On 20 January 2016 the England and Wales High Court (Chancery Division) issued its final decision on the Kit Kat case (the text is available here) dismissing the appeal filed by Société des Produits Nestlé SA (Nestlé) against the decision by which the Trademark Office rejected the trademark application for registration of the famous four stripes chocolate bar.
Preliminarily, it must be emphasized that the trademark application rejected by the Office concerned the three-dimensional sign corresponding to the shape of Nestlé’s four-finger KIT KAT product without the KIT KAT logo normally embossed onto each of the fingers of the product. This circumstance was decisive for both the decision of the English Court and that of the EU Court of Justice to which the former had applied for a preliminary ruling.
The dispute started in 2011 when Cadbury UK Ltd (Cadbury) filed a notice of opposition against Nestlé’s trademark application for infringement of
- Article 3.1 lett. b) and lett. e), sub i) and ii) of Directive 2008/95/EU, according to which a trademark which is devoid of any distinctive character or which consists exclusively of the shape which results from the nature of the goods themselves or the shape of goods which is necessary to obtain a technical result shall not be registered or, if registered, shall be liable to be declared invalid, and
- Article 3.3 of Directive 2008/95/EU, which provides that the registration shall not be refused or the trademark shall not be declared invalid if following the use which has been made of the trademark, it has acquired (before or after the date of application for registration or after the date of registration) a distinctive character (the so called “secondary meaning“).
In 2014 the England and Wales High Court (Chancery Division) addressed the CJEU for a clarification, in order to determine the appeals filed both by Nestlé and Cadbury against the Trade Marks Registry of the United Kingdom Intellectual Property Office’s decision issued in 2013. In its decision, the Office had held that the Nestlé’s trademark was devoid of inherent distinctive character and had not acquired a distinctive character in relation to all goods covered by the application except for “cakes” and “pastries” and that the trademark consisted exclusively of the shape which was necessary to obtain a technical result.
The CJEU’s decision
The Court of Justice’s decision was delivered on 16 September 2015 (available here) and has undergone many critics probably because it has determined the rejection by the English Court of the registration of the famous chocolate bar.
The decision, on one hand, is convincing where it states that the proof of the use of a shape trademark can be given also through the proof of the use as part of another trademark or in conjunction with such a mark (Nestlé’s trademark application for registration concerned, as said, the shape of the bar without the KIT KAT logo). On the other hand, by affirming that the occurrence of “secondary meaning” can be ascertained only by proving that the relevant class of persons (that is the “average consumer of the category of goods or services in question, who is reasonably well-informed and reasonably observant and circumspect”, and not also the trader) perceive the goods or services designated exclusively by the trademark applied for, as opposed to any other mark which might also be present, as originating from a particular company, the Court has given a very restrictive interpretation of the function of the trademark, since it seemingly excludes that the association of the shape with the trademark owned by the company is enough to assess the acquisition of the distinctive character.
The Court was requested of a preliminary ruling also about the obstacles under Article 3.1 lett. e) of Directive 2008/95/EU. On this point, it confirmed its previous case law according to which the grounds for refusal of registration set out by the provision operate independently of one another and it is sufficient that one of them is fully applicable to the shape at issue for precluding registration as a trademark of a sign consisting exclusively of the shape of goods (even in a case such the KIT KAT one), where that shape contains three essential features, one of which results from the nature of the goods themselves (the basic rectangular slab shape of the Nestlé’s chocolate bar) and two are necessary to obtain a technical result (the presence of the grooves running along the length of the bar, which, together with the width of the bar, determine the number of ‘fingers’).
The English Court’s decision
However, in its final decision the English Court not only ignored the issue concerning the necessity to obtain a technical result but didn’t consider the case law, also recalled by the Court of Justice, according to which a sign which is refused registration under Article 3.1 lett. e) of Directive 2008/95/EU can never acquire a distinctive character (that is a “secondary meaning”) for the purposes of Article 3.3 (see C-299/99 Philips case, point 57 and 75; C-53/01 Linde case, point 44, C-371/06 Benetton case point 23-28 and C-48/09 Lego case point 47). Thus, the Court dismissed the appeal exclusively on the basis of the lack of proof of the consumer’s perception of the goods as originating from Nestlé.
Both decisions evidence, once again, how difficult is to validly register shape trademarks – especially shape trademarks concerning amorphous products like those in the food industry (however, the Court of Justice confirmed that the criteria for assessing the distinctive character of three-dimensional trademarks consisting of the shape of the product itself are not different from those applicable to all other categories of trademarks).
England and Wales High Court (Chancery Division), 20 January 2016, Société Des Produits Nestlé SA v. Cadbury Uk Ltd