21 January, 2016

Another Break - Justice Arnold Settles the Kit Kat Case After CJEU Decision

After quite an unsatisfying Court of Justice decision earlier in September in the Kit Kat case, many of us invested in the world of IP were waiting for the decision by the High Court of Justice in the UK applying the CJEU's considerations. The case has since been decided by Justice Arnold, finally settling (for now?) the debate around the the-dimensional marks.

By way of a short introduction, the case of Société Des Produits Nestlé SA v Cadbury UK Ltd dealt with the arguably iconic Kit Kat chocolate bar. The bars comprise four individual chocolate wafer fingers connected to each other with a solid chocolate base. Nestle applied to register the three-dimensional shape of the bar as a trademark without the Kit Kat logo embossed on the top of each finger, which was subsequently opposed by Cadbury. The case was referred to the CJEU by Justice Arnold (discussed more here), leading to the decision in question.

Justice Arnold post the CJEU decision (approximation)
The biggest issue in the case was the apparent mistranslation of Justice Arnold's question, who, in essence, asked whether an applicant needed to only prove recognition (and subsequent association to the applicant) of the mark by a significant portion the relevant public, or whether they have to rely on the mark to indicate the origin of the goods for a mark to have acquired distinctiveness. One has to note that this has to be in isolation of any other marks present in that product, and that particular feature has to identify the origin of the goods by themselves (i.e. the shape of the bar rather than the embossed logo on the top of it). The questions were, however, partially mistranslated during the proceedings, with the latter question being changed to a matter of perception rather than reliance.

Both the Opinion of Advocate General Wathelet and the judgment by the CJEU failed to address Justice Arnold's question in full, rejecting the first part of the question but leaving the matter of reliance unanswered.

Having considered the possible answer to his question, Justice Arnold summarized what he perceived the accurate consideration to be: "...in order to demonstrate that a sign has acquired distinctive character, the applicant or trade mark proprietor must prove that, at the relevant date, a significant proportion of the relevant class of persons perceives the relevant goods or services as originating from a particular undertaking because of the sign in question (as opposed to any other trade mark which may also be present)". (emphasis the court's)

Additionally, he concluded that "...when assessing whether the applicant has proved that a significant proportion of the relevant class of persons perceives the relevant goods or services as originating from a particular undertaking because of the sign in question, to consider whether such persons would rely upon the sign as denoting the origin of the goods if it were used on its own".

The focus on provenance is therefore on both perception of a particular mark as the indicator of the origin of certain goods or service, and whether the same public subsequently relied on that mark to indicate that very origin, irrespective of any other marks that might be present on those goods.

Justice Arnold then answered the question, agreeing the initial decision of the Hearing Officer. In his mind, although he referred to reliance on the mark, his rationale was in line with the CJEU decision. He correlated reliance with perception, which would fulfill the requirement set by the CJEU. Although survey evidence showed identification of the Kit Kat bar, it merely displayed recognition and not that they perceived it as the exclusive designation of the origin of the goods in question. Therefore he dismissed Nestle's appeal due to a lack of concrete evidence establishing acquired distinctiveness.

The Kit Kat saga has been a curious one, and does highlight some issues that surround CJEU referrals and linguistic nuances. Even so, this writer thinks Justice Arnold applied the law as well as he could in the light of the answer given by the CJEU. This does, however, raise questions on evidence, especially with the survey evidence shown by Nestle and the uncertainty as to what would be sufficient to establish 'perception' and subsequent reliance.

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