What is interesting about this dispute from an intellectual property (IP) perspective is that Hotel Chocolat had the foresight to register the shape and appearance of its flagship product as an EU-wide registered design. This provided the company with a powerful tool in its arsenal when it wished to object to Waitrose's alleged imitation.
How could Hotel Chocolat have defended itself without a registered design?
Without a registered design, Hotel Chocolat may have been able to rely on unregistered design rights, though the length of protection is shorter in respect of the EU-wide unregistered design right and may therefore have expired. The scope of protection is also narrower in respect of UK unregistered design right.
It may also have been able to claim passing off where features of get-up (e.g. brand name or distinguishing features of the product itself) have been copied so as to create a misrepresentation to the public that the Waitrose product was either created by or associated with Hotel Chocolat.
However, the fact that the Waitrose product was marketed under a different and distinctive brand name (Waitrose) would likely have made an argument based on passing off difficult. It is therefore likely that Hotel Chocolat was able to assert a registered right, which gave Waitrose greater cause for concern.
Furthermore, if Hotel Chocolat had to issue legal proceedings (as opposed to fighting it out in the media), it would likely have been easier and cheaper for the company to enforce its registered right rather than relying on unregistered rights, the existence and scope of which must be proved by substantial evidence.
What does this case tell us about why and how businesses should protect IP?
In other examples from the confectionary sector, Nestle sought to register the shape of its four-finger KitKat bar, and Mondelez the shape of its Toblerone bar, as registered trade marks. However, in order to obtain a trademark registration for a "non-traditional" mark such as the shape of a product, it is necessary to show consumers will recognise the shape as a badge of origin.
Shape trademarks must also overcome "technical" objections which have been designed to prevent the monopolisation of shapes by means of a registered trademark (which, if renewed and used, can potentially last forever) in circumstances where the shape should really be protected by means of a time-limited registered design (which protects the shape and appearance of a product) or patent (which protects the way an invention works).
What steps can businesses take to protect IP?
Choosing the right type (or types) of intellectual property is crucial. We describe some of the main options above but there are others, including copyright and database rights, along with more niche rights relevant to specific technology sectors. The cost and ease of obtaining different types of IP protection will differ from right to right.
Ultimately, however, obtaining a registered design or registered trade mark need not be expensive and should always be considered for commercially valuable aspects of branding and design.
Aligning IP strategies to wider business strategy
Alongside choosing the right type of protection, businesses should seek to build IP strategies aligned to wider business strategy. For instance, in considering the territories covered by its IP portfolio, a business should consider where its products are manufactured and sold – and which markets it might want to expand into in the future.
Alternatively, if a business is not planning on entering a given
market directly, it may still be worth obtaining IP rights in that
territory in order to develop licensing or franchising arrangements
with third parties in that market. These questions and more are
where business strategy and IP strategy meet.
Key to achieving the right IP protection for your business then, as
illustrated by the most recent IP infringement claim to hit the
headlines, is to view IP as an investment.
By investing time and effort early in considering your IP strategy, you will be building a solid base upon which your business can continue to grow. You will also be ensuring that it is your innovation and effort which are eventually rewarded, rather than a competitor's imitation.
This article first appeared in Real Business.
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.
