India: The Shape Mark Conundrum Vis-À-Vis Acquired Distinctiveness

Last Updated: 20 July 2017
Article by Shrabani Rout

Most Read Contributor in India, July 2017

INTRODUCTION

An average consumer in India does not just recognize a product from the name embossed on the product alone. There are customers who connect more to the feel of the trademark rather than its visual appeal. They rely heavily on the color combination, packaging and sometimes even the shape of the goods to identify the product. Coming exclusively to the issue of shape marks, they were not statutorily recognized in India before the Trademarks Act, 1999 came into force. Post the enactment, a trademark under Section 2(zb) can include, interalia, the shape of goods, their packaging so long as it is possible to graphically represent the same and such shape clearly distinguishes the goods sold under such trademark from those of another manufacturer.

The first set of challenges in registering a shape mark arises when an application is made to register a shape as a trademark. From graphically representing it to proving that the shape has acquired distinctiveness, the hurdles to registration are endless. It is pertinent to mention here that shape marks are not considered to be inherently distinctive in nature. The Applicant has to prove that the shape of the mark has acquired distinctiveness and consumers rely on that to identify the Applicant.

The protection of shape marks in India, is however unclear due to the lack of suitable precedents regarding the same. However it is interesting to note that the Indian Trademark Registry granted protection to the shape of 'ZIPPO' lighters way back in 1996. Another notable instance was the registration of the shape of the famous Gorbatschow Vodka bottle which was registered in class 33 in the year 2008 for the unique shape of its bottle.

Along with the general criterion that a trademark needs to fulfill before it can be registered, shape marks are required to fulfill 3 other criterions:

  1. The shape should not result from the nature of the goods themselves.
  2. The shape should not be such that it would be necessary to obtain a technical result.
  3. The shape should not be such that it gives substantial value to the goods.

NESTLÉ VS. CADBURY - NEED A BREAK?

Recently, Nestlé's Kit Kat bar was denied registration in Europe1 when Cadbury opposed the application stating that the shape mark was not distinctive and hence could not be registered as a trademark.

The main issue before the Court was that of acquired distinctiveness. Nestlé had produced heaps of evidence stating that the four fingered bar had acquired immense popularity and distinctiveness and consumers directly associated the bar with Kit Kat.

The Indian Trademarks Act of 1999 and First Council Directive 89/104/EEC of 21 December 1988 (European Statute) have very similar provisions when it comes to the registration of shape marks and the conditions to be fulfilled by a shape mark to be considered for registration. As a consequence of the similarity between the statutes, the arguments put forth could very well be of consequence when such questions come up in any Indian case.

Before delving into the issue of acquired distinctiveness, the facts and issues raised before the Court have been stated down below:

FACTS OF THE CASE:

Société de produits Nestlé SA ("Nestlé") had filed an application on 8th July, 2010 seeking registration of a three-dimensional sign (the Kit Kat chocolate bar) with the European Intellectual Property Office (the "EUIPO") under class 30.

Cadbury Schweppes Plc ("Cadbury") objected and had claimed that the trade mark should be declared invalid on the grounds of lack of distinctive character.

The case travelled across quite a few judicial bodies, details of which are not mentioned here for th e sake of brevity. Finally after the Advocate General of the Court of Justice of the European Union ("CJEU") gave their opinion on the matter; the case had gone back to Justice Arnold in the England and Wales High Court, who concluded the matter in favor of Cadbury.2

ISSUE OF ACQUIRED DISTINCTIVENESS

The question regarding acquired distinctiveness that led Justice Arnold to his decision can be summarized as follows:

"In order to establish that a trade mark has acquired distinctive character following the use that had been made of it, is it sufficient for the applicant for registration to prove that at the relevant date a significant proportion of the relevant class of persons recognize the mark and associate it with the applicant's goods or must the applicant prove that the relevant class of persons rely upon the mark (as opposed to any other trademarks which may also be present) as indicating the origin of the goods?"

OPINION OF THE COURT AND ITS ANALYSIS

The question posed by Justice Arnold sought to determine the question of acquired distinctiveness. To determine whether the shape had in fact acquired distinctiveness, two scenarios have to be looked at. Firstly, whether the consumers use the shape to identify the company i.e. Kit Kat from Nestlé or whether the consumers rely on the shape mark to identify the company?

The Court rightly settled on the latter in deciding the question of acquired distinctiveness. Mere general recognition of the shape mark does not necessarily mean that the consumers identify it exclusively as a trademark for the company.3 The consumers might know and recognize that the shape of the mark is associated with a company but they might not rely on the mark exclusively to determine if a product belongs to the company. If the shape is not exclusively and independently recognized by the consumers as a trademark, then it fails to qualify as a trademark.

To determine if a mark has acquired distinctiveness, the relevant question to be asked is "Are consumers using the mark to identify the manufacturer in exclusion to his competitors?" If the consumers don't use the shape mark to exclusively identify the company then it cannot be considered as a trademark. While coming to this conclusion, the Court relied on the case of Philips vs. Remington4 where while deciding upon the issue of acquired distinctiveness, the Court had held that:

"the identification, by the relevant class of persons, of the product as originating from a given undertaking must be the result of the use of the mark as a trade mark and thus as a result of the nature and effect of it, which makes it capable of distinguishing the product concerned from those of other undertakings"

If the shape mark is not used as a trademark by the consumers, then it cannot have acquired distinctiveness. The Court applied the factors regarding acquired distinctiveness laid down in Philips vs. Remington and held that the consumers did not place reliance on the shape to identify the company. It instead focused on the fact that the consumer has to understand origin as a result of use of the sign in question and that sign alone.

Apart from the issue of acquired distinctiveness, Justice Arnold in the EU High Court held that the shape was functional in nature and was necessary to obtain a technical result i.e. the slab shape resulted from the nature of chocolate bars and the fingers were necessary to separate and break the product and were therefore technical in nature. Therefore the mark could not be registered in the European Union.

It is pertinent to mention here that Nestlé was successful in registering the shape in South Africa. The South African Supreme Court of Appeal held that the shape trade mark was not hit by the "technical result" exclusion, because the trade mark did not consist "exclusively" of a shape that is necessary to obtain a technical result. The court felt that, even though there were functional features to the shape, there were also non-functional features. The court also held that the four-finger shape had become distinctive through use.

CONCLUSION

The main hindrance to shape mark registration is being able to prove the inherent distinctiveness of the shape. Proving inherent distinctiveness is however not a mandate. If the Applicant can show that his mark has acquired distinctiveness, then the mark can be considered for registration. In the above mentioned case however, Nestlé failed to prove that consumers relied upon the shape of the Kit Kat bars to denote the origin. It had only proved that they recognized the shape and associated it with Kit Kat products.

However an Applicant can take the following steps to make their shapes distinctive to the consumers:

Adopting and using ''shapes'' for goods that depart significantly from the norm or customs of the sector of goods concerned - they are more likely to be deemed inherently distinctive and registrable.

Promoting the shape of their goods as identifying the trade source of the goods. By educating consumers to perceive the goods as originating from a particular business because of the shape and appearance of the goods, the same may well ''become'' a trade mark and thus should be capable of registration. Another reason why Nestlé lost to Cadbury. They failed to prove that the consumers use and rely upon the four-finger shape to denote the origin of the shape.

Obtaining evidence that, as a result of the marketing efforts, average consumers have indeed come to see the shape of the goods as indicating the trade source of the goods .They will need to prove that such persons would rely upon the shape as denoting the origin of the goods if it were used on its own.

Thus it is essential for companies wishing to trademark the shape of goods to plan their marketing strategies accordingly and make the consumers aware by educating them to perceive the goods as a trademark of the company and to rely on the shape itself to indicate origin. The current case, along with Philips vs. Remington has strongly established the use factor as a necessary factor for proving a shape mark has acquired distinctiveness.

Footnotes

1. http://www.independent.co.uk/news/business/news/nestle-kit-kat-trade-mark-denied-eu-court-four-finger-chocolate-shape-a7477196.html

2. Société de produits Nestlé SA vs. Cadbury U.K. Ltd. [2016] EWHC 50(CH)

3. Case No. CH/2014/0392

4. Koninklijke Philips electronics N.V vs. Remington Consumer Products Ltd. Case C-299/99

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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