No Breaks for Kit-Kat
The latest in Nestlé’s attempt to trademark its iconic four-finger chocolate is at odds with EU law.
On the 11th of June, 2015, it was reported that the Advocate General (AG) of the Court of Justice of the European Union (CJEU) has advised that Nestlé’s application for the three dimensional ‘Kit Kat’ shape is not compliant with EU law. Although not an official ruling, it poses a serious threat to the future of three dimensional trademarks.
The AG’s opinion is the latest development in this long-running chocolate bar dispute between Nestlé and Cadbury, which started off when Cadbury tried to trademark the colour purple it uses on its Cadbury chocolate wrappers. Nestlé objected and finally had its original decision allowing Cadbury to trademark the colour overturned in 2013.
Nestlé is of the opinion that over time, the four-fingered chocolate bar’s physical form had acquired distinctive character associated with the company since its launch in 1935, and should thus become a trademark. Nestlé sought to register the three dimensional shape as a trademark with the UK Intellectual Property Office, back in 2010, to which Cadbury opposed.
Indeed, many other three dimensional shape marks have been successfully trademarked, the most famous example perhaps being the Coca-Cola bottle. So why should the Kit Kat three dimensional trademark application be refused? Three dimensional trademarks are notoriously difficult to register because a registered trademark grants perpetual monopoly rights and, because, the registration of these marks provide a huge advantage in a highly competitive market where products are alike or differ only by a few features. Once a three dimensional mark is registered, no one else can use the same or similar shape for the same or similar goods and is thus, considered anti-competitive.
The argument put forward by Cadbury was that without the branding and the logo, the four-fingered rectangular shape which Nestlé seeks to trademark, was not distinctive enough to warrant a trademark. The AG agreed with Cadbury and took the view that the shape of the Kit Kat bar would not be eligible as a trademark since in terms of EU legislation, trademarks that are devoid of distinctive character, or signs that consist exclusively of the shape which results from the nature of the goods themselves, or the shape of goods is necessary to obtain a technical result, and therefore cannot be validly registered. The AG acknowledged that distinctiveness can be either inherent in the product or acquired through the use of the mark. The assessment of whether a particular three dimensional mark fulfils this requirement must be based on the perception of an average consumer of the category of goods in question, who is reasonably well-informed, observant and cautious.
Considering these factors, the AG opined that although there may be a general recognition of the shape of the Kit Kat bar, this did not necessarily mean that consumers perceive it as the indicator of origin. For this reason, the AG did not consider the Kit Kat bar shape as capable of identifying the origin of the goods by itself.
The AG’s opinion on the above-mentioned matter should perhaps not come as a surprise, as Lindt’s bunny, reindeer and mouse-shaped chocolates have also been deemed unregistrable trademarks.
Indeed it is thought that the CJEU’s reluctance to register such trademarks may be explained as the CJEU’s unwillingness to allow companies to monopolise three dimensional shapes, especially, as in the case of Kit Kat, where the shape in question may not be seen by the consumer until after the product has been purchased.
This matter will now proceed for a final judgment before the CJEU, following which the UK High Court will give its decision on the merits of Cadbury’s opposition to the registration of Nestlé’s Kit Kat three dimensional mark.