21 January 2016

Kit Kat shape: not registrable as a UK trade mark

In the long-running case relating to Nestlé’s application to register as a UK trade mark the 3D shape of a four fingered Kit Kat (but without the Kit Kat branding), Arnold J has decided that the mark was correctly rejected by the UK IPO, following an opposition by Cadbury, as it lacked acquired distinctiveness. The decision follows the Court of Justice’s ruling (discussed in our September 2015 bulletin) which, due to its somewhat opaque nature, had opened up arguments of how it should be interpreted when the case went back to the English Court. In reviewing the CJEU’s decision, Arnold J analysed in detail the process of translation of referred questions and judgments, and the possible implications this had for the CJEU’s understanding of the question he had referred. He concluded that it is necessary to show that, at the relevant date, a significant proportion of the relevant class of persons perceives the relevant goods or services as originating form a particular undertaking because of the sign in question (as opposed to any other sign that may also be present). 

Key aspects of the decision

  • Arnold J’s provisional view when referring the case to the CJEU was that, for acquired distinctiveness, an applicant for a trade mark must prove that a significant proportion of the relevant class of persons rely upon the trade mark (as opposed to any other trade marks which may also be present) as indicating the origin of the goods. 
  • Both the Advocate General and the CJEU accepted that it was not sufficient for a trade mark applicant to prove that, at the relevant date, a significant proportion of the relevant class of persons recognised the mark and associated it with the applicant's goods. However, they did not appear to accept or rule out the alternative option Arnold J had posed, i.e., as represented by his provisional view. Arnold J expressed regret that the CJEU had (as it often does) reformulated the referred question, with the result that its answer was unclear and failed to address explicitly this second option. 
  • The CJEU’s ruling was that the applicant must prove that the relevant class of persons perceive the goods or services designated exclusively by the applied for mark, as opposed to any other mark which might also be present, as originating from a particular company. Arnold J said that this perception must arise because of the sign in question (as opposed to any other trade mark which may also be present). Further, it was legitimate to consider whether the relevant class of persons would rely upon the sign as denoting the origin of the goods if it were used on its own. 
  • In this case, Arnold J agreed with the Hearing Officer’s assessment of the relevant factors which had led him to conclude that, whilst a significant proportion of consumers recognised the shape and associated it with goods made by Nestlé, consumers did not rely on the shape to identify the origin of the goods:
    • The shape did not feature in Nestlé’s promotions for the product in the many years prior to the application.
    • The product is sold in opaque packaging which, until a few months before the filing of the application, did not show the shape.
    • There was no evidence that consumers used the shape post purchase to check they had chosen the product from the intended trade source. 
    • A survey which showed that at least half of those surveyed thought that a picture shown to them depicted a KIT KAT product merely showed that consumers recognised the shape and associated it with KIT KAT products. Arnold J agreed that just because a majority were able to name KIT KAT did not prove that they perceived the shape as exclusively designating the trade origin of such products. 
    • There was likely to have been a number of similarly shaped products produced by other companies on the market in the period leading up to the mark being applied for, but there was no evidence that consumers thought those products were KIT KAT products.
  • Given the way in which the CJEU had answered the questions relating to the shape objections (i.e. that a shape mark will only be precluded from registration if one of those objections applies to all essential features of the mark), Cadbury accepted that those objections should not be maintained and they are not considered further in the decision.

Next steps

Nestlé has confirmed that it will seek permission to appeal to the Court of Appeal, and that Court is likely to need to consider further the unfortunate lack of clarity in the CJEU’s decision. In his frustration with the CJEU, Arnold J went as far as to say he was tempted to refer the question again, but decided against this course of action, as there was no realistic proposition that it would lead to a materially different result. This does not rule out the possibility though, if there is an appeal, of a further CJEU reference. 

In the meantime, there are separate proceedings relating to Nestlé’s CTM for the shape, which the OHIM Board of Appeal had upheld finding that there was acquired distinctiveness, rejecting Cadbury's challenge. Cadbury had appealed that decision to the General Court, and the proceedings had been suspended pending the CJEU’s decision in this case. A decision concerning an application for a two-finger version of the mark has also been stayed by the OHIM Board of Appeal.

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