South Africa: Lindt Fails To Shape Up

Last Updated: 22 April 2013
Article by Gaelyn Scott

Most Read Contributor in South Africa, September 2016

Lindt received a nasty shock just before the Easter weekend. A 12-year legal battle ended with a German court ruling that Lindt could not use the German trade mark registration that it has for its famous Easter bunny to stop a competitor, Riegelen, from selling very similar looking confectionery – Lindt's registration is for a sitting bunny wrapped in gold foil and featuring a red ribbon and a bell. The reason for the decision:  bunnies are commonplace in the field of confectionery (especially around Easter time), so there was no likelihood of confusion.

The decision must have come as a shock to Lindt, as it won a similar case in Austria a while back. Yet it can't have come as a complete surprise.  That's because last year Lindt failed in its attempt to get the shape and appearance of its chocolate bunny registered as a Community (EU) Trade Mark, despite the fact that it has registrations for the bunny in 15 individual EU countries - in the EU the national and regional registration systems co-exist, so you can register the same trade mark nationally and as an EU-wide registration.

So why was the application to register the bunny as a Community Trade Mark refused? Well, although distinctive product shapes can be registered as trade marks in the same way that distinctive words or logos can be registered, the reality is that it's far more difficult with shapes. First, there are specific exclusions regarding shapes that are functional – Philips, for example, failed in its attempt to register the shape of its three-headed shaver because the shape served a function, and Lego failed to get the shape of its brick registered. Second, the trade mark authorities take the view that consumers are less likely to see the shape of a product as an indicator of commercial origin than a brand name or logo. So, not only do you need to show that the shape has been around for some time, but the European authorities have decided that you also need to show that the shape 'departs significantly from the norms of the industry'.

The Lindt bunny did not pass muster. Few shapes do – car manufacturers do fairly well, with Mini, Smart and Porsche succeeding, but confectionery companies struggle, with applications for the shape of the Bounty chocolate bar and the Werther's Original sweet failing.  Yet it is precisely in a product area like confectionery that shape confusion is most likely - confectionery is often an impulse purchase, bought at supermarket checkouts by stressed parents egged on by nagging kids. Which explains why confectionery companies are so keen to protect things other than names and logos – not only have there been  battles over shape, but colour is keenly contested too, and Nestle recently failed in its attempt to stop Cadbury registering the colour purple for confectionery in the UK. 

So can product shapes be protected in South Africa? They most certainly can, but it's unlikely to be straightforward. A trade mark registration is definitely an option, but it will almost always be necessary to show that it's been used a great deal, and quite possibly also that it's a bit unusual – there isn't much South African authority on shape trade marks, although the Supreme Court of Appeal did once refuse an application to register the shape of the Grunberger bottle for wine.   It's highly unlikely that you'll get a trade mark registration for a shape that you've just started using, and it's always a good idea to promote the shape of the product in your advertising – if you use statements like 'buy the chocolate that looks like a triceratops' in your advertising, it will be easier to deal with the objection that consumers don't regard the shape as an indicator of origin.

A design registration is another possibility.  You can get a design registration for the shape of your product if the shape is new, and that shape can even be functional. There is no real examination of the application so, provided that you comply with the minimal registration formalities, your application will be granted. Once you have a registration you can automatically stop anyone else selling goods of that type featuring that shape.   So in many ways a design registration is preferable – you don't need to show that consumers see the shape as an indicator of origin, you don't need to show that it's become distinctive of your company, and you don't need to show that your competitor's use of that shape will cause confusion. But there are downsides. First, it's quite possible that a competitor will respond to a threat by applying to cancel your registration on the basis that the design was not new. Second, a design registration is limited to a maximum of 15 years, whereas a trade mark registration can be renewed indefinitely. In some cases the best way to go is to get a design registration initially, and follow this up with a trade mark registration once the shape has become well-established.

There are other possibilities. There's the law of unlawful competition, which makes competition unlawful if it offends against the general sense of justice of the community – notions of fair play, as well as the morals and ethics of the particular industry sector, are considered.  Previous cases suggest that the copying of a product shape may be regarded as an act of unlawful competition in unusual situations, for example where a company does it simply to destroy its competitor's business rather than to grow its own, or where copying is against the norms of that industry (unlikely in a low-tech and competitive field like confectionery).  It's also possible that the copying may amount to an act of passing-off (a specific form of unlawful competition) if there is consumer confusion, although the court will consider to what extent the differences in the names, logos and colours reduce the likelihood of confusion.   Finally, it's possible that the Advertising Standards Authority (ASA) might be persuaded that the copying of a product shape contravenes the prohibitions on exploiting a competitor's goodwill or copying their advertising – the ASA will consider whether the copied shape is the 'signature' of the product, whether any original intellectual thought or creativity went into the shape, and whether there's any likelihood of confusion. The ASA hasn't shown much enthusiasm for claims of this sort where colour has been copied, but it's arguable that shape warrants more protection.

So do think about getting your legal protection into shape.

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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