Mars loses Bounty shape mark case

Mars applied to register the shape of its Bounty bar as a CTM in 1998. The application was initially refused on the grounds that the mark lacked inherent distinctive character. Mars filed evidence of distinctiveness acquired through use and, in 2003, the mark proceeded to registration under Article 7(3) of the Community Trademark Regulation (40/94). 

In December 2003 Ludwig Schokolade GmbH Co KG, a manufacturer of chocolate bars for the private label market, filed an application for a declaration of invalidity in relation to the registration. In August 2006 the Cancellation Division of OHIM rejected Ludwig's application. It held that while the mark was devoid of any inherent distinctive character, Mars's evidence was sufficient to prove that:

Ludwig appealed. The Second Board of Appeal of OHIM upheld the Cancellation Division's finding that the mark was devoid of inherent distinctive character. However, it disagreed with the Cancellation Division on the issue of acquired distinctiveness, holding that Mars's evidence had failed to establish that the mark had acquired distinctiveness throughout the European Union as a whole.

Mars appealed to the CFI, arguing that the substantial evidence filed in support of the registration was sufficient to justify a finding of acquired distinctiveness under Article 7(3). In particular, Mars argued that:

Accordingly, while its evidence (which included consumer surveys, witness statements from members of the trade and public, and advertising and packaging examples) was primarily directed to six member states, Mars argued that those jurisdictions made up around 85% of the total EU market for chocolate confectionery and over 70% of the European Union by population. According to Mars, this ought to suffice to demonstrate that the mark had acquired distinctive character under Article 7(3). Alternatively, Mars argued that the evidence filed in relation to those jurisdictions could reasonably be extrapolated to the remaining member states. 

The CFI rejected Mars's appeal. It held that the Board of Appeal had been right to approach the issue of acquired distinctiveness for each member state separately, in line with its earlier decision in Glaverbel II (for further details please see "Glass texture has not acquired distinctive character, says CFI"). Further, the CFI refused to extrapolate the data for the six member states to the remaining markets.

It remains to be seen whether the country-by-country approach of the CFI to the assessment of evidence of acquired distinctiveness is ultimately endorsed by the European Court of Justice. With currently 27 EU member states, requiring CTM applicants to prove acquired distinctiveness in each individual national market rather than across the European Union as a whole is likely to make it very difficult for owners of non-traditional trademarks, such as shapes and colours, to secure registration of their marks as CTMs. The issue is, therefore, one of considerable significance for brand owners.