11 November, 2015

Taking a Break - Kit Kat Decision Issued by ECJ

For all lovers of confectionery goods the name Kit Kat will undoubtedly be a familiar one, even without its highly memorably slogan. The iconic British chocolate bar has been around since the 1930s, and above all else what many will remember is its shape, comprising of five individual chocolate covered wafer 'fingers' connected at the base by a lawyer of chocolate. As such shapes can be protected through intellectual property law, but whether Kit Kat's design is truly distinctive enough to be protected as a trade mark, has been a contested question here in the UK for several years, ultimately being referred to the European Court of Justice by Justice Arnold nearly two years ago in Société Des Produits Nestlé SA v Cadbury UK Ltd [UK High Court of Chancery]. As a result the ECJ handed down its judgment in September this year.

The case of Société Des Produits Nestlé SA v Cadbury UK Ltd [European Court of Justice] dealt with an application for a trademark by Nestle for a three-dimensional representation of the Kit Kat bar, omitting the embossed words "Kit Kat" from the top of the chocolate bar's individual fingers. After the application's publication Cadbury submitted an opposition against its registration, arguing a lack of distinctive character, initially having the mark rejected by the UK Intellectual Property Office, ending in Nestle's appeal to the UK High Court.

Justice Arnold submitted three questions to the ECJ prior to his later judgment applying the Court's consideration.

The ECJ started by answering the second question posed by Justice Arnold. What was asked was seen as "...whether Article 3(1)(e) of Directive 2008/95... must be interpreted as precluding registration as a trade mark of a sign consisting of the shape of goods where that shape contains 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".

After a very brief consideration of precedent, especially relating to the prevention of any registration monopolizing a technical solution or functional characteristics, the Court determined that "...Article 3(1)(e)... must be interpreted as precluding registration as a trade mark of a sign consisting of the shape of goods where that shape contains 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, provided, however, that at least one of the grounds for refusal of registration set out in that provision is fully applicable to the shape at issue". What remains key is the refusal of registration based on a single ground under Article 3(1)(e), even if, predominantly, the shape does not fall under all of the grounds. Public interest in the strict enforcement of the grounds of refusal was important in the Court's view, as a contrary position would allow for the monopolization of the very subject matter the Article seeks to disallow. What is uncertain is how this applies to a shape as whole and its respective components. Would a shape be negated as a whole if it contains a part that would fall under the grounds (negating the registrability of the whole design)? Arguably, this would be the case, but the decision leaves this unclear.

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The Court then moved on to the third question, which it saw as asking "...whether Article 3(1)(e)(ii)... under which registration may be refused of signs consisting exclusively of the shape of goods which is necessary to obtain a technical result, must be interpreted as referring only to the manner in which the goods at issue function or whether it also applies to the manner in which they are manufactured". As the wording of the sub-section does not discuss the manner of manufacture for the goods, the Court had to decide whether it implicitly does so. They quickly decided against this, setting out that "...that Article 3(1)(e)(ii)... must be interpreted as referring only to the manner in which the goods at issue function and it does not apply to the manner in which the goods are manufactured". The inclusion of manufacturing methods, in this writer's mind, would encroach onto the territory of patents, and how a product is made does not designate its origin; the primary function of trademarks.

Finally, the Court proceeded to question one, which was set out as "...whether an applicant to register a trade mark which has acquired a distinctive character following the use which has been made of it within the meaning of Article 3(3)... must prove that the relevant class of persons perceive the goods or services designated exclusively by that mark, as opposed to any other mark which might also be present, as originating from a particular company, or whether it is sufficient for that applicant to prove that a significant proportion of the relevant class of persons recognise that mark and associate it with the applicant’s goods".

Again, considering precedent in brevity, the Court saw that "...in order to obtain registration of a trade mark which has acquired a distinctive character following the use which has been made of it within the meaning of Article 3(3)... regardless of whether that use is as part of another registered trade mark or in conjunction with such a mark, the trade mark applicant must prove that the relevant class of persons perceive the goods or services designated exclusively by the mark applied for, as opposed to any other mark which might also be present, as originating from a particular company". What the question therefore requires is that the proprietor of the mark has to prove that the relevant class of people perceive their mark, in this case "Kit Kat", to only originate from them and not other proprietors selling similar goods, even if the goods contain other registered trademarks (or a design, in this case). The onus would be on Nestle to show that the shape of the chocolate bar, regardless of the inclusion of the words "Kit Kat", would be indicative of the source of the bar by itself (i.e. a distinctive feature). The Court did omit Justice Arnold's question on reliance on the mark, focusing on their 'perception' and 'recognition' of the mark. Arguably reliance does not necessarily follow the two, but this writer thinks, in the Court's mind, their intention is to include reliance through perception, as seeing and knowing a mark in conjunction with another would still carry some weight in the purchase decision, effectively creating a level of 'reliance'.

The case has since been referred back to the High Court for ultimate decision, but this writer thinks, based on earlier considerations, that the shape of the Kit Kat bar might not be enough to distinguish it from other similar ones to allow for the registration of the mark. The ECJ's answers to the questions seemed unsurprising, however leaving many things uncertain or somewhat unanswered, but give more nuanced guidance, which is never too abundant in today's legal sphere. How the case will be applied in the future is uncertain, but hopefully this application will manifest even more clarity as a result.

Source: IPKat

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