Retail store layouts – Italian Supreme Court applies CJEU decision in Cofemel and confirms copyright protection

In a decision that will be welcomed by the designers (and operators) of retail concept stores, the Italian Supreme Court has confirmed that the design of a store layout may attract copyright protection under Italian law.

In reaching this conclusion, the Italian Supreme Court applied the CJEU’s decision in the case of Cofemel (case C-683/17), which held that for designs to warrant copyright protection as “works” under the InfoSoc Directive (2001/29/EC) two requirements need to be met:

• there must be “something original in the sense that it is an intellectual creation of its author”; and
• the subject matter of the “work” must be expressed in a manner which makes it identifiable with sufficient precision and objectivity.

EU member States are precluded from imposing additional requirements such as artistic or aesthetic appeal (read more about Cofemel here).

Background

The case before the Italian courts (Wycon S.p.a v Kiko S.p.a. (decision 780/2020)) concerned two retailers of cosmetic products. The claimant, Kiko, had invested in a project to remodel its stores in an attempt to distinguish itself from others with an innovative and characteristic layout. It claimed that the defendant, Wycon, had copied every aspect of its store design.

Kiko’s copyright infringement claim was upheld by the Italian court of first instance and by the Court of Appeal of Milan, with the Courts finding that the layout of KIKO concept stores, and specifically the way in which the various elements used to furnish the stores are combined, coordinated and assembled, is eligible for protection as an architectural plan under Italian copyright law.

Findings of the Italian Supreme Court

Wycon’s main ground of appeal before the Italian Supreme Court was that the design of the KIKO store layout was not a copyright work.

Specifically, Wycon claimed that KIKO’s layout was not well-defined in all its elements meaning that it could be appreciated as a whole, and it was not clear where the layout would fit within a defined space or building. Thus, according to Wycon, the store’s layout should not be protected as a whole under copyright law as an architectural plan, but rather the individual design works present in the shops themselves may be protected as industrial designs. Wycon also made a reference to a previous CJEU ruling (Apple, case C-421/13) and argued that the layout and furnishings of retail stores could be protected as three dimensional trade marks (if certain criteria were met) and should not be protected as copyright works.

In rejecting Wycon’s appeal, the Supreme Court made a specific reference to the CJEU’s decision in Cofemel (C-683/2019 ), and ruled that “in copyright law, a project of interior design work, characterised by a sole and unified organisational plan of the space, derived from the adoption of a scheme which is itself well defined and visually appreciable, which clearly reveals the originality of the style used, of organized and coordinated components made to make the environment functional and harmonious (i.e. the author’s personal touch), can be protected as a work of architecture […]”. The Supreme Court continued: “it is irrelevant the requirement of the inseparable embodiment of the furnishings with the store or the fact that the single furnishing elements that constitute it are common in the interior design sector, as long as the result is an original combination of the elements used, which was not imposed by the author’s will to give a solution to a functional problem.”

Comment

This is an interesting decision that appears to confirm copyright protection for the look and feel of a shop captured in an overall design, as opposed to the specific details and elements of the design project itself. While the vast majority of retail stores are currently closed due to the COVID 19 pandemic, retailers have for some time been investing more money in the design and layout of their stores in a bid to elevate them to destinations in their own right. This decision gives retailers a better means to protect that investment, as it brings some clarity to the requirements for the copyright protection of such designs as architectural works.

In this sense, the Italian Supreme Court’s interpretation of Cofemel is in line with Intellectual Property Enterprise Court’s approach in Response Clothing Limited v The Edinburgh Woollen Mill Limited [2020] EWHC 148 (see here), the first UK decision applying the CJEU’s ruling.

The Supreme Court decision also addressed the issue of overlapping intellectual property rights. In particular, the Court reiterated the CJEU’s observations in Cofemel that protection reserved for industrial designs and the protection ensured by copyright are not mutually exclusive but can overlap and afford protection to different aspects of the same work, where the criteria for each right are met.

Further, while assessing Wycon’s reference to Apple (case C-421/13), the Supreme Court reinforced what the CJEU had previously acknowledged, that a store layout can, in principle, be registered as a trade mark if it has distinctive character: that is to say that the layout is able to distinguish the goods and services of the applicant, which may be the case if the layout departs significantly from the norm or customs of the economic sector concerned. The Supreme Court also clarified that the distinctive character of a trade mark must be assessed in relation to the perception of the final consumer, and the fact that a mark has distinctive character does not necessarily endow it with the creativity required to attract copyright protection, and vice-versa. For this reason, although Kiko’s store layout had been refused trade mark protection by the EUIPO, the Italian Supreme Court could find that the same design was protected by copyright.

Currently existing CJEU decisions (like Cofemel and Apple) continue to bind the UK courts in accordance with the Withdrawal Agreement. It is not yet clear to what extent (if any) CJEU decisions will be binding on UK courts after 31 December 2020 when the current transitional arrangements are due to expire, and if there will be any divergence in the UK and EU approach to trade mark and copyright protection for designs. In the meantime, UK retailers should bear in mind that the design and layout of their retail stores may be protectable as part of their wider brands, with different IP rights affording a potential basis to enforce against copycat stores.