designs, each with its own requirements in order to secure protection.
There are a number of issues that would need to be considered by persons assessing which regime would be the best form of protection for their store design, including (i) the scope of protection under each protection regime, (ii) which protection regime would reflect the applicant's best interests, (iii) whether the legal regimes could be applied for cumulatively, (iv) how a store design could be designed to fulfil the prerequisites of one or more protection regimes, (v) particular consideration if the owner/user of the store design and the author of the copyright are different persons (e.g. whether this can be dealt with by contractual agreement), and (vi) protection for more generic stores, etc..
In a nutshell, given the variety of possibilities for protection and the many aspects to be kept in mind, assessment of the specific facts of the case by an IP expert is highly recommended. In any event, stakeholders should take the above into account early in the development phase and also during the shop's operation in order to create and promote a store design that is protectable and also fulfils a shop owner's needs from a commercial perspective.
This article was written by Marisa Machacek, Research Assistant.