Gimme a break?

No break for Nestlé in trademark row

On 25 July 2018, the European Court of Justice (ECJ) dismissed Nestlé’s attempt to overturn a ruling that it had not done enough to prove KitKat’s shape deserved legal protection.

The case was about whether the brand had become distinctive enough to deserve its trademark, meaning that its shape alone was how people recognise the snack.

The ECJ declared that it’s not enough to prove that a product has become iconic in “a significant part” of the EU – it has to be recognised throughout all 28 countries of the EU i.e. proven across all the markets of the bloc and not just some.

The ECJ instructed the EU Intellectual Property Office to reconsider its decision to grant Nestlé a trademark in the first place.

The ECJ sided with the makers of Kvikk Lunsj, a Norwegian snack that is a long-time favourite of hikers and skiers – and is shaped almost exactly like a KitKat. The decision will allow Mondelez, the maker of Kvikk Lunsj, to market and sell the chocolate bar more widely throughout the bloc.

 

How did we get here?

For 16 years Nestlé has been trying to trademark its KitKat four-finger shape in the EU, arguing that it’s a distinctive feature which deserves protection.

The ECJ is the latest battleground in the feud between the chocolate bars, which began when the company Freia first introduced the Kvikk Lunsj – “Quick Lunch” in English – to Norwegians in 1937, two years after KitKat hit UK shelves.

For 65 years, KitKat and Kvikk Lunsj co-existed – until 2002 when Nestlé applied for a trademark in Europe for Kit Kat.

Their battle intensified in 2006 when Nestlé secured a trademark for KitKat’s shape, only to be challenged by Kvikk Lunsj maker Cadbury, now owned by Mondelez.

In 2016, a lower EU court decided that Nestlé had to prove a Kit Kat was recognisable in every EU country – and no evidence had been provided for Belgium, Ireland, Greece and Portugal.

Nestlé and the EU’s trademark office appealed against the 2016 decision. If proof of distinctiveness had to be shown for every single member state, they argued, no company could ever reach that high standard.

Mondelez, meanwhile, argued that it was wrong to conclude that KitKat had “distinctive character” anywhere – including countries like the UK, Germany and France.

The European court threw out all those objections.

 

What does this mean for Nestlé?

For now, KitKat is set to lose its EU trademark, but there is still a fight to be fought.

Rather than cancelling the trademark the ECJ decided that it should never have been awarded at all on the basis of the evidence. This means the decision heads back to the EU trademark office. Assuming the EU Intellectual Property Office does not have evidence that the shape is distinctive across the EU, the trademark will be removed from the register. It is open to Nestlé to apply again, and to put stronger evidence in.

Nestlé are determined to keep fighting as they believe the “distinctive shape” of their KitKat is deserving of protection.

 

What does this mean for us?

Courts wish to ensure that they are not giving a monopoly to a company for a shape that’s needed to make a product. For example, a circle for a cracker can’t be trademarked.

As discussed in our previous article, establishing distinctiveness of a 3D shape is still a high hurdle to overcome.

In order to get trademark approval, you need to be able to show that your shape is distinctive enough and that it’s not merely  functional. When proving distinctiveness, carefully consider the evidence you plan to document in your application. Where it is possible to gather evidence of comparability in similar markets, expressly refer to it in your application.

 

If you have any queries regarding trademarks, please get in touch with Alison Marshall and Sophie Graham in our corporate team.