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.

IP Laws Amendment Bill 2013

A new Bill was recently introduced to the Australian Parliament, dubbed the "IP Laws Amendments Bill 2013". The aim of the Bill would be to amend current legislation pertaining to patents and plant breeder's rights, and to introduce some changes to the all-new Intellectual Property Amendments (Raising The Bar) Act 2012 (discussed on this blog some time ago).

The first amendment relates to the Crown's use of patents, further clearing up the existing provisions on the use of patents for services funded by the Federal, State or Territorial Governments of Australia. The aim of this is to reduce uncertainty as to when the power can be used. It also adds more levels of accountability over the use of patents for those purposes, forcing the Government agencies to negotiate with the patent owner prior to invoking the Crown's use on that patent - earlier legislation required absolutely no notice to the patent owner prior to use or negotiation over its use. If the negotiations are unsuccessful, Ministerial authorization can be sought to use this power. The amendments would lastly include proper guidelines as to remuneration over the use of patents by the Crown.

Australian Bills lack the pizzazz of their American cousins

The second amendment would implement the TRIPS protocol into Australian law, which would enable the issuance of compulsory licenses by the Courts for the manufacturing and exportation of patented medication to third-world countries. This would enable the importation of much cheaper drugs to countries suffering from diseases such as HIV, malaria or tuberculosis which would otherwise have very limited resources to attain these drugs.

The third amendment gives owners of Plant Breeder's Rights a course of redress against possible infringers of those rights in the Federal Circuit Court. The aim for this is to allow for a much quicker, more cost-effective and less formal way to handle these disputes when compared to taking it to the Federal Court.

The fourth amendment deals with the creation of a single trans-Tasman (Australia & New Zealand) patent attorney regime, with common qualification requirements, an IP Attorneys Board and a Disciplinary Tribunal. The amendment also creates a single patent application and examination process, lessening the amount of administration in these processes which currently exist.

The other more minor amendments deal with document retention requirements in patents, trade marks and registered designs, removing them completely from all related acts. This brings all document retention requirements under the Archives Act 1983, removing redundant copies. As said above, there are also some amendments dealing with the Raising The Bar Act 2012, fixing some oversights in its drafting.

Overall the Bill does propose some welcome changes, especially relating to the implementation of the TRIPS protocol which Australia accepted in 2007 and the faster and easier way of dealing with possible infringements of PBRs. The Bill has only passed its first reading, so its content is still subject to change over the course of its road to assent, but the given form of the Bill does inspire faith in its efficacy.

The Explanatory Memorandum for the Bill can be found here.