Acquired Distinctiveness through Use - Nestlé v Cadbury

In Nestlé's continuing battle to register the shape of its four finger chocolate bar, The CJEU has issued a preliminary ruling in the case between Nestlé and Cadbury.

Background

In July 2010, Nestlé filed an application in the UK for the registration of the three-dimensional four fingered Kit Kat bar.

Nestlé has used the mark of the application since 1935. However, in use the chocolate bar is embossed with the words KIT KAT. The UK Trade Marks Registry accepted the application, which was published for opposition. Cadbury successfully opposed the application on the grounds that the mark was devoid of inherent distinctive character and that it had not acquired such a character following the use which had been made of it. Nestle appealed the decision at the High Court of England and Wales.

Article 3 of the EU Directive 2008/95, prevents the registration of the following types of marks

(b) Trade marks which are devoid of distinctive character

(e)      signs which consist exclusively of:

(i)       the shape which results from the nature of the goods themselves;

(ii)      the shape of goods which is necessary to obtain a technical result;

(iii)      the shape which gives substantial value to the goods;

A finding that a mark is devoid of inherent distinctive character does not prevent its registration if it is demonstrated that the mark has acquired a distinctive character through use.

The evidence filed by Nestle showed that a significant portion of the relevant public recognised the shape. However, in use the chocolate bar is embossed with the words KITKAT and Nestlé had not shown that consumers relied upon the shape as an indicator of trade origin. Also, the shape of the goods is necessary in order to divide the bar into detachable fingers is necessary. Therefore, the shape of the goods is necessary to obtain a technical result.

The Advocate General referred the following questions to the Court of Justice (CJEU) for recommendations under EU law.

'(1)      In order to establish that a trade mark has acquired distinctive character following the use that had been made of it within the meaning of Article 3(3) of Directive 2008/95 ..., is it sufficient for the applicant for registration to prove that at the relevant date a significant proportion of the relevant class of persons recognise the mark and associate it with the applicant's goods in the sense that, if they were to consider who marketed goods bearing that mark, they would identify the applicant; or must the applicant prove that a significant proportion of the relevant class of persons rely upon the mark (as opposed to any other trade marks which may also be present) as indicating the origin of the goods?

(2)      Where a shape consists of 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, is registration of that shape as a trade mark precluded by Article 3(1)(e)(i) and/or (ii) of Directive 2008/95 ...?

(3)      Should Article 3(1)(e)(ii) of Directive 2008/95 ... be interpreted as precluding registration of shapes which are necessary to obtain a technical result with regard to the manner in which the goods are manufactured as opposed to the manner in which the goods function?'

The CJEU has recently issued a preliminary ruling which held that:

The Court held that if a mark has acquired a distinctive character following the use which has been made of it, regardless of whether that use is as part of another registered trade mark or in conjunction with such a mark, the trade mark 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 (para 67).
The Court held that the three grounds for refusal in Article 3(1)(e) operate independently of one another, and it does not matter whether the sign in question could be denied registration on the basis of a number of grounds for refusal, so long as any one of those grounds is fully applicable to that sign.

3)The Court held that Article 3(1)(e)(ii) must be interpreted as referring only to the manner in which the goods at issue function and it does not apply to the manner in which the goods are manufactured.

The case will now go back to the High Court for a final ruling.