Nestlé successfully enforces Kit Kat shape mark
In Société des Produits Nestlé SA v International Foodstuffs Co ((100/14)  ZASCA 187, November 27 2014), the Supreme Court of Appeal has granted Nestlé an interdict against Iffco for infringing its four-finger wafer shape and two-finger wafer shape trademark registrations.
Images of the Nestlé wafer shape marks and the Iffco four-finger wafer and two-finger wafer Break chocolate bars are depicted below.
Nestlé wafer shape marks:
Iffco Break bars:
The court considered the following issues:
whether Nestlé’s wafer shape marks were three-dimensional (3D) shapes of the chocolates themselves and therefore registrable;
whether the trapezoidal shape of Nestlé’s wafer shape marks was entirely a technical requirement, in which case is was not registrable; and
whether Iffco's Break bars amounted to infringement of Nestlé’s wafer shape marks.
With regards to the first issue, Iffco asserted that Nestlé initially sought to register pictorial devices placed on its packaging and not 3D shapes of the Kit Kat bars themselves. In addition, Iffco alleged that Nestlé had entered an endorsement (“the mark consists of the distinctive shape or appearance of the goods”) against its wafer shape marks after registration to transform the marks from device marks into shape marks.
Nestlé argued that its marks were applied for as shape marks and that this was visually apparent from the representations of the marks as filed. According to Nestlé, the endorsement clarified and confirmed the exclusivity claimed by Nestlé in the marks.
The court interpreted Nestlé’s trademark applications through the eyes of an ordinary consumer and the subjective views of the parties and those of their expert witnesses were irrelevant. The court determined that the representations of the marks as contained in the applications for registration by Nestlé would be perceived as two dimensional depictions of 3D shapes. The court established that addition of the endorsement by Nestlé after registration of the marks limited the marks to shape marks and did not amount to a substantial amendment of the marks and no prejudice or injury resulted.
Turning to the second issue, the court determined that the 'plinth' or 'apron' which formed the basis of the composite finger wafer shapes imported a distinctive appearance and aesthetic appeal to the products. The court established that the finger wafer shape did not grant Nestlé a monopoly over trapezoidal-shaped chocolate bars.
As to infringement, there was no evidence of actual confusion even though the parties’ products were sold side by side for over nine years. Nestlé submitted survey evidence showing that members of the public recognised the Nestlé wafer shape marks as the Nestlé Kit Kat bar. Nestlé also submitted evidence of a substantial reputation in its Kit Kat shape, which has been advertised in South Africa for over 50 years. This was long before Iffco entered the South African market.
The court determined that no significance could be attached to actual evidence of confusion. According to the court, there was a likelihood of confusion, as the shapes of the parties’ products were almost identical on first impression. The court determined that, once it was accepted that Nestlé enjoyed a reputation in the shapes, the shapes were distinctive and designated the origin of the proprietor.
Thus the court found that the Iffco’s wafer shape as depicted on the Break bar packaging and its 3D form would be perceived by customers as a source identifier, that is, a badge of origin of goods emanating from Nestlé. In addition, the court agreed with Nestlé that, as Iffco's sales rose, consumers would associate the Nestlé wafer shape marks with Iffco. The loss of the unique shape of Nestlé's Kit Kat bar as a distinctive attribute would lead to loss of advertising or selling power to Nestlé. Hence, Iffco’s Break bar was found to infringe on the Nestlé wafer shape marks.
Turning to use of the mark BREAK by Iffco, the court determined that this use was not likely to deceive or confuse consumers when compared to Nestlé’s HAVE A BREAK HAVE A KIT KAT trademark.
The court then dealt with Iffco's defences of acquiescence, waiver and estoppel rather swiftly. The court established that acquiescence was not part of South African law and that the conduct of Nestlé never unequivocally indicated a waiver of the rights held in its trademarks, nor did it amount to representations that action would not be taken. In this regard, Nestlé previously sent demands to Iffco, the parties litigated over the same issues in the United Arab Emirates and had several meetings to try and resolve their global disputes.
This decision is much welcome as it shows that owners of registered shape marks which enjoy a reputation can enforce their rights in South Africa.
Lita Miti-Qamata and Darren Olivier, Adams & Adams, Sandton
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