10 September 2018 #Commercial
Last year, we wrote about Nestlé’s decade-plus efforts to achieve EU trade mark registration for the three-dimensional shape of its Kit Kat chocolate bar (certainly very distinctive here in the UK!), and setbacks in 2016 both with an adverse ruling from the EU General Court and with the UK High Court ruling against UK trade mark protection for the shape. We also noted that Nestlé’s nemesis in all of this has been Mondelēz International, a group whose brands include Cadbury.
In relation to Nestlé’s EU trade mark application, the EU General Court accepted that Nestlé had shown, through survey evidence, that the Kit Kat shape was recognised in 10 EU countries, and so had acquired a “distinctive character” in a substantial part of the EU. This was not enough for the Court, however, as there was no such evidence for other parts of the EU, and the Court’s view was that it was not possible simply to ignore that, as “distinctive character” had to be shown throughout the territory of the EU.
Perhaps unsurprisingly, Nestlé appealed this part of the ruling to the European Court of Justice (ECJ) (Mondelēz also appealed, claiming that the finding of “distinctive character” was wrong, but had its appeal dismissed).
The ECJ handed down its decision at the end of July. This supported the 2016 decision of the EU General Court, and set out that, for a trade mark to acquire distinctive character through use if it did not already have a distinctive character throughout the EU, the distinctive character acquired through use of that mark had to be shown throughout the EU, and not only in a substantial part of it. Whether an applicant for an EU trade mark puts forward proof of distinctive character globally for all the EU member states concerned, or separately for different member states or groups of member states, does not matter. But the applicant cannot (as Nestlé did) simply produce evidence that does not cover part of the EU, even a part consisting of only a single member state, if looking for EU-wide protection. Nestlé’s survey evidence, that the product shape was recognised in 10 EU countries, and so had acquired a “distinctive character” in a substantial part of the EU, was therefore not sufficient.
The judgment is obviously potentially very challenging for a brand owner seeking EU trade mark protection, which explains why Nestlé were supported in their appeal by MARQUES, the European association representing the interests of brand owners. Effectively, if your brand does not already have a distinctive character throughout the EU (and there are only a relatively limited number of brands which achieve this), and you are seeking EU trade mark protection, you are required to demonstrate that the brand has acquired distinctiveness in parts of the EU where hitherto it had no such distinctive character.
So where now? The case goes back to the EU Intellectual Property Office Board of Appeal, whose decision led, on appeal, to the 2016 EU General Court ruling. And it could be that Kit Kat need to do some more survey work round the EU.