KitKat Cut - The KitKat Shape Trademark Ultimately Rejected by CJEU

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

Kit Kat Kontinues - Advocate General Wathelet Dismisses Appeal on Kit Kat Shape Trademark

One would've never imagine a chocolate bar could be litigated over for many years, but the Kit Kat saga has proven that even the most seemingly mundane things can be worth a tremendous monetary investment. After the EU General Court decision last year (discussed more here) you could have imagined the matter has been largely concluded. This was clearly not the case, as Mondelez appealed the decision, which has now reached the desk of Advocate General Wathelet. They issued their opinion only last week, which will give direction to the CJEU who will decide the matter once and for all later this year.

Although discussed extensively on this blog, the case still merits a short introduction. The matter Société des produits Nestlé v Mondelez UK Holdings & Services concerns the design of the Kit Kat chocolate bar, which Mondelez has registered as a trademark (EUTM 2632529). Cadbury, now Mondelez, filed for an application of invalidity regarding the mark sometime after, with the matter being decided by the General Court last year. Nestle appealed the decision (which went against them), ending up heading to the CJEU via the Advocate General.

The case on appeal hinges on the extent of the territory that you need to show distinctive character that is acquired through use of the trade mark under Article 7(3) of the CTM Regulations. In the General Court Nestle failed to show use throughout the EU, not just in a substantial part of it, and therefore the mark was invalidated.

A Kit Kat Kounterfeit

Per the decision in August Storck KG v OHIM, the CJEU set the bar for the acquisition of distinctive character through use as requiring "…evidence… that [the mark] has acquired, through 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". Adding to this, the CJEU noted that an argument for acquired distinctiveness could be rejected if there is no evidence of use, as detailed above, in a single Member State. Subsequent cases have shown that partial acquisition of distinctive character within the EU is not enough, as there needs to be 'quantitatively sufficient evidence' of acquired distinctiveness.

Looking at the above, the AG did, however, not shut the door entirely on partial acquisition of distinctiveness. They added that a mark could have acquired distinctiveness in the entire EU if evidence is provided for "…a quantitatively and geographically representative sample" of the EU. This means taking into account the various links between the national markets of Member States, and whether those links negate a lack of evidence for acquired distinctiveness in the bigger picture within Europe. Potentially a more regional approach has to be taken and therefore acquired distinctiveness could be extrapolated for any missing countries, i.e. produce evidence for the Nordics and other such 'collectives' of countries if evidence for all Member States is missing for others within those 'collectives'.

Having considered the missing evidence discussed in the General Court's decision, the AG concluded that Nestle's appeal should be dismissed.

While we are still awaiting the CJEU's decision on this matter, things don't look great for Nestle, or 3D marks in general. It will be difficult for many proprietors of such marks to show acquired distinctiveness within the EU, or most of it. It remains to be seen whether the CJEU will go in a different direction, but it seems very unlikely considering the General Court's decision and now the AG's opinion.

A Sole of Color - Louboutin Red Shoe Sole Potentially Possible to Register as TM, Says AG Szpunar

After discussing the Louboutin shoe sole case some time ago, one envisioned the matter going ahead to the CJEU without a hitch. Unbeknownst to this writer, the CJEU decided to assess the case in the Grand Chamber (essentially en banc), and therefore the matter went into further hearings. Having concluded, the case was then passed onto Advocate General Szpunar for his opinion, which he handed down very recently. Even though the AG had given their opinion before, this is still an important consideration ahead of the Grand Chamber decision in the future.

As a quick primer, the case of Christian Louboutin v Van Haren Schoenen BV dealt with a registered Benelux trademark owned by Louboutin (TM No. 0874489) for a high-heeled shoe with a red sole. The mark only encompassed the sole, not the entire shape of the shoe. Van Haren had been selling a similar shoe since 2012, and was sued for trademark infringement by Louboutin. Van Haren then counterclaimed for invalidity.

The crux of the case falls on whether the red sole is a registrable trademark, and therefore enforceable.

In his initial opinion last year the AG considered that a sign combining colour and shape, like the Louboutin red sole, is potentially caught by the prohibition contained in Article 3(1)(e)(iii) of Directive 2008/95. This meant that the Article should be interpreted as being capable of applying to a sign consisting of the shape of a product and seeking protection for a certain colour. Even so, he did determine that the mark in question should be "…equated with a sign consisting of the shape of the goods and seeking protection for a colour in relation to that shape, rather than one consisting of a colour per se". The ultimate classification of the mark, however, should be made by the referring court, and not the CJEU.

Similarly, the decision on whether the mark exclusively 'gives substantial value' to the goods, which is prevented from being registered under Article 3 above, is for the referring court. The AG did clarify this and considered that the matter "…relates exclusively to the intrinsic value of the shape and must take no account of the attractiveness of the goods… and does not permit the reputation of the mark or its proprietor to be taken into account".

The AG wanted to expand on his considerations on a number of points, including the classification of the mark, applicability of Article 3 and classification of the mark with reference to Article 3.

In his view the shape is not "…wholly abstract or of negligible importance, which could justify the finding that the mark at issue seeks protection for a certain colour per se, without any spatial delimitation". The focus is on the shape of the sole. The AG doubts that the color red can perform the essential function of a trade mark and identify its proprietor where that colour is used out of context, i.e. the shape of the sole. He concluded that, following his earlier opinion, that "…the mark… should be equated with a sign consisting of the shape of the goods and seeking protection for a colour in relation to that shape, rather than as a trade mark consisting of a colour per se".

The AG then moved onto his additional considerations in relation to the applicability of Article 3(1) of the Directive to signs consisting of the shape of the goods and a certain colour.

The point revolved around whether the mark can be classified as a 'position mark' under the Implementing Regulation 2017/1431, and whether this prevents the mark from falling under Article 3(1) of the Directive. As the Article does not define what 'shapes' fall in its remit, position marks would not be excluded from being invalid under the provision. The AG considered that this had no bearing on his earlier opinion.

The second main point dealt with by the AG related to the scope of Article 3(1) when compared to Article 4(1)(e)(iii) of Directive 2015/2436.

The 2015 Directive replaced the 2008 Directive, and with no transitional provisions over both, the AG considered that they would cover the same marks (although the former did make changes e.g. to the provisions around the 'own name' defence). The AG determined that any changes would not interfere with the mark's registrability under the 2008 Directive, with Article 3(1) still "…being interpreted to the effect that that provision applies to signs consisting of the shape of the goods which seek protection for a certain colour".

The AG had to then expand on the rationale underlying the ground for refusal or invalidity in Article 3(1).

Following new arguments from both sides, while sympathetic to the pro-registrant argument, the AG set out that, as per the decision in Hauck GmbH & Co KG v Stokke A/S, the assessment to determine whether a shape 'gives substantial value to the goods "…involves account being taken of the average consumer’s perspective [of the aesthetic characteristics]". This perception isn't, however, the decisive element in the assessment, but "…account must be taken both of the perception of the sign at issue by the relevant public and the economic effects which will result from reserving that sign to a single undertaking".

It is important, in the AG's mind, for "…a characteristic to remain available for all market participants over the period during which that characteristic has a particular effect on the value of the goods". Once interest has weaned, it is possible for that characteristic to be registrable as a trademark and not fall under Article 3(1). Unlike the two other prohibitions in Article 3(1), this prohibition is dependent on external factors, e.g. interest and the public's perception of value in the shape, and could catch even a registration of a shape for a certain color.  This would, however, "…exclude the characteristics linked to the reputation of the trade mark or its proprietor" as a part of the assessment. This would shift the assessment from one that includes reputation, to one where the value of the shape of the mark is the only factor that matters, i.e. a more notable brand could still register marks like the sole in question.

In summary: "…the reference to the public’s perception as a factor which, among others, determines the characteristics giving substantial value to the goods argues in favour of Article 3(1)… being interpreted as meaning that that provision applies to signs consisting of the shape of the goods and seeking protection for a colour in relation to that shape".

Finally, the AG moved onto the classification of the mark with reference to Article 3(1)(b) of the 2008 Directive.

The AG considered that this would be useful for the CJEU in case they find that Article 3(1)(e) cannot be applied in this case. In summary, the AG determined that "…when analysing the distinctive character of a sign which is indissociable from the appearance of the goods in question, it is necessary to assess whether the registration of that sign would run counter to the general interest that the availability of the characteristics represented by that sign should not be unduly restricted for other operators offering for sale goods or services of the same type. However, Article 3(1)(b)… cannot fully assume the role of Article 3(1)(e)(iii) of that directive, since it is possible to derogate from that first provision in accordance with the detailed rules laid down in Article 3(3) of that directive". This means that, when assessing a mark's distinctiveness under Article 3(1)(b) that cannot be separated from the goods it is used on (like the bottom sole of a shoe), one has to keep in mind whether it could be an anti-competitive registration of goods of a similar type.

The opinion lays down the foundation for the CJEU's decision later this year, but doesn't by any means close the door on Louboutin's registration. Ultimately this will be determined by the guidelines set by the CJEU, and should the proprietor's reputation be separated from the assessment of value, it is possible for the mark to not be invalid under Article 3(1). This writer keenly awaits the CJEU's decision, as it will undoubtedly have a big impact on similar registrations in the future.

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.

Blake loved the design of his taxi a little too much

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.

Toblenone - The Battle of the Peaks Begins Over the Toblerone Shape

Imitation is thought to be the greatest form of flattery, but in the world of IP, this is often the opposite of the case. Copying the looks of a product can be quite beneficial for the copying company, riding on the coattails of a potentially well-known look of a product, especially if they are undercutting the price of the original. This blog has discussed issues of generic packaging before, and the notorious KitKat saga, but none of the cases have looked at the matter of changing the shape of the original product, yet still seeking protection over the shape.

A recent case discussed in the Guardian has shed a new perspective, as discussed above, relating to the Toblerone chocolate bar. Poundland, a UK discount retailer selling products predominantly at £1, launched their Toblerone competitor Twin Peaks earlier this summer, aiming to compete against the reduced size Toblerone bar. This change featured bigger gaps in the Toblerone bar between the iconic triangular peaks, due to rising ingredient prices.

The matter has since gone to court, with Mondelez (the company that owns the Toblerone brand) arguing (possibly among other grounds) trademark infringement. Poundland have counterclaimed (possibly among other grounds) for invalidity and argued that "…the triangular prism shape of the Toblerone bar, which was registered under an EU trademark in 1997, is no longer distinctive partly because of the existence of the new version". Adding to this, they argued that "…any good reputation enjoyed by the Toblerone bar trademark has been “irretrievably abandoned” by the launch of the product with bigger gaps between its nine chunks, which the public “consider unfavourably in comparison”".

Mondelez put a wholly different spin
on the change to the Toblerone bar

The crux of the question is therefore whether the trademark registered by Toblerone (EUTM 31237) would no longer be distinctive due to the change in the Toblerone chocolate bar, and even if it's distinctive, whether the Twin Peaks bar creates a different impression so as to not infringe on the trademark or other possible rights under common law.

Arguably, Poundland potentially do have a point. The Toblerone bar has reduced its size by about 10%, and changed its shape from the registered 12 peaks to 11, with the gaps between the peaks has doubled by this writer's estimate. The base of the bar has also arguably become thinner. The Twin Peaks bar does not feature the wider gaps of the new Toblerone bar, including having a curved gap rather than a flat one, and splits the peaks into two. The Twin Peaks bar is also sold in a loosely fitting wrapper packaging, rather than a hard triangular cardboard package.

Case law has looked at changes to earlier registrations, and it does not necessarily bode well for Toblerone. In The Coca-Cola Company v OHIM the cola manufacturer changed the look of their iconic bottle, removing its distinctive fluting, and due to this change the EU General Court rejected their application for a lack of acquired distinctiveness, as "…[the bottle] was a mere variant of the shape and packaging of the goods concerned, which would not enable the average consumer to distinguish the goods from those of other undertakings". It is possible for the registration to be attacked (although the name and the triangular packaging will still arguably remain protected), so Toblerone would benefit from a new registration for the reduced size bar, unless it is simply treated as a stop-gap while prices are still high for some ingredients.

The Toblerone question is a very curious one, and this writer for one would love to see the case actually go to court (but heavily doubts this will happen). The point of changing the shape of a product with an existing trademark registration hasn't been dealt with by the judiciary much at all, so more light on this issue would be very helpful for both would-be registrants and competitors alike.

Source: The Guardian

Seeing Red - Registration of Red Shoe Sole Potentially Invalid, Says AG Szpunar

The color of a product or a logo can often be just as memorable as its shape, design or quality. When you think of a Coca Cola bottle, do you think of the color red? If you see a chocolate bar draped in purple, do you think of Cadbury? Colors are a great differentiator, and the more striking the color the more you tend to probably remember it. That's why many companies register a particular color as a trademark in relation to their goods or services, protecting that very association from competitors. In a similar vein, could you register a trademark that incorporates a color with your product, for example in conjunction with a shoe? A recent case involving this has been going through the European courts, and the Advocate General has finally given their two cents on the matter ahead of the CJEU's decision.

The case of Christian Louboutin SAS v Van Haren Schoenen BV concerns the registration of a mark in Benelux by Louboutin, comprising of a high-heel shoe with a red sole. Only the sole was registered. Van Haren made and sold similar red-soled shoes, and upon identifying this, Louboutin took the company to court for trademark infringement. Van Haren challenged the infringement opposing the mark's registration, claiming invalidity. Having made its way through the Dutch courts, the case ultimately ended up with the CJEU, and prior to their judgment Advocate General Szpunar aimed to give the court guidance on the issue.

The question referred to the Court was "[i]s the notion of ‘shape’ within the meaning of Article 3(1)(e)(iii) of Directive 2008/95... limited to the three-dimensional properties of the goods, such as their contours, measurements and volume (expressed three-dimensionally), or does it include other (non three-dimensional) properties of the goods, such as their colour?" In essence, the question asks whether a 'shape', as defined in the Directive, can include colors as well as the actual three-dimensional shape of an object.

The Advocate General first considered the classification of the mark and its impact on the registration. He determined that the classification of the contested mark is a factual assessment to be made by the referring court. That consideration does not prevent the CJEU from making remarks which may guide that court in making its assessment. He also saw that the classification of the goods does not necessarily have any legal consequences regarding the goods. Even if the mark is a 'position mark', which some parties argued it was, it doesn’t prevent that mark from consisting of the shape of the goods (i.e. the color). He then concluded that "…it is for the referring court to determine whether the mark at issue in the present case is a per se colour mark or a mark consisting of the shape of the goods, but also seeking protection for a colour".

To determine whether the mark is a color mark per say, or consists of the shape of the goods, as defined in the Directive, the Advocate General set out the test as "…the referring court should carry out an overall assessment, taking into account the graphic representation and any descriptions filed at the time of application for registration, as well as other material relevant to identifying the essential characteristics of the contested mark, where applicable". One would also have to account for whether the mark was registered as for the color only, or if the shape was incorporated in the registration as a part of the color.



The CJEU could impede Cindy's new color schemes 

The Advocate General rejected that the color, albeit restricted from applying to a particular shape, would not in itself limit the mark to simply a color mark. Instead "…what must be determined is whether the sign derives its distinctive character from the colour in respect of which protection is sought per se, or from the exact positioning of that colour in relation to other elements of the shape of the goods". Therefore the Advocate General accepts that it is possible for the mark to apply to the position of the color as well.

When considering the actual mark that was registered, the Advocate General saw that, even though the contours of the shoe were not a part of the registered mark, its placement on the shoe was very relevant. The mark sought to protect simply a red sole on any high-heeled shoe, irrespective of its shape. He finally thought that "…[t]he contours of the sole appear in any event to be a negligible element of the mark, which derives its distinctive character from the unusual positioning of the coloured element and, potentially, the colour contrast between different parts of the shoe".

Although the Advocate General considered that the mark, at least on the outset, would be one that consists of a shape in conjunction with the color, he still aimed to analyse both possible outcomes in more depth.

Firstly, whether the mark consists of a color per say. As established in previous cases, colors per say don't have distinctive character; however, they may become distinctive through use. The registration, even so, shouldn't prevent other proprietors from using the color for goods of a similar type. The Advocate General ultimately concluded that "…if the contested mark were to be classified as a ‘mark consisting of a colour per se’, it would be appropriate to hold that it did not fall within the scope of Article 3(1)(e)".

Secondly, whether the mark consisting of the shape of the goods and of a certain colour. The Advocate General set out that, to answer whether a mark consists of both the shape and the color applied to it, one has to heed the logic and scheme of Article 3(1)(e), i.e. to prevent the registration of marks that would impede fair competition. The Advocate general considered that any shape that incorporates color in the mark would have to be analysed under Article 3(1)(e) as a part of the overall assessment of the sign. This would apply even under the new Directive.

He concluded that "… Article 3(1)(e) of [the] Directive… does potentially apply to signs consisting of the shape of the goods which seek protection for a certain colour". The mark in question would also be, in his view, potentially caught by the Article and therefore invalid. He also observed that, while the color potentially does add value to the mark (and potentially falls under Article 3(1)(e)(iii)), the value added only relates to the intrinsic value of the shape (for example, is it commonly used and therefore valuable) and not the reputation of the proprietor or the mark.

The Advocate General clearly sets the stage for the CJEU to find that color marks applied to a particular shape would be invalid, as the protection of a color to an indeterminate amount of soles could prevent fair competition. Less conventional trademarks could be hindered by a negative decision by the CJEU, and it remains to be seen how they navigate this paradigm in the light of the expansion of registrations through the new Directive 2015/2436. Should the shape be taken into account the mark could survive, but it looks like Louboutin might have to simply rely on their goodwill in passing off in the future.

A Piece of Humble Pie - Design of Apple Pie Not Registrable, Says US Court of Appeals

What is more enjoyable than a case involving food and an intellectual property law? This writer for one will freely admit his love of both, and any case that presents a scenario mixing the two is a delight. Many recent cases have touched on the design of various food items, including the recent Kit Kat litigation in the UK (discussed more here) and in the CJEU (discussed more here), and as manufacturers and makers of edible goods compete for marketshare, the shape of these items can become quite valuable and important. One still has to distinguish this from recipes (discussed more here), and while they are much less likely to be protectable, shapes are a different matter altogether. With that said, could you protect the shape of a dish, specifically a pie? The Court of Appeals in the US aimed to answer this question only late last month.

The case of Sweet Sweet Desserts, Inc. v Chudleigh's Ltd dealt with a design of a single-serving apple pie, meaning a whole pie meant for one person in a neat, convenient package. This particular food item was the creation of Scott Chudleigh, the owner of an apple farm and bakery in Ontario, Canada. It consisted of a ball-like shape, with upward facing, spiralling petals that overlap each other, encasing the apple pie filling within. He subsequently filed for a trademark in 2005 (US trademark 2262208, which includes an illustration of the design). The pies where distributed to various companies for resale, including a discussion with Applebee's in the US for the sale of the item in their restaurants, but the negotiations fell through. In 2010 Applebee's approached Sweet Sweet Desserts to create a single-serving apple pie, much akin to the idea conjured by Mr Chudleigh, who developed an "apple pocket" with a pie-like bottom and an overlapping spiral top design, leaving a gap in the top (subjectively quite similar to Chudleigh's apple pie design).  After launch Mr Chudleigh noticed, through online advertising, the similarities of the two designs, and took Sweet Sweet Desserts to court over trademark and trade dress infringement.

Little Jimmy's "floor pie" was received with less enthusiasm

The first issue dealt with by Justice Shwartz was whether Chudleigh's design was merely functional, and thus not registrable as a trademark. 15 USC section 1125(a) prohibits the use of any marks that would deceive a consumer as to the origin of goods or services, potentially including the aforementioned design, provided the design is not only functional and thus not a designation of such an origin. Justice Shwartz further set out that "...in general terms, a product feature is functional, and cannot serve as a trademark, if it is essential to the use or purpose of the article or if it affects the cost or quality of the article". Even if a feature were deemed to not be functional, a court can still find against the owner should the mark put competitors "...at a significant non-reputation-related disadvantage", therefore potentially restricting competition in the field (i.e. if a design or shape of a mark is essential or near-essential to the creation or presentation of certain types of goods).

What the Court found was that the design was indeed functional, as "...the shape of the dough is essential to the purpose of an effective single-serving fruit pie, and affects its cost and quality". Arguably this is correct, since the folding of the dough in order to seal the filling into the pie does just that, and does not, at least for the most part, act as purely decorative, clearly designating an origin for those particular pies. Mr Chudleigh admitted to this fact somewhat, stating that the use of the dough in that particular shape was designed to save on cost and to fill a particular market need for single-serving pies. Additionally, the number of 'petals' in the pies would be predominantly as a functional aspect, giving the best results for holding in the filling and baking, again enforcing a lack of decorative purpose and pure functionality. The Court therefore determined the design to be functional, and revoked Mr Chudleigh's registration.

The final claim dealt with by the court was Sweet Sweet Desserts' claim for tortious interference with their relationship with Applebee's through Mr Chudleigh's assertion of his alleged rights (being very similar to groundless threats in the UK). Justice Shwartz quickly ruled against this claim, determining that Mr Chudleigh's cease-and-desist letter, sent to Applebee's after his discovery of the Sweet Sweet Desserts' apple pie, since the letter was an "...objectively plausible effort to enforce rights" and not a sham to extract a settlement from the parties prior to a full case. Even though he failed in the case at hand, losing his rights in the design, does not take away from his legitimate belief at the time as to the existence of these rights. The Court ultimately allowed the application for summary judgment for both parties.

The case, albeit not ground-breaking in any way, is a curious predicament for the law, especially considering the uncertain world of food-related trademarks and rights. This writer would fully agree with the Court, since the design of the pie was purely functional, and any decorative or indicative purposes were either incidental or minor in the grand scheme of things. It is unclear whether Mr Chudleigh could have succeeded in a claim for passing off in the UK, and this writer sure does have his doubts as to this, but the idea would seem to be a novel one as a hypothetical.

Source: JDSupra

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.

Terry's take on Halloween was more diabetes inducing

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

Retrospective - Passing Off

Success often breeds those who wish to follow in your footsteps, or even attempt to utilize it for their own gain. In the world of consumer products, distinguishing one's products is imperative, but what if your competitor uses your characteristics, or attempts to mirror them closely in order to improve their own sales? Such attempts could fall under the tort of passing off, where a competitor will try to imitate the market leader's product by making it look as similar to it as possible, in essence passing it off as it it were the same product or of equal quality. This can be a similar logo, shape or other characteristic that distinguishes the product which is being imitated from other such products. Passing off is used if that mark or characteristic is not registered, therefore not falling under any specific trademark legislation. The tort also applies to services. The defining case for passing off was Erven Warnink BV v J Townend & Sons (Hull) Ltd in England, however a later case distilled the essence of the tort itself; Reckitt and Colman Products Ltd v Borden Inc & Others.

A product that definitely isn't a lemon

Reckitt and Colman v Borden concerned the incredibly well-known product called a Jif Lemon. What this product is is a yellow lemon shaped container with lemon juice inside. For Pancake Day enthusiasts and other lemon lovers, a quintessential product for their purposes. What makes this product so easily distinguishable is its shape and striking resemblance to a real lemon, which has been used since the 1930s. Some decades later, Borden Ltd, who had sold lemon juice under the name ReaLemon, attempted to break the UK market by selling their lemon juice in a lemon shaped container only slightly deviating from the Jif design. In the course of several complaints on Reckitt and Colman's part Borden did change the shape, color of the cap and the size of their container, but still maintained the lemon shape. Reckitt and Colman subsequently sued Borden, and the final decision came from the House of Lords in 1990.

Passing off hinges heavily on one factor which has to be explained, called 'goodwill'. The concept of goodwill is reputation, how well-known the product is and how well consumers identify that particular product among others of a similar type. The less goodwill the product has, the less likely an action in passing off will succeed. This does not necessarily amount to just the longevity of the period in which the product or services is traded in, but can be merely its introduction as the only product of its kind, effectively becoming the only one consumers identify as the defining product of that type.

Lord Oliver provided a summation of the law's position in passing off, containing three requisite elements to prove the tort: "First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying 'get-up' (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. … Thirdly, he must demonstrate that he suffers or … that he is likely to suffer, damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff".

In the court's judgment, delivered by Lord Oliver and Lord Jauncey, the tort of passing off was a matter of answering three questions:

"(i) Have the respondents proved that the get-up under which their lemon juice has been sold since 1956 has become associated in the minds of substantial numbers of the purchasing public specifically and exclusively with the respondents' (or "Jif") lemon juice? 

(ii) If the answer to that question is in the affirmative, does the get-up under which the appellants proposed to market their lemon juice in all or any of the Mark !, Mark II or Mark HI versions amount to a representation by the appellants that the juice which they sell is "Jif" lemon juice? 

(iii) If the answer to that question is in the affirmative, is it, on a balance of probabilities, likely that, if the appellants are not restrained as they have been, a substantial number of members of the public will be misled into purchasing the defendants' lemon juice in the belief that it is the respondents' Jif juice?"

What Lord Oliver is asking is whether the product or service in question has goodwill or reputation; whether there has been a misrepresentation on the other party's part; and where there has been damage or there is a likelihood of such should the other party not be prevented from misrepresenting their product as the other. The assessment of each given factor is a matter of evidence, and there is no steadfast rule as to any hardline indicators proving either goodwill, damage or the likelihood of damage. In the case at hand their Lordships saw that Borden Ltd were liable under the tort of passing off, purely for the reason that the products' similarities would likely cause confusion on the purchaser's part and therefore cause damage to Reckitt and Colman. Borden intention was to not necessarily confuse the purchaser, but to identify their product with the other, causing the purchaser to pick up either product purely on the instinct that it is what they think it is due to its indicative shape. Their Lordships heard arguments over matters relating to a possible monopoly should the shape be kept strictly under Reckitt and Colman's control, and the possibility that the shape was commonly used in the trade (thus making it available for all to use in that trade); however none of these arguments were accepted.

The tort of passing off is incredibly important in the protection of traders' goods through the common law. Should this protection not be offered, distinctive shapes, marks or other characteristics which are not registered could be freely used by others to the detriment of the original trader. Some laws do offer protection through statutory means, such as the Australian Consumer Law (Competition and Consumer Act 2010) in Australia or the Trade-Marks Act in Canada, but the tort still remains an important part of the common law.