-It’s a Kit Kat, isn’t it?
Is it though?
-Well, it looks like a Kit Kat.
But is that enough?
-Enough for what?
Let me tell you a story…
As you likely know, Kit Kats are 2 or 4 fingers of connected chocolate covered wafers. For a number of years they have been amongst the highest selling chocolate bars in the UK.
In 2010, the company that produces Kit Kats in the UK, Société des Produits Nestlé SA, filed an application seeking to register this 3D sign as a trade mark in the United Kingdom:
In effect, Nestlé sought a monopoly over the shape of a 4 fingered Kit Kat bar, which, amongst other things, would in theory allow them to stop others using this shape, or similar shapes, for chocolate bars.
In order to be validly registered, trade marks must be distinctive (i.e. the public must be able to use them to tell the goods of one business from those of another). Cadbury UK Limited filed an opposition to try to stop this application being registered by arguing, amongst other things, that it lacked distinctive character. Nestlé argued that even if this were true when chocolate bars in this shape were first launched by their predecessors in 1935, the shape has become distinctive of their goods in the eyes of the public a result of the use that has been made of it over the years.
Nestlé submitted evidence in support of their arguments, including a survey of members of the public, which, it was found by the Hearing Officer at the British Trade Marks Registry, suggested that at least half of the respondents gave answers which probably meant that they thought that the shape was a Kit Kat. Nonetheless, he did not consider that the evidence was sufficient to show that the mark applied for had become distinctive of chocolate bars in the UK. Cadbury’s opposition was upheld and the application refused.
This led to an appeal to the High Court, which referred several questions to the Court of Justice of the European Union for clarification on the precise nature of the test to be applied when determining whether or not a mark has acquired a sufficient level of distinctiveness. The case then returned to the High Court, in which Mr. Justice Arnold applied the CJEU’s guidance to the facts of the case, and upheld the Hearing Officer’s refusal of the application. Nestlé then appealed the case to the Court of Appeal, which issued its judgment this week (http://www.bailii.org/ew/cases/EWCA/Civ/2017/358.html), who also found against them.
The main focus of the cases turns on whether, in order for a non-distinctive shape mark to have become distinctive (and hence registrable) as a result of its use, a significant proportion of the relevant class of consumers have to:
1. Rely on the shape of such goods to inform their buying choices (i.e. is the shape of a Kit Kat something that the public rely on to ensure that they are buying Nestlé’s product),
2. Simply perceive that goods in that shape come from a particular business, without necessarily relying on the shape themselves to decide whether or not to buy the product (i.e. do the public think that chocolate bars in that shape are exclusively from Nestlé), or
3. Merely recognise and associate the mark with a particular business (even if other businesses do or may use that shape also).
Nestlé has never promoted Kit Kats solely with reference to their shape, which cannot be seen before it has been bought and unwrapped. Further, the packaging clearly displays a prominent Kit Kat logo, which is also embossed onto the fingers themselves. It has been suggested that the distinctive name, packaging and logo are far more likely to be relied upon by the public to verify that they are getting the Kit Kat product than the shape of the bar itself (to which they are rarely, if ever, exposed before purchase). With this in mind, Nestlé fulfilling test 1 above seems almost impossible.
Fortunately for Nestlé, the CJEU suggested that the correct test was test 2 above. Unfortunately for Nestlé , on applying this test, the High Court and the Court of Appeal nonetheless concluded that the Hearing Officer at the Trade Marks Registry did not make any material errors and upheld his decision to refuse the application. In short, he correctly concluded that Nestlé’s evidence, including its survey evidence, did not prove that the public associate the shape alone with only their products.
This can come across as overbearingly pedantic, but the subtlety is an important one, as there are issues of public interest behind these judgments. It may be the case that a majority of the people in the UK, on seeing this shape, think of Kit Kats, and if so, test 3 above is clearly fulfilled. However, just because people associate something with a person or business does not necessarily mean that that person/business should be entitled to a monopoly in it over that product or service, or indeed that the public only associate it with that person or company. Many people associate corn flakes with Kellogg’s, though they are probably aware that others make corn flakes too, and it is not in the public interest to stop them making such goods or calling them corn flakes. In relation to chocolate bars, UK law has allowed Nestlé a monopoly over the word ‘KIT KAT’, the Kit Kat logo, the slogan ‘Have a break Have a Kit Kat’, and even ‘Have a break’ on its own. The public can readily perceive each of these, independent of the others, to refer to chocolate bars coming from Nestlé and no-one else. However, the courts have held, they do not see the shape of the bar alone as exclusively representing Nestlé goods, and so Nestlé should not be entitled to stop others using similar shapes for their chocolate bars.
Whether or not Nestlé attempt to appeal the case to the Supreme Court is not yet clear, and we continue to follow the case with interest. In the meantime, this latest judgment solidifies a line of case law illustrating the difficulties clients may face when trying to register shapes (or indeed sounds, movement marks, or any other sign that is not a traditional word or logo trade mark).