Microsoft And The Amazing Technicolor Trade Dress Infringement

"Good artists copy.  Great artists steal." - Steve Jobs

By that logic, the boys in Redmond are pretty great.  A few weeks ago, I was walking through the Prudential Center in Boston and came across the newly opened Microsoft Retail Store.  If you've seen one, then you probably thought the same thing I did: they totally ripped off the Apple Store!  Here's a picture I took the other day:

And for comparison's sake, here's a picture of the Apple Store I worked at three years ago:

Aside from the visual similarities to the store exteriors, both include well-lit, spartan layouts with wooden tables featuring hands-on product displays.  Both stores are divided by product type: MP3 players, smart phones, tablets, laptops, desktops, accessories. They both feature Genius bars where customers can get immediate tech assistance.  Employees in both stores wear brightly colored T-shirts and lanyards, and walk around with touchscreen tablets to ring up customers.  While Microsoft's store is generally more colorful inside, the design language is obviously Apple's.

"Why hasn't Apple sued them into oblivion?" I thought.  [I must admit a little bias and outrage since I'm a rabid Apple partisan]. The resemblance between the stores was uncanny.  Curiosity compelled me to look into it and this is what I found: Microsoft can get away with ripping off Apple because no one is walking into a Microsoft Store to buy Apple products.

You see, U.S. Trademark Law protects something called "trade dress" which is defined as "the total image or overall design or appearance of a product or its packaging."  Trade dress also includes design and layout of a retail space or restaurant.  In an effort to protect its store designs from theft, Apple registered those designs with the United States Patent and Trademark Office (USPTO).  This past May, the USPTO approved Apple's registration; you can see those documents here.  In response, Microsoft filed an objection to that registration, claiming that Apple's store designs aren't distinct enough to be protectable (so we may actually see a fight over this issue soon).

The distinctiveness issue aside, you can understand why Apple would want to prevent Microsoft from using its store designs.  But if Apple sues Microsoft for trade dress infringement, Apple will lose.  That's because Apple can only prevail by showing, among other things, that the Microsoft Store is so similar that people are likely to get confused and walk in thinking it's an Apple Store.  Frankly, that's a losing argument for the following reason.

In a trade dress infringement case, courts can weigh a variety of factors on the confusion issue, including the relationship between the brands in the minds of the consumers.  In this case, Apple and Microsoft are two of the largest corporations in the world (Apple just passed Microsoft as the world's biggest company as measured by stock market value).  Both companies were founded by men who are/were world-famous geniuses.  People are aware that the two companies are in direct competition with one another and know the Apple logo the same way they recognize the Disney logo, the Coca-Cola logo, or the Superman emblem.  Apple is the world leader in electronics sales, specifically when it comes to the iPod (which revolutionized the MP3 player market) and touchscreen devices like the iPad and iPhone - Last quarter alone, Apple sold 17 million iPads and 2 million iPhone 5's... and the phone hasn't even been released yet!  These devices are synonymous with Apple.  Furthermore, Apple's entire line of notebooks and desktops contain the same well-known design scheme, aluminum casing with black accents and a glowing Apple logo.  By the same token, the public recognizes Microsoft's logo from daily use, since 95% of the world's computers run its Windows operating system.  Nearly every business in the world uses Microsoft Word and Excel.  Microsoft is also the creator of the Xbox 360, one of the most successful video game consoles of all time.

If someone did walk into a Microsoft Store looking for an Apple product, they would immediately discover that they were in the wrong place due to the absence of Apple's logo and dearth of Apple products.  Based on these facts, I think Apple is in no danger of losing sales to Microsoft just because the stores look the same.  That is, after all, the whole point of suing for trade dress infringement... that someone has purposely confused the customer in order to draw sales away from the trade dress owner.

In short, the public knows who Apple and Microsoft are, and no one's mistaking one for the other.  Because the likelihood of confusion between the stores is negligible, it's no shock that Apple hasn't commenced a lawsuit against Microsoft.  Microsoft made its retail store plans public back in 2009, and while I wouldn't completely rule out a legal fight over this at some point, I think Apple knows it doesn't have much of a leg to stand on.

[Author's Note: I dramatically over-simplified the trade dress analysis for a few reasons.  First, for the sake of brevity; second, because it can get extremely convoluted and you probably don't care that much; and third, because at the end of the day I truly believe that this case would hinge on the confusion issue.  Of course, if there are any trademark lawyers out there who take issue with my analysis, please feel free to tell me why I got it wrong!]