(Gruff Voiceover) Previously on SpicyIP’s Choco Wars:
Nestle had successfully prevented Cadbury from registering the colour Pantone 2685C.
*In the courtroom, Cadbury’s CEO glares at his Nestle Counterpart*
*Screen goes blank*
In this piece, I shall explain how Cadbury thwarted Nestle’s attempt to register the following shape:
Yes, indeed. Nestle tried to register the shape of Kit Kat as a trade mark.
So, without much ado, let us get straight to the facts.
What we call “Kit Kat” today, was first launched, in 1935, as “Rowntree’s Chocolate Crisp”. Gradually, the chocolate’s etymology evolved to “Kit Kat Chocolate Crisp”, followed by the snazzier “Kit Kat”. Interesting trivia aside, here are the more relevant facts:
If you were to take a break and have a look at an unwrapped Kit Kat, this is what you would see:
Note the absence of the embossed words “Kit Kat” in the earlier Black and White Image. That image was a part of Nestle’s application and is a graphical representation of the mark that Nestle is trying to register.
So, Nestle tried to register the shape in its purest form. Had Nestle been successful, competitors would not have been able to use the shape, even if they embossed the fingers with different words.
Moving on, the case has travelled through quite a few judicial bodies.
After it finally got to the England and Wales High Court, Justice Arnold referred the matter over the Court of Justice of the European Union (CJEU) for clarification upon three questions. It is these very questions that will form the crux of my analysis over the course of the next three pieces.
Anyway, after the Advocate General (Court of Justice) and the CJEU gave their opinion on the matter, the case went back to Justice Arnold, who concluded the matter in favour of Cadbury.
I have reproduced the three questions over here for your convenience.
‘(1) In order to establish that a trade mark has acquired distinctive character following the use that had been made of it within the meaning of Article 3(3) of Directive 2008/95 …, is it sufficient for the applicant for registration to prove that at the relevant date a significant proportion of the relevant class of persons recognise the mark and associate it with the applicant’s goods in the sense that, if they were to consider who marketed goods bearing that mark, they would identify the applicant; or must the applicant prove that a significant proportion of the relevant class of persons rely upon the mark (as opposed to any other trade marks which may also be present) as indicating the origin of the goods?
(2) Where a shape consists of three essential features, one of which results from the nature of the goods themselves and two of which are necessary to obtain a technical result, is registration of that shape as a trade mark precluded by Article 3(1)(e)(i) and/or (ii) of Directive 2008/95 …?
(3) Should Article 3(1)(e)(ii) of Directive 2008/95 … be interpreted as precluding registration of shapes which are necessary to obtain a technical result with regard to the manner in which the goods are manufactured as opposed to the manner in which the goods function?’
“1. The following shall not be registered or, if registered, shall be liable to be declared invalid:
(e) signs which consist exclusively of:
(i) the shape which results from the nature of the goods themselves;
(ii) the shape of goods which is necessary to obtain a technical result;
(iii) the shape which gives substantial value to the goods;
Question (1) Deconstruction
The question seeks to know the standard for determining “acquired distinctiveness”.
I have already discussed “acquired d.” here.
The question provides two thresholds to choose from:
Is “acquired distinctiveness” said to have been achieved when a significant proportion of the public associates the mark to a particular undertaking? Is it enough, if upon being asked about the origin of a mark, consumers correctly identify the applicant undertaking or;
Is “acquired distinctiveness” said to have been achieved only when customers rely on the mark, as opposed to other marks that could also be present (word marks, etc.), to make a purchase?
The court chose Threshold 2 and I believe it made the right choice.
But first, let us look at what exactly the Court meant.
Consider this question:
1. Will customers use the Kit Kat shape to identify the undertaking, in the absence of other marks(such as word marks or other conventional marks)?
The same question can be twisted another way:
2. Will customers get confused w.r.t. the origin of the product, if a chocolate is of the Kit Kat shape, but has other marks on it (such as word marks or other conventional marks) indicating a different origin?
The Court held that only if:
the answer to the first question (1) is a “Yes” and;
the answer to the second question (2) is a “No“, could the shape be registered as a trade mark.
Now, let us look at the aptness of such a line of reasoning.
The court chose not to allow an undertaking to protect a mark, if consumers merely associated the mark to the undertaking, instead of using the mark to identify the product’s origin. For instance, you might know that a shape is associated with a particular undertaking, but you might not decide that the product belongs to said undertaking based exclusively on that mark.
If consumers do not use or rely upon the mark, then the mark cannot be said to be fulfilling the role of a trade mark and can consequently be considered to be useless as a trade mark. It follows that conferring status of a trade mark to a mark that doesn’t deserve it will result in unnecessary costs upon the world at large. These costs include costs of disallowing competitors from using the mark, enforcement costs borne by the regulator, future litigation costs and so on.
If we look back at the factors for determining “acquired d.” enumerated upon in Philips, we would notice that one of the factors was that consumers had to use the shape mark and not just associate the shape mark with an undertaking.
The current case, along with Philips has strongly established the use factor as a necessary factor for proving a shape mark has acquired distinctiveness.
Note that this is a special requirement for registration of unconventional trade marks. Conventional trade mark are inherently distinctive and consumers are naturally inclined to use them to identify the undertaking behind a product. Therefore, in their case, establishing reliance is not required.
Deconstruction of Question. 2. Click here.