You may have heard about the ongoing Court battle between Nestlé and Cadbury, arising out of Nestlé’s application to register a three-dimensional shape as a trade mark.
Nestlé v Cadbury – shape trade mark application dispute
Case Summary
In 2010, Nestlé applied to register a three-dimensional shape mark for its Kit Kat chocolate bar. The 3D mark (left) depicts the four-finger chocolate-coated wafer, without the Kit Kat logo embossed into the chocolate.
Fellow confectionary giant, Cadbury, opposed Nestlé’s application. It argued that the mark did not have a distinctive character and that, further, the shape of the mark was necessary to obtain a technical result.
If Cadbury was right in either of its arguments, the application for registration had to fail: section 3 of the Trade Marks Act 1994 dictates this, should either of those circumstances apply.
Unfortunately for Nestlé, the hearing officer at the Intellectual Property Office (IPO) agreed with Cadbury and rejected the application, except in relation to cakes and pastries.
Nestlé appealed the decision in relation to the remaining classes of goods for which registration was refused. Cadbury appealed the ruling that the mark could be registered for cakes and pastries.
When the matter came before the Court again in January 2014, the High Court referred three questions to the Court of Justice of the European Union (CJEU), so that those answers could then be applied in determining the parties’ appeals. In reply to the questions posed, the CJEU held that:
- A shape cannot be registered if it has a mixture of features that contravene different provisions of Article 3(1)(e) of the Trade Mark Directive (provisions mirrored in section 3(2) of the Trade Mark Act 1994) as long as at least one of the objections apply fully to the shape;
- The ‘necessary to achieve a technical result’ ground for refusal of registration relates only to the functionality of goods, not their manner of manufacture;
- To show that a mark has acquired distinctiveness, the applicant must show that the relevant public perceives the mark exclusively as designating origin.
Following the response from the CJEU, the parties agreed that the CJEU’s answers in relation to the shape of the mark and the nature of the goods meant that this ground did not prevent the registration of the mark.
The battleground was therefore the question of whether or not the mark had acquired distinctiveness.
The High Court came to the conclusion that in order to show that a mark has acquired distinctive character, Nestlé needed to be able to show that a significant proportion of the relevant class of persons perceived the relevant goods or services (those in relation to which the registration was applied for) as originating from Nestlé because of the sign in question (the three-dimensional mark), as opposed to any other trade mark which may be present, such as the Kit Kat name.
In applying this decision to the evidence, the Court upheld the reasoning of the hearing officer:
- There was no evidence that the shape of the product had featured in Nestlé’s promotions for its chocolate bars for many years prior to its application for registration of that shape;
- The product is sold in an opaque wrapper which until recently did not feature the shape of the goods within e.g. the chocolate bar;
- There was no evidence – and it seemed unlikely – that consumers would use the shape of the goods post-purchase to verify what it was that they had purchased;
- Whilst customers associated the shape of the product with Kit Kat, they did not rely on the shape to distinguish the product as being a Kit Kat.
In conclusion, the Court held that it had not been proved that the mark had acquired distinctiveness. Nestlé’s appeal was therefore dismissed and Cadbury’s appeal was allowed.
Summary
The case is interesting on a number of levels. First of all, the CJEU reformulated the question that had been asked of it in relation to acquired distinctiveness. As a consequence, the answer did not match the question put! The High Court was left with two options: one, to refer to the question again or, two, to continue with its determination of the matter.
The Court chose to press on and in so doing interpreted the CJEU’s decision that in determining whether the relevant public perceived the relevant goods as originating from Nestlé as a consequence of the sign, it is also permissible to consider whether that relevant public relies on the trade mark to do just that. Perception is, arguably, a lower evidential threshold to overcome than reliance.
It is also worth noting that Nestlé put forward survey evidence which confirmed that at least half of those surveyed recognised the mark as a Kit Kat product. This was not considered sufficient to show that the shape had acquired distinctiveness in line with the test as now formulated: the questions that had been asked in those surveys were, the Court felt, designed to prompt those participating to name the source of the product in question. This was not felt to prove that the participants perceived (or indeed relied on) the mark as exclusively designating the origin of the product.
Survey evidence is unlikely to ever be determinative in proving acquired distinctiveness – as this case demonstrates, a number of factors led both the hearing officer and the High Court to the conclusion that the mark had not acquired distinctiveness – but the case serves as a salutary reminder that any questions posed within a survey must be very carefully structured to be of evidential value.
How can Nelsons help?
Emma Toes (née Ward) is a Partner in our Dispute Resolution team, specialising in contentious intellectual property matters.
For more information on the subjects discussed in this article, please contact Emma or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.