KitKat and the difficulties of trademarking a shape

The slogan ‘Have a break, have a KitKat’ has become synonymous with Nestlé’s chocolatey treat, so it must be quite frustrating for the company that its efforts to create a distinctive chocolate bar shape has so far failed to pay off as a trademark registration. Novagraaf’s Frouke Hekker examines the thin line between success and failure for 3D shape marks.

Obtaining trademark protection of shapes is not as common or as simple as trademark protection for other types of signs, such as words, slogans or logos.

Toy manufacturer LEGO’s attempts to protect its iconic bricks as 3D trademarks is just one of the high profile examples of brands whose otherwise iconic shapes have failed to meet the criteria for shape marks set by trademark offices, and national and European courts. Why has the bar been set so high?

Limits to registration Registration limits have been imposed to prevent companies from acquiring a monopoly over technical solutions or a product’s functional characteristics. To prevent shapes from being monopolised in this way, European legislation contains three limitations. These exclude shapes from trademark protection, if:

• they consist of a shape which results from the nature of the goods themselves;
• the shape gives substantial value to the goods; or
• if the shape of goods is necessary to obtain a technical result.

Shapes that are not excluded on these grounds can obtain trademark protection, but – as with trademarks in general – only if they satisfy criteria for distinctiveness. In practice, this is quite a hurdle as it can be difficult to argue that consumers recognise a shape as a distinguishing mark of a particular undertaking. The greater the similarity of the shape to a product’s obvious shape, the less distinctive it will be deemed to be. Ideally, shapes need to depart significantly from the norm or customs of the sector in order to fulfil the essential function of a trademark of indicating a product’s origin.

Does KitKat’s four-finger shape fall short? In 2010, Nestlé filed an application to register a trademark for its four fingered KitKat bar. As the application was for a shape mark, the (word) mark KitKat was not included in the image.

The UK Intellectual Property Office (IPO) originally accepted the application and registered the shape mark; however, competitor Cadbury’s opposed the registration. In the procedure that followed, the High Court of Justice of England and Wales referred the following questions to the Court of Justice of the European Union (CJEU) for a preliminary ruling.

In essence, the procedure concerned the following questions:

• Is the shape of the KitKat bar excluded from trademark protection because one of the grounds for refusal is applicable? And, if the answer to that question is negative;
• Has the shape acquired a distinctive character through use?

Applying the grounds for refusal With respect to the first question, the CJEU heard arguments that the chocolate bar’s shape contained three essential features: one of which results from the nature of the goods themselves and two of which are necessary to obtain a technical result.

The court discussed that it is possible for the essential features of a sign to be covered by one or more grounds of refusal. It then went on to clarify that the grounds of refusal regarding the technical result must be interpreted as referring only to the manner in which the goods at issue function and not the manner in which they are manufactured. The court also clarified that registration may be refused only where at least one of those grounds is fully applicable to the sign at issue.

The case has now been returned to the UK courts for review. It is important to point out that, contrary to suggestions in the world’s media, the CJEU’s ruling has not led to the final refusal of KitKat’s shape. The CJEU gives its interpretations of EU law in preliminary rulings, not the ruling itself.

The final decision belongs to the court that referred the question, the UK’s High Court, and is yet to be made.

The question of distinctiveness The second question of distinctiveness will only need answering if the UK High Court finds that none of the grounds of refusal is fully applicable. If it does not, the question of distinctive character will not be relevant as the sign at issue will be forever excluded from trademark protection.

If, however, the High Court decides that KitKat’s shape is not excluded from trademark protection, than it will next need to consider whether it has acquired a distinctive character through use. Here, the CJEU explained that: “In order to obtain registration of a trademark which has acquired a distinctive character following the use which has been made of it within the meaning of Article3(3) of Directive 2008/95, regardless of whether that use is as part of another registered trademark or in conjunction with such a mark, the trademark applicant must prove that the relevant class of persons perceive the goods or services designated exclusively by the mark applied for, as opposed to any other mark which might also be present, as originating from a particular company.”

In other words, for a successful appeal to acquired distinctiveness, Nestlé must show that the relevant public recognises the shape in itself as originating from Nestlé. Reportedly, Nestlé has commissioned a survey that shows that 90% of respondents recognise the shape as belonging to the KitKat. Therefore, if the High Court does go on to assess acquired distinctiveness and Nestlé can actually prove these impressive numbers, trademark registration for the KitKat shape could be a possibility after all.

Further confusion to come? As a final thought, it’s also worth noting that upcoming reforms to European trademark law intend to extend the provision that excludes certain shape marks to also apply to signs with ‘other characteristics’. That is to say, all signs which consist exclusively of a shape or any other characteristic which results by the nature of the goods, which gives substantial value to the goods or which is necessary to obtain a technical result will be excluded from trademark protection.

Frouke Hekker works at Novagraaf’s Competence Centre