Nestlé have suffered a significant blow in their battle to trademark their four-fingered wafer shape chocolate bar known as KitKat. After the trademark was initially granted, the company fought for 11 years to retain the trademark. During these 11 years, Nestlé have been met with consistent opposition from their rival Cadbury, itself another household name and ultimate subsidiary of Mondelēz International.
Background to the case
Nestlé first applied for a European trademark of the "four trapezoidal bars aligned on a rectangular base" – as a KitKat was once referred to by a European Union (EU) legal advisor – back in 2002. After much consideration, the trademark was approved. However, competitors in the market contested this decision in 2007 and thereby began the protracted litigation saga that culminated in yesterday's decision confirming that the EU's General Court had been right to annul the decision of the European Union Intellectual Property Office (EUIPO).
Following a long and no less hard-fought battle through the court system then, the Court of Justice of the European Union (CJEU) have directed the EUIPO to reconsider their decision to trademark the KitKat shape. The principal reason for this direction is that the CJEU deemed the bar as being not well-known enough throughout the entire EU bloc itself. In other words, it was not sufficiently distinct from other products to warrant the coveted protection of a trademark. For the KitKat to have qualified, it would need to have been recognisable through the shape of the bar alone. In the lower courts, Nestlé could not provide evidence of the KitKat's distinctiveness in Belgium, Ireland, Greece and Portugal. On appeal, the requirement for the product to be recognisable in each EU Member State was challenged by the worldwide conglomerate as being too difficult to achieve in practice.
Although the CJEU decision was only revealed yesterday, many commentators predicted the outcome as a result of the Advocate General's opinion back in April of this year. This opinion is only persuasive and not legally binding, but in most cases the CJEU align themselves with the views of the Advocate General.
Implications of the decision
Before the decision of the CJEU yesterday, the position was that a mark which was not originally distinctive could nevertheless be registered as a trademark if it has acquired distinctiveness. Broadly speaking, if consumers are educated as to the origin of the particular mark through marketing and advertising, the mark can be said to have acquired distinctiveness.
The clear ruling stemming from the CJEU's judgment is that in order for such products to be protected throughout the EU, they need to be distinctive enough across all Member States, not just amongst a 'significant part' of these countries. This is a much higher hurdle to satisfy than was previously thought necessary.
The ramifications of this judgment are not difficult to predict. Indeed, it is highly likely that the ruling against Nestlé will encourage other companies to engage in copycat practices across the industry. One only has to look as far as discount shopper Poundland for such imitations, when they were sued for trademark infringement of the renowned Toblerone product. Incidentally, this matter was settled before it even went to court.
The decision will certainly please Mondelēz, which owns and produces Kvikk Lunsj, itself a popular Norwegian chocolate bar that is practically identical in size and appearance to the KitKat. As mentioned above, Mondelēz first opposed the decision of the EUIPO in 2007.In rather tit-for-tat fashion, Nestlé opposed Cadbury's application for trademark protection over the shade of purple that their chocolate products are wrapped in.
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