Nestlé Loses Appeal In “KitKat” Case

July 2018

The Court of Justice of the European Union handed down its judgment today on the “KitKat” case, resulting in Nestlé (the maker of the KitKat) losing its EU trade mark for the shape of its chocolate wafer product. 

The basis for the decision was that Nestlé had failed to provide sufficient evidence that the KitKat shape mark had acquired distinctive character throughout the EU. Nestlé had only produced evidence relevant to some and not all member states. If evidence had been submitted that could show acquired distinctiveness across all member states, the mark may well have survived attack. 

Background

In 2006 Nestlé was granted an EU trade mark for the shape of the KitKat. Rival confectionary company Mondelēz subsequently filed an application for a declaration of invalidity against the mark and we now have the final resolution of this dispute 11 years later.

The case was first heard by the EU IPO who decided the mark was valid based on acquired distinctiveness. This decision was appealed by Mondelēz to the General Court who reversed the decision and decided that the mark was invalid. The reason for this was that acquired distinctiveness had only been shown for part and not all of the EU.

Nestlé appealed to the CJEU, arguing that the requirement that a mark needs to be distinctive across all of the EU states is incompatible with the idea of the single market and the European Union trade mark itself, which is unitary in character.

Decision

The CJEU upheld the General Court’s judgment, finding that a sign without distinctive character can only be registered as an EU trade mark if it has acquired distinctive character in the part of the EU where it did not previously have such character.

The trade mark owner therefore needs to be very careful as to the evidence it puts before the court to ensure that it has shown distinctive character in all member states. This is what Nestl had failed to do.

The CJEU was clear that although it is not necessary that evidence of the mark acquiring distinctive character must be submitted for each individual member state, the evidence overall must show distinctiveness throughout all Member States where the mark had no inherent distinctive character. For certain goods or services, member states can be grouped together in the same distribution network and those member states can be treated as if they were one national market.

Where a party with the burden of proving evidence of acquisition produces evidence that fails to cover part of the EU, this is not sufficient for proving acquired distinctiveness  - even if that part consists of only one member state.

Comment

Putting the correct evidence before the Court is vital when proving acquired distinctiveness. Nestl had put evidence forward in relation to 10 EU countries, but this was not enough for the CJEU to conclude that the burden was met for all relevant EU countries. The CJEU did say that proof of acquired distinctiveness could be produced globally, but if this does not cover part (even one) member state this will not be sufficient. 

Press Release - https://curia.europa.eu/jcms/upload/docs/application/pdf/2018-07/cp180116en.pdf

Judgment in Joined Cases C-84/17 P Société des produits Nestlé SA v Mondelez UK Holdings & Services Ltd, formerly Cadbury Holdings Ltd, and EUIPO, C-85/17 P Mondelez UK Holdings & Services Ltd, formerly Cadbury Holdings Ltd v EUIPO, and C-95/17 P EUIPO v Mondelez UK Holdings & Services Ltd, formerly Cadbury Holdings Ltd

This update was prepared by HGF IP Solicitor Chris Robinson.  If you would like further advice on this or any other matter please contact Chris or your usual HGF representative, alternatively visit our Contact Page to get in touch with your nearest HGF office.

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