European Court denies Nestlé four-fingered KitKat trademark after Cadbury objection

Nestlé may well have sought consolation in a few of their own chocolate products after their application to register the shape of their four-finger KitKat bar was thwarted by the decision of the Court of Justice of the European Union (CJEU) in Case C-215/14 Societe des Produits Nestlé SA v Cadbury UK Ltd after Cadbury had registered an objection to Nestlé’s application.

Background

Most people are familiar with the four-finger KitKat bar which has been produced by Nestlé in the UK since 1935.

In 2010 Nestlé decided to apply to register the four-finger shape of the KitKat bar as a trade mark. Cadbury, fearing Nestlé would be able to establish a monopoly on four-fingered chocolate products, raised an objection to the application.

Nestlé were initially successful in their application but, following Cadbury’s legal challenge, the case escalated to the High Court and the CJEU where the shape was subjected to further scrutiny and ultimately rejected as a trademark for the reasons set out in the remainder of this article.

What support was there for registering the trade mark?

Before we assess why Nestlé’s application was ultimately rejected, we should consider what evidence Nestlé submitted in support of its application which initially prompted the IPO to permit registration of the shape as a trade mark.

First of all, it is important to note that shapes, 3D images and other non-conventional features can be registered as trade marks. Examples include the use of the colours copper, silver and black on a battery shaped object which are owned by Duracell as well as the distinctive triangular shape of Toblerone chocolate.

Nestlé’s main argument in support of its application concerned a survey it had conducted in which it presented an image of the four-finger shape to members of the public and asked them to give their responses to what they saw. Over 90% of people involved in the survey recognised or used the word “KitKat” in their response.

Why was Nestlé’s application rejected despite the overwhelming response of the general public?

1. The survey did not go far enough to satisfy the definition of a “trade mark”

Firstly, a trade mark is defined in section 1(1) of the Trade Mark Act 1994 (“TMA”) as “any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings”.

Whilst Nestlé’s survey showed that the shape was associated with the goods, it could not guarantee that the shape alone would distinguish the goods as a Nestlé product as required by the TMA. After all, there were still 10% of those who took part in the survey who did not associate the shape with a KitKat.

Likewise, the CJEU also raised concerns whether the shape could single-handedly distinguish the goods as those of Nestlé without the use of other visible trade marks such as the KitKat logo. Ultimately, does one recognise a KitKat because of the shape of the bar or because of the well-known red and white packaging and italic lettering?

2. The shape was prohibited from registration under the TMA

It was widely acknowledged that the KitKat shape had 3 key components:

• the rectangular slab shape;
• the grooves dividing the four fingers; and
• the number of grooves.

Section 3(2) of the TMA states that a trade mark cannot consist exclusively of:

a)  the shape which results from the nature of the goods themselves; or
b)  the shape of goods which is necessary to obtain a technical result.

The CJEU therefore assessed each of the three features to determine whether Nestlé’s trade mark application fell under the scope of section 3(2) of the TMA.

The CJEU held that the first of the shape’s features resulted from the nature of the goods. As we are all well aware, chocolate bars are, by their nature, rectangular slabs.

Regarding the second feature, the CJEU was of the opinion that the grooves existed to create the fingers which enabled customers to easily break off and eat the chocolate and that this therefore amounted to obtaining a technical result.

In assessing the third feature of the trade mark, the CJEU took into consideration that “obtaining a technical result” includes reference to the manner in which the goods are manufactured as well as the manner in which they function. The reason for this is so as to prevent a manufacturer obtaining a monopoly on technical solutions or functional characteristics of goods.

In this case the number and angle of the grooves were determined by the specific machinery and equipment used to mould the chocolate bar. It was therefore concluded that this element of the KitKat shape also fell under the scope of “obtaining a technical result”.

As all three elements of the KitKat shape either resulted from the nature of the goods or were necessary to obtain a technical result the CJEU was of the opinion that the shape could not be registered as a trade mark.

What are the implications of this decision?

On a practical level this is a welcome result for Cadbury and other rival chocolatiers as it means that they are free to manufacture their own four-finger chocolate bars without fear of any trade mark infringement claims being brought against them by Nestlé.

From a legal perspective this decision highlights the fact that businesses seeking to register shapes as trade marks may struggle to establish that consumers use the shape of products to establish trade origin rather than brand names or other logos.

You will recall that despite the fact that 90% of those people Nestlé surveyed recognised the KitKat shape, the CJEU deemed that this was still not enough to prove that it was the shape and not the KitKat logo or wording that established the product as definitely that of Nestlé. This is particularly true in cases such as this where the shape of the product was concealed from the consumer. Here, the four-finger shape of the KitKat would not be evident to the consumer until after it had seen other registered Nestlé trade marks such as the red and white KitKat logo on the chocolate bar’s wrapper.

Furthermore, businesses should be aware of the implications of section 3(2) of the TMA when applying for trade mark registration of shapes. Before proceeding with any application, businesses should check whether the shapes they are applying to register are not limited to features which result from the nature of the goods or are necessary to obtain a technical result.

Indeed, in light of these obstacles, whilst securing a trade mark in a particular shape is not impossible (even in the chocolate industry as Toblerone has proved) and can be a useful added level of protection, the potential costs of a failed application and the expenses which could be incurred in dealing with challenges from other parties might suggest that businesses’ time is better spent ensuring their word marks and logos are sufficiently protected.