Court gives Nestlé appeal the finger in long-awaited KitKat shape mark decision

  • CJEU dismisses appeals in four-finger KitKat case, EUIPO to reconsider protection
  • For registration, a sign must have distinctive character throughout the EU
  • Experts say decision illustrates challenge in obtaining shape mark protection

The Court of Justice of the European Union (CJEU) has dismissed appeals brought in the high-profile four-finger KitKat case, ruling that the EUIPO must reconsider whether the three-dimensional shape can be retained as an EU trademark. Reacting to the decision, industry experts note that it highlights the significant challenges that brands must overcome to obtain EU-wide protection for shape marks.

Today’s decision in Mondelez UK Holdings & Services v EUIPO (joined cases C‑84/17 P, C‑85/17 P and C‑95/17 P) is the latest in a long-running battle over a mark first registered in 2006. In 2012, when deciding on an invalidity action, the EUIPO took the view that Nestlé’s three-dimensional sign for the ‘KitKat fingers’ had acquired distinctive character through the use made of it in the EU. However, on 15 December 2016, the General Court annulled that decision, finding that such acquisition had been proved only for part of the territory of the EU.

The decision was appealed, with Nestlé and EUIPO submitting that the court was wrong to hold that the proprietor of an EU trademark must show that it has acquired distinctive character through use in each of the Member States separately, arguing that this is incompatible with the unitary character of the European trademark and the existence of a single market.

On 19 April 2018, the advocate general issued an opinion, stating that account must be taken of the geographical size and the distribution of the regions in which acquired distinctive character has been positively established, in order to ensure that the evidence from which an extrapolation is made for the whole of the European Union relates to a quantitatively and geographically representative sample. In this case he observed that, while Nestlé provided market research for a number of member states, the information provided for Belgium, Ireland, Greece and Portugal was not sufficient to establish that the relevant public in those countries identified Nestlé as the commercial origin of the product covered by the trademark at issue. His conclusion was that the General Court had to annul EUIPO’s decision and that the court should dismiss the appeals.

Today the court did just that. On the wider question, it pointed to case law illustrating that a sign without inherent distinctive character can be registered as an EU trademark only if it is proved that it has acquired distinctive character in the part of the EU in which it did not previously have such character. Such a part may be comprised of a single Member State but the court also noted that the regulation does not require that the acquisition of distinctive character through use be established by separate evidence in each individual Member State (for example, if an economic operator has grouped a number of Member States into one distribution network and treated the respective states as if they were ‘one market’, the evidence for the use of a sign within such a cross-border market is likely to be relevant for all Member States concerned).

However, the CJEU concluded that the evidence submitted must be capable of establishing such acquisition throughout the Member States of the EU in which that mark was devoid of inherent distinctive character. Therefore, it upheld the General Court judgment, noting that, given the unitary character of the EU trademark, in order to be accepted for registration, a sign must have distinctive character throughout the EU. As the EUIPO had not adjudicated on whether the mark had acquired distinctive character in Belgium, Ireland, Greece and Portugal, the CJEU found that the General Court was right to annul its decision.

Media headlines are proclaiming that KitKat has lost its trademark protection, although in first instance, notes Claire Lehr, partner and head of trademarks at EIP Europe, “the EUIPO must again consider whether the four-finger bar is sufficiently distinctive such that a consumer would automatically recognise it as a KitKat – without the words, logo or wrapper”. However, she adds that it will now “likely lose its EU trademark, although it may not have been such a surprise since the UK courts have already found that the four-finger shape was not distinctive”.

Lehr suggests that it is not impossible obtain protection for shape marks for confectionary products, highlighting Toblerone and Nestlé’s Walnut Whip as instances where this has been achieved, but notes that the decision does illustrate how difficult it can be for manufacturers aiming for such rights.

Alex Borthwick, of counsel Powell Gilbert, concurs, concluding: “It is difficult to demonstrate acquired distinctiveness for a shape mark as consumers are assumed not to view product shape as a badge of origin. In this case, Nestlé had overcome this hurdle in the EU case for many member states. [However] Nestlé’s difficulty in the EU case arose from the court’s requirement that acquired distinctiveness is demonstrated across the EU. Today’s ruling therefore demonstrates the challenge of showing acquired distinctiveness for EU trademarks, particularly for shape marks.”

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