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Case analysis: Nestlé and Cadbury [2016] EWHC 50 (Ch) 20 January 2016


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  • Case analysis: Nestlé and Cadbury [2016] EWHC 50 (Ch) 20 January 2016

    In our recent blog post (here), we outlined the UK High Court judgment on the latest appeal concerning Nestlé’s attempt to register the 3D shape of its four-fingered bar.  Here, Julius Stobbs shares his further thoughts and comments on the decision:

    The big difficulty in this decision is that Arnold’s key question relates to the concept of “reliance”. Is it enough to show that consumers recognise a product as being a specific product from a particular party based on the shape of the product (as Nestle’s surveys seemed to show in this case) or does one have to go further and show that consumers rely on the shape in some way and understand that the shape is functioning in a trade mark sense. The CJEU did not seem to engage with this question and instead focussed on the fact that the consumer has to understand origin as a result of use of the sign in question and that sign alone. A literal application of the CJEU decision would surely confirm that Nestle did do enough? The surveys did show that a large proportion of people being shown the sign recognised the sign’s origin, and they did so without the help of any other sign, so on the basis of the CJEU determination why not confirm registration on the basis of acquired distinctiveness?

    The problem for Arnold is that the reason that he did not do this in the first place was the question of reliance, and it does not seem that this question has been answered. I would imagine another reference will have to happen on this point (although not in this case!).

    This is a very important case for anyone interested in trade mark protection for unusual marks such as shapes or colours. The concept of reliance, whilst intellectually understandable, creates huge issues from a practical point of view. How does one really show that a consumer not only recognises the sign but relies on it also? And without leading the consumer to a particular answer in the way that we are not allowed to do in surveys?

    I can only make sense of this position if the concept of reliance is really another way of expressing “trade mark use”. If you study the development of the case law on this point, the difficulty in the cases is in showing that the party has used the mark in a trade mark sense rather than used it any old how, but to such an extent that consumers recognise it anyway. Naturally it is usually easier to do that for a traditional word or logo as against a shape or colour but not impossible. This surely fits with the statutory scheme – acquired distinctiveness must be based on use of the sign, and is reasonable to interpret this “use” as being use in a trade mark sense. Ultimately Nestle are penalised here for the fact that they rarely use their sign in a way that suggests that they think of it as a trade mark which is intended to indicate origin. If they don’t use it this way why should they have the monopoly? Unfortunately that does not appear to be exactly what is being said, which, at least in my view, leaves a very unsatisfactory position.