The Kit Kat shape saga goes on and on. A few months back we reported on how the Advocate General ("AG") of the EU had written an opinion on the issue of an opposition by Cadbury (now Mondelez) to Nestle's application to register the four-fingered shape of its Kit Kat chocolate bar as a UK trade mark . The opinion was written because a UK court had referred the issue to the Court of Justice of the European Union ("CJEU") for guidance. The AG's opinion was that the trade mark application should fail.
There were two reasons for this. The first was that the application contravened the functionality or "technical result" exclusion; in other words, the provision that says that a trade mark must not consist exclusively of the shape that results from the nature of the goods, or the shape that is necessary to obtain a technical result. On this score, the AG suggested that this exclusion applies to both the way in which the goods function and the way in which they are manufactured – it's been claimed that the shape of the Kit Kat bar not only makes it easier for consumers to break the product up, but also makes it easier for the company to remove it from the mould during the manufacturing process.
More controversially, however, the AG also suggested that the application should be refused on the basis that the Kit Kat shape had not acquired the level of distinctiveness that is required for trade mark registration. This is despite the fact that a survey that Nestle had submitted suggested that 90% of UK consumers recognise the four-finger shape. The AG's view on this was that mere recognition of the shape isn't sufficient, because it doesn't follow that consumers actually perceive it as the trade mark of Nestle.
The CJEU has now handed down its ruling. On this issue of the technical result exclusion, it said that the reason why this exists is to prevent trade mark law from being used as a way of monopolising technical solutions or functional characteristics that a consumer would be likely to look for in the goods of competitors. It went on to say that the technical result exclusion relates to the way that the goods function only, and does not extend to the way in which they're manufactured.
On the issue of acquired distinctiveness, however, the court was a little vague. It said that a trade mark applicant must show that, as a result of extensive use, the trade mark identifies the goods as coming from that company. This use must not only be trade mark use, but it must also be use of the trade mark that the company wants to register. What the trade mark applicant cannot do is simply submit evidence of use of the trade mark that it wants to register in conjunction with other trade marks (I assume that the court had the word trade mark "Kit Kat" in mind here).
It's worth bearing in mind that the CJEU does not decide cases, but simply answers specific legal questions that are put to it. So what happens now is that the case goes back to the UK court that referred the matter to the CJEU. Some trade mark lawyers seem to feel that this is the end of the road for Nestle. Others, however, feel that it creates an opportunity. They seem to think that Nestle may have the opportunity to present a new survey to the UK court - one that is far more specific, and one that makes it clear that people don't simply recognise the Kit Kat shape but also associate it with Nestle, and that they do this without the assistance of any other trade marks like Kit Kat. We'll have to wait and see!
One thing we can be sure of, is that Nestle will be glad that the South African authorities aren't quite as strict or nuanced in these matters. In a judgment that was handed down at the end of 2014, the Supreme Court of Appeal held that a trade mark registration for the shape of the Kit Kat chocolate bar was valid, despite the fact that South Africa also has a technical result exclusion. The court held that the trade mark did not consist "exclusively" of a shape that's necessary to obtain a technical result because, even though there were functional features, there were also non-functional features, such as the plinth.
More significantly, the court also found that the shape had become distinctive through use. The court was happy to accept this on the basis of evidence of use going back many years and it seemingly drew no distinction between mere recognition and acceptance as a trade mark. It also didn't seem to take into account the fact that the shape may have been used in conjunction with word trade marks like "Kit Kat".
Although shape trade mark applications are examined critically in South Africa, it is, I think, safe to say that they generally stand a better chance of success than applications in the EU.
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