IP Protection of Visual Merchandising

Upper West Side Apple Store
September 21, 2015

For creators of goods these days, the attractive and innovative design of a product itself is no longer the only thing to focus on when releasing goods out into the market for consumption. It is not only how the product itself is perceived by the consumers, but also the way in which consumers perceive the product’s packaging and presentation. Increasingly, producers of goods are pouring in more time, effort, and expense on the format through which products are presented to consumers. With this increase in attention to merchandising comes a certain level of creativity that these innovators are interested in protecting. Although intellectual property law provides multiple avenues of protection, trademark law, provides owners with the best protection over the way in which they choose to present their goods.

When the market is saturated with multiple products that include similar features and provide a similar, if not improved service to the original’s product, visual merchandising comes into play. Visual merchandising refers to anything the customer sees that promotes a positive image of the business or brand that may lead to changes in the consumers’ behavior. [1] In a recent study from the European Journal of Business and Management, a significant relationship was found between a home furnishings store’s “Creative/Inspirational Coordination” and the “store visit frequency,” implying that in the home furnishings setting, this factor of visual merchandising has a significant effect on consumers’ behavior. [2] Visual merchandising may have significant effects on the psychology of the consumer, and can truly affect the success of a business.

Visual merchandising has the potential to play an important role in marketing a product, and producers of goods who come up with creative ways to display their products are looking for intellectual property protection. Trademark can refer to “any word, name, symbol, or device, or any combination thereof” that is used in commerce to identify and distinguish the owner’s goods. (15 U.S.C. § 1127). Today, the Lanham Act of 1946 governs trademark law, and it provides a great deal of flexibility, because it is concerned with the protection of brand. However, there are a number of limitations on what may be eligible for protection, as in the other avenues of intellectual property law. For a mark to be eligible, it must be distinctive, which means the consumer must perceive the mark and be able to identify the source of the good.[3] Trademark was separated into four different classifications known as “(1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful.”[4] These levels of distinctiveness are used by the courts in determining the level of protection that a mark may have.

Trademarks also extend to objects that are not marks and are referred to as trade dress. Trade dress falls under the pillar of trademark, but is a distinct form of intellectual property protection. It gives protection to characteristics of a product’s visual appearance, such as its packaging. Owners may get trade dress protection for a products design, shape, texture, and even color. In Qualitex Co. v. Jacobson Products Co., the Supreme Court held that a color may be trademarked, as long as all requirements of a trademark are met. [5] As long as the color has attained a “secondary meaning” and is capable of distinguishing a particular brand, infringement may lead to consumer confusion, and the mark’s owner shall be afforded protection.[6]

Trade dress law intends to promote competition by protecting a producer’s reputation, but is also concerned with stopping a producer from monopolizing a functional mark. As long as the merchandising technique is distinctive and non-functional, trade dress provides adequate protection over a producer’s choice of displaying goods. Recently, Apple Inc. has gone to the Court of Justice of the European Union (CJEU) and successfully applied for a trademark registration of their retail store. [7] Following a dispute between the Company and the German Patent and Trademark Office (DPMA), Apple went to the CJEU claiming that their spacious and minimal layout with counter-less checkouts was subject to trademark. The CJEU found that their store design was sufficiently distinctive and non-functional for trademark protection. “The representation, by a design alone, without indicating the size of the proportions, of the layout of a retail store, may be registered as a trademark for services.”[8] What the court is essentially saying here is that the apple store’s layout is unique and distinguishable enough to consumers, that they should be afforded protection against competitors from copying their store design.

Increasingly, improving a product’s design is not the only thing that a corporation can do to attract consumers. The way in which those products are displayed and made accessible to the consumer is seen to have great value. There is very little precedent for infringement of cases involving visual merchandising, however as technology becomes more and more incorporated into the lives of consumers, and producers have greater access to designs that work, the push for intellectual property protection of merchandising may become more important to producers. Trade dress law seems to be the type of protection that producers may turn to when attempting to protect their designs in the future.

 


[1]See Holly Bastow Shoop, Dale Zetocha, & Gregory Passewitz, Visual Merchandising: A Guide for Small Retailers, North Central Regional Center for Rural Development, May 1991. http://tinyurl.com/nbktrpn.

[2] Yoo-Kyoung Seock & Young Eun Lee, Understanding the Importance of Visual Merchandising on Store Image and Shopper Behaviours in Home Furnishings Retail Setting, European Journal of Business and Management, Vol.5, No.4, 2013. http://tinyurl.com/ok3u7gq.

[3]See Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir. 1976).

[4] Id.

[5] See Qualitex Co. v. Jacobson Products Co., 514 U.S. 159, 163 (1995).

[6] See Id.

[7] See CJEU: Apple Can Trademark Store Design, World Intellectual Property Review, November 7, 2014. http://tinyurl.com/po8mok3.

[8] Id