The KitKat shape trademark saga has been detailed on this blog in great detail, going back several years (e.g. here, here and here). The fight over the chocolate bar shape seems to have gone on forever, and this writer thought he would be old and grey before the matter ultimately concluded. After Advocate General Wathelet's opinion in April, the CJEU has finally taken the matter on, and the decision will decide the fate of the current KitKat shape registration.
While the facts of the case have been discussed extensively, it is still useful to recite the basics to anyone not familiar with the background. The case of Société des produits Nestlé v Mondelez UK Holdings & Services concerns the registration of the shape of the KitKat chocolate bar (EUTM 2632529), owned by Nestle. Cadbury challenged the registration, seeking to invalidate it, with the matter ending up with the CJEU 11 years later.
The case revolves around Article 52(2) of the CTM Regulation, which allows for the registration of marks that have acquired distinctiveness through the use of the mark in conjunction with the goods or services. The distinctive character of the mark has to exist in the entirety of the EU for it to avoid invalidation.
What underpinned the matter was whether evidence has to be proved for the entirety of the EU, and not just a select sample of countries. In the case of August Storck KG v OHIM, the CJEU saw that a mark can be registered under Article 7(3) (which has to be read in conjunction with Article 52 above) "…only if evidence is provided that it has acquired, in consequence of the use which has been made of it, distinctive character in the part of the [EU] in which it did not, ab initio, have such character". If no distinctiveness exists in relation to the mark from the very beginning, acquired distinctiveness would have to be shown in the EU.
When it comes to acquired distinctiveness, the Court emphasised that, for any mark devoid of inherent distinctiveness, "…evidence be submitted, in respect of each individual Member State, of the acquisition by that mark of distinctive character through use, the evidence submitted must be capable of establishing such acquisition throughout the Member States of the European Union". Evidence therefore does not have to be produced for each individual Member State, but can be produced in a way that shows acquired distinctiveness due to proximity in geography, culture or linguistics, and therefore acquired via another Member State even in the absence of evidence for that particular Member State.
The assessment of whether the evidence produced is enough to give the mark acquired distinctiveness in the EU is a matter for the EUIPO or its appellate courts in any given case.
The CJEU agreed with the General Court's decision, which rejected the argument by Nestle that the evidence covered the entirety of the EU, or a substantial part of it, leading to sufficient coverage. The Court therefore rejected all of Nestle's appeals, and the mark was invalidated.
The decision is a huge culmination of years of litigation, but by no means is the end of the KitKat shape trademark. While evidence was lacking for the current registration with regards to Belgium, Ireland, Greece and Portugal, Nestle are still within their rights to apply for a new registration, producing evidence to cover any missing Member States. Due to the clear monetary value of the mark, it is clear that Nestle will pursue to register the shape one way or another; however, this might just be the beginnings of a reboot for this particular litigation series
Showing posts with label acquired. Show all posts
Showing posts with label acquired. Show all posts
19 December, 2017
Hollowed Out - Can You Register a Geographical Name as a Trademark?
The origin of the materials of goods can be very influential as a part of a consumer's purchase decision, often signalling particularly high quality or desired traits not seen in similar materials from elsewhere. As such the location's name carries weight, and many different products can be made from the materials from the same source, albeit potentially still varying in quality. Being able to use the location's name is therefore quite important to all interested parties, so this begs the question; can you register the name as a trademark? The matter was recently discussed in the IPEC this past summer.
The case of Mermeren Kombinat AD v Fox Marble Holdings Plc concerned marble quarried from the Sivec region in Macedonia, where these types of activities have been going on since Ancient Rome. Mermeren is a marble extraction company operating since the 1950s in Prilep, a region that includes Sivec. They registered the name SIVEC as a trademark in 2014 (EUTM 12057915), ultimately pursuing Fox Marble for trademark infringement for using the name SIVEC. Fox Marble also counterclaimed for invalidity of the trademark.
The matter focussed on whether the trademark was invalid under Article 7(1)(c) of the CTM Regulation, which sets out that marks consisting exclusively of "…or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin or the time of production of the goods or of rendering of the service, or other characteristics of the goods or service" cannot be registered. Even with this focus the above Article is still subject to Article 7(3), where a mark can avoid Article 7(1)(c) if it has inherent distinctive character.
The Court then moved on to assessing whether the mark in question has inherent distinctive character. After an exhaustive review of case law relating to inherent distinctive character, Judge Hacon, presiding over the matter, set out the summarised eleven principles relevant when considering distinctiveness. While not discussed at length in the decision, they are still important to keep in mind when thinking about distinctiveness.
The judge started by looking at who the average consumer is. He did, however, first observe that the CJEU has not considered the meaning of a 'relevant class of persons' or what a 'significant proportion', which are an important part of this principle. Judge Hacon concluded that this would be "…a proportion markedly above de minimis but not necessarily over half" – a line that is difficult to draw when a majority isn't needed, so will heavily rely on the facts in each case.
The judge first very quickly dealt with the question of the average consumer in the matter. Agreed by both parties, the average consumer is "…a specialist dealer in marble or a person who advises their customers on the choice of materials to be used in a building, such as an architect or designer of interiors", but this person would have to be from the EU and therefore not Macedonia.
The second matter was whether the mark had inherent distinctive character. Judge Hacon swiftly determined that the mark would not have inherent distinctive character denoting geographical origin due to the obscurity of the location it referred to. The average consumer wouldn't have heard of Sivec, unless you lived near the area, which eliminates the possibility of the name having inherent distinctiveness. Use of the name would have to be disregarded, as that relates to acquired distinctive character.
The Court then moved onto the matter of acquired distinctive character. Fox Marble argued three assumptions to support a non-finding of acquired distinctiveness: the trademark is inherently distinctive and therefore can be argued to not be distinctive through use; the average consumer would only see it as denoting a geographical origin, even without knowing the place exists; and that not enough people would perceive the goods to come from Mermeren.
The judge quickly dealt with the first two assumptions, with the former having been decided when no inherent distinctive character was found. The latter was accepted by the judge, as it is possible for the average consumer to perceive the origin of the goods through this assumption; however, their actual perception would differ from this when considering the mark's use in isolation from this assumption.
Finally, the judge considered the 'messy reality' of the relevant persons' belief as to the meaning of the mark. As discussed above, the judge highlighted that, although the mark has to be perceived by a significant portion of the relevant people, this can be a portion that is markedly above de minimis. Therefore, even if all people are not persuaded, the law can still consider the amount significant.
Judge Hacon then moved onto the extensive evidence on acquired distinctive character. He concluded that "…by August 2013 a significant proportion of relevant persons, certainly markedly above de minimis and probably higher than that, had come to believe that 'Sivec' was a trade mark owned by Mermeren, signifying that marble marked with that name came from a single undertaking" and had therefore acquired distinctiveness. The more influential evidence included invoices, presence at exhibitions and advertising campaigns launched by Mermeren.
The trademark had ultimately remained validly registered and had no grounds for revocation.
The case is not ground-breaking by any means (although clarified important parts of the law in acquired distinctiveness), but shows that, through a concerted effort to educate the population as to the origin of a trademark, even if a place on Earth, can lead to a successful registration and maintenance of a mark. Evidence was clearly key in the case, rather than complex legal arguments.
Source: IPKat
The case of Mermeren Kombinat AD v Fox Marble Holdings Plc concerned marble quarried from the Sivec region in Macedonia, where these types of activities have been going on since Ancient Rome. Mermeren is a marble extraction company operating since the 1950s in Prilep, a region that includes Sivec. They registered the name SIVEC as a trademark in 2014 (EUTM 12057915), ultimately pursuing Fox Marble for trademark infringement for using the name SIVEC. Fox Marble also counterclaimed for invalidity of the trademark.
The matter focussed on whether the trademark was invalid under Article 7(1)(c) of the CTM Regulation, which sets out that marks consisting exclusively of "…or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin or the time of production of the goods or of rendering of the service, or other characteristics of the goods or service" cannot be registered. Even with this focus the above Article is still subject to Article 7(3), where a mark can avoid Article 7(1)(c) if it has inherent distinctive character.
The Court then moved on to assessing whether the mark in question has inherent distinctive character. After an exhaustive review of case law relating to inherent distinctive character, Judge Hacon, presiding over the matter, set out the summarised eleven principles relevant when considering distinctiveness. While not discussed at length in the decision, they are still important to keep in mind when thinking about distinctiveness.
The judge started by looking at who the average consumer is. He did, however, first observe that the CJEU has not considered the meaning of a 'relevant class of persons' or what a 'significant proportion', which are an important part of this principle. Judge Hacon concluded that this would be "…a proportion markedly above de minimis but not necessarily over half" – a line that is difficult to draw when a majority isn't needed, so will heavily rely on the facts in each case.
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| Not all art materials are created equal |
The second matter was whether the mark had inherent distinctive character. Judge Hacon swiftly determined that the mark would not have inherent distinctive character denoting geographical origin due to the obscurity of the location it referred to. The average consumer wouldn't have heard of Sivec, unless you lived near the area, which eliminates the possibility of the name having inherent distinctiveness. Use of the name would have to be disregarded, as that relates to acquired distinctive character.
The Court then moved onto the matter of acquired distinctive character. Fox Marble argued three assumptions to support a non-finding of acquired distinctiveness: the trademark is inherently distinctive and therefore can be argued to not be distinctive through use; the average consumer would only see it as denoting a geographical origin, even without knowing the place exists; and that not enough people would perceive the goods to come from Mermeren.
The judge quickly dealt with the first two assumptions, with the former having been decided when no inherent distinctive character was found. The latter was accepted by the judge, as it is possible for the average consumer to perceive the origin of the goods through this assumption; however, their actual perception would differ from this when considering the mark's use in isolation from this assumption.
Finally, the judge considered the 'messy reality' of the relevant persons' belief as to the meaning of the mark. As discussed above, the judge highlighted that, although the mark has to be perceived by a significant portion of the relevant people, this can be a portion that is markedly above de minimis. Therefore, even if all people are not persuaded, the law can still consider the amount significant.
Judge Hacon then moved onto the extensive evidence on acquired distinctive character. He concluded that "…by August 2013 a significant proportion of relevant persons, certainly markedly above de minimis and probably higher than that, had come to believe that 'Sivec' was a trade mark owned by Mermeren, signifying that marble marked with that name came from a single undertaking" and had therefore acquired distinctiveness. The more influential evidence included invoices, presence at exhibitions and advertising campaigns launched by Mermeren.
The trademark had ultimately remained validly registered and had no grounds for revocation.
The case is not ground-breaking by any means (although clarified important parts of the law in acquired distinctiveness), but shows that, through a concerted effort to educate the population as to the origin of a trademark, even if a place on Earth, can lead to a successful registration and maintenance of a mark. Evidence was clearly key in the case, rather than complex legal arguments.
Source: IPKat
14 November, 2017
Indistinct Taxi Service - London Taxi Design not Distinctive, says UK Court of Appeal
Shape trademarks have always been a difficult issue for the courts. The balancing act of trying to protect the general shape of something while being distinctive to get protection is a difficult line to tread, as the recent Kit Kat cases have shown among other decisions. One such saga that is currently being waged is over the design of the London black taxi, which many, this writer included, have used on a regular basis in the city. After a defeat at first instance, The London Taxi Company pursued the matter further into the Court of Appeal, who rendered their decision very recently.
The case of The London Taxi Corporation Ltd (t/a the London Taxi Company) v Frazer-Nash Research Ltd dealt with, as mentioned above, EU and UK trademarks over the design of the London black taxi (EUTM 951871 and UKTM 2440659). Frazer-Nash Research, a vehicle research and design company, designed and were ready to launch a new London taxi called the Metrocab (a hybrid electric car). In anticipation of infringement, LTC sued FNR for trademark infringement and passing off.
The Court had to look at 8 different points of appeal focusing on the validity of the trademarks and infringement of the trademarks if deemed valid.
The first point dealt with the definition of the average consumer in the case, particularly whether it would be the taxi driver who purchases the taxi or the same together with members of the public who hire taxis. Having extensively considered case law on the definition of 'average consumer', Lord Justice Floyd saw that the 'average consumer' is "…any class of consumer to whom the guarantee of origin is directed and who would be likely to rely on it". It followed from this that the 'average consumer' could include both the purchaser and the hirer of the services, but the Court didn't make a full decision on this point.
The second point dealt with the trademarks' inherent or acquired distinctive character.
In terms of inherent distinctive character, Lord Justice Floyd observed that the test for assessing distinctiveness for 3D trademarks, as set in Freixenet, is whether "…the appearance of the product itself [is] no different from those applicable to other categories of trade mark". Additionally, the trademark has to depart significantly from the norm of the customs of the sector would have distinctive character. Lord Justice Floyd then set out his test for determining whether a mark departs significantly from the norms and customs of the sector (1) determine what the sector is; (2) identify common norms and customs, if any, of that sector; and (3) whether the mark departs significantly from those norms and customs. Following this test, Lord Justice Floyd determined that the trademarks didn't have inherent distinctive character, since none of the features in the design registered were a significant departure from features in other taxis in the sector.
Therefore, the only way for the trademarks to have distinctive character is for them to have acquired it through use. As set in the recent Court of Appeal judgment in Nestle (see more in the link above), the test for acquired distinctiveness is that "…the mark must have come to identify the relevant goods as originating from a particular undertaking and so to distinguish those goods from those of other undertakings". In other words, the London Taxi Company's taxis would have to be distinguishable from other taxis through their design.
Following the decision of Justice Arnold at first instance, Lord Justice Floyd decided that the trademarks had not acquired distinctive character among taxi drivers, and that consumers were not concerned with the origin of the taxis they hired and therefore the trademarks wouldn't have acquired distinctive character in the mind of the average consumer. Lord Justice Floyd ultimately considered the marks to be invalid, but still went through the other points of appeal for the sake of clarity.
The third point is whether the shape of the mark gives substantial value to the goods, exclusive of any goodwill in the shape. Lord Justice Floyd found the guidance on this point unclear, and would have referred the matter to the CJEU if this point would still have been relevant.
The fourth point was revocation for a lack of use of the EUTM. If the mark hasn't been used in five years within the EU, the trademark is revoked. The only activity that LTC had undertaken in the EU in relation to the marks was to sell them second-hand, as production had ceased some time ago (the EUTM model was an older model of the taxi). Lord Justice Floyd, in his hypothetical answer, saw that the mark had been used in the EU, although only through the later models that were sold.
The fifth and sixth points dealt with infringement of the trademarks under Article 9(1)(b) and 5(1)(b), and Articles 9(1)(c) and 5(2). As the Metrocab and the trademark designs differed significantly, there would likely be no infringement on the marks under the former two Articles, according to Lord Justice Floyd. With regards to the latter two, there could be infringement, had distinctive character been established in the marks, as the Metrocab would've caused detriment to the trademarks' distinctiveness.
The seventh point concerned a defence of using an EUTM as an indication of, among others, quality, quantity and geographical origin. As set in Maier v ASOS, the legitimacy of the use is considered looking at "…whether there exists a likelihood of confusion; whether the trade mark has a reputation; whether the use of the sign complained of takes advantage of or is detrimental to the distinctive character or repute of the trade mark; and whether the possibility of conflict was something which the defendant was thought to have been aware".
Having considered the matter briefly, Lord Justice Floyd accepted LTC's assertion that there would be no defence of legitimate use, as the rights of a trademark holder should not be trumped by the conveying of a message that the vehicle is a licenced London taxi. This would be possible to be displayed otherwise, without infringement (although none happened in the matter).
Finally, the Court looked at the point of passing off. Lord Justice Floyd swiftly dismissed the claim of passing off, as, similarly to acquired distinctiveness above, LTC would struggle to prove goodwill in the design of the trademark. Even so, the design of the Metrocab is very different to LTC's design, and therefore wouldn't infringe even if goodwill were present in the case. The Court ultimately dismissed the appeal.
The case is yet another painful reminder of the difficulty in registering and particularly maintaining 3D trademarks. Distinctiveness is the hurdle most fall on, and the LTC taxi was no different. LTC have indicated that they might appeal to the Supreme Court, so the fight over taxis might not be over just yet.
The case of The London Taxi Corporation Ltd (t/a the London Taxi Company) v Frazer-Nash Research Ltd dealt with, as mentioned above, EU and UK trademarks over the design of the London black taxi (EUTM 951871 and UKTM 2440659). Frazer-Nash Research, a vehicle research and design company, designed and were ready to launch a new London taxi called the Metrocab (a hybrid electric car). In anticipation of infringement, LTC sued FNR for trademark infringement and passing off.
The Court had to look at 8 different points of appeal focusing on the validity of the trademarks and infringement of the trademarks if deemed valid.
The first point dealt with the definition of the average consumer in the case, particularly whether it would be the taxi driver who purchases the taxi or the same together with members of the public who hire taxis. Having extensively considered case law on the definition of 'average consumer', Lord Justice Floyd saw that the 'average consumer' is "…any class of consumer to whom the guarantee of origin is directed and who would be likely to rely on it". It followed from this that the 'average consumer' could include both the purchaser and the hirer of the services, but the Court didn't make a full decision on this point.
The second point dealt with the trademarks' inherent or acquired distinctive character.
In terms of inherent distinctive character, Lord Justice Floyd observed that the test for assessing distinctiveness for 3D trademarks, as set in Freixenet, is whether "…the appearance of the product itself [is] no different from those applicable to other categories of trade mark". Additionally, the trademark has to depart significantly from the norm of the customs of the sector would have distinctive character. Lord Justice Floyd then set out his test for determining whether a mark departs significantly from the norms and customs of the sector (1) determine what the sector is; (2) identify common norms and customs, if any, of that sector; and (3) whether the mark departs significantly from those norms and customs. Following this test, Lord Justice Floyd determined that the trademarks didn't have inherent distinctive character, since none of the features in the design registered were a significant departure from features in other taxis in the sector.
Therefore, the only way for the trademarks to have distinctive character is for them to have acquired it through use. As set in the recent Court of Appeal judgment in Nestle (see more in the link above), the test for acquired distinctiveness is that "…the mark must have come to identify the relevant goods as originating from a particular undertaking and so to distinguish those goods from those of other undertakings". In other words, the London Taxi Company's taxis would have to be distinguishable from other taxis through their design.
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| Blake loved the design of his taxi a little too much |
The third point is whether the shape of the mark gives substantial value to the goods, exclusive of any goodwill in the shape. Lord Justice Floyd found the guidance on this point unclear, and would have referred the matter to the CJEU if this point would still have been relevant.
The fourth point was revocation for a lack of use of the EUTM. If the mark hasn't been used in five years within the EU, the trademark is revoked. The only activity that LTC had undertaken in the EU in relation to the marks was to sell them second-hand, as production had ceased some time ago (the EUTM model was an older model of the taxi). Lord Justice Floyd, in his hypothetical answer, saw that the mark had been used in the EU, although only through the later models that were sold.
The fifth and sixth points dealt with infringement of the trademarks under Article 9(1)(b) and 5(1)(b), and Articles 9(1)(c) and 5(2). As the Metrocab and the trademark designs differed significantly, there would likely be no infringement on the marks under the former two Articles, according to Lord Justice Floyd. With regards to the latter two, there could be infringement, had distinctive character been established in the marks, as the Metrocab would've caused detriment to the trademarks' distinctiveness.
The seventh point concerned a defence of using an EUTM as an indication of, among others, quality, quantity and geographical origin. As set in Maier v ASOS, the legitimacy of the use is considered looking at "…whether there exists a likelihood of confusion; whether the trade mark has a reputation; whether the use of the sign complained of takes advantage of or is detrimental to the distinctive character or repute of the trade mark; and whether the possibility of conflict was something which the defendant was thought to have been aware".
Having considered the matter briefly, Lord Justice Floyd accepted LTC's assertion that there would be no defence of legitimate use, as the rights of a trademark holder should not be trumped by the conveying of a message that the vehicle is a licenced London taxi. This would be possible to be displayed otherwise, without infringement (although none happened in the matter).
Finally, the Court looked at the point of passing off. Lord Justice Floyd swiftly dismissed the claim of passing off, as, similarly to acquired distinctiveness above, LTC would struggle to prove goodwill in the design of the trademark. Even so, the design of the Metrocab is very different to LTC's design, and therefore wouldn't infringe even if goodwill were present in the case. The Court ultimately dismissed the appeal.
The case is yet another painful reminder of the difficulty in registering and particularly maintaining 3D trademarks. Distinctiveness is the hurdle most fall on, and the LTC taxi was no different. LTC have indicated that they might appeal to the Supreme Court, so the fight over taxis might not be over just yet.
31 May, 2017
KitKat Snapped - UK Court of Appeal Rejects KitKat Trademark
Having discussed the KitKat chocolate bar saga near ad nauseum, this writer was content that things might've just settled down and the matter finished its course through the courts. To my chagrin, this was not correct, and the fight over everyone's favorite four-fingered chocolate bar rages on. After a spell in the EU courts (discussed here and here), the matter moved on to ultimate determination in the UK courts (here), with the latest decision appealed to the Court of Appeal. Will Nestle be successful on their appeal after a slew of losses?
As a basic primer for the case, Societe Des Produits Nestle SA v Cadbury UK Ltd concerned the application to register the shape of the KitKat chocolate bar made by Nestle (TM 2552692), which comprised of a four-fingered bar with no markings on the surface (although commonly includes the KitKat logo on each finger). Cadbury opposed the application, and since the opposition proceedings the case has bounced between the UK and EU courts, having been decided on by the CJEU and applied by Justice Arnold in the High Court. The matter was then appealed to the Court of Appeal.
The Court's decision concerned acquired distinctiveness, which was extensively discussed in both the CJEU and the High Court, and in particular, whether the mark can have acquired distinctiveness in the absence or in the presence of an already registered trademark (i.e. the embossed KitKat logo on the fingers, but not the registration). Lord Justice Kitchin noted that, even if a three-dimensional shape is sold in conjunction with another registered trademark does not mean that the shape in itself will acquired distinctiveness, or, in other words "..[consumers] might simply regard the shape as a characteristic of products of that kind or they might find it brings to mind the product and brand name with which they have become familiar".
Lord Justice Kitchin then moved on to applying the test for acquired distinctiveness to the sign at hand, which looks at "...whether the applicant has proved that a significant proportion of 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 undertaking", i.e. the shape acts, by itself, as the badge of origin.
What remains important is the consumers' perception of the mark (seeing it and knowing where the product comes from) and reliance on the same when purchasing the product. As discussed above, Lord Justice Kitchin concluded that the main test to resolve the question above would be "...whether [a] person would rely upon the sign as denoting the origin of the goods or services if it were used on its own". This would have to be evidenced somehow, for example, through surveys. The difficulty is in showing, through evidence, the distinction of reliance on the other mark (e.g. the KitKat logo) or on the shape of the chocolate bar. Mere association of the latter with the former is not enough.
The Court didn't disagree with the initial hearing officer in their decision, as Nestle had failed to establish acquired distinctiveness, since there was no evidence that the shape of the product had featured in promotional and advertising material, that it has it never been sold in opaque packaging, or had been featured on the packaging itself (bar for a short time). Survey evidence was also inconclusive on the recognition and reliance on the shape as an indicator of a KitKat product specifically, even though identified by many by the brand.
Although the EU General Court (discussed more here) and CJEU (discussed here) decisions shed some doubts over the need for 'reliance' on the mark (allowing for it to be used in conjunction with other marks and still be distinctive), Lord Justice Kitchin rejected this argument quite straightforwardly. In his mind, the decisions simply reiterated the requirement above on perception and reliance by consumers, and while reliance is not a requirement under the CJEU decision (discussed more here), it still remains an important consideration.Reliance demonstrates that a non-distinctive mark has become distinctive in its own right.
The Court of Appeal therefore was satisfied that the mark had not acquired distinctiveness and dismissed the appeal.
The case is a big blow for Nestle, and it'll be interesting to see whether they appeal the decision further to the Supreme Court. With a CJEU decision and a strong affirmation of the same by the Court of Appeal, success on appeal would seem unlikely, and permission would probably not be granted; however, the brand and the chocolate bar itself is hugely valuable and is potentially worth fighting for. The decision also highlights the importance of reliance on a mark, even if it's not required by EU legislation. Companies should heed the need to use a shape to actively market their goods, should it be something they want to defend, and simply not assume that association with another brand will bring in distinctiveness.
Source: BBC
As a basic primer for the case, Societe Des Produits Nestle SA v Cadbury UK Ltd concerned the application to register the shape of the KitKat chocolate bar made by Nestle (TM 2552692), which comprised of a four-fingered bar with no markings on the surface (although commonly includes the KitKat logo on each finger). Cadbury opposed the application, and since the opposition proceedings the case has bounced between the UK and EU courts, having been decided on by the CJEU and applied by Justice Arnold in the High Court. The matter was then appealed to the Court of Appeal.
The Court's decision concerned acquired distinctiveness, which was extensively discussed in both the CJEU and the High Court, and in particular, whether the mark can have acquired distinctiveness in the absence or in the presence of an already registered trademark (i.e. the embossed KitKat logo on the fingers, but not the registration). Lord Justice Kitchin noted that, even if a three-dimensional shape is sold in conjunction with another registered trademark does not mean that the shape in itself will acquired distinctiveness, or, in other words "..[consumers] might simply regard the shape as a characteristic of products of that kind or they might find it brings to mind the product and brand name with which they have become familiar".
Lord Justice Kitchin then moved on to applying the test for acquired distinctiveness to the sign at hand, which looks at "...whether the applicant has proved that a significant proportion of 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 undertaking", i.e. the shape acts, by itself, as the badge of origin.
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| With bloodlust in his eyes, Conker devoured his KitKat |
The Court didn't disagree with the initial hearing officer in their decision, as Nestle had failed to establish acquired distinctiveness, since there was no evidence that the shape of the product had featured in promotional and advertising material, that it has it never been sold in opaque packaging, or had been featured on the packaging itself (bar for a short time). Survey evidence was also inconclusive on the recognition and reliance on the shape as an indicator of a KitKat product specifically, even though identified by many by the brand.
Although the EU General Court (discussed more here) and CJEU (discussed here) decisions shed some doubts over the need for 'reliance' on the mark (allowing for it to be used in conjunction with other marks and still be distinctive), Lord Justice Kitchin rejected this argument quite straightforwardly. In his mind, the decisions simply reiterated the requirement above on perception and reliance by consumers, and while reliance is not a requirement under the CJEU decision (discussed more here), it still remains an important consideration.Reliance demonstrates that a non-distinctive mark has become distinctive in its own right.
The Court of Appeal therefore was satisfied that the mark had not acquired distinctiveness and dismissed the appeal.
The case is a big blow for Nestle, and it'll be interesting to see whether they appeal the decision further to the Supreme Court. With a CJEU decision and a strong affirmation of the same by the Court of Appeal, success on appeal would seem unlikely, and permission would probably not be granted; however, the brand and the chocolate bar itself is hugely valuable and is potentially worth fighting for. The decision also highlights the importance of reliance on a mark, even if it's not required by EU legislation. Companies should heed the need to use a shape to actively market their goods, should it be something they want to defend, and simply not assume that association with another brand will bring in distinctiveness.
Source: BBC
13 January, 2017
Not Taking a Break - EU General Court Sends Kit Kat TM for Reconsideration at EUIPO
The Kit Kat chocolate bar trademark saga is one that seems to just
keep on giving and giving to the IP community, offering new and fangled ways
where the iconic (or dare we might now say the opposite) chocolate bar has been
fought over in Europe. After a hard-fought several rounds in the CJEU and the
UK courts, it all seemed all over; however, the EU General Court offered us a
new judgment as an early Christmas present in mid-December.
The case of Mondelez UK Holdings & Services Ltd, formerly Cadbury Holdings Ltd v EUIPO dealt with an EU registered trademark (2632529) for a three-dimensional mark comprising of the Kit Kat chocolate bar without any markings. The mark was subsequently challenged by Nestle's favorite candy competitor, Cadbury (now owned by Mondelez), and the matter has since ultimately ended up in the General Court, largely dealing with lack of use and distinctive character.
The GC only concerned itself with Article 52(2) of the Community Trade mark Regulation, in conjunction with Article 7(3), which set out that a trademark, even if potentially found invalid, might still be registrable should the mark have acquired a distinctive character with respect to the goods and services covered. Mondelez argued that the EUIPO had failed to correctly assess this distinctive character (allowing the mark to be registered), and directed their argumentation in four separate parts.
The Court initially dealt with the second part of their plea argues that the mark had not been used for all of the relevant goods it was registered for. The Board of Appeal had seen that, based on the evidence submitted, the mark had been used for all of the goods listed above. This assessment, according to the GC, would be done "...in relation, on the one hand, to the goods or services in respect of which registration has been sought and, on the other, to the presumed perception of the mark by an average consumer of the category of goods or services in question, who is reasonably well informed and reasonably observant and circumspect". Any proof employed would have to be viewed independently within the context of sub-sections within the broad terms of goods to identify whether the mark has been used for those goods.
Under the evidence supplied, the GC did concede that the Kit Kat mark had been used for the majority of the goods listed; however, saw that it had equally not been used for bakery products, pastries, cakes and waffles, since the advertising materials only showed biscuit-like, chocolate treats with no real bakery goods included at all. This was deemed an error on the part of the Board of Appeal.
The first part of the plea dealt with a lack of use of the mark in the form as registered, and therefore would only stem from the branding or the use of other marks in conjunction with the contested mark. The EU courts have previously held that a 3D mark can acquire distinctive character even if used with other marks, as long as the public distinguishes the product from originating from a particular source as a result. The GC quickly rejected this argument, as surveys indicated a high percentage of individuals identifying the brand from just the shape alone.
They then moved onto the third part of the plea, which argues that there is a lack of use of the mark as an indicator of origin and insufficient evidence to that effect. The latter point would be assessed based on evidence showing that a significant portion of the public identifies the mark as an indicator of origin, which entails in it several factors, including market share and duration of use. The GC rejected this argument as well, having extensively discussed the evidence submitted and its application to the matter at hand, illustrating a clear recognition of the mark as an indicator of origin for those particular goods, and that it was sufficient to overcome this plea.
Finally, the fourth part of the plea asserted a lack of proof of distinctive character acquired through use of the contested trade mark throughout the European Union. Mondelez contested that, as Nestle only provided evidence with respect to 10 Member States out of 15, the Board of Appeal should not have extrapolated from that evidence applicable to the entire EU (with the Board only finding evidence of distinctive character for 5 being sufficient for the whole of the EU). According to established EU case law, a mark needs to have distinctive character in the whole of the EU, and would fail to be registered should it not have it for a part of the EU, even one single Member State. Evidence provided needs to be quantitively sufficient to prove distinctive character in the Member States concerned. The GC corrected the Board of Appeal's approach in assessing this, and set out that "…the relevant question is not whether it was shown that a substantial proportion of the public in the European Union, merging all the Member States and regions, perceived a mark as an indication of the commercial origin of the goods designated by that mark, but whether, throughout the European Union, it was proved that a significant proportion of the relevant public perceived a mark as an indication of the commercial origin of the goods designated by that mark".
The GC allowed this part of the first plea, determining that a lack of evidence for the rest of the Member States would mean that the mark has not been established to have distinctive character in the entire EU, and the registration is therefore invalid and would have to be re-examined.
Source: Reuters
The case of Mondelez UK Holdings & Services Ltd, formerly Cadbury Holdings Ltd v EUIPO dealt with an EU registered trademark (2632529) for a three-dimensional mark comprising of the Kit Kat chocolate bar without any markings. The mark was subsequently challenged by Nestle's favorite candy competitor, Cadbury (now owned by Mondelez), and the matter has since ultimately ended up in the General Court, largely dealing with lack of use and distinctive character.
The GC only concerned itself with Article 52(2) of the Community Trade mark Regulation, in conjunction with Article 7(3), which set out that a trademark, even if potentially found invalid, might still be registrable should the mark have acquired a distinctive character with respect to the goods and services covered. Mondelez argued that the EUIPO had failed to correctly assess this distinctive character (allowing the mark to be registered), and directed their argumentation in four separate parts.
The Court initially dealt with the second part of their plea argues that the mark had not been used for all of the relevant goods it was registered for. The Board of Appeal had seen that, based on the evidence submitted, the mark had been used for all of the goods listed above. This assessment, according to the GC, would be done "...in relation, on the one hand, to the goods or services in respect of which registration has been sought and, on the other, to the presumed perception of the mark by an average consumer of the category of goods or services in question, who is reasonably well informed and reasonably observant and circumspect". Any proof employed would have to be viewed independently within the context of sub-sections within the broad terms of goods to identify whether the mark has been used for those goods.
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| Gilbert always forgot what his chocolate bars looked like |
Under the evidence supplied, the GC did concede that the Kit Kat mark had been used for the majority of the goods listed; however, saw that it had equally not been used for bakery products, pastries, cakes and waffles, since the advertising materials only showed biscuit-like, chocolate treats with no real bakery goods included at all. This was deemed an error on the part of the Board of Appeal.
The first part of the plea dealt with a lack of use of the mark in the form as registered, and therefore would only stem from the branding or the use of other marks in conjunction with the contested mark. The EU courts have previously held that a 3D mark can acquire distinctive character even if used with other marks, as long as the public distinguishes the product from originating from a particular source as a result. The GC quickly rejected this argument, as surveys indicated a high percentage of individuals identifying the brand from just the shape alone.
They then moved onto the third part of the plea, which argues that there is a lack of use of the mark as an indicator of origin and insufficient evidence to that effect. The latter point would be assessed based on evidence showing that a significant portion of the public identifies the mark as an indicator of origin, which entails in it several factors, including market share and duration of use. The GC rejected this argument as well, having extensively discussed the evidence submitted and its application to the matter at hand, illustrating a clear recognition of the mark as an indicator of origin for those particular goods, and that it was sufficient to overcome this plea.
Finally, the fourth part of the plea asserted a lack of proof of distinctive character acquired through use of the contested trade mark throughout the European Union. Mondelez contested that, as Nestle only provided evidence with respect to 10 Member States out of 15, the Board of Appeal should not have extrapolated from that evidence applicable to the entire EU (with the Board only finding evidence of distinctive character for 5 being sufficient for the whole of the EU). According to established EU case law, a mark needs to have distinctive character in the whole of the EU, and would fail to be registered should it not have it for a part of the EU, even one single Member State. Evidence provided needs to be quantitively sufficient to prove distinctive character in the Member States concerned. The GC corrected the Board of Appeal's approach in assessing this, and set out that "…the relevant question is not whether it was shown that a substantial proportion of the public in the European Union, merging all the Member States and regions, perceived a mark as an indication of the commercial origin of the goods designated by that mark, but whether, throughout the European Union, it was proved that a significant proportion of the relevant public perceived a mark as an indication of the commercial origin of the goods designated by that mark".
The GC allowed this part of the first plea, determining that a lack of evidence for the rest of the Member States would mean that the mark has not been established to have distinctive character in the entire EU, and the registration is therefore invalid and would have to be re-examined.
The case is a very curious one, and highlights a potential big issue for applicants when it comes to evidencing the distinctive character in the entire EU. With surveys and other evidence gathering exercises being costly both monetarily and time wise, and newer launches in other territories being a hindrance for proving distinctive character. In the end, the threshold should be high; however, this writer would be a firm believer in statistics, especially for more notable, established brands, and would want more flexibility at the EUIPO (although, understanding the risks associated with giving away trademarks like candy). It will remain to be seen whether the case is appealed, and this writer would not want to see the fight for chocolate bars to ever end.
Source: Reuters
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