The Court of Appeal has recently upheld the decision of the High Court to not allow the registration of the well known four fingered KitKat chocolate bar shape to be registered as a 3D trademark in the United Kingdom.
This ruling was the latest twist in a decade-long dispute between Cadbury and Nestlé, the owner of KitKat.
Nestlé argued that the shape of the KitKat is so unique that it warrants formal protection by way of registration in the UK. Cadbury, on the other hand, argued that the shape lacks distinctive character and so registration of the shape is precluded by section 3(1) of the Trade Marks Act 1994. Nestlé’s counter argument to this is that the shape has acquired distinctive character through use prior to the date of application for registration.
When the challenge by Cadbury first came to light, the UK Intellectual Property Office (“IPO”) held that although consumers did associate the shape with KitKat, the word mark KITKAT and other words and pictorial marks were more likely to be the identifying factors for consumers. This was particularly so as the KITKAT mark is imprinted on each biscuit finger.
Nestlé appealed the decision of the IPO, and on appeal the High Court referred questions to the ECJ for a preliminary ruling. Based on the ECJ’s response, the High Court dismissed Nestlé’s appeal.
Nestlé again appealed to the Court of Appeal.
The Court of Appeal dismissed the appeal, holding that:
- in determining whether a mark (or shape as in this instance) has acquired distinctiveness, it would be sufficient to show that consumers had come to rely upon the mark as an indication of origin, but reliance was not a precondition. It was sufficient to establish that consumers had come to perceive the product designated by the mark as originating from a particular undertaking. Mere recognition and association of the mark with Nestlé’s product (KitKat), however, was not enough; and
- the ICO and High Court had not erred in their approach, and the ICO was entitled to reach the conclusion that it had on distinctiveness.
Whilst this decision of the Court of Appeal appears to be just another set back for Nestlé and a win for Cadbury in their long-running chocolate war, it demonstrates the difficulties of attempting to register a 3D shape mark as a trade mark, and in particular the difficulties of proving acquired distinctiveness of a 3D shape mark through use with another registered trade mark.
One of the judges gave an analogy of a supermarket basket of unwrapped and otherwise unmarked chocolate bars with the key question being whether the consumer would perceive the bars in the basket as originating from Nestlé and not from others. The existence of the Norwegian “Kvikk Lunsj” chocolate bar, which is a four-fingered chocolate bar with a striking resemblance to the KitKat, would serve to demonstrate this analogy in practice. On the facts in this case, the ICO found that consumers would associate the shape with KitKat, but would not see it as a badge of origin, which is a pre-requisite to registration.
The decision of the Court of Appeal appears in part to have been due to the limited amount of evidence that the shape mark has been used as a trade mark by Nestlé. The judges’ analysis of the test to be applied means it is possible to establish acquired distinctiveness without showing that consumers have, in fact, come to rely on the mark as an indication of origin, and that it can be enough to show that consumers have come to perceive the product designated by the mark as originating from a particular undertaking. However, in practice this may be difficult to establish without considerable evidence.
In stark contracts to the late 1990s when 3D marks were registered with ease, the current practices show that it is likely to be an uphill struggle for applicants to secure registration of a 3D shape mark through use with another registered trade mark. This case highlights that the courts are particularly cautious when it comes to determining what constitutes a registrable 3D shape mark, because, once granted, such a mark will give the trade mark owner a monopoly on that shape, and one that will generally not be subject to the test of likelihood of confusion if third parties are using an identical shape.
It is not known at this stage whether Nestlé will appeal the decision, but they may want to “Have a Break” and reconsider whether this is worth the fight. Notably Nestlé has not attempted to register the two-fingered KitKat bar.
If you have any trade mark queries or other intellectual property matters do get in touch with one of the team.