Shape Up! Or Ship Out !

by Udita Kanwar

Societe des Produits Nestlé v. Cadbury UK

Credits: BigPicture
Credits: BigPicture

Legal Provision

Directive 2008/95/EC[1] -Article 3(1) (e).

Article 3(1) (e)

 The following shall not be registered or, if registered, shall be liable to be declared invalid:

Signs which consist exclusively of:

(i)the shape which results from the nature of the goods themselves;

(ii)the shape of goods which is necessary to obtain a technical result;

(iii)the shape which gives substantial value to the goods;

Facts

Nestlé’s Kit-Kat is undoubtedly one of the most popular and loved chocolates across the world. The chocolate boasts of an 80 year old patronage and popularity. Nestlé has secured trademark for its chocolate Kit Kat in U.K. however, in a bid to gain a broader protection for its chocolate brand it sought out to register trademark for the 3D four ‘fingers’ shape of the chocolate at the UK Intellectual Property Office (IPO). This formed the subject matter of the recent CJEU decision in the case of Societe des Produits Nestlé v. Cadbury UK[2] on 16th September, 2015.

Decision of the UK IPO Examiner

Nestlé’s application for registration of shape as trademark was opposed, in January 2011, by the rival Chocolate brand Cadbury, stating that it lacked ‘inherent distinctive character’. The matter was decided (in 2013) by the UK IPO examiner, who rejected the application due to it being ‘devoid of inherent distinctive character.’ The decision of the Examiner was based on the examination of the three essential features of the chocolate’s shape:

1.The Rectangular shape;

2.Presence, Position, and Depth of grooves; and

3.The total number of grooves that divided the rectangular slab and created the requisite number of ‘fingers’.

On examination of the abovementioned features, it was concluded that the rectangular shape was a result of the nature of the goods itself (rather than a result of creative ingenuity) but it could be registered for cakes and pastries. The second and third features were necessary to obtain a technical result therefore incapable of being protected as trademark; as a result the application was rejected. In July 2013, Nestlé Appealed against this decision to the English High Court[3].

Cadbury too appealed against the decision on the premise that the Examiner had been incorrect in deciding that the shape had inherent distinctive character if considered for cakes and pastries.Nestle-suffers-setback-in-Kit-Kat-shape-trademark-registration_strict_xxl

The English High Court and CJEU (Court of Justice of European Union) Guidance

The High Court held that it was incorrect of the Examiner to make a distinction between cakes and pastries and other goods of Class 30 (NICE Classification) when deciding upon the distinctive nature of goods. In order to decide whether the impugned trademark had acquired a distinctive character by virtue of its long use, prior to the relevant date (Application filing date), the High Court sought the guidance of CJEU on three questions[4]:

1.Whether it is sufficient evidence for the Applicant to prove that at the relevant date, a significant proportion of the relevant class of persons recognized the mark and associated it with the Applicant’s goods?

CJEU’s Response

The court held that a strong trade mark is one which immediately invokes in the minds of the consumers the identity of origin of the said goods or services. The court observed that a distinctive character in a trademark ought to assessed in relation to (a) the goods and services in question; and (b) the presumed expectations of the class of persons/consumers who are reasonably well informed and observant. Therefore, irrespective of the fact whether the trade mark sought to be registered is being used independently or in along with other marks as long as it is capable of creating a recall value it is capable of being registered. In the case of a shape (for registration as a trademark), it was observed that the shape should be so distinct that the consumers can simply by looking at the shape relate to the origin (i.e. Kit-Kat). This also means that no other mark should be present on such shape, it has to be seen independently (for instance, Toblerone has registered its shape as trade mark).

2.Whether Article 3(1) (e) of the Directive 2008/95 precludes registration as a trademark of a sign that consist of shape of goods where the shape contains three essential features, one of which results from the nature of goods themselves, and two of which are necessary to obtain technical result?

It was stated by the CJEU that for a shape (consisting of three essential features (one of which results from the nature of goods themselves, and two of which are necessary to obtain technical result) to be precluded it was necessary to prove that at least one of the grounds specified under Article 3(1) (e) is completely applicable to shape sought to be registered.

3.Whether Article 3(1) (e) must be interpreted to refer only to the manner in which the goods at issue function or also to the manner in which they are manufactured?

The court clarified that wording of the provision made a reference only to the shape of the goods that were obtained as a technical result, there had been no mention of process in which the goods were manufactured. Hence, the same did not have to be taken into consideration.

The matter is now left to be decided finally by the English High Court.

Conclusion

If one reads the CJEU guidance it becomes quite clear that Nestle will not succeed in its attempt to trademark its shape, the reason being that there is no evidence that has been shown (conclusively/convincingly) that the consumers identify the four ‘finger’ shape exclusively with Kit Kat [the mark Kit Kat is visible on the shape, the shape is not seen in isolation]. Secondly, the examiner had concluded that shape of the good (chocolate) was basically to achieve the technical result of breaking the wafers (the grooves make it easier to break the chocolate) therefore, it will be falling within the ambit of Article 3(1)(e). If the English High Court rejects the Application (of Nestle) [which is highly possible] there might be a rise in imitators of the shape of Kit Kat, much to the concern of Nestle. A very interesting conclusion that can be drawn from this decision is that if manufacturers are cautious and advertise their product based on their shape alone (no branding over the shape) then they can successfully register it as a trademark giving them a much broader protection and preventing imitators of their product’s unique shape.

(Udita is pursuing Masters in Intellectual Property and Technology Laws from National University of Singapore. She is a graduate of Gujarat National Law University and writes regularly on popcornlawindia.wordpress.com)

_______________________

[1] Directive to approximate the laws of the Member States relating to trade marks.

[2] 3C-215/14

[3] [2013] EWHC 16 (Ch).

[4] Media, N. (2015). CJEU issues mixed ruling in Kit Kat shape row. [online] Worldipreview.com. Available at:http://www.worldipreview.com/news/cjeu-issues-mixed-ruling-in-kit-kat-shape-row-8847 [Accessed 19 Sep. 2015].

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s