Article

Customer experience and IP

Protecting crucial aspects of an in-store experience against imitators.

July 20, 2008 by James Bickers — Editor, Networld Alliance

Shoppers setting foot in the Cincinnati-based superstore Jungle Jim's understandably feel the urge to reach for their cameras. Dubbed "a food lover's paradise," the store sprawls across six acres and is subdivided into more than a dozen colorful departments. Life-size fiberglass elephants and gorillas flank the entrance; the seafood department backs up to an indoor pond containing the live product; and a raised monorail whisks shoppers around the periphery of the store. The shelves groan under the weight of an immense variety of product, from thousands of different cheeses to 950 different hot sauces.

It's a singular experience, no doubt, but try to take a picture and one or more store employees will immediately approach and ask you to either stop what you're doing or leave the premises.

When asked why the store so fiercely works to keep photographers out of its aisles — even with a conspicuous press badge, this writer was stopped multiple times — a spokesperson said the company had worked hard on both its product assortment and its visual merchandising strategy, and didn't want to make it easy for competitors to imitate any aspects of it.

Such a policy may be well-intentioned, but it appears to do little if anything to protect a retailer's in-store experience.

"To me these policies seem anti-consumer, and do very little to protect intellectual property," said Jed Wakefield, a California-based intellectual property and commercial litigation attorney. "As a practical matter, competitors who want to photograph or record a video of your store can do so covertly, using hidden digital cameras. But the people openly taking photos in retail establishments are more likely to be customers."

What then should retailers do to protect the experience they've created from being imitated and hijacked? A number of legal options exist, along with some well-defined legal precedents.

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Copyright, trademark and "trade dress"

Portions of the in-store experience can be registered with the U.S. Copyright Office, such as photographs, illustrations, architectural elements and planograms. As for the text displayed in the store itself, intellectual property attorney Jonathan Kirsch said they can be protected under copyright provided they are long enough to constitute a "work of authorship."

"If the store design includes posters, wall placards or other displays that consist of a block of text, as opposed to just words or phrases, the text may be protected under the law of copyright," he said.

A more expansive set of protections exists under trademark law, specifically under the concept of "trade dress." Kirsch said trade dress is the totality of features that help a consumer distinguish one store from a competitor - that includes colors, décor, furnishings, wall coverings, display of merchandise, themes, interior designs and architectural features.

Trade dress applications for in-store experiences can be extensive and detailed, as in the case of a 2005 filing for the Shoe Carnival:

... a microphone stand featuring games on the periphery, large shoe replicas, a center aisle leading to a center circle and the microphone stand, a checkered design with circles for signage, staggered display racks, seating pods, neon lighting on the signage featuring "circus" lettering with the wording "Shoe Carnival," "Family Fun," "Name Brands" and "Lowest Prices," and department signage in "Bullhorn" style lettering.

Alternately, they can be simpler and more direct, as in Ikea's 2006 application for trademark protection for its color scheme:

... a combination of the colors blue and yellow used on the outside of the applicant's stores. The exterior is predominantly blue with yellow trim ...

Peter Sloane, a partner with New York-based Ostrolenk Faber Gerb & Soffen and one of the authors of the Shoe Carnival and Ikea applications, said the seminal case in trade dress protection for store design is Two Pesos, Inc. v. Taco Cabana, Inc., which went to the U.S. Supreme Court in 1992.

Taco Cabana, a San Antonio-based quick-serve restaurant chain, first filed suit against competitor Two Pesos in 1987, claiming the Houston-based company had copied its look and feel. Appeals raged for five years, but judgments in favor of Taco Cabana were upheld all the way to the highest court in the land, which said the company was able to protect its trade dress as:

... a festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors, paintings and murals. The patio includes interior and exterior areas with the interior patio capable of being sealed off from the outside patio by overhead garage doors. The stepped exterior of the building is a festive and vivid color scheme using top border paint and neon stripes. Bright awnings and umbrellas continue the theme.

Other notable examples of trade dress registrations include the McDonald's restaurant exterior, the exterior appearance and functionality of a Fotomat drive-up booth, and the "cow motif" of Gateway retail computer stores.

Interestingly, trade dress protection can also extend to customer service-oriented or "performance" aspects of the customer experience, such as the way a shopper is greeted when he enters the store. Washington D.C.-based attorney B. Brett Heavner points to the Peabody Hotel in Memphis, Tenn., which has registered its "morning duck walk," which consists of a red carpet being rolled out, followed by ducks appearing at an elevator, then marching across the lobby and into the pool.

"If any retailer has a greeting or other customer experience that is as unusual or unique as the Peabody duck walk, it could be protected and registered so long as consumers associated it solely with the retailer," he said.

Patents and retail design

Best practices for retail IP protection

Attorney B. Brett Heavner offers four tips for retailers planning protection for store look-and-feel:

1. Identify the combination of elements in the store design that the retailer believes are unique or unusual.

2. Use those elements uniformly and consistently in all stores.

3. Feature those elements in the store's advertising and promotional materials so that consumers will understand that they identify the retailer.

4. If possible, register the design elements as trade dress with the U.S. Patent and Trademark Office.

Certain aspects of the retail experience can also be protected under patent law. Wakefield said patent law grants exclusive rights to inventions that are "non-obvious and useful." That is, if a retailer develops a new way to deliver its service — perhaps through a physical device used in the store design — that retailer can apply for a patent on that delivery mechanism. This is referred to as a utility patent, an example of which is the 2004 patent awarded to Washington Mutual bank for a new store environment that included a concierge desk and a children's play area.

By contrast, design patents protect the ornamental design of functional items. Wakefield noted that Apple holds a patent on the glass staircase used in some of its retail stores, and Victoria's Secret holds a patent on its storefront design.

And certain aspects of a brand or an experience can be protected multiple times under different parts of the law. Heavner points out that the shape of a Coca-Cola bottle is protected both by a design patent and by trademark registration.

"The disadvantage of the design patent is that it only lasts for 14 years, and is limited to features of functional items," he said. Trade dress protection, on the other hand, can last forever, as long as the retailer continues to use the trade dress that was registered.