It's shaping up to be a difficult time for Nestlé
In Société des Produits Nestlé SA v Cadbury UK Ltd (Case C-215/14), the advocate general for the Court of Justice of the European Union (ECJ) has recommended that the English courts reject Nestlé’s attempts to protect the ‘four-finger’ design of the Kit Kat bar as a trademark.
This signals the latest development in an ongoing saga dating back to 2010, when Swiss-based food giant Nestlé sought to register the 'four-finger' shape as a three-dimensional UK trademark, covering various goods including chocolate products, chocolate confectionery, pastries, cakes and biscuits in Class 30 of the Nice Classification. Cadbury, the other confectionery titan, opposed the application on numerous grounds.
The UK Intellectual Property Office (UKIPO) considered two issues in particular:
- Did the mark consist exclusively of the shape of the goods which was necessary to obtain a technical result (ie, did the shape assist in the product’s manufacture and facilitate the division and consumption of the goods)?
- Was the mark devoid of distinctive character and, if it did not have one in the first place, had it acquired same?
Taking into account Cadbury's technical functionality objections, as well as evidence from witnesses representing both parties under cross-examination of the functional aspect of the shape represented by the mark, the UKIPO concluded that consumers would perceive that:
“[t]he basic rectangular ‘slab’ shape is a shape which results from the nature of moulded chocolate bars or moulded chocolate biscuits sold in bar form and the presence of breaking grooves is a feature which is necessary to achieve a technical result."
The UKIPO found that the mark consisted of a functional shape and rejected Nestlé’s application (except for cakes and pastries), particularly as the product when sold was wrapped in such a way that the consumer did not see the shape until after they purchased it.
It also found the shape of the bar to be devoid of distinctiveness, as it was a shape commonly found for chocolate bars and biscuits. Nestlé adduced evidence from two surveys to prove that the mark had acquired distinctiveness through use. Unconvinced, the UKIPO concluded that:
“[consumers] associate the shape with Kit Kat (and therefore with Nestlé), but no more than that. Therefore, if it is necessary to show that consumers have come to rely on the shape mark in order to distinguish the trade source of the goods at issue, the claim of acquired distinctiveness fails.”
Nestlé appealed and in Société Des Produits Nestlé SA v Cadbury UK Ltd ( EWHC 16 (Ch)), the English High Court, acknowledging that, in principle, European trademark law permitted the shape of a product to be registered as a trademark, sought clarification from the ECJ on a number of aspects which it deemed unclear namely:
"1. In order to establish that a trademark has acquired a distinctive character... is it sufficient for the applicant... to prove that at the relevant date a significant proportion of the relevant class of persons recognise the mark and associate it with the applicant's goods in the sense that, if they were to be asked who marketed goods bearing that mark, they would identify the applicant; or must the applicant prove that a significant proportion of the relevant class of persons rely upon the mark (as opposed to any other trademarks which may also be present) as indicating the origin of the goods?
"2. Where a shape consists of three essential features, one of which results from the nature of the goods themselves and two of which are necessary to obtain a technical result, is registration of that shape as a trademark precluded by Article 3(1)(e)(i) and/or (ii) of Directive 2008/95/EC?
3. Should Article 3(1)(e)(ii) of Directive 2008/95/EC be interpreted as precluding registration of shapes which are necessary to obtain a technical result with regard to the manner in which the goods are manufactured as opposed to the manner in which the goods function?"
Advocate General Wathelet found that mere recognition of a shape by the public is insufficient to prove distinctiveness of a trademark. The shape must act as a badge of trade origin. While he accepted that trademarks can achieve acquired distinctiveness through use, even when used in combination with other signs, he found that the shape had to independently act as a trademark in its own right, devoid of the other signs. In this instance, the public had to view the shape of the Kit Kat bar as a badge of trade origin, excluding the word mark KIT KAT or the packaging of the product.
He also held that, if any of the three key aspects of the shape of the bar resulted from the nature of the goods themselves or to achieve a technical result, and at least one of these grounds fully applies to the shape as a whole, registration should be denied. In addition, it was found that a shape which is necessary to obtain a technical result not only with regard to the manner in which the goods function, but also with regard to the manner in which they are manufactured, was precluded from registration.
Three-dimensional shapes are theoretically registrable as trademarks (although notoriously difficult to register in the United Kingdom) and it is noted that Kraft managed to successfully trademark the Toblerone prism shape before the Office for Harmonisation in the Internal Market. Indeed, Nestlé successfully registered the shape of its Kit Kat bar as a Community trademark before Cadbury appealed that decision, a matter which is presently before the ECJ.
The current opinion is reminiscent of the Lego case (2010), when the ECJ ruled that the Danish toy manufacturer could not trademark the shape and dimensions of its bricks. The European court continues to discourage manufacturers from seeking to perpetuate monopolies resulting from “technology” via trademarks.
The matter will now proceed to a final judgement by ECJ. The vast majority of opinions of the advocate general are followed by the court. Once the ECJ has given its final judgement, the case will go back to the English High Court for the decision on the UK trademark application.
Ironically, the four-finger Kit Kat, originally called Chocolate Crisp, was first sold in England in 1935. It subsequently became the Kit Kat Chocolate Crisp and after World War Two, just Kit Kat. Consequently, the shape preceded the name.
Sumi Nadarajah, FRKelly, Dublin and Belfast
Copyright © Law Business ResearchCompany Number: 03281866 VAT: GB 160 7529 10