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Nestle's four-fingered setback

The UK High Court has issued its decision on the long running dispute between Nestlé and Cadbury over the registrability of the 3D shape of the four-fingered KitKat.

Background

Cadbury successfully opposed Nestlé’s original trade mark application on the basis that it lacked the distinctive character required to be registered as a trade mark. Following an appeal by Nestlé to the UK High Court, a number of questions were referred to the Court of Justice of the European Union (CJEU).

The key question referred to the CJEU related to the requirements for a trade mark to acquire distinctive character through use.The CJEU was asked whether, to establish acquired distinctiveness:

  • it is sufficient to prove that a significant proportion of the relevant class of persons associate the mark with the applicant; or 
  • whether the applicant must prove that a significant proportion of the relevant class of persons rely upon the mark as indicating the origin of the goods

The CJEU’s decision has been heavily criticised for not directly answering the question posed – especially by Arnold J. The CJEU confirmed that a trade mark can acquire distinctiveness provided that the relevant class of persons perceive the mark itself,as opposed to any other trade marks that might also be present, as the identifiable indication of origin of the source of the goods or services applied for. In other words, Nestlé must be able to show that the public recognises the shape in itself as originating from Nestlé.

High Court decision

Nestlé relied on a survey showing that 90% of people when shown a picture of the four-fingered chocolate bar (without any other trade marks present), mentioned KitKat. Arnold J held that this evidence only showed that consumers associated the shape of the chocolate bar with Nestlé and would rely on the other word and logo marks present to identify the trade origin of the goods. He confirmed that consumers must perceive the goods and services as originating from a particular undertaking because of the sign in question. Association alone was not sufficient to meet the necessary requirements for acquired distinctiveness. Nestlé’s application was therefore refused.

What next?

The threshold for acquired distinctiveness of shape marks has been set very high and arguably is more difficult where consumers are influenced by the brand name and packaging of a product rather than its shape alone. A registered trade mark would have given Nestlé a clear competitive edge and restricted the ability of other confectioners to make similarly shaped chocolate bars. 

The difficulty of registering shape marks was also recently considered in another decision by Arnold J concerning the registration of the shape of the traditional London taxi cab. The London Taxi Company issued proceedings against Metrocab, who have manufactured a new style taxi cab, for infringement of its UK and Community trade marks. Applying the CJEU’s reasoning in the KitKat case, Arnold J held the shape marks were devoid of inherent distinctive character and had not acquired distinctive character through use. 

There is no time to “Have a Break” yet though as Nestlé has confirmed that it will appeal the High Court’s ruling.

Contributor: Asima Rana

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at February 2016. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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