Supreme Court upholds Kit Kat Pop Choc block

In Nestlé Schweiz AG v Masterfoods AG (Case 4P.222/2006/len, December 21 2006), the Swiss Supreme Court has upheld the Commercial Court of the Canton of Aargau's decision to grant provisional remedies prohibiting Nestlé Schweiz AG from selling chocolate products under the trademark KIT KAT POP CHOC.

Masterfoods AG, which owns Swiss registrations in relation to its Maltesers chocolate products, filed a civil action with the court in Aargau to obtain provisional measures to prohibit Nestlé from producing, selling, stocking or putting into circulation in any other way chocolate products under the trademark KIT KAT POP CHOC. Masterfoods argued that the packaging of the Nestlé Kit Kat Pop Choc products created a risk of confusion with the packaging and trademarks of its own Maltesers products.

The Aargau court granted Masterfoods' request for preliminary measures. Even though there were different brand names indicated on the packaging of the two products, the court held that the intended distribution of Nestlé's Kit Kat Pop Choc products created an indirect risk of confusion pursuant to Articles 2 and 3(d) of the Swiss Unfair Competition Act (UCA).

Nestlé appealed the decision to the Supreme Court, claiming arbitrariness of the decision and accordingly a violation of Article 9 of the Federal Constitution. Nestlé argued that there was no risk of confusion because only non-distinctive elements of the two products' packaging were similar. Furthermore, Nestlé emphasized that the public would consider the mark MALTESERS as the most dominant element of Masterfoods' product's packaging. Nestlé claimed that the Aargau court had neglected these main arguments and by doing so had gravely violated the principles of the law of distinctive signs, and applied Article 3(d) of the UCA without foundation.

The Supreme Court upheld the decision of the Aargau court, stating that a risk of confusion with regard to the trade dress of goods under the principles of unfair competition law had to be judged in view of the packaging as a whole. In other words, an examination of a product's trade dress has to include an analysis of all the relevant signs and elements in their specific combination and not individually. Furthermore, the Supreme Court stated that the Aargau court had considered the effect of the MALTESERS word mark, but had considered it in light of an indirect risk of confusion.

For analysis of the decision of the Aargau court, see Trade dress infringement finding prevents launch of Nestlé's product.

Mario Strebel, Meyer Lustenberger, Zurich