Is there any chocolate bar more recognizable than the KitKat? Maybe, but that does not make it special according to the recent decision from the Court of Justice of the European Union (“CJEU”) in Société des Produits Nestlé SA v Cadbury UK Ltd [Nestlé]. Nestlé has produced the KitKat chocolate bar for over 80 years. In 2010, the company filed an application to register the 3-D shape as a trademark. The Trade Marks Registry of the United Kingdom Intellectual Property Office (“UKIPO”) initially registered the mark. Cadbury filed an objection to that application. In June 2013, the examiner of the UKIPO found the shape of the proposed trademark devoid of inherent distinctive character and that it had not acquired that character from the use that had been made out of it.
In its appeal, Nestlé sought to use the recognisability of its product to show that it had acquired a distinctive character. On appeal the case was referred by the UK Court to the Court of Justice of the European Union to decide three separate issues:
- whether the trademark had acquired distinctive character following the use that had been made out of it;
- whether the three essential features of the KitKat—one which derives from the nature of the goods themselves and two which are necessary to obtain a technical result—are precluded from registration by UK and EU law; and,
- whether the EU provisions should be interpreted as precluding the registration of shapes that are necessary to obtain a technical result.
The distinctive character of the KitKat bar could not be confirmed merely because of its recognisability. The definition of a trademark in the EU is “any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings”. Additionally, the registration of a trademark cannot be rejected if “before the date of application for registration and following the use which has been made of it, it has acquired a distinctive character”. The Trade Marks Act in the UK contains an almost identical provision. To satisfy these requirements Nestlé relied on a survey in which over 90% of those surveyed identified the four-finger shape as a KitKat. The premise was that KitKat had acquired a distinctive character through its use over time. This strategy failed.
The shape of a KitKat can be reduced to three features: the rectangular slab shape, the grooves between the four fingers, and the number of grooves. The first feature was given little consideration by the Court because most chocolate bars are rectangular slabs. Both the second and third features were assessed as existing in order to obtain a technical result – separating the four rectangular slabs – and so were considered as a means to an end and not the end itself.
Nestlé’s strategy was peripheral rather than direct. The strategy of using the recognisability of the bar using survey evidence failed to address the problems that the court identified. Nestlé failed to show that members of the public could separate the shape of the bar from the logo embossed onto it or the packaging associated with it.
Following the decision in Nestlé, businesses should consider whether their products have features that result from the nature of their goods or are necessary to obtaining a technical result. Failing to successfully register a trademark can be costly. Competitors and other interested parties often bring challenges to these sorts of applications. From a policy perspective, the ruling is intended to prevent the monopolization of the features related to a shape.
The decision is not entirely dissatisfying for Nestlé, who was concerned that the CJEU might confirm an opinion written by the Advocate General of the UK High Court. In that opinion Advocate General Wathelet denied the trademark to Nestlé and—further than the CJEU—required the shape of the proposed trademark to be distinguished from goods with different commercial origins.
The CJEU did agree, however, that the trademark for which the application was brought was “capable of fulfilling the function of identifying the origin of the goods by itself”. In other words, the CJEU took the 10% of respondents who saw the four-fingered shape as something other than a KitKat as a very significant group. For a 3-D product, however, the recognisability of the proposed trademark is not enough for the product to acquire a distinctive character. In January of 2016, the case was heard in the UK High Court of Justice, Chancery Division. After an exhaustive review of the CJEU decision as well as British case law, Nestlé’s application was dismissed.
In 2014, Canadian Parliament passed Bill C-31 which made significant amendments to our Trade-marks Act [the Act]. In particular was an amendment to Section 32 of the Act. The amendment, expected to come into force sometime in 2016, allows a 3-D trademark to be registered where that trademark is distinctive at the filing date of the application. The Nestlé decision will likely be persuasive in Canadian jurisprudence given the similarity between the UK and Canadian provisions.
Quin Gilbert-Walters is an IPilogue Editor and a JD Candiate at Osgoode Hall Law School. He also works as a Research Assistant at the Canadian Forum on Civil Justice.