Out-Law News | 22 May 2017 | 10:56 am | 4 min. read
The Court of Appeal dismissed Nestlé's trade mark claims despite acknowledging that evidence the company produced from a consumer survey showed most consumers of its product associated the shape of its mark with a Kit Kat.
The consumers' mere association of the shape mark with the Kit Kat brand was, however, not sufficient to demonstrate, under trade mark law, that the shape had 'acquired distinctiveness' through its use, the Court ruled. Indeed, Lord Justice Kitchin said that it was "fatal" to Nestlé's trade mark application "that the public had only come to associate the shape with Kit Kat".
The Court said, however, that it is possible for marks, including shapes, to be considered to have acquired distinctiveness from their use, whether on their own or in conjunction with other marks.
Intellectual property expert Iain Connor of Pinsent Masons, the law firm behind Out-Law.com, said: “The Court of Appeal has given some really helpful guidance on the question of when a 3D shape will have acquired sufficient distinctiveness to allow it to become a trade mark. Interestingly for brand owners, it appears that one reason why the attempt to register the Kit Kat shape has faced an uphill struggle is because consumers have been used to seeing the shape and the distinctive 'Kit Kat' name together which has led to consumers recognising the shape as a Kit Kat but not regarding that shape as denoting who makes the chocolate bar.”
The Court of Appeal's ruling was shaped by an earlier judgment by the EU's highest court, the Court of Justice of the EU (CJEU), in the long-running dispute between Nestlé and Cadbury over whether the shape of Nestlé's Kit Kat bar can benefit from trade mark protection.
EU trade mark law recognises that shapes or other signs capable of being represented graphically can qualify for trade mark protection if they are "capable of distinguishing" one company's goods or services from those of its rivals.
Marks which are devoid of distinctive character cannot be registered as trade marks. However, where marks are not inherently distinctive, they can nevertheless be registered as trade marks if it can be shown that the mark has "acquired a distinctive character in relation to the goods or services for which it is registered" through its use.
The legal test for determining whether there is a sufficient link between marks and brands to merit trade mark protection involves evaluating what the 'average consumer' of a type of product perceives when they see a mark, such as a shape. The average consumer is deemed to be reasonably well informed and reasonably observant and circumspect.
In the Court of Appeal's ruling, Lord Justice Kitchin said the CJEU had deemed that it is not sufficient for a brand owner to point to the average consumer's recognition and association of their mark with their product as evidence of acquired distinctiveness under trade mark law.
The judge explained that there is an important distinction to be made between what an average consumer can be said to perceive and what they recognise and associate when they see a mark. He admitted the distinction "may be a rather elusive one" for "a non-trade mark lawyer".
Lord Justice Kitchin said: "We are concerned here with a mark, the three-dimensional shape of a chocolate product, that has no inherent distinctiveness. A shape of this kind is not inherently such that members of the public are likely to take it as a badge of origin in the way they would a newly coined word or a fancy name."
"Now assume that products in that shape have been sold on a very large scale under and by reference to a brand name which is inherently highly distinctive. Assume too that the shape has in that way become very well-known. That does not necessarily mean that the public have come to perceive the shape as a badge of origin such that they would rely upon it alone to identify the product as coming from a particular source. They might simply regard the shape as a characteristic of products of that kind or they might find it brings to mind the product and brand name with which they have become familiar," he said.
"These kinds of recognition and association do not amount to distinctiveness for trade mark purposes, as the CJEU has now confirmed in its decision in this case," the judge said.
That there are rival chocolate bars on the market with a similar shape to the Kit Kat bar was a relevant factor in the outcome of the case.
"For the shape in question here to have acquired distinctiveness, the court must be able to conclude that a significant proportion of consumers, seeing it used in relation to chocolate bars, would perceive it as designating the goods of a particular undertaking," Lord Justice Floyd said. "That does not mean that he or she must be able to identify the undertaking. In essence, what he or she must be able to conclude is that the goods in question are the goods of one undertaking and no other."
"I have found it helpful to have in mind a basket of unwrapped and otherwise unmarked chocolate bars, in the shape of the mark applied for, available for selection in a shop or supermarket. For there to be acquired distinctiveness, the consumer must perceive these goods as being Kit Kats, or as originating from the people who make Kit Kats, and not from others. A perception that they looked like Kit Kats is not enough. Acquired distinctiveness carries with it an indication of exclusive trade origin," he said.
Brand owners do not have to show that consumers "rely on the shape as an indicator of trade origin", but if they can evidence that it would help prove the mark had acquired distinctiveness, Lord Justice Floyd said.
However, the judge making it "a necessary precondition" that brand owners show consumers have relied on the shape as an indicator of origin "could conceivably lead to error".
He said: "The ultimate question is whether the mark, used on its own, has acquired the ability to demonstrate exclusive origin. It would be unwise to attempt a list of the ways in which this can be demonstrated."