Intellectual Property Update: No Break for Kit Kat as Cadbury Wins Again
11 July 2017
In May 2017, the UK Court of Appeal ruled that Nestlé‘s 3D shape mark for the four-fingered Kit Kat product cannot be registered in the UK. This is despite the fact it has been previously registered in a number of countries worldwide. We look at the key issues for food companies in light of this decision.
This chain of trade mark litigation commenced in January 2011 when Cadbury UK Limited (‘Cadbury’) first opposed the Société des Produits Nestlé SA (“Nestlé”) 3D trade mark application. In order for a trade mark to be successfully registered, it must possess distinctive character. In the absence of what is known as “inherent distinctive character”, it can be acquired. For example, Weetabix Limited successfully registered a 3D European trade mark for the Weetabix breakfast cereal due the distinctiveness it had acquired since it was first sold in the UK in 1932. The test for what constitutes acquired distinctive character has been the subject of much debate throughout this litigation.
Cadbury UK Limited opposed the application on a number of grounds including the alleged lack of distinctiveness of the mark. Nestlé argued that the mark had acquired distinctive character as a result of use prior to the application date. In 2013, the UK Intellectual Property Office held that the mark could be registered but only in respect of cakes and pastries, a decision which was appealed by both parties to the High Court.
In January 2014, the case was heard by Mr Justice Arnold of the UK High Court, who referred three questions to the Court of Justice of the European Union (the "CJEU"), one of which related to acquired distinctiveness. The CJEU delivered its judgment in September 2015. Our analysis of this judgment can be found here. In essence, the CJEU determined that, in order to prove acquired distinctiveness, “the trade mark applicant must prove that the relevant class of persons perceive the goods or services designated exclusively by the mark applied for, as opposed to any other mark which might also be present, as originating from a particular company." The matter returned before Mr Justice Arnold who dismissed the appeal in January 2016 and held that the hearing officer of the UK IPO was correct in finding that the mark has not acquired distinctive character. However, the Court also overturned the finding of distinctive character in relation to cakes and pastries. This meant that the mark could not be registered in respect of any goods or service.
Nestlé appealed the decision to the UK Court of Appeal on the grounds that the mark was distinctive as it was capable of being correctly identified by consumers at the date of application. In addition, evidence was produced which established that the four-finger Kit Kat was sold and advertised on a substantial scale in the years leading up to the application. Nestlé argued that Mr Justice Arnold had imposed an unnecessary requirement that consumers must have relied on the mark when buying the goods. It was argued that this approach was inconsistent with the finding of the CJEU.
Cadbury responded by arguing that the correct test had been applied by Mr Justice Arnold and suggesting that evidence produced by Nestlé was insufficient to prove acquired distinctiveness.
The UK Court of Appeal considered it appropriate for a court, when assessing whether a mark has acquired distinctiveness, to consider whether a person would rely on the mark to identify the origin of the product in question. In other words, the relevant class of persons must view the product with only the relevant mark and identify it as originating from Nestlé. The Court ultimately held that the recognition and association of the shape with the Kit Kat brand did not amount to distinctiveness for trademark purposes and the mark had not acquired distinctive character.
A further appeal to the Supreme Court cannot be ruled out. In the meantime, Cadbury has indicated that they intend to appeal the General Court’s decision in relation to the EU mark to the CJEU.
Interestingly, since the delivery of the High Court judgment in January 2016, the EU General Court had handed down its judgment relating to the EU equivalent of the UK trade mark. Nestlé relied on this judgment. They argued it was directly contrary to the judgment of Mr Justice Arnold. In particular, the General Court had found that the EU trade mark had acquired distinctive character in the majority of Member States, including the UK. The UK Court of Appeal did not consider this finding to be binding on it as only decisions on points of EU law are binding.
The important points for food companies and other industry participants to note from the 2017 decision are:
- Shapes of this kind are not considered inherently distinctive and remain difficult to register as trade marks
- The Courts continue to take a strict view on trade mark registrations, recognising that they provide traders with “a monopoly for all time”
- A finding of acquired distinctiveness by an EU Court in relation to an EU mark is not binding on individual member states
- Trade mark registration requirements remain far from harmonised throughout the world as the Kit Kat shape mark enjoys registration in many countries including France, Australia and Canada
For more information on trade mark applications and related litigation, please contact a member of our Intellectual Property team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.