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21 January 2016Trademarks

Kit Kat trademark ruling: lawyers say you haven’t heard the last of it

Nestlé’s failure to register the 3D shape of the Kit Kat in the UK will not be the end of the story, as there is uncertainty following yesterday’s court decision, lawyers have told WIPR.

Mr Justice Arnold, sitting at the English High Court, ruled that the 3D shape of the ‘four fingered’ variety of the Kit Kat bar had not acquired distinctiveness and therefore could not be trademarked.

The ruling has temporarily put the breaks on a six-year dispute between Nestlé and rival chocolate maker Cadbury.

But Hastings Guise, partner at law firm Fieldfisher, told WIPR that Arnold’s ruling had left some questions unanswered.

In yesterday’s decision, Arnold criticised the Court of Justice of the European Union (CJEU) which, in a ruling handed down in September last year, attempted to answer three questions he had asked.

The CJEU sufficiently answered Arnold’s two questions centring on whether features of a shape that are necessary to obtain a technical result should be denied trademark registration.

But according to yesterday’s judgment, the CJEU’s response to Arnold’s remaining question, which focused on the grounds for determining distinctive character, was ambiguous.

Nestlé had shown evidence that consumers already associated the shape of its bar with the Kit Kat, but did not provide evidence that consumers would know the shape without seeing the Kit Kat brand name.

“The question to the CJEU was intended to identify whether the first kind of evidence was sufficient or whether the second kind of evidence was also required,” said Guise, adding that the CJEU’s answer “fell somewhere in the middle”.

“Arnold concludes that it is legitimate, when assessing acquired distinctiveness, to consider whether the evidence shows that consumers would rely on the [‘Kit Kat’] trademark. My reading of the CJEU judgment was that it implies evidence showing that consumers could rely on the mark.

“However, such an interpretation looks to the future behaviour of consumers, and is very different from a requirement for evidence that consumers have relied on the trademark historically.”

This, said Guise, was the original requirement imposed by Allan James, the UK Intellectual Property Office’s hearing officer who rejected Nestlé’s application in 2010.

“Unfortunately, Arnold has not been clear in his application of that test to the hearing officer’s decision. He acknowledged that the hearing officer appears to have referred to existing or historical reliance; however, he also considered that despite this reference, the hearing officer had nonetheless applied the correct test. He did not explain why he has reached this view.

“The judgment therefore leaves matters uncertain for Nestlé and I doubt that this is the end of the Kit Kat story,” Guise added.

Sharon Daboul, trademark attorney at law firm EIP, said it was a “common sense” decision but that Nestlé’s likely appeal against the ruling will see it run on.

“Consumers will tend to be influenced by a brand name and the outer packaging of a product rather than its shape alone, so the threshold for registering shapes as trademarks is high. The hurdle is arguably higher for bigger brand owners like Nestlé and Cadbury, whose brand names and packaging are far more famous than the shapes of their products,” she said.

Daboul added that while it is rare to win trademark protection for shapes, it is not impossible. She pointed to the Toblerone and Nestlé’s Walnut Whip as shapes that are both protected.

“This seems to be a common-sense decision, and perhaps public policy also played a part.  Allowing registration of the Kit Kat shape would have given Nestlé a valuable monopoly and competitive advantage over other confectionery manufacturers.

“However, this may not be the end to this long-running, tit-for-tat dispute with Cadbury, as Nestlé has already said that it will appeal against this decision,” she added.

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More on this story

Trademarks
20 January 2016   The English High Court has dismissed Nestlé’s appeal against a decision to reject its trademark application for the 3D shape of the four-finger Kit Kat chocolate bar.
Trademarks
31 January 2016   The English High Court’s decision to reject Nestlé’s attempt to trademark the shape of the four-fingered Kit Kat chocolate bar was wrong, readers have told WIPR.
Trademarks
15 December 2016   The European Union Intellectual Property Office must reconsider the registration of Nestlé’s 3D four-finger KitKat shape, according to the General Court in the latest round of proceedings with Mondelez International.