Kit Kat: The Nooks and Crannies of Acquired Distinctiveness for Three-Dimensional Marks

It's a biscuit, not a chocolate bar!

Confectionery giants Nestlé and Cadbury have been at it again, this time over the three-dimensional four-fingered shape of the Kit Kat, a chocolate-lined biscuit treat that has nothing to do directly with kits, cats or Kats. Although a green version of Nestlé's product can be found in Japan, colour was not at issue in this recent decision of the Board of Appeal of the OHIM, unlike the previous dispute between the parties concerning exotic trade marks, reported by the IPKat here.

In Case R 513/2011-2 Société des Produits Nestlé S.A v Cadbury Holdings Ltd, Nestlé appealed a decision of the Cancellation Division finding the three-dimensional Community trade mark, consisting of four trapezoidal bars aligned on a rectangular base for 'Sweets; bakery products, pastries, biscuits; cakes, waffles' in Class 30, was devoid of distinctive character and had therefore been invalidly registered contrary to Art. 7(1)(b), Reg. No 207/2009. "The Division has misapplied the law and incorrectly interpreted the evidence! Our mark has surely acquired distinctiveness through use in the relevant territories of the EU and therefore not invalid as provided for in Art. 52(2)!" Nestlé [may have] exclaimed.

Lucky for Nestlé, the Board of Appeal eventually agreed, after making its way through the reasoning assault course of: first, determining whether the Division made a correct assessment as to the distinctiveness of the mark (Art. 7(1)(b)); secondly, assessing whether the mark had acquired distinctiveness through use (Art. 52(2)) and; thirdly, whether the mark's essential characteristics consisted exclusively of technical solutions therefore falling outside the scope of the exception of acquired distinctiveness (Art. 7(1)(e)(ii)).   

It's invalid if it's devoid of distinctiveness...

The Board reiterated the general principle that the essential function of a trade mark is to be distinctive so as to enable the identification of the commercial origin of goods or services by the consumer, which is assessed, first, by reference to the goods or services of the mark and, secondly, by reference to the perception of the relevant public, which consists of the average consumer of those goods or services who is reasonably well informed and reasonably observant and circumspect. Although it was not appropriate to apply more stringent criteria when assessing the distinctiveness of figurative marks as Art. 7(1)(b) makes no distinction between different categories of mark, the assessment of the distinctive character of three-dimensional marks must be based on the assumption that only a mark which departs significantly from the norm or customs of the sector can fulfil the essential function of indicating origin. The more closely the mark resembles the shape most likely to be taken by the product in question, the greater the likelihood of the mark being devoid of any distinctive character. In order to ascertain whether a mark consisting of a number of components may be perceived by the relevant public as an indication of origin, the overall impression produced by that combination must be analysed. A mark which is excessively simply and constituted by a basic geometrical figure, is not, in itself, capable of conveying a message which consumers will be able to remember, with the result that they will not regard it as a trade mark (unless it has acquired distinctive character through use).

In the present case, the goods were sweet, fast-food low priced products for everyday consumption targeted at the general public. Consequently, the consumers' attention would not be high. The sign was three-dimensional, consisting of four trapezoidal elongated bars aligned on a rectangular base. That the trapezoidal shape was original was insufficient as it remains one of the basic geometrical forms, which was not a feature that allowed one to conclude that the elongated product with a trapezoidal section departed significantly from the norm or customs of the sector. The consumer would simply see the bars as a portion of the product. It did not, therefore, significantly depart from the norm and customs of the relevant sector. Nor was the basic geometrical trapezoid shape capable of identification with the origin of the goods. Therefore, the Cancellation Division rightly concluded that the sign lacked any distinctive character under Art. 7(1)(b).

...But not if it's acquired distinctiveness through use...

War time Kit Kat

Article 52(2) provides that where the mark has been registered in breach of the grounds laid down in Art. 7(1)(b), (c) or (d) it may nevertheless not be declared invalid if it has acquired distinctive character through use in the relevant part of the EU where it was previously devoid of any such character. This requires at least a significant proportion of the relevant public of the relevant territories at the relevant time (either before the mark's filing date or between the date of registration and the application for a declaration of invalidity) to identify the goods or services as originating from a particular undertaking because of the use of the mark. The impression which a three-dimensional sign, consisting of the shape of the goods themselves, may create in the mind of the consumer is in principle likely to be the same throughout the EU, unless there is concrete evidence to the contrary. Thus, in the case of non-word marks, it is in the EU as a whole that that mark must have become distinctive though use in order to not be declared invalid.

However, if a mark was registered or applied for before the dates of accession of new Member States, then the relevant territory, and therefore relevant public, is made up only of the States that composed the EU at the relevant time (Art. 165(4)(a)). Further, the CJEU's judgment in the Lindt chocolate bunny case that it would be unreasonable to require proof of acquisition for distinctive character for each individual Member State in which the mark did not have such character applied:

'In general, it would be unreasonable and disproportionate both to request the owner of the trade mark to divert and invest important quantities of money in collecting evidence of the acquired distinctiveness in each corner of the Internal Market and to refuse protection to a trade mark, whose recognition as been duly shown for the vast majority of the territory of the EU' (at [78])

In this case, the Board assumed that surveys submitted by Nestlé were carried out according to the expected professional standards; the results and analysis provided by the author companies being reliable. Although some of the surveys had been conducted subsequent to the date of filing, the period between the relevant date and the survey period was sufficiently short (less than a year) to not diminish their supporting probative value as the data did not measure an immediate effect but mapped a market development process. Further, market share and ranking oscillations showed a certain stability of the market trend.

The Board agreed with Nestlé that the populations of Germany, France, the UK, Italy and Spain together made up 79.2 per cent of the total population of the EU as composed by the fifteen Member States to be considered in the proceedings, as supported by population figures in 2007 published by Eurostat. Not only that, but add the Netherlands, Austria and other Member States into the mix, and it was possible for the Board to conclude that:

'the contested mark has been used in almost the totality of the EU's territory, covering the market of fourteen of the fifteen Member States that formed the EU at the relevant point in time; that as a consequence of such use, it can be determined that almost 50 per cent of the general public of the EU taken as a whole (or, said in another way, around 50 per cent of the general public of the  Member States representing around 90 per cent of the EU's population), identifies as first option the Nestlé as the business origin of a product with the shape of the contested mark (which belongs to the categories of 'sweets, bakery products, pastries, biscuits, cakes and waffles')' (at [88])

As such, the evidence was sufficient to establish that the trade mark had become distinctive through use in the relevant parts of the EU territory.

...Although only if it's essential characteristics relate to more than technical solutions...

At this last hurdle, it was necessary for the Board to consider the exception to the exception (as it was one of the grounds of Cadbury's initial request for a declaration of invalidity) laid down in Art. 7(1)(e), which precludes registration of a sign, even if it has acquired distinctiveness through use, if it consists exclusively of shapes, inter alia, necessary to obtain a technical result (Art. 7(1)(e)(ii)). Once the essential characteristics, which are the most important elements of the sign (per Case R 513/2011-2 'Lego Brick'), of the three-dimensional sign have been identified by the authority deciding on the application for registration, the competent authority still has to ascertain whether they all perform the technical function of the goods at issue. As such, Art. 7(1)(e)(ii) is not applicable where the mark relates to a shape of goods in which a non-functional element, such as a decorative or imaginative element, plays an important role.

The Board found; first, that the bars being aligned together and joined through a thinner base contributed to the making the portioning of the product easier but did not respond to a technical need or performed a technical function of the goods at issue (nor does it incorporate any technical solution developed and patented by the manufacturer of the product); Secondly, even if the bars served the purpose of facilitating partitioning of the product at the moment of consumption, such a solution was neither technical nor essential in the shape of the goods at hand; Thirdly, that solution might be incorporated without difficulty by competitors in shapes which do not have the same non-functional elements as that contained in the current shape, in particular the trapezoidal shape of each bar (to which can be added the alignment of bars, the alignment into four bars, the common joining base and its rectangular shape).

'One could say that those non-technical functions are rather banal, as the Board has already found that the sign is per se non-distinctive under Art. 7(1)(b). Nonetheless, be they as banal as can be, the fact remains that those characteristics, not dictated by any technical reason, are, as it has been established, sufficient to make that shape be recognised by the relevant public as a badge of origin...This means that those elements, while not inherently important, through the use of the sign have nevertheless become important and are now recognised by the relevant public as a commercial origin indicator' (at [108])

The objection under Art. 7(1)(e)(ii) was not, therefore, applicable.

"Hooray!" shouted Nestlé [maybe] and this Kat. Reading the summary of the Cancellation Division's decision she had an uneasy feeling but was happy when she got to the Board's reasoning. However, she was, and is, a little shocked [and a little disgusted] to discover how much information about the (not so) humble Kit Kat was taking up precious space in her mind. Not only is she aware of the various evolved varieties and promotional campaigns but also has a special way of eating the four fingered three dimensional mark, which she will share with the IPKat readers, as a parting gift: make a strong cup of Earl Grey tea with a touch of milk so it's almost black, bite off both ends of one finger and use said finger as a straw for drinking the tea. Perhaps not worthy of a patent, but surely an evolution of the art of biscuit eating.

When this Kat started studying IP and encouraged to read the IPKat by her lecturer she never dreamed she would have the opportunity to contribute to the blog. It has been a great honour. She thanks her fellow Kats and all IPKat readers.

Happy New Year!