The Battle Of The Chocolate Bars

High Court thwarts Nestlé’s attempt to trade mark the shape of its KitKat bars

20.01.2016

Kate Rawlings, Press Officer | 0114 274 4238
Chocolate Bar

Chocolate Bar

Almost 6 years ago Nestlé made an application to the UK Trade Mark Office to register the shape of its four-finger KitKat bar as a three-dimensional trade mark.  Rival Cadbury opposed Nestlé’s application on the grounds it lacked one of the requirements for registration, namely distinctive character.  This was not a surprise to many in the industry, given Nestlé had already sought to block Cadbury’s trade mark application.

Since then, the application has been refused at the UK Intellectual Property Office, appealed to the High Court, and referred to the Justice of the European Union (CJEU) before coming back to the High Court for final determination. 

Yesterday, Mr Justice Arnold ruled that Nestlé’s application was not capable of registration as a trade mark as it had not acquired distinctive character.

Mr Justice Arnold said that the CJEU had not answered a question he had asked sufficiently and whilst it was tempting to refer the question initially raised by the High Court again, he did not think it would yield a materially different result so far as his decision was concerned.

Mr Justice Arnold had posed three questions to the CJEU which involved the interpretation of European law that was unclear, and which informed whether Nestlé’s trade mark application should be allowed to proceed to registration.

The questions posed by Mr Justice Arnold and the responses given by the CJEU can be summarised as follows:

  1. Q when determining distinctive character, is it sufficient for the applicant to prove that a significant proportion of ‘relevant’ people associate the mark with the applicant?

    A: An applicant must prove that the “relevant class of persons” perceives the goods or services as being designated exclusively by the applied-for mark, as opposed to any other mark which might also be present (in this case meaning the shape of the KitKat bar must be disassociated from the KitKat name and packaging).

  2. Q If a shape has three essential features, two of which are necessary to obtain a technical result, should trade mark registration be denied?

    A: The Trade Mark directive precludes the registration of a shape containing three essential features, “one of which results from the nature of the goods themselves and two of which are necessary to obtain a technical result”.

  3. Q In relation to the Trade Mark Directive, should this be interpreted as preventing registration of shapes that are necessary to obtain a technical result?

    A: Legislation barring 3D trade mark registration refers only to “the manner in which the goods at issue function and it does not apply to the manner in which the goods are manufactured”.

Mr Justice Arnold said that the answers to questions two and three had been accepted by both parties, but that they disagreed on the effect of the court’s answer to question one concerning acquired distinctiveness. As a result, the judgment only referred to acquired distinctiveness. 

Mr Justice Arnold made an interesting comment at the end of his decision, referring to the Hearing Officer’s decision at the UK Intellectual Property Office that there was likely to have been a number of similarly shaped products produced by others and on the market in the years leading up to Nestlé’s application with no evidence showing that consumers thought that those other products were KitKat products.

This could be seen as the green light to any competitors who might like to produce a similar shaped bar.

Speaking after the ruling, a spokesman from Nestlé said: “KitKat is much loved and the iconic shape of the four-finger bar, which has been used in the UK for more than 80 years, is well known by consumers.

“We believe the shape deserves to be protected as a trade mark in the UK and are disappointed that the court did not agree on this occasion. We are taking the necessary steps to appeal this judgment.”

Expert Opinion
Despite the judge having certain misgivings about the way in which the European court interpreted his referring question, he nevertheless agreed with the position that in order for a trade mark to be granted, it must be shown that a significant proportion of the public would rely on the shape as opposed to any other trade mark (here, the KitKat name, logo or outer packaging), and that Nestlé had not done this.

Nestlé has said it will appeal the decision. In the highly competitive arena of consumer goods, the shape of a product can be a market differentiator and a way of distinguishing your product from that of another brand. This decision illustrates the difficulty of securing trade mark protection for shapes, even where the shape in question has exceptional recognition amongst consumers. In this case, 90% of survey respondents mentioned the KitKat brand when shown a picture of a four-fingered chocolate bar, but this was not enough to grant Nestlé a monopoly over the four-finger shape.

This could result in competitors producing similar shaped products. They would need to avoid using any other KitKat related trade marks otherwise they may face claims of trade mark infringement and/or passing off. However, in light of this decision, using a similar shaped product alone but with different branding and a name could be enough to get away with it.

This is not the end of this case; it is likely to go on for at least a couple more years. Nestlé is likely to appeal, if the case goes to the Court of Appeal, further questions may be referred back to the European Court of Justice in light of Mr Justice Arnold’s misgivings. If a higher Court eventually agrees that Nestlé’s application can proceed to registration, then anyone who has embarked on using an identical or similar bar may find itself in trouble.
Georgie Collins, Partner