On Thursday, the General Court (GC) annulled the Board of Appeal’s decision on the validity of Nestlé’s EUTM shape registration for its 4-bar KitKat. The decision is another blow for Nestlé, as it potentially sets a higher bar for them to prove acquired distinctiveness and suggests that their evidence of use does not relate to the goods covered in their registration.
Nestlé’s mark was registered in 2006 for ‘sweets; bakery products, pastries, biscuits; cakes, waffles’ but crucially, not for ‘chocolate, chocolate products, confectionery, candy’ which had originally been in the specification, but were removed prior to publication.
The GC considered whether the use made of the mark could be considered use on the goods covered by the registration. Here, it was found that the KitKat is a type of sweet or biscuit, and therefore not a subset the other goods covered by the registration such as ‘bakery products, pastries, cakes and waffles’. The evidence submitted by Nestlé therefore could not be used to demonstrate acquired distinctiveness in relation to these other goods.
A further question was whether Nestlé’s evidence showed acquired distinctiveness across the whole EU. Nestlé demonstrated acquired distinctiveness in ten out of the fifteen member states, but this was deemed to be insufficient by the GC, who required proof of acquired distinctiveness in every member state. The insistence that acquired distinctiveness must be shown throughout the EU is consistent with the EUIPO’s practice on other non-distinctive marks. However, it sets a very high bar for applicants wishing to show acquired distinctiveness. The GC did permit grouping member states together, but even then, collecting evidence across all 28 member states is no small feat.
This decision creates another question around how the EUTM system deals with national boundaries. It has long been established that showing reputation in one member state can be sufficient to prove reputation in an EUTM. The IPEC decision in Sofa Workshop v Sofa Works concluded that use in only one member state was not sufficient to show genuine use of an EUTM (see our post on that decision here, and on the application of this approach by the UKIPO here). It now appears that in order to show acquired distinctiveness, evidence must be submitted relating to every member state (or as good as). In doing so, a three-speed evidence test based on whether a party is looking to claim acquired distinctiveness, valid use or a reputation has been created.
As raised previously, Cadbury argued that the shape of the goods cannot have acquired distinctiveness because it is only ever used in conjunction with other marks, e.g. “KIT KAT”. The GC followed the CJEU’s decision and confirmed that it’s not necessary to show that consumers rely on the shape in order to identify the origin of the goods, it is only necessary to show that the mark, when used independently of other marks (e.g. as in the surveys submitted by Nestlé) serves to identify the origin of the product without the possibility of confusion. The fundamental condition is that the mark could serve to identify the goods as originating from a particular undertaking in the mind of the relevant public.
This approach confirms that the concept of ‘reliance’ is not part of EU trade mark law. It also confirms that a mark can acquire distinctiveness even when it is only ever used as part of or in conjunction with other marks. It goes further and states that in order to acquire distinctiveness, a mark need not appear on packaging or be visible at the time of sale.
Another underlying factor not discussed at length is that in order to acquire distinctiveness, a mark must be used as a trade mark; it is only through brand use of a mark that consumers can be educated to perceive an inherently non-distinctive mark as an indicator of origin. Whilst conducting surveys to show consumer recognition across 28 different countries may be beyond the budgets of most trade mark owners, this sort of brand use (labelling marks as trade mark, using ‘look-for’ advertising) is at least something which is within the control of all brand owners.
Overall, this is a mixed decision. On the one hand, the test for showing acquired distinctiveness appears to have increased. On the other, upholding the notion that a mark can acquire distinctiveness even if only ever used alongside other marks provides brand holders with some light at the end of the 28 member state tunnel.