Nestlé can't catch a break as Court of Appeal rules against trade mark application
The recent decision by the Court of Appeal in Nestlé v Cadbury  EWCA Civ 358 demonstrates the uphill struggle faced by product owners when it comes to registering shapes as trade marks.
Nestlé have been looking to register the shape of the four-finger KitKat bar as a UK trade mark since 2010.
Cadbury objected to Nestlé’s application, arguing that the four-fingered shape was not distinctive enough to be registered as a trade mark. In response, Nestlé relied upon “acquired distinctiveness”: that registration should be granted on the basis that the shape, although not initially distinctive, had subsequently acquired a distinctive character as a result of the use which Nestlé had made of it prior to the trade mark application being made.
Cadbury won the first leg of their challenge at the UK Intellectual Property Office (UK-IPO), which decided that the four-fingered shape did not have sufficient distinctive character and that it had not later acquired this through subsequent use (contrary to Nestlé’s arguments). Nestlé appealed the decision to the High Court which, after having received guidance from the Court of Justice of the European Union (CJEU), upheld the UK-IPO’s decision.
Court of Appeal: Survey evidence didn’t help Nestlé
Nestlé appealed to the Court of Appeal, which gave its judgment at the end of May 2017. At the centre of Nestlé’s appeal was a survey that it had conducted on various members of the public, half of whom indicated that they recognised the four-fingered biscuit shape as being a KitKat. Despite this evidence (which you might think would have been enough to show that the shape had acquired distinctiveness through use), the Court of Appeal was not satisfied that the test for acquired distinctiveness had been met.
Lord Justice Kitchin, giving the leading judgment, said that the survey may have supported the conclusion that the public “recognised and associated” KitKat with the four-fingered shape, but this was not enough. In order to pass the test of acquired distinctiveness, Nestlé had to show that consumers had come to perceive the shape as a “badge of origin”, which the Court of Appeal ruled it had failed to do.
Lord Justice Floyd agreed with Kitchin LJ’s assessment, and threw in a handy “basket of goods” analogy for good measure:
“For the shape in question here to have acquired distinctiveness, the court must be able to conclude that a significant proportion of consumers, seeing it used in relation to chocolate bars, would perceive it as designating the goods of a particular undertaking. That does not mean that he or she must be able to identify the undertaking. In essence, what he or she must be able to conclude is that the goods in question are the goods of one undertaking and no other. I have found it helpful to have in mind a basket of unwrapped and otherwise unmarked chocolate bars, in the shape of the mark applied for, available for selection in a shop or supermarket. For there to be acquired distinctiveness, the consumer must perceive these goods as being KitKats, or as originating from the people who make KitKats, and not from others. A perception that they looked like KitKats is not enough. Acquired distinctiveness carries with it an indication of exclusive trade origin.”
What does decision mean for shape trade marks?
Shape marks will, after this judgment, continue to be more difficult to register than word marks or logos.
When looking to register shapes as trade marks, product owners should think carefully about how they market that particular shape. In Nestlé’s case, the Court commented that the four-fingered shape had not been used by Nestlé in marketing for the KitKat product and it was not visible at the point of sale (being wrapped in the familiar foil-and-paper combination). This contributed to the Court of Appeal not seeing Nestlé’s use of the shape as being used in the “trade mark sense” (for the purposes of consumers being able to identify the product as made by KitKat). This is likely to have contributed to the Court viewing the survey evidence as indicating only recognition/association of the shape as being one which Nestlé happened to use, which was not the same as identification as a badge of origin.
For more information, please contact Felix Dodd