Rulings rejecting taxi and chocolate bar shapes as trade marks reflect intentions of trade mark law, says expert

Out-Law News | 22 Jan 2016 | 3:15 pm | 3 min. read

The strict circumstances in which shapes can benefit from trade mark protection have been reinforced by two new rulings issued by the High Court in London, an expert has said.

Specialist in intellectual property law Iain Connor of Pinsent Masons, the law firm behind Out-Law.com, said the rulings reflect the difference public policy makers intended there to be between the scope of protection offered by trade marks and design rights.

"Law makers intended to restrict the circumstances in which shapes could be registered as trade marks to ensure that trade mark law does not stand in the way of freedom, innovation and competition in 3D design," Connor said. "Trade mark law provides monopoly rights to rights owners. In the context of 3D designs, even those that are the most iconic, it has never been the intention for trade marks to apply to any 3D shape that cannot, without the addition of features such as brand names, colour or packaging design, serve as a symbol of the brand it originates from."

Connor was commenting after the High Court rejected Nestlé's bid to trade mark the shape of its Kit Kat bars and separately revoked two trade marks owned by London Taxi Company for the shape of London taxi models.

In the Kit Kat case, Nestlé challenged an earlier ruling by the Intellectual Property Office (IPO) which found that the shape of its Kit Kat bars was not distinctive enough on its own for a clear link to be associated with the Nestlé brand since there are similar products available on the UK market. Nestlé unsuccessfully challenged this finding despite producing consumer survey evidence to support its argument.

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.

Intellectual property law expert David Woods of Pinsent Masons said: "Cadbury will be pleased to have won the latest round in this on-going battle with Nestlé. It’s possible that Cadbury have a similarly shaped product in the pipeline which they are planning to launch and this decision would help clear the way for that new product. It also clears the way for others in the confectionary market and Cadbury may well be just as happy to see Nestlé have to deal with more competition." 

"This argument between Cadbury and Nestlé is just the latest battle between these parties. In 2013 Nestlé was successful in preventing Cadbury from obtaining a trade mark registration for the colour purple,” he said.

In the taxi case London Taxi Company had argued that companies behind a new zero-emissions taxi being trialled currently in London had "substantially copied" the shape of its model of taxis that it held trade marks for, in breach of those rights. However, the High Court rejected those infringement claims and revoked the trade mark owned by London Taxi Company. Revocation was on the grounds that the marks "were devoid of inherent distinctive character" and had not acquired distinctive character through their use.

The judge for both cases, Mr Justice Arnold, previously asked the Court of Justice of the EU (CJEU) a number of questions on how the High Court should interpret certain aspects of trade mark law and how it applies to shapes. The CJEU issued its ruling in September last year. Mr Justice Arnold applied the CJEU's findings when determining the outcome of the Kit Kat and taxi cases.

In one of his main findings, the judge said: "In order to demonstrate that a sign has acquired distinctive character, the applicant or trade mark proprietor must prove that, at the relevant date, a significant proportion of the [average consumer] perceives the relevant goods or services as originating from a particular undertaking because of the sign in question (as opposed to any other trade mark which may also be present)."

However, Mr Justice Arnold said there are still areas of trade mark law that are unclear in relation to its application to shapes and that it would beneficial for the CJEU to offer guidance on the points in future.

In his taxi case judgment, the judge said that it is his view that the shape of product can only be deemed to have inherent distinctive character if that shape is "unusual". However, he said that the mere fact a shape is unusual does not mean it can automatically be said to have inherent distinctive character.

However, Mr Justice Arnold said that the issue would need to be referred to the CJEU for guidance on. The judge said he did not do this in the taxi case because it was not "necessary to do so" to determine the outcome of the dispute before him.