No break for Nestlé?
In its ruling of July 25, the Court of Justice of the European Union (CJEU) did not take a break on Nestlé as it dismissed the food giant’s appeal against the General Court’s decision on its four-finger ‘KitKat’ shape mark. The CJEU held that the General Court was right to annul the decision of the EUIPO Board of Appeal which declared the shape of the chocolate bar a valid trademark.
The CJEU did not adopt Nestlé’s reasoning—which was supported by the EUIPO and Marques—that the unitary character of the EU trademark (EUTM) and the principle of the EU single market imply that the territorial borders within the EU should be disregarded and acquired distinctiveness must be proved for only a significant part of the EU.
Instead, the CJEU held that the unitary character of the EUTM means that a specific sign—or shape, as in this instance—must have distinctive character throughout the EU. As it was established that the ‘KitKat’ shape mark was, ab initio, devoid of any inherent distinctive character across all member states, Nestlé had to prove that its four-finger chocolate bar had acquired distinctive character throughout the whole territory of the EU, not just in ten of what were 15 EU member states at the time of filing the application.
The ruling provides clear instructions for brand owners on what is required to acquire the registration of the shape of their product as an EUTM.
Contrary to the CJEU’s previous judgment in Chocoladefabriken Lindt (C-98/11), the first part of the ruling seems to require that acquired distinctiveness cannot be proved on the basis of significant quantitative evidence of consumer recognition but requires evidence for every single member state where the shape mark is inherently non-distinctive (ie, in all EU member states).
A pragmatic approach
However, the CJEU immediately provided a nuance to this approach in its second part of the judgment. In accordance with the opinion of advocate general Melchior Wathelet, the CJEU took a pragmatic approach for proving acquired distinctiveness in all EU member states. Applicants are not required to provide evidence for every single state but can instead group comparable markets together regarding the geographic, cultural or linguistic proximity of those markets, or other homogenous market conditions.
As a result, companies need not provide evidence of acquired distinctiveness in Luxembourg, for example, if they can demonstrate that for the relevant product, Luxembourg is part of the same market as Belgium, France and/or Germany and they are able to provide sufficient evidence for those countries.
The ruling essentially means that companies who aim to pursue the registration of the shape of their product as an EUTM must carefully prepare and assess their survey, market and advertising evidence before filing an EU shape mark application. Shape marks principally lack any inherent distinctive character, as a consumer will only perceive them as an indicator of origin if they are properly familiar with the brand and the product.
