Advocate General finds shape of a Kit Kat chocolate bar is not a trade mark
In principle, European Union trade mark law allows the shape of a product to be registered as a three dimensional trade mark.
However, the UK High Court concluded in January 2014 that significant aspects of the application of the law in the UK remained unclear, when considering Nestlé’s attempt to register the shape of its iconic Kit Kat chocolate bar as a trade mark and referred three questions to the CJEU for deliberation and guidance in Case C-215/14.
Today, 11th June 2015, Advocate General Wathelet has given his opinion in order to clarify the law and answer the questions concerning in what circumstances a trader may secure a perpetual monopoly in the shape of a product by registering it as a trade mark.
The questions answered by the Advocate General in essence make it clear that mere recognition of a shape by the public is not sufficient to show a trade mark is distinctive, it must act as a badge of trade origin. Although he accepted that trade marks can achieve acquired distinctiveness through use when used in combination with other signs (ironically in accordance with the HAVE A BREAK…. HAVE A KIT KAT decision) he found that the sign concerned had to independently act as a trade mark in its own right, devoid of the other signs. So in the case of the shape of a Kit Kat bar, the public had to view the shape as a badge of trade origin, excluding the word mark KIT KAT or the packaging of the product. Also if any of the three key aspects of the shape of the bar are the result of the nature of the goods themselves or to achieve a technical result, and at least one of these grounds fully applies to the shape as a whole, registration should be denied.
He also found that a shape which is necessary to obtain a technical result not only with regard to the manner in which the goods function, but also with regard to the manner in which they are manufactured was precluded from registration.
The matter will now proceed to a final judgement by CJEU. The vast majority of opinions of the Advocate General are followed by the CJEU. Once the CJEU has given its final judgement, the case will go back to the UK High Court for the decision on the UK trade mark application.
It is interesting to note that Nestle were successful in an appeal to register the shape of the Kit Kat bar as a Community Trade Mark, and an appeal by Cadbury in relation to that decision is presently before the CJEU. One would presume the CJEU will bring a decision on the Community Trade Mark Application into line with that of the UK Application, but one can never be sure!
The shape at issue was the well-known Kit Kat four-finger chocolate-coated wafer bar. On 8 July 2010 Nestlé applied to register the three-dimensional sign graphically represented below as a United Kingdom trade mark. The bar has been sold in the UK since 1935 by then Rowntree, acquired in 1988 by Nestle. The application was made in respect of the following goods in class 30:
"Chocolate; chocolate confectionery; chocolate products; confectionery; chocolate-based preparations; bakery goods; pastries; biscuits; biscuits having a chocolate coating; chocolate coated wafer biscuits; cakes; cookies; wafers."
The application was accepted by the UKIPO and published for opposition on the basis that, although the trade mark was devoid of inherent distinctive character, the applicant had shown that the Trade Mark had acquired a distinctive character as a result of the use made of it prior to the application date.
Cadbury opposed the application on three grounds of the Trade Marks Act 1994;
- Section 3(1) (b) - that registration should be refused as devoid of distinctive character;
- Section 3(2) (a) - that the mark applied for was a shape which resulted from the nature of the goods themselves, and
- Section 3(2) (b) – that the shape was necessary to obtain a technical result.
Nestle relied on the proviso to 3(1), which states that, “…a trade mark shall not be refused registration…if before the date of application for registration, it has in fact acquired a distinctive character as a result of the use made of it.”
In spite of survey evidence, where over 90% of respondents mentioned “Kit Kat” in response to seeing an image of the mark applied for, the Hearing Officer held that the trade mark was devoid of inherent distinctive character, and had not acquired a distinctive character through use in relation to all goods covered by the application, except "cakes" and "pastries". The Hearing Officer effectively holding that there was a difference between mere ‘recognition’ that the shape may be associated with Nestlé, and the stronger requirement that the shape acted as a badge of trade origin, and that consumers acted on the shape and the shape alone to distinguish the Nestle product from those of competitors. The Hearing Officer holding that the word mark Kit Kat and associated packaging of the product being the trade marks for this product rather than its shape.
He also held that registration of the trade mark in relation to those goods was precluded on the grounds that the trade mark consisted exclusively of the shape which is necessary to obtain a technical result and was a shape which resulted from the nature of the product itself. The Hearing Officer holding that the shape of the chocolate bar consisted of three essential elements: (a) the rectangular slab of chocolate, (b) the presence, position and depth of the breaking grooves and (c) the number of such grooves, which together with the width of the bar determine the number of figures. The Hearing Officer concluding that (a) resulted from the nature of the goods themselves and (b) and (c) were necessary to obtain a technical result i.e. an easily breakable chocolate wafer bar.
In relation to "cakes" and "pastries", however, he held that the trade mark was inherently distinctive and registration was not precluded.
The Hearing Officer went on to refuse the application, except in relation to cakes and pastries.
On appeal to the UK High Court in December 2013, neither party challenged the facts found by the UKIPO Hearing Officer, but there was considerable divergence between the parties on whether the Hearing Officer had applied the law correctly.
Inherent Distinctive Character
Nestlé did not challenge the conclusion that the trade mark was ‘devoid of inherent distinctive character in relation to all the good covered by the application save for “cakes” and “pastries”.’
Cadbury’s view however, was that the trade mark was devoid of any distinctive character for cakes and pastries, specifically because the Hearing Officer had applied his reasoning only referring to “…common shapes for chocolate bars and biscuits…” and furthermore that stating a shape was outside the norms and customs of the sector, was not sufficient to endow it with distinctive character. Arnold J agreed in principle with the Cadbury viewpoint.
Acquired Distinctive Character
Nestlé argued that the trade mark had acquired distinctive character for all goods specified in the application. Despite a comprehensive overview of the current law on acquired distinctive character, Arnold J still concluded that the position of the English courts was far from clear. Although, in principle, he stated his initial view accorded with the Hearing Officer and thus that of Cadbury, that there was a distinction between mere recognition and a shape acting as a badge of origin. The later and not the former was necessary to obtain trade mark protection.
Nature of the goods/Necessary to obtain a technical result
Nestlé challenged the Hearing Officer's conclusion that, in relation to all the goods applied for save "cakes" and "pastries", the trade mark consisted exclusively of the shape of goods which either resulted from the nature of the goods themselves or was necessary to obtain a technical result.
Nestlé effectively argued that as the Hearing Officer had effectively found that the shape of Kit Kat chocolate bar consisted of three elements, one of which, the slab of chocolate, was a result of the product itself and the second and third elements, the grooves and fingers were for a technical result, and thus he had found that not all three elements feel into any one exclusion for protection, which they argued was a pre-requisite for rejection. Arnold provisionally indicated that he did not agree with Nestlé’s viewpoint, but referred this matter to the CJEU for deliberation.
Cadbury challenged the Hearing Officer's conclusion that, in relation to "cakes" and "pastries", the trade mark does not consist exclusively of the shape which either resulted from the nature of the goods themselves or was necessary to obtain a technical result.
Referral to the CJEU
Arnold J appeared to agree in essence with Cadbury’s argument, but felt that it was necessary for the law to be clarified at CJEU level in order to determine whether the trade mark was precluded from registration. The questions referred were answered by the AG as follows:
(1) It is not sufficient for the applicant for registration to prove that the relevant class of persons recognises the trade mark in respect of which registration is sought and associates it with the applicant’s goods or services. He must prove that only the trade mark in respect of which registration is sought, as opposed to any other trade marks which may also be present, indicates, without any possibility of confusion, the exclusive origin of the goods or services at issue.
(2) Article 3(1)(e) of Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks must be interpreted as precluding registration of a shape where that shape has three essential features, one of which results from the nature of the goods themselves and the other two of which are necessary to obtain a technical result, provided that at least one of those grounds fully applies to that shape.
(3) Article 3(1)(e)(ii) of Directive 2008/95 must be interpreted as precluding registration of a shape which is necessary to obtain a technical result not only with regard to the manner in which the goods function, but also with regard to the manner in which they are manufactured.’
The answers from the Advocate General, in essence, agree with Arnold J’s and Cadbury’s viewpoint, subject to the one small point on the application of the three key aspects of the shape for technical result or the nature of the goods, and reject the registration of the shape of the Kit Kat bar by Nestlé. The matter will now proceed to a final judgement by CJEU.