South Africa: Chocolate Bar Brawls

Last Updated: 20 June 2018
Article by Jason Drew

Most Read Contributor in South Africa, October 2018

Over the past few years, we've reported on a number of legal battles involving chocolate bars such as Kit Kat and Toblerone. These cases have dealt with the shape or appearance of chocolate bars. Another "food fight" has erupted in the UK, and this time it involves a speciality chocolate manufacturer called Hotel Chocolat and the retail chain Waitrose.

Hotel Chocolat has accused Waitrose of copying the look of, and thereby infringing its right to, a particular chocolate product that it produces. The essential feature of Hotel Chocolat's product is the fact that is has curvy lines, making it easily distinguishable from regular chocolate bars which tend to have straight sides.

According to the designer, the design draws its inspiration from how chocolate would look when you pour it out on top of a table top and let is set. The result is the curvy outline.

Not only does Waitrose's product share the curvy outline, but one particular version which is made of white chocolate and has pieces of meringue and strawberry in it (the Eton Mess) is similar to Hotel Chocolat's product.

In cases of product copying, loss of business is the most obvious form of damage, but in this case, reputational damage seems to be a big issue too.

The cases we've reported on like Kit Kat and Toblerone have involved trade mark rights, in other words, trade mark applications or registrations for product shapes. As we've seen, it can be very difficult to protect and enforce product shapes through trade mark law. The problem is that the authorities need a great deal of convincing that the shape has become so synonymous with a company's product that it is entitled to a monopoly. In the language of IP, there needs to be significant and convincing evidence of acquired distinctiveness. When it comes to registering a product shape as a trade mark you will invariably need to show that you've been using it for a long time and on an extensive scale.

The Hotel Chocolat case, however, involves design law. Hotel Chocolat have a number of European design registrations that claim protection for their unique chocolate bar. Design law is essentially all about protecting what the product looks like. The South African Designs Act, 1993 offers protection for both aesthetic designs and functional designs. When it comes to aesthetic designs, this protection is afforded to "features which appeal to and are judged solely by the eye, irrespective of the aesthetic quality thereof."

The main difference between trade mark law and design law is that, whereas with trade mark law, distinctiveness (invariably acquired through use) is the critical issue, and with design law, it's all about novelty. In other words, you can only get a design registration if the design is new. In terms of South African law, you can file a design up to six months after it is first disclosed to the public. The two forms of protection are therefore at opposite ends of the scale. They can, however, be combined by getting a design registration for a shape that's new and, before the registration expires, applying for a trade mark registration on the basis of the distinctiveness that has been built up. The benefit of a design is that it registers quickly and is not examined in South Africa, while the benefit of a trade mark is that it is effectively perpetual if registered, and provided it is kept in force, by paying the renewal fees every 10 years.

The Hotel Chocolat dispute raises some other interesting issues. One is the imbalance that often exists in IP cases, with IP owners sometimes simply being too scared to enforce their rights. Often, bigger corporate entities are viewed as intimidating targets, with an endless supply of money, while the IP owner may not have this luxury.

Another issue that this case highlights is how IP owners are increasingly making use of unconventional methods in order to take action against infringers. The man behind Hotel Chocolat started off on social media, tweeting as follows: "Imitation is the sincerest form of flattery apparently but hey @waitrose this crosses the line!! As well as breaching our Registered Design Mark, designed to protect innovation." When this failed to achieve the desired result, he wrote to Waitrose, asking the company "to do the right thing." Finally, he resorted to approaching the mainstream media, no doubt in the hope that this would shame Waitrose, a company with a significant public profile, into respecting his small company's IP rights. We'll have to wait and see whether he's successful.

A similar case, which is closer to home, is the recent social media backlash and negative media that Zara received for retailing socks that embodied a similar design to Laduma's own sock design called MaXhosa. In similar fashion, a tweet from a fan who spotted the similar socks at Zara sparked it all. The result – Zara pulled the socks of their shelves. In this case, the IP owner did not have design rights, where possibly he or she should have.

When registered rights are potentially being infringed, and in this case, design rights, it is very important to firstly look at the scope of protection of the design that the owner claimed in the design application. In the South African context, this is determined by the "definitive statement" which is like a claim, as well as the drawings accompanying the application.

Secondly, and importantly, the "prior art" also becomes relevant when defining the actual extent of the design owner's right, ie, whether it is new and original. "Prior art" is effectively any and all existing and/or known products that may have a similar design, ie, they may have one or more features that are similar to or the same as the product that forms part of the design. The prior art should be carefully considered, and in this case, any freely poured and set chocolate with chunks should be considered, provided it was available to the public before Hotel Chocolate applied for design protection.

Thirdly, the alleged infringing product must be directly compared to the registered design. The test applied to determining infringement in South Africa is whether or not the infringing product is the same as or not substantially different from the design. In this situation, the question to be asked is: are the small differences in the outline, or are the differences in the appearance of "chunks" significant enough to differentiate the two?

It is worth remembering that registered IP rights are much simpler to enforce than unregistered rights. The burden of proof is lowered, and the fact that you have a registration certificate is evidence of your right.

However, IP owners should also be cautious of threatening people or companies of infringing their IP (registered or unregistered), and using social media to reach the infringer. Alleged infringers who are prejudiced by false claims may approach the court for relief against an IP owner or others making such threats, should they think they are false. Using social media may apply pressure on the infringer to remedy their wrong, but our advice is that before making any threats, you should seek advice on whether you have IP rights, and whether or not they are being infringed. In addition to this, when innovating a new and original design, it is important to ask for advice early on, to find out whether you have IP that can be registered.

Reviewed by Rowan Forster, a director in ENSafrica's IP department.

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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