Fingers crossed: is the shape of the Kit-Kat bar registrable as a community trade mark?

Ever since the introduction of the Community Trade Mark (CTM) it has been possible to seek registration for (inter alia) “the shape of goods or of their packaging”.  Manufacturers have made good use of this entitlement over the past two decades to secure the registration of a wide range of 3D marks.  Yet the confectionery industry has struggled to take advantage of this entitlement.  Thus, in the last few years, Mars, Lindt and Storck have all failed in their respective attempts to register the shape of their confectionery as CTMs.

But Nestlé has managed to buck the trend, for, in a recent ruling won from an Office for Harmonisation in the Internal Market (OHIM) board of appeal, it succeeded in securing a ruling that the shape of its well-known four-fingered KIT-KAT bar was a valid CTM registration.[1]

Background

In 2002 Nestlé applied to OHIM to register as a CTM for a range of class 30 goods a 3-D sign consisting of four trapezoidal bars aligned on a rectangular base (the Shape).  Although it initially objected to the entire application on grounds of non-distinctiveness, OHIM subsequently withdrew its objection to all of the goods in the specification other than chocolate, confectionery and candy, and the application achieved registration in 2006 for sweets, bakery products, pastries, biscuits, cakes and waffles.

In the following year Cadburys applied to OHIM for a declaration that the registration was invalid, which was granted by the Cancellation Division in 2011.  Nestlé appealed and, in a decision of the Second Board of Appeal of OHIM (the Board) in December 2012 (the Decision), the appeal was allowed.

The Decision

Both of the principal issues in the Decision related to Article 52 (“Absolute grounds for invalidity”) of the Community Trade Mark Regulation (CTMR). [2]  The major issue was whether or not the mark was “devoid of any distinctive character”  and, if so, whether that prohibition should be disregarded if the trade mark had become distinctive in relation to the goods for which registration had been requested in consequence of the use which had been made of it.   The other, and minor, issue was whether the mark was unregistrable on the grounds that it consisted exclusively of the shape of goods which is necessary to obtain a technical result.   We shall discuss each of these issues below.

Inherent distinctiveness?

Whilst acknowledging that it was not appropriate to apply more stringent criteria when assessing the distinctiveness of shape marks than in the case of other categories of marks, the Board recognised that the task of establishing distinctiveness for shape marks could be more difficult than for other categories.  Average consumers, it held, were not in the habit of making assumptions about the origin of products on the basis of their shape, in the absence of any graphical or word element.  Furthermore, it was not enough to show originality:  the shape in question must “differ substantially” from the basic shape of the goods.  And where low-priced goods were involved (like sweets, for example) consumers’ attentiveness was low.

The hurdle to establish inherent distinctiveness in a case such as this was therefore high, and the Board found that Nestlé had failed to clear it.  In its opinion a trapezoid was a basic geometrical shape; the presence of four identical bars did not add any striking feature; and the mere fact that Nestlé had been the first in the market to use that shape did not per se make it distinctive.  In summary, the Board agreed with the Cancellation Division that the mark was devoid of inherent distinctiveness.

Acquired distinctiveness?

The Board held that, for the argument of acquired distinctiveness to succeed, the proprietor needed to evidence intense use of the mark, and to show that that use had enabled the sign to possess the central function of a trade mark, namely the function of indicating origin.  In other words, the proprietor had to show that a significant proportion of the relevant section of the public identified the goods as originating from a particular undertaking.

With non-word marks, the Board explained that the assessment of distinctiveness would be the same throughout the EU, in the absence of concrete evidence to the contrary.  But it went on to rule that it was unnecessary to establish this distinctiveness “in every nook and cranny” of the EU.  Furthermore, the EU would be assessed not as it is today, but as composed at the time of the filing date of the mark.  It followed from the latter that almost half of the current member states could be disregarded for evidentiary reasons, a point that substantially assisted Nestlé in its task.

Applying the above law to the case in issue, the Board accepted that in the five largest member states (France, Italy, Germany, Spain and the UK), which together represented some 80% of the (then) EU’s population, Nestlé’s surveys had shown a spontaneous recognition of the Shape in excess of 42%.  The Board also noted that there had been high degrees of recognition in other member states, and that the Shape had been used by Nestlé as a trade mark in almost the totality of the EU’s then territory.  On the basis of this evidence, the Board overruled the Cancellation Division’s decision, and found that the mark had indeed acquired distinctiveness for use in the EU.

Technical result?

Cadburys had argued that the joinder of the four bars through a thinner base contributed to making the portioning of those bars easier, that this was “a technical result”, and that the mark was therefore unregistrable.  But the argument was swiftly rejected by the Board.  It did not consider that any contribution made by the Shape to the easier portioning of the product constituted the performance of a technical function.  And the Board considered that any such solution might in any case have been incorporated without difficulty in 3-D marks that did not include a trapezoidal shape of each bar.

Conclusion

The Decision represented sweet revenge for Nestlé which, only a couple of months earlier, had been thwarted in its opposition in the English High Court to Cadburys’ UK trade mark application to register a purple colour mark for chocolate.  But, in the circumstances,  this is unlikely to be the last legal battle between the two competitors!