Kit Kat bar is no badge
Salmah Ebrahim explains why Nestlé once again failed in its bid for shape registration. [2017] EWCA Civ 358, Société des Produits Nestlé SA v Cadbury UK Ltd, Court of Appeal, 17th May 2017.
[2017] EWCA Civ 358, Société des Produits Nestlé SA v Cadbury UK Ltd, Court of Appeal, 17th May 2017
Key points
- To acquire distinctiveness, an inherently non-distinctive shape mark must exclusively designate the goods it is applied to as originating from a particular undertaking. It is not sufficient only to show that consumers recognise and/or associate a mark with an applicant’s goods
- Evidence that consumers have come to rely on a mark as denoting the origin of the goods to which it has been applied will demonstrate that the mark has become distinctive, although this is not a prerequisite for demonstrating acquired distinctiveness
In the latest instalment of the ongoing battle to register the shape of the four-fingered Kit Kat bar as a trade mark in the UK, Nestlé’s appeal before the Court of Appeal has been rejected. In particular, it was found that Nestlé had failed to demonstrate acquired distinctiveness within the meaning of Article 3(3) of Directive 2008/95/EC (the Directive). To acquire distinctiveness, an inherently non-distinctive shape mark must exclusively designate the goods it is applied to as originating from a particular undertaking. It is not sufficient to show only that consumers recognise and associate a mark with an applicant’s goods.
Early stages
In 2010, Nestlé applied to register the shape of the four-fingered Kit Kat chocolate bar as a trade mark. The application was made in relation to class 30 goods. The shape in the application did not include the Kit Kat logo, which is embossed onto each of the fingers of the actual product as sold, but was instead sought without the logo (the Mark). Cadbury subsequently opposed the application, arguing, among other points, that the Mark lacked distinctive character and its registration was therefore precluded by s3(1)(b) of the Trade Marks Act 1994, which gives effect to Article 3(1)(b) of the Directive. In defending its application, Nestlé argued that the Mark had acquired distinctive character as a result of the use that Nestlé had made of it prior to the application date.
In June 2013, the Hearing Officer (HO) found that the Mark was devoid of inherent distinctive character (except in relation to cakes and pastries) and had not acquired distinctive character in relation to any of the other goods in respect of which registration was sought. Nestlé subsequently appealed to the High Court, while Cadbury cross-appealed on the issue of allowing Nestlé’s application to proceed in respect of cakes and pastries. In the process of deciding these appeals, Mr Justice Arnold deemed it necessary to seek a preliminary ruling from the CJEU and, following on from the CJEU’s response, held that: the HO had not erred as a matter of law in addressing the issue of acquired distinctiveness, and had been correct in the decision reached; and that the appeal should be dismissed. Arnold J stressed that, to demonstrate that a sign had acquired distinctive character, the applicant or trade mark proprietor must prove that, at the relevant date, a significant proportion of the relevant class of persons perceived the relevant goods or services as originating from a particular undertaking because of the sign in question (as opposed to any other trade mark that may also have been present).
Appeal arguments
By the time of the appeal, it had been accepted that the shape of the Kit Kat bar was not inherently distinctive, and the registrability of the Mark turned on whether it had acquired distinctiveness. This, however, was the point at which agreement between the parties ended.
Broadly, Nestlé argued that a substantial proportion of the relevant consumers, when presented with the 3D shape of the Kit Kat bar, had identified it as a Kit Kat and subsequently as a specific product from a single source, meaning the Mark is and was distinctive within the meaning of Article 3(3) of the Directive at the relevant date. Cadbury countered that the correct question had always been whether consumers had come to perceive the Mark as an indication of origin, and Cadbury had ultimately succeeded in its opposition because Nestlé’s evidence merely established that consumers had come to associate the Mark with Nestlé.
Appeal decision
Dismissing the appeal, in the leading judgment (with which Lord Justice Floyd and Sir Geoffrey Vos, Chancellor of the High Court, agreed), Lord Justice Kitchin stressed the importance of distinguishing evidence that a significant proportion of the relevant class of persons recognised and associated a mark with an applicant’s goods from evidence that they perceived the goods designated exclusively by the mark applied for as originating from a particular undertaking. The latter, he noted, would secure the registration of an inherently non-distinctive 3D shape mark such as the Mark, while the former would not.
Kitchin LJ pointed to an applicant’s exclusive right to use a shape in relation to a product should its application prove successful. A proprietor would not need to show a likelihood of confusion about the origin of the product (save for certain defences) in a trade mark infringement case, as a likelihood of confusion could be presumed even if consumers did not perceive the shape of the product as denoting the origin of the product and were not actually confused.
In addition, Kitchin LJ noted that the HO had properly taken into account additional facts, such as: there being no evidence that the shape of the Kit Kat bar had featured in Nestlé’s promotional and advertising material; the Kit Kat bar having only ever been sold in an opaque wrapper; and the shape of the Kit Kat bar not having been shown on the packaging for the most part. At this juncture, it was also noted that it was relevant that there were other finger-shaped chocolate products on the market long before the application date that were never thought to be Kit Kats, and that the Kit Kat logo had itself always been embossed on the fingers of the Kit Kat bar.
In short, recognising and associating a product with an applicant was not enough: trade mark law demanded that the relevant class of persons regard the shape concerned alone (as opposed to any other trade mark that may be present, such as the Kit Kat logo) as exclusively indicating origin. Assessed against this backdrop, the shape of the Kit Kat bar did not perform the function of acting as a badge of origin.
Salmah Ebrahim is a Senior Associate in Gowling WLG (UK) LLP’s IP team
Sophia Khan, a Trainee Solicitor at Gowling WLG, assisted with this article