CJEU’s KitKat decision maintains high bar for proving acquired distinctiveness of shape marks

European Union
  • It is not sufficient to prove only that mark has acquired distinctiveness through use in significant part of EU
  • However, it is not necessary to prove that mark has acquired distinctiveness in each member state
  • Case will now return to EUIPO for another ruling on acquired distinctiveness

In Joined Cases C‑84/17 P, C‑85/17 P and C‑95/17 P (25 July 2018), the Court of Justice of the European Union (CJEU) has ruled that the European Union Intellectual Property Office (EUIPO) must re-examine whether Nestlé’s three-dimensional (3D) trademark for the shape of its four-fingered KitKat chocolate-covered biscuit bar had acquired distinctiveness.

Background

In 2002 Nestlé applied to register as a 3D trademark the shape of its four-fingered KitKat chocolate-covered biscuit bar. The mark was registered for sweets, bakery products, pastries, biscuits, cakes and waffles in 2006.

In 2007 Cadbury (now part of Mondelez) applied for a declaration of invalidity in respect of all the goods covered by the trademark.

The mark was initially declared invalid by the Cancellation Division of the EUIPO in 2011, but this decision was annulled by the Board of Appeal in 2012. The Board of Appeal held that the mark had acquired distinctiveness in 10 EU member states (Denmark, Germany, Spain, France, Italy, the Netherlands, Austria, Finland, Sweden and the United Kingdom) and that this was sufficient for a finding that the mark had acquired distinctiveness throughout the European Union.

General Court decision

In 2016 the Board of Appeal’s decision was annulled by the General Court (Case T‑112/13). The General Court ruled that the Board of Appeal had erred in law in finding that the mark at issue had acquired distinctive character throughout the European Union, given that acquired distinctive had been proved only for part of the territory of the European Union. The General Court held that the Board of Appeal had not validly concluded its examination as it had not analysed the evidence adduced in four other EU member states (Belgium, Ireland, Greece and Portugal) and ruled on the relevant public’s perception of the mark in those member states.

Nestlé, Mondelez and the EUIPO all appealed to the CJEU against the judgment of the General Court. Mondelez’s appeal was against the General Court’s decision to uphold the Board of Appeal’s finding that the mark had acquired distinctiveness in 10 EU member states. Nestlé and the EUIPO appeal was against the General Court’s decision that the proprietor of an EU trademark must show that a trademark has acquired distinctive character through use in each member state.

CJEU decision

The CJEU rejected Mondelez’s appeal as inadmissible, as it only asked that certain grounds of the judgment under appeal be amended and did not seek to have the operative part of the judgment set aside.

In relation to Nestlé and the EUIPO appeal, the CJEU held that in order to register a mark that is devoid of distinctive character throughout all EU member states, it is not sufficient to prove only that the mark has acquired distinctive character through use in a significant part of the European Union. The evidence submitted must be capable of establishing acquired distinctiveness throughout the European Union.  

However, this does not mean that it is necessary for a proprietor to submit evidence that the mark has acquired distinctiveness in respect of each member state. By way of example, the CJEU said that a proprietor may be able to show that it has grouped several member states together in the same distribution network and treated those member states as if they were one and the same national market or that, due to a geographic, cultural or linguistic proximity between two member states, the relevant public of the first has a sufficient knowledge of the products and services that are present on the national market of the second. In such circumstances, it is likely that the evidence for the use of a mark within that cross-border market would be relevant for all of the member states concerned.

The case will now return to the EUIPO for another ruling on acquired distinctiveness, which will likely focus on the evidence adduced in the four EU member states (Belgium, Ireland, Greece and Portugal) and the relevant public’s perception of the mark in those member states.

Comment

The CJEU’s decision provides some good news for brand owners as it confirms that it may not be necessary for a proprietor to submit evidence that the mark has acquired distinctiveness in respect of each member state - a time-consuming and expensive task. However, in circumstances where a brand owner wishes to argue that evidence of the use of a mark within a cross-border market is relevant for all of the member states concerned, it will need to clearly explain and submit evidence to demonstrate why that is the case. By way of example, Nestlé had argued before the EUIPO that television advertisements shown in the United Kingdom should also be taken into account in assessing whether the mark had acquired distinctiveness in Ireland. However, the EUIPO held that, as Nestlé had not submitted any figures demonstrating Irish viewers’ access to UK television etc, any acceptance of such evidence would have been based on a mere assumption.

With this in mind, it will likely continue to prove difficult to register a shape mark that is devoid of distinctive character as an EU trademark on the basis that the mark has acquired distinctive character through use throughout the European Union.

Nick Bolter and Martin Henshall, Cooley (UK) LLP, London

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