Nestlé loses TM battle with Cadbury over KitKat, again

Nestlé has lost its appeal against the rejection of the 3D shape of its four-finger KitKat chocolate bar as a trademark in the UK.

Today, the English Court of Appeal handed down its decision, marking the latest development in Nestlé’s long-running war with Cadbury.

Chancellor of the High Court Lord Justice Vos, Lord Justice Kitchin and Lord Justice Floyd issued a unanimous opinion.

Kitchin said: “We are concerned here with a mark, the 3D shape of a chocolate product, that has no distinctiveness.”

He explained that consumers are not likely to take it as a badge of origin, in the way they would with a newly coined word.

“Now assume that products in that shape have been sold on a very large scale under and by reference to a brand name which is inherently highly distinctive,” he said, adding that the shape should be assumed to have become well-known in this way.

“That does not necessarily mean that the public have come to perceive the shape as a badge of origin such that they would rely upon it alone to identify the product as coming from a particular source.”

He added that the public may regard the shape as a characteristic of such products or find that it brings to mind the product and brand name with which they have become familiar.

According to Kitchin, these kinds of recognition and association do not amount to distinctiveness in trademark cases.

The ruling followed a decision in January last year by the English High Court that dismissed Nestlé’s appeal against an earlier decision to reject its trademark application for the 3D shape.

Mr Justice Arnold, in the January decision, said the proposed trademark had not acquired distinctive character and that the Court of Justice of the European Union (CJEU) had not sufficiently answered a question he had asked.

Nestlé and Cadbury had appealed against aspects of a decision by the UK’s Intellectual Property Office (IPO) in 2013 to reject Nestlé’s application for the 3D shape.

Following the January decision, Nestlé appealed, arguing that a “substantial proportion” of the relevant consumers, when presented with the 3D shape, identified it as a KitKat and that when they identified the shape, they meant a “specific product from a specific source”.

Nestlé may now appeal to the UK Supreme Court.

A spokesperson for Nestlé said the company was disappointed with the judgment and is considering its next steps.

“This judgment does not mean that our four finger-shape is now free for use in the UK or elsewhere. KitKat is much loved around the world and its four-finger shape is well-known by consumers,” added the spokesperson.

A spokesperson for Mondelez, the owner of Cadbury, said: “We are pleased with the Court of Appeal’s decision today and welcome their conclusion. As we have previously stated, we do not believe the shape of the KitKat bar should be protected as a trademark in the UK.”

Sally Britton, IP lawyer at Mishcon de Reya, said: “Non-traditional trademark registrations covering shapes, sounds, colours and smells are becoming increasingly popular as brands look to experiences to drive brand value.”

According to Britton, the court’s decision has set a high bar for the registration of shape marks.

“This case is interesting as it examines the type of use and consumer recognition required to obtain monopoly protection over a shape mark,” she added.

Robert Guthrie, a partner in Osborne Clarke’s IP litigation department, said: “This decision contrasts with a General Court of the Court of Justice ruling that the shape of the KitKat was distinctive in the UK.

“This is an early indication of the ways in which UK and EU trademark law may diverge,” said Guthrie, adding it seems likely that in the future it will be harder to register shapes as trademarks in the UK than in the EU.

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