Kit Kat—CJEU gives thumbs down to registration of 3D shape mark

What does the latest guidance from the Court of Justice of the European Union (CJEU) in Societe des Produits Nestle SA v Cadbury UK tell us about the pitfalls of registering product shapes as trade marks?

What is the background to this case?

This ruling from the CJEU is the latest instalment in a four year spat between Cadbury and Nestle concerning Nestle’s application to register the shape of its famous four-fingered Kit Kat as a UK trade mark (the mark).

For a comprehensive background, see coverage of the High Court’s ruling: Kit case – Have a break and wait for CJEU to clarify law on shape trade marks.

After the UK Intellectual Property Office refused registration of the mark in 2013, Nestle appealed to the High Court. Arnold J referred questions to the CJEU in order to clarify certain areas of trade mark law. The Attorney General’s Opinion suggested that EU trade mark law precluded registration of the mark. The CJEU has followed with a slightly more mixed ruling but the overall indication is that Nestle’s mark will not achieve registration in the UK.

What are the key legal issues?

As demonstrated in this case, three dimensional shape trade marks depicting a product are notoriously difficult to register because often they will be caught by the Trade Marks Directive 2008/95/EC, art 3(1)(e) (TMD) which prevents registration of marks which consist exclusively of:

  • the shape which results from the nature of the goods themselves (art 3(1)(e)(i))
  • the shape of goods which is necessary to obtain a technical result (art 3(1)(e)(ii))
  • the shape which gives substantial value to the goods (art 3(1)(e)(iii))

Also key to this case is the application of TMD, art 3(3):

‘A trade mark shall not be refused registration or be declared invalid…before the date of application for registration and following the use which has been made of it, it has acquired a distinctive character.’

What questions were referred to the CJEU by the High Court?

Question 1

In order to establish that a trade mark has acquired a distinctive character following the use that had been made of it within the meaning of TMD, art 3(3), is it sufficient for the applicant to prove that at the relevant date a significant proportion of the relevant class of persons recognise the mark and associate it with the applicant’s goods in the sense that, if they were to be asked who marketed the goods in question, they would identify the applicant. Alternatively, must the applicant prove that a significant proportion of the relevant class of persons rely on the mark (as opposed to any other trade marks which may also be present) as indicating the origin of the goods?

Question 2

Where a shape mark comprises three essential features, one resulting from the nature of the goods themselves and two of which are necessary to obtain a technical result, is registration of the shape as a trade mark precluded by TMD, art 3(e)(i) and/or (ii)?

Question 3

Should TMD, art 3(1)(e)(ii) be interpreted as precluding registration of shapes which are necessary to obtain a technical result with regard to the manner in which the goods are manufactured as opposed to the manner in which the goods function?

What did the CJEU decide?

First, the CJEU changed the order of the questions referred asserting that it should first established whether or not the mark can proceed to registration by the operation of TMD, art 3(1)(e) (set out above) before considering the issue of acquired distinctiveness under art 3(3).

Question 2—concurrent or independent application of art 3(1)(e)(i) and 3(1)(e)(ii)

Beginning with the second question, the CJEU explained that the reason for the limitations on set out in art 3(1)(e) is to prevent a trade mark registration providing monopoly rights over technical solutions or functional characteristics of goods. The CJEU confirmed that the three grounds set out in art 3(1)(e) operate independently of one another—ie if one criteria is fully satisfied, that is sufficient to defeat registration of the mark.

On the facts of this case, the mark comprised three essential features:

  • the rectangular slab shape
  • the grooves running along the length of the bar
  • the number of grooves which determine the number of ‘fingers’

The CJEU makes it clear that the criteria of art 3(1)(e) do not need to apply concurrently, it is enough that at least one of the grounds for refusal is fully applicable to the shape at issue.

Question 3—technical function relates to method of manufacture or manner in which goods function

The CJEU dealt with this question fairly briefly. In essence, the court found that the restriction in art 3(1)(ii) refers only to the manner in which the goods function and does not relate to the way in which the goods are manufactured.

Question 1—acquired distinctive character

The CJEU began with the fundamental premise that the essential function of a trade mark is to guarantee the identity of the origin of the goods in question. Referring to the Advocate General’s Opinion, the CJEU held that:

‘Regardless of whether that [trade mark] use is as part of another registered trade mark or in conjunction with such a mark, the trade mark applicant must prove that the relevant class of persons perceive the goods or services designated exclusively by the mark applied for, as opposed to any other mark which might also be present, as originating from a particular company.’

This is a key point because Cadbury has argued that absent from the mark in this case is the Kit Kat word mark which is embossed on each finger of the Kit Kat bar.

What does this ruling mean for the future of 3D trade marks?

Although it remains to be seen exactly how things will pan out in the High Court, the CJEU has provided welcome guidance concerning the tricky area of registering 3D marks.

Where shape marks fall within art 3(1)(e), applicants should think about other routes to IP protection such as a registered design or, if applicable, patent registration albeit that these routes provide a limited term unlike potentially infinite trade mark protection.

Mere association of a trade mark with a product by consumers is not enough to prove acquired distinctive character—if it were, Nestle would likely have no problem as the four finger shape has a long history and is widely recognised. Instead, a trade mark owner would need to prove that consumers perceive the mark as an indication of origin independently of any other marks that are present. This is a tough hurdle for Nestle and other applicants of 3D marks because shapes are often used in conjunction with a word mark and/or logo and therefore it is difficult to prove that consumers rely on shape alone to identify the origin of the goods.

Jessica Stretch, solicitor in the Lexis®PSL IP & IT team.

This article is republished with kind permission of WIPIT’s sister site, Lexis®PSL IP & IT. For a free trial click here.

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