ECJ refuses Nestlé a break, but will it taste victory back in the UK?

The European Court of Justice (“ECJ”) has recently failed to swallow Nestle’s legal arguments in its long standing battle to get a registered trade mark for the shape of its KitKat chocolate bar.

The First Chamber of the ECJ handed down its judgement last week in the case of Societe des Produits Nestle v Cadbury UK Limited (Case C-215/14) in which it considered that the shape of the KitKat bar lacked distinctiveness. Nestle has one more chance to catch a break as the case has been referred back to the High Court of England and Wales for a final decision.

Five years ago, Nestle applied to register its KitKat four fingered bar (pictured below) in the UK as a shape trade mark for various chocolate related goods in class 30.

The application was accepted and published on the basis that it had acquired distinctiveness as Nestle’s trade mark through its use. Cadbury opposed the application on several grounds including lack of distinctiveness and that the shape resulted from the nature of the goods themselves and was necessary for a technical result (i.e. for the fingers to break apart). After having its application rejected by the UK Intellectual Property Office in respect of all the goods applied for except cakes and pastries, Nestle appealed to the High Court who referred several questions to the European Court of Justice.

The first question was whether it was sufficient that a significant portion of the relevant class of consumers recognised the goods as the applicant’s in the sense they could identify the applicant when asked. Several English courts and the UK Intellectual Property Office had held that it must be established that a significant portion of the relevant class of people had relied upon the mark as indicating the origin of the goods.

On this issue, the ECJ gave its opinion in June 2015 that mere recognition by the public was not sufficient to show that the mark had acquired distinctiveness – Nestle had to show that the shape mark alone identified the trader from whom the goods originate and not any other trade mark present such as the KitKat logo on the product. They agreed that mere recognition by the public is not enough to prove acquired distinctiveness but did not go so far as to say that the public needed to “rely” on the shape.

The second question related to the number of criteria that were required to refuse a trade mark application if a shape contained features resulting from the nature of the goods and features which were necessary for a technical result. Unsurprisingly, only one criteria had to be met for the shape to be refused registration.

Finally, the ECJ had to consider whether the prohibition under European law on registration of shapes which are necessary to obtain a technical result included the way the goods were manufactured as well as their function. The ECJ found that the exclusion on registration applied only where the shape was dictated by the function of the product and not an inevitable result of the manufacturing process.

The UK High Court will now apply the findings from the ECJ decision to the facts of the case. The key issue is whether consumers associate the shape alone, without any embossed KitKat logo on the fingers of the chocolate bar, with Nestle exclusively. Nestle will be hoping that its consumer survey, showing over 90% of its survey sample identified the KitKat shape as originating from Nestle, will be palatable to Justice Arnold. Whether they will taste victory remains to be seen.
POINTS FOR NEW ZEALAND
• In New Zealand, Nestle failed to obtain registrations of its two finger and four finger bars, also on the grounds that they were not capable of distinguishing Nestle’s goods and largely because they were packaged in a foil wrapper which did not indicate the bars’ shape. Whittaker was awarded a registration for the shape of its SANTE bar which was considered to have acquired distinctiveness. A major factor in that decision was fact that the packaging hugged the SANTE bar shape and it has been sold unwrapped for 55 years.
• Supermarket retailers may wish to consider a shape trade mark for products with a very distinctive shape by which consumers may recognise it. Significant evidence, including consumer surveys will be needed to demonstrate that the shape has “acquired distinctiveness” irrespective of any word or logo marks it features. A trade mark for a distinctive shape could add value to a trade mark portfolio made up of word and logo marks.

Sophie Thoreau 

Senior Associate, Baldwins Intellectual Property