Case C-215/14 Societe des Produits Nestle SA v Cadbury UK Limited

United Kingdom

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

Case C-215/14

Societe des Produits Nestle SA v Cadbury UK Limited

Often, where time-limited intellectual property rights expire, companies keen to retain the monopoly on that aspect of their products or services will seek trade mark protection to extend that protection.  A notable example is in the case of shape marks, which are often more suitably protected by registered designs but these can only confer a maximum of 25 years protection. The perpetual protection offered by a trade mark is an attractive option, which, if obtained, affords the trade mark proprietor a monopoly and the ultimate advantage over their competitors.

Nestle in 2010, sought protection for the four fingered shape of its Kit Kat bar, a well-loved chocolate bar that has been sold in the UK since the 1930s:

 

  KitKat

Cadbury UK Limited opposed this application.   This is not the first time that the two parties have crossed swords.  Previously, Cadbury had been prevented from registering the colour purple as a trade mark, in respect of chocolate, as a result of an opposition by Nestle.  Therefore, it seems that more than a legal principle is at stake here.

Cadbury opposed on the basis that the four fingered chocolate bar shape was not sufficiently distinctive to be registered as a trade mark.  This argument was largely accepted by the UK trade mark office, finding that the shape was necessary to obtain a technical result (the grooves along the bar were to enable easy breaking of the product, and the number of grooves were to enable the correct portion size), and that the shape resulted from the nature of the goods themselves.  However, the trade mark office found that this preclusion did not extend to cakes or pastries.  Both parties appealed, Cadbury arguing that the mark lacked distinctiveness in respect of all products covered by the application, and Nestle arguing that the mark was inherently distinctive, and that furthermore, the mark had acquired the necessary distinctive character through use.

Mr Justice Arnold, sitting in the High Court, when assessing the matter, sent three questions to the ECJ for further consideration:

  1. To show that a mark has acquired distinctiveness, is it merely necessary that the average consumer of the product in question views the mark and associates an undertaking with that mark, or that the consumer must view the mark as, in isolation, indicating a single origin of a product or service, and rely on the mark to make a purchase of the product?

    AG Wathelet took the view that the average consumer would have to rely on the mark in question, in isolation, to indicate the origin of a product.  Whilst it would be too far to say that applicant would have to show that the average consumer saw the mark as indicating a particular legal entity as the origin of the product or service, the mark would still have to be the sole indication of origin to a consumer.  Whilst some use of a mark in conjunction with others (such as the KIT KAT mark as applied to the chocolate fingers) may assist in demonstrating that the consumer associated a mark with a particular undertaking, it would not be sufficient by itself to demonstrate acquired distinctiveness.

    Essentially, this would mean that for Nestle to demonstrate that the Kit Kat shape had acquired distinctive character, that consumers would purchase the product on the basis of the four-finger shape, and no other marks.  This is a tough burden to overcome.
     
  2. Could the provisions that precluded certain shape marks from being registered be applied cumulatively?

    Referring to previous case-law, in which it was found that these provisions could not be applied in combination (ie: where only part of each provision was fulfilled), AG Wathelet considered the policy reasons behind these provisions.  Essentially, she indicated that their purpose was to limit the monopolies afforded to trade mark proprietors, so that they were unable to prevent competitors from producing a product with a certain shape, or to achieve a particular technical result that users would be likely to seek out.  She therefore equally saw that it would be against such policy to disallow application of such provisions cumulatively, provided that a mark was only precluded from registration should at least one of these provisions be made out in full.
     
  3. Could a mark be precluded from registration on the basis that it was necessary to achieve a technical function in respect of how the goods are manufactured, as opposed to how the goods function?

    Whilst AG Wathelet noted that the specific provision relating to shapes necessary for a technical function remained silent on whether this applied to the manufacture, and a literal interpretation would assume that it did not.  However, once again, when considering the policy reasons behind this provision, AG Wathelet found that as the specific manufacturing process was a technical solution adopted to incorporate a function into a product (that of being able to break the fingers separately), by not precluding protection under this ground, it would prevent others from making a product incorporating such a technical function, or at least limit their choice in making such a product.  Therefore, the logical conclusion would be that this provision also included manufacturing processes to achieve a technical result.

This opinion serves to reinforce the UK's reluctance to allow trade mark protection for shape marks, and limit the extent to which brands may extend their intellectual property rights to trade mark monopolies.  Perhaps a four-fingered chocolate bar produced by Cadbury is one step closer to our shops.