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KitKat’s EU shape mark in trouble (again)

19-12-2016

Last week, the General Court of the European Union issued a judgement on the EU trademark (EU TM) registered to protect the shape of Nestlé’s four-fingered KitKat chocolate bar. The General Court decided that Europe’s IP office (EUIPO) must re-examine if the trademark has acquired distinctiveness throughout the entire EU. Frouke Hekker outlines the implications of the ruling.  

More than a year ago, a ground-breaking judgement by the Court of Justice of the European Union (CJEU) eventually led to the invalidation of the UK registration for the KitKat shape. Last week, the EU’s General Court also laid a proverbial bomb under the EU TM registration that protects the shape of Nestlé’s four-fingered bar.

Shape marks can be difficult to acquire
Registration exclusion grounds have been imposed to prevent companies from acquiring a monopoly over technical solutions or a product’s functional characteristics. To prevent shapes (and other characteristics) from being monopolised in this way, European legislation contains three grounds of exclusion. These exclude shapes and other characteristics (such as colours and sounds) from trademark protection, if: 1) they consist of a shape or characteristic which results from the nature of the goods themselves; 2) if the shape or characteristic gives substantial value to the goods; or 3) if the shape or characteristic of  the good is necessary to obtain a technical result.

Only shapes that are not excluded on these grounds can obtain trademark protection, but – as with trademarks in general – only if they satisfy criteria for distinctiveness. In practice, this is quite a hurdle as it can be difficult to argue that consumers recognise a shape as a distinguishing mark of a particular undertaking. The greater the similarity of the shape to a product’s obvious shape, the less distinctive it will be deemed to be. Ideally, shapes need to depart significantly from the norm or customs of the sector in order to fulfil the essential function of a trademark of indicating a product’s origin.

The KitKat EU TM registration
Nestlé filed an application to protect the four-fingered shape of its KitKat bar for sweets, bakery products, pastries, biscuits, cakes and waffles in 2002. Cadbury (now part of Mondelez International) applied for a declaration of the mark’s invalidation in 2007. This declaration was dismissed by EUIPO in 2012. EUIPO held at the time that the four-fingered bar had acquired distinctiveness as a result of its intense and frequent use in the EU; in other words, Nestlé was able to argue successfully that the shape mark had acquired distinctiveness and the registration remained intact.

EUIPO’s Board of Appeal (BoA) found that:

  • The surveys conducted in 10 EU member states showed sufficiently that the shape mark had  acquired distinctiveness throughout the EU;
  • Acquired distinctiveness was demonstrated in respect of all the goods specified in the goods and services description.

The General Court judgement
In this latest ruling, the EU’s General Court has disagreed with the findings of the BoA. It states instead that acquired distinctiveness must be proven in all EU member states.  

Based on the CJEU’s standard case law, a trademark applicant must demonstrate that distinctive character has been acquired through the use of a mark in the member states where the mark had no intrinsic distinctive character. In the case of 3D shape marks, such as the four-fingered KitKat bar, this means that acquired distinctiveness must be shown for the entire EU. At the moment that Nestlé filed the application, the EU comprised 15 member states. Therefore, BoA should have examined the evidence that was adduced  for the remaining member states.

In addition, the General Court, stated that BoA erred in law with its consideration that acquired distinctiveness was proven for all the goods and services that were mentioned in the goods and service description because, as EUIPO stated, these could all be seen as subcategories of the confectionery category. Instead, to prove acquired distinctiveness for all the goods for which protection is sought, the mark must be used for each category of goods and services as specified by the trademark proprietor. The BoA overlooked the fact that the evidence only demonstrates use of the mark with regard to sweets and biscuits.

Based on the considerations above, the General Court has annulled the BoA’s decision and ordered it to re-examine if the shape of the four-fingered bar satisfies the criteria of distinctiveness. (Note - the shape mark has not been declared invalid yet, as the world’s media suggests. The final decision belongs to EUIPO and is yet to be made).

If you have a question about trademark protection and/ or the grounds of exclusion please do not hesitate to contact us.

Frouke Hekker works in Novagraaf’s Competence Centre. She is based in Amsterdam