Chocolate wars

Cadbury, Nestlé, and Kit Kat. Three ?trade marks, all recognisable brands. ?We immediately associate these brands with their respective brand owners, and with that a guarantee of quality, consistency, and, perhaps most importantly in the confectionery world, flavour. But what about the more unusual elements used by consumers to identify their favourite calorific treats? What about the shape ?of the goods? What about the colour of the packaging? When the consumer begins to identify these aspects of goods with a brand, what can a proprietor do to protect their trade marks?

A trade mark registration is an unusual right – potentially a perpetual monopoly used to control markets, stifle competitors, and generate revenue. The registration of a trade mark – ‘a sign capable of distinguishing the goods and services of one undertaking from those of another’ – can be perpetuated without limit.

Registration of shapes

So, how can a company register a more unusual indication of origin? Confectionery giants regularly appear in the European Court of Justice (CJEU), disputing the registration of indications of ?origin perceived as deserving a monopoly right. ?The latest case has seen Nestlé seek to protect a three-dimensional mark in the UK. The application includes no description, merely a single black-and-white image (see far right).

The mark features no ‘traditional’ branding. ?The brand is not mentioned by name, nor is the proprietor or manufacturer. There is no packaging. Nestlé claims that consumers can identify this shape as originating from Nestlé for the goods covered in their application (in this case chocolate, confectionery, biscuits, and similar goods). 

However, shapes of goods themselves present issues. The European Trade Marks Directive permits registration of shapes, but prohibits under article 3(1)(e) the registration of three-dimensional marks deemed ‘functional’ – those resulting from the nature of the goods themselves, those necessary ?to obtain technical results, or those which give substantial value to the goods. This prevents registration of a permanent, anticompetitive monopoly on a technical solution or functional characteristic of goods. 

Nestlé’s competitor, Cadbury, opposed the registration of this three-dimensional mark on these grounds. The UK trade marks registrar agreed. ?The application was rejected for all goods except ‘cakes’ and ‘pastries’ (given the innate distinctiveness relative to these goods). Given that its first bite left a bittersweet taste, Nestlé appealed to the High Court, where Mr Justice Arnold referred the case to the CJEU for clarification on several points. 

First, where the essential features of a product arise from both the nature of the goods themselves and as a necessity in order to obtain a technical result, is the registration of that shape still prohibited under the directive? Second, does the article prohibit the registration of shapes necessary to obtain a technical result related to the manner in which the goods are manufactured, rather than a manner in which they function? Finally, Arnold J questioned whether, when assessing instances where a mark has acquired distinctiveness through use, the use of the three-dimensional mark must be taken into account alone? Will the public have to identify the source of the goods without any other branding present?

For the first two questions, Arnold J was questioning whether these grounds should ?be applied cumulatively in order to preclude registration, or whether a shape mark with multiple objectionable grounds could slip through the net. A similar query was raised in 2014, in Hauck, which related to a high chair, where it was held that each of the grounds must be considered independently and a combination of grounds, none of which fully apply, is not sufficient to preclude a mark’s registration. A registry cannot pick and mix ?the three quasi-functional criteria.

Grounds for refusal

In the case of the Kit Kat mark, the shape was both a result of the nature of the goods themselves and a technical result of the manufacture. The groove between fingers is necessary to break the bar – a technical result. The angled ‘slope’ on each finger of the bar and the ‘slab’ of chocolate at the base result from the nature of the moulding process during manufacture. Finally, the number of breaking grooves determines portion size – again, a technical result. Do any of these functional elements fully apply to the mark, precluding registration? What if more than one of the criteria ?is fully applied? Can cumulative independent grounds for refusal be granted?

In its decision of September 2015, in Société des Produits Nestlé SA v Cadbury UK Ltd, the CJEU confirmed that any one of the criteria can be sufficient to prohibit registration as a trade mark. Only one of the criteria is required – fall at one hurdle and the application will fall at all. However, Advocate General Wathelet’s opinion took a novel interpretation that if at least one ground for refusal fully applies, cumulative objectionable characteristics may preclude registration. ?Cue Cadbury’s celebrations. 

The judgment also clarifies the issue of technical results arising from manufacturing processes. ?A trade mark is perceived from the point of view of the average consumer, a reasonably well-informed, reasonably circumspect fictional character with an imperfect recollection, whom the law must protect from an unfair monopoly. The average consumer will not associate a manufacturing process with the goods themselves. The manner in which the goods function is integral to their interpretation as a source of origin; the method of manufacture is not. 

Finally, the judgment addresses the question of distinctive character acquired through use of the mark. Should Nestlé wish to seek registration of a mark with a low distinctive character, such as the three-dimensional shape, the CJEU states that it must prove that the mark alone, without any other branding, is sufficient for the consumer to identify the source. When seeking to prove that distinctiveness has been acquired, use may be shown in conjunction with other registered trade marks (following another Kit Kat judgment in 2005, Société des Produits Nestlé SA v Mars UK Ltd); however, the mark in question must act as an indication of origin alone. 

The case has been referred back to the UK court for a decision.

Distinctive character

In 2005, in Nestlé v Mars, Nestlé applied to register the mark ‘Have a break…’, which was opposed by another confectionery heavyweight, Mars. ?Again relating to Nestlé’s Kit Kat bar, and the famous slogan ‘Have a break… Have a Kit Kat’, the application for just the prefix was initially refused due to a lack of distinctive character. Nestlé argued that the phrase had in fact acquired distinctive character through use, and that customers recognised Nestlé as the source of origin.

Nestlé had already registered both Kit Kat and its slogan as trade marks for confectionery in the UK. Mars argued Nestlé’s use of a longer phrase, including the highly distinctive element Kit Kat, was insufficient to prove distinctiveness of the prefix alone. Does the court’s mythical average consumer recognise an element of a mark? In a somewhat breakaway judgment, the CJEU decided that distinctiveness can be acquired through use in conjunction with another registered mark, if the applicant can show that the average consumer associates the mark as a source of origin of the particular goods. Nestlé could show that association, and now owns registrations to ‘Have a break…’ alone, despite its rocky road to registration. 

In Société des Produits Nestlé v Cadbury UK Ltd [2013], Nestlé opposed Cadbury’s attempt to register a shade of purple as a trade mark for confectionery. Trade marks can be registered if they meet the criteria defined in Sieckmann: an application must be clear, objective, precise, self-contained, intelligible, durable, and easily accessible. Cadbury’s description of the colour ‘applied to the whole visible surface, or being the predominant colour applied to the whole visible surface, of the packaging of the goods’ was not considered sufficiently precise. The application flaked.

In 2004, Lindt attempted to register a chocolate bunny wearing a red ribbon around its neck as a community trade mark. After eight years and numerous appeals, the CJEU confirmed in Chocoladefabriken Lindt & Sprüngli v OHIM that the mark was devoid of distinctive character and, in principle, could not be registered. The mark was considered a typical seasonal shape; Lindt ?could not prove the mark had acquired distinctiveness throughout the EU, and therefore could not own a registered monopoly to that mark. 

Trade marks can be registered by a proprietor for a range of unusual and complex marks; however all marks are subject to the same legislation and examination procedure, regardless of how well known or famous proprietors perceive them to be. If the criteria are met, registration of a colour or a shape is a genuine possibility for manufacturers of any goods – the next chocolate magnate attempting to register an unusual indication of origin may well get the break they crave.

(Image source: www.ipo.gov.uk/tmcase/Results/1/UK00002552692?legacySearch=False )

Ben Scarfield is a trade marks specialist at Kilburn & Strode @KilburnStrode www.kilburnstrode.com