Thursday, January 21, 2016

Nestlé loses high court battle to trademark shape of KitKat

Door opens for rivals to launch copycat chocolate bars after ruling, the culmination of a long-running battle with Cadbury
Nestlé has failed in its attempt to trademark the shape of KitKat in the UK, opening the door for rivals to launch copycat products.

The high court ruling on Wednesday was the culmination of a long-running legal battle between Nestlé and Cadbury that has involved hearings in Britain and courts elsewhere in Europe.

It first tried to trademark the shape of the four-fingered chocolate bar in 2010, but its attempts were opposed by Cadbury. The confectioners have been battling over trademarks since Nestlé blocked Cadbury’s attempts to trademark the shade of purple used in the packaging of Dairy Milk.

The European court of justice previously ruled that the shape of the KitKat was not distinctive enough to merit a trademark and that such a designation would not comply with European law.

Mr Justice Arnold had referred the case to the European courts for clarification after beginning the high court hearing in 2014. In his written ruling, the judge said Nestlé had not promoted the chocolate bar’s shape as one of its selling points and had distributed it in an opaque wrapping that did not reveal its design.

“In these circumstances it seems likely that consumers rely only on the word mark KitKat and the other word and the pictorial marks used in relation to the goods in order to identify the trade origin of the products. They associate the shape with KitKat (and therefore with Nestlé), but no more than that,” he said.

“Therefore, if it is necessary to show that consumers have come to rely on the shape mark in order to distinguish the trade source of the goods at issue, the claim of acquired distinctiveness fails.”

The first KitKat-type bar was sold in Britain by Rowntree & Co in 1935, when it was called Chocolate Crisp, and the shape has changed little since then. Nestlé acquired Rowntree in 1998.

A lookalike called Kvikk Lunsj, translated as “quick lunch”, launched in Norway in 1937 and is available in some UK shops.

After the ruling, a Nestlé spokesman said: “KitKat is much loved and the iconic shape of the four-finger bar, which has been used in the UK for more than 80 years, is well known by consumers.

“We believe the shape deserves to be protected as a trademark in the UK and are disappointed that the court did not agree on this occasion. We are taking the necessary steps to appeal this judgment.”

Sharon Daboul, a trademark attorney at law firm EIP, said the high court ruling was a “common-sense decision”.

She said: “The question is whether a consumer would look at the four-finger chocolate bar and straight away know it was a KitKat, without the logo or wrapper. Consumers will tend to be influenced by a brand name and the outer packaging of a product rather than its shape alone, so the threshold for registering shapes as trademarks is high. However, while it is rare to win trademark protection for shapes, it is not impossible – the Toblerone shape and Nestlé’s Walnut Whip are both protected.”

Daboul said proving that consumers associated the shape with a KitKat bar was not enough: ”Consumers had to rely on the shape as an indication of origin, and the onus was on Nestlé to have shown this in the earlier evidence rounds.

“This seems to be a commonsense decision and perhaps public policy also played a part. Allowing registration of the KitKat shape would have given Nestlé a valuable monopoly and competitive advantage over other confectionery manufacturers, which is one of the reasons why Cadbury has been keen to stop them.”


Read more on The Guardian




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