Nestlé loses latest trade mark battle with Cadbury over KitKat shape



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  • Nestlé loses latest trade mark battle with Cadbury over KitKat shape

    Case comment: [2016] EWHC 50 (Ch) 20 January 2016

    The Chancery Division of the High Court yesterday issued its judgment on the latest appeal concerning Nestlé’s attempt to register the 3D shape of its four-fingered bar. Sadly for Nestlé, in a double blow, Mr Justice Arnold dismissed their appeal against an earlier decision to refuse the registration of their shape mark and upheld Cadbury’s cross appeal also to refuse the mark protection for ‘cakes’ and ‘pastries’.

    Since the filing of Nestlé’s trade mark application back in 2010, Cadbury has argued that the shape of the KitKat bar is not distinctive enough to be protected as a trade mark, hence Nestlé should not be granted a monopoly to manufacture confectionery goods to that shape. Nestlé has counter-argued that the shape is iconic and well known by consumers as indicating a KitKat bar, thus it deserves registered trade mark protection.

    The first decision, issued by the UK Intellectual Property Office (UK IPO) in 2013, held that the mark had not acquired a distinctive character and consisted exclusively of a shape which results from the nature of the goods, and therefore refused to register the mark. This decision was appealed by both parties to the High Court, which prompted Arnold to refer three questions on points of law to the Court of Justice of the European Union (CJEU).

    In his analysis of the CJEU’s answers, Arnold expressed regret that one of his precisely worded questions on acquired distinctiveness had been reformulated by the CJEU, such that the answer provided to that question was unclear. The ambiguity over the answer to this question resulted in disagreement between the parties as to the correct interpretation, leaving Arnold to apply the answer as best as he could in order to reach his final conclusion.

    Ultimately, Arnold supported the original UK IPO contention that the evidence of use filed by Nestlé had demonstrated that consumers associate the shape with Nestle’s product, but no more than that. In order for a claim of acquired distinctiveness to succeed, it is necessary to show that consumers rely upon the shape of the goods alone in order to identify the origin of the goods, without seeing any brand names, logos, or packaging, to assist them in making this connection.

    As consumers are so influenced by these other visual elements, it is notoriously difficult (albeit not impossible) to establish that consumers rely exclusively upon the shape to determine trade origin. In this case, it was noted that KitKat bars had been sold in opaque wrappers, such that the shape of the four-fingered bar inside was not even visible to consumers at the time of purchase.

    With Arnold sticking firmly to his guns, there is little doubt that Nestlé will wish to challenge his interpretation. A further appeal from Nestlé will be expected.