KIT KAT faces a Trade Mark Meltdown

Distinctive character?

In the latest instalment to the KIT KAT legal battle (Joined Cases C-84/17 P, C-85/17 P and C-95/17 P, Société des produits Nestlé v Mondelez UK Holdings & Services, 25 July 2018), the CJEU has recently reconsidered what is required to prove the acquired distinctiveness of a shape for a European Union Trade Mark (EUTM) that is devoid of inherent distinctive character.

The question of whether the shape has acquired a sufficient level of distinctiveness through use is answered by considering whether the shape alone has become a means by which people recognise the brand. To provide a working example, could it be said that ‘four trapezoidal bars aligned on a rectangular base’ is a shape that is instantly recognisable as a KIT KAT bar?

Background

In 2006, the EU intellectual Property Office (EUIPO) granted Nestlé a trade mark for the shape of the four-finger KIT KAT bar. Mondelēz International (previously Cadbury Holdings) contested the granting of this trade mark, because its product ‘Kvikk Lunsj’ is an almost identical four-finger chocolate snack.

In 2007, Mondelēz International filed an application for a declaration of invalidity, initiating the long-standing legal battle between the two corporations.

The issue for consideration was whether, in order to obtain trade mark protection for a shape, it must be proven that the shape has acquired distinctiveness in the EU as a single geographical territory (i.e. considering the EU as a single market), or whether it must be proven that the shape had acquired distinctiveness in every individual member state of the EU.

Mondelēz argument:

It was argued by Mondelēz International that, in consideration of the unitary nature of a EUTM, each constituent state of the European Union should recognise the shape of the KIT KAT bar as distinctive, in order for it to be said that the shape of the product had acquired a sufficiently distinctive quality to give rise to trade mark protection.

This argument was rejected by the court. Conversely, as per the argument advanced by Nestlé, the CJEU agreed that if proof of distinctiveness had to be shown for every single individual member state, it would become too onerous for a company applying for trade mark protection for their product to attain such a high standard.

Nestlé argument:

Whilst also considering the unitary nature of the EUTM itself, Nestlé conversely argued that the EU should be considered as a single market, and distinctiveness should only need to be acquired in a ‘substantial part of the EU’.

Evidence in support of the acquired distinctiveness of the shape had been collected by the company for at least 90% of the population of the European Union, namely every member state excluding Belgium, Ireland, Portugal and Greece.

The outcome

Notwithstanding the arguments advanced by both parties, the CJEU confirmed that ‘the acquisition of distinctive character must be substantiated for the European Union as a whole and not for the sum of its national markets. Such an interpretation is inherent in the very existence of the internal market, which has characteristics similar to those obtaining in a national market’ (Paragraph 114 of the judgment).

The above excerpt from the judgement confirms that it is not necessary for a trade mark owner to adduce evidence of acquired distinctiveness through use for each individual member state.

Moreover, the CJEU agreed with all points in the Opinion of Advocate Melchior Wathelet given on 19 April 2018, where his recommendation was to strike out Nestlé’s appeal.

The CJEU upheld the previous ruling of the General Court in 2016, which indicated that the KIT KAT chocolate bar had not acquired a sufficient level of distinctiveness as a shape trade mark across the European Union.

The CJEU also instructed the EUIPO to re-examine whether the KIT KAT product should be afforded trade mark protection, following the Opinion given by Advocate Melchior Wathelet that the entire shape trade mark should be annulled.

Briffa comment:

Non-conventional trade marks are hard to get. This case has clarified the position of the CJEU that EUTM owners wishing to obtain trade made mark protection for non-conventional marks such as shapes mush demonstrate that the mark has acquired distinctiveness in the European Union as a whole and not for the sum of its national markets (although where Member States can be grouped by geographical or cultural interrelation, such groups may be treated as one market and applicants may use the evidence to indicate acquired distinctiveness that group of Member States).

Identify all brand identifiers. This case demonstrates the importance of trade mark protection in general, as vital way to protect the words, logos, shapes, colours and other signs and brand identifiers that customers use to identify and find your products. It is always advisable to invest in your primary brand identifiers first in our view (e.g. your headline brand name and logo) and then to invest in secondary brand identifiers (e.g. non-conventional marks such as shapes and colours) as the business grows and the brand becomes more distinctive.

Briffa advises on all areas of intellectual property law including trade mark advice, prosecution, opposition, invalidation, revocation and infringement cases. If you would like more information or if you would like to book a free 30-minute consultation with one of our IP expert lawyers, please do not hesitate to drop us an email on info@briffa.com or call 020 7096 2779.