KitKat case – 3D Trade Marks digested by OHIM and UKIPO
On 20 June 2013 the UKIPO (Intellectual Property Office) gave its decision in the dispute between Nestlé and Cadbury over the latter's bid to cancel the registered trade mark originally obtained by Nestlé in 2006 for the 3D shape of its four fingered KitKat bar.
What is immediately noteworthy about the UK decision is that the IPO has upheld Cadbury's opposition, a finding which is at odds with the December 2012 decision of the EU OHIM Board of Appeals who had previously found in Nestlé's favour in its appeal against the cancellation of its Community Trade Mark for the same shape in relation to sweets, bakery products, pastries, biscuits, cakes and waffles.
On closer analysis, the two decisions can be seen to take slightly different approaches based on their applicable legislation (the Community Trade Mark Regulations for OHIM, and the Trade Marks Act 1994 for the UK IPO).
The focus of the OHIM decision was on the question of distinctiveness under Article 7(1)(b) of the Community Trade Mark Regulations ("the Regulations"). The OHIM board found that there was no inherent distinctiveness to the 3D shape, as the trapezoid shape of each KitKat "finger" constitutes a basic geometric shape, which is not capable of distinctiveness except through use (acquired distinctiveness ). The alignment of four trapezoids did not make a difference to this analysis.
However, they concluded that the 3D shape did have acquired distinctiveness, under Art 7(3) and 52(2) of the Regulations. The evidence relied upon by the OHIM board in this regard was that when taking at the EU as a whole (they were not required to show distinctiveness in each individual Member State), 'top-of-mind' recognition figures, taken from surveys showed around 43-50% of the people questioned recognised the shape as "KitKat" or "Nestlé."
Despite only relatively small sections of the public being questioned (around 0.003% of population in some cases), this evidence was enough to persuade the OHIM board that distinctiveness had been acquired.
Their final consideration was under Article 7(1)(e)(ii) of the Regulations, specifically that the mark would not be capable of registration if the 3D shape in question was "exclusively necessary to acquire a technical result." The OHIM decision gives little commentary on this aspect but concludes that the terms 'exclusively' and 'necessary' infer that this ground only applies where the shape mark's only purpose was for the purpose of a technical result and that making portioning easier does not correspond to a technical need or purpose.
In contrast to the EU decision, the UK ruling focused heavily and in detail on the question of whether the shape relied upon was necessary to achieve a technical result pursuant to s.3(2)(b) of the Trade Marks Act 1994.
Relying upon expert evidence about the moulding process, and the grooves which are regularly used in the confectionery industry to portion chocolate (essentially "the deeper the groove the cleaner the break"), and on the optimum angle for the moulding process to achieve this, they Hearings Officer concluded that the shape was as a result of the nature of the moulded goods and to achieve the technical result of a clean break.
Little differences like smooth top surface, the base and the rounded corners were not essential to the overall impression on the consumer and hence made no impact on whether the shape relied upon in Nestlé's application was necessary to achieve the technical result of portioning and breaking. They also relied in this regard upon the emphasis in Nestlé's advertising on the slogan 'have a break'.
The UK decision also gave commentary in relation to the question of distinctiveness, and in fact the two decisions appear to agree that the shape is not inherently distinctive. The UK saw the fingers and shape as a "norm of the sector."
In relation to the question of acquired distinctiveness (considered by the Hearings Officer pursuant to s.3(1) of the Trade Marks Act) they found that Nestlé had not proved acquired distinctiveness. The UK decision states that although surveys showed substantial percentages of recognition this was not sufficient to demonstrate acquired distinctiveness as the purpose of a trade mark is to allow a consumer to decide between products, and (they concluded) evidence did not suggest that the shape was sufficiently relied on by consumers in the selection process. Rather, it was the word mark 'KitKat', the design of the wrapper and the slogan 'have a break, have a KitKat' which helped them determine which to buy.
There is an emphasis in both decisions on the limited degree of attention consumers pay to making their product selection in this sector.
The end result however appears to be that Nestlé now find themselves without a UK registered trade mark in respect of the 4-finger KitKat shape, but still with the benefit of a Community Trade Mark which gives them protection in the UK market, so in a sense (and although Nestlé may well choose to appeal the UK IPO's decision) this could prove to be something of a pyrrhic victory for Cadbury.
Clearly, the two decisions are not easily reconciled, and appear to contain contrasting findings. What may bear further consideration by brand owners is the differing approaches taken by these two tribunals to the question of acquired distinctiveness and the evidence needed to establish it in each case, under the Regulations and our Trade Marks Act respectively. In the EU merely substantial survey results showing recognition and association was held to be sufficient, whereas in the UK the IPO held that there is a requirement to show that consumers rely on the mark to make their buying decisions. In choosing whether to proceed with a UK or a Community Trade Mark application relying on acquired distinctiveness, this fairly subtle distinction may prove to be an important tactical consideration for brand owners and their advisers.
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.