Nestlé v Cadbury - Trade mark monopolies over 3D shapes

United Kingdom

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

Mr Justice Arnold, in his High Court judgment in Société Des Produits Nestlé SA v Cadbury UK Ltd [2014] EWHC 16 (Ch), concluded that it was necessary to seek clarification from the Court of Justice of the European Union with respect to certain legal principles surrounding the registrability of Nestlé's four-finger chocolate-coated wafer bar, known as Kit Kat.

Background

Nestlé's Kit Kat bar has been sold in the United Kingdom since 1935. Whilst the name of the product has evolved over the years, the shape of the product- a four fingered bar separated with breaking grooves- has remained the same. In its current form, each finger forming part of the Kit Kat bar is embossed with the Kit Kat stylised logo:

KitKat

In July 2010, Nestlé applied to register as a UK trade mark the 3D mark shown below in class 30 for "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." Whilst the mark was devoid of inherent distinctive character, Nestlé had demonstrated to the UK IPO that the shape had acquired a distinctive character as a result of the use made of it by Nestle (and its predecessors) prior to the application date. Accordingly, the shape mark was published for opposition.

KitKat2

Cadbury opposed the application arguing that registration should be refused because the shape mark:

  • was devoid of any distinctive character;
  • consisted exclusively of the shape which results from the nature of the goods themselves; and
  • consisted exclusively of the shape of goods which is necessary to obtain a technical result.

The opposition hearing officer concluded that:

(a)  the shape mark was devoid of inherent distinctive character in relation to all of the goods covered by the application, except "cakes" and "pastries";

(b)   that Nestlé had not acquired distinctiveness in respect of the remaining goods covered by the application;

(c)   in relation to all of the goods covered by the application, except "cakes" and "pastries", it consisted exclusively of the shape of goods which either results from the nature of the goods or is necessary to obtain a technical result since:

 i)  The basic rectangular 'slab' shape results from the nature of moulded chocolate bars or moulded chocolate biscuits sold in bar form;
 ii) Breaking grooves are necessary to achieve a technical result;
 iii) The angle of the product, and for the breaking grooves, results from the nature of moulded chocolate products and are necessary to achieve a technical result; and
 iv) The number of breaking grooves and fingers is determined by the portion size.

(d)   the application should proceed to registration only in respect of "cakes" and "pastries"

Appealing the opposition decision

Nestlé appealed against point (b) & (c) and Cadbury cross appealed against point (a), (c) & (d).

  • Inherent distinctive character

Mr Justice Arnold adopted Cadbury's reasoning in relation to point (a), namely, that the shape mark applied for was devoid of inherent distinctive character in respect of "cakes" and "pastries" as well as the other goods covered by the specification. He agreed that the fact that a shape was unusual and outside the norms and customs of a sector was insufficient to render the mark distinctive and denoting trade origin.

  • Acquired Distinctiveness

To determine whether Nestlé's shape mark had acquired a distinctive character by the relevant date, Mr Justice Arnold considered it necessary to refer the following provisional question to the CJEU:

"In order to establish that a trade mark has acquired a distinctive character following the use that had been made of it within the meaning of Article 3(3) of Directive 2008/95/EC, is it sufficient for the applicant for registration to prove that at the relevant date a significant proportion of the relevant class of persons recognise the mark and associate it with the applicant's goods in the sense that, if they were to be asked who marketed goods bearing that mark, they would identify the applicant; or must the applicant prove that a significant proportion of the relevant class of persons rely upon the mark (as opposed to any other trade marks which may also be present) as indicating the origin of the goods?"

In his opinion, Mr Justice Arnold considered the correct answer to be that the applicant must prove that the mark is relied upon as indicating the origin of the goods.

  • Nature of Goods/Technical Result

To determine whether Nestlé's shape mark was precluded from registration on grounds that it consisted exclusively of the shape which results from the nature of the goods themselves or which is necessary to obtain a technical result, Mr Justice Arnold considered it necessary to refer the following provisional questions to the CJEU:

"Where a shape consists of three essential features, one of which results from the nature of the goods themselves and two of which are necessary to obtain a technical result, is registration of that shape as a trade mark precluded by Article 3(1)(e)(i) and/or (ii) of Directive 2008/95/EC?

Should Article 3(1)(e)(ii) of Directive 2008/95/EC be interpreted as precluding registration of shapes which are necessary to obtain a technical result with regard to the manner in which the goods are manufactured as opposed to the manner in which the goods function?"

In his opinion, Mr Justice Arnold considered that both questions should be answered in the affirmative.

Practical implications

This case will have practical implications for brand owners who seek to register the shape of their product, as a trade mark, in an attempt to monopolise the shape. If the shape mark sought for registration is, in effect, unusual but not intended to be used as a secondary trade mark (i.e. as a badge of origin), brand owners should instead consider applying for a registered UK or Community Design to protect novel designs.