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Kit Kat loses its break – CJEU judgment

26/07/2018
Kit Kat's long running saga to register the four-finger bar as a trade mark has taken another hit. The CJEU has confirmed that the four-finger Kit Kat had not acquired distinctive character across the EU and therefore must be returned to the EUIPO for further consideration.

Kit Kat's long running saga to register the four-finger bar as a trade mark has taken another hit. The CJEU has confirmed that the four-finger Kit Kat had not acquired distinctive character across the EU and therefore must be returned to the EUIPO for further consideration. 

Recap of the background

In 2002, Nestlé applied to register the below three dimensional-shape as an EU trade mark:

In 2006, the mark was registered for a number of goods: "Sweets; bakery products; pastries; biscuits; cakes; waffles". 

In 2007, Cadbury Schweppes (now Mondelez UK Holdings & Services) applied for a declaration of invalidity, which was initially rejected by the EUIPO in 2012. 

However, in 2016, the EU General Court annulled the EUIPO’s decision (see our blog here for the details of this decision). The court held that the EUIPO had erred in law by finding that the mark at issue had acquired distinctive character through use in the EU, when Nestlé had proved use for only a number EU member states. Nestlé had demonstrated use in 10 countries to prove the mark had acquired distinctive character, but the General Court held that the EUIPO could not determine acquired distinctiveness when it had not considered the relevant public's perception in all of the member states (at the filing date, there were only 15 member states). 

In April 2018, Advocate General (AG) Wathelet's gave his opinion in which he proposed that the CJEU dismiss Nestlé's appeal (see our blog here for the opinion). However, in doing so the AG seemed to suggest a slightly more pragmatic approach than the General Court to demonstrating acquired distinctiveness, taking account of brand owners' distribution networks. 

CJEU ruling

Both Nestlé and the EUIPO appealed the General Court decision, but the CJEU, in a judgment which is in line with the AG's opinion, dismissed the appeals. 

The CJEU found that it is not sufficient to prove that the mark had acquired distinctive character through use in a significant part of the EU. Although there is not a requirement to produce evidence of use in each individual member state, the evidence must be capable of establishing acquired distinctiveness throughout the EU member states as a whole. This means that the evidence must be produced “globally” for all member states concerned. The judgment refers to the fact that it is possible to group several member states together (as if they were one) if they are part of a linked distribution network, or if the same marketing strategy is applied throughout the group of member states. Therefore, evidence of use cross-border will likely be relevant.  

The CJEU held that the General Court was right to annul the EUIPO’s decision whereby the EUIPO had concluded that distinctive character had been acquired through use, without considering Belgium, Ireland, Greece and Portugal.  

The matter will now be handed back to the EUIPO, although it is likely they will refuse the application.

Comment

Although this is a setback for Nestlé, after fighting this battle for so many years, they could apply for a new EU trade mark. Nestlé already have the four finger bar protected as a trade mark in a handful of European jurisdictions, for example their German registration was filed in 1999 and proceeded to registration in 2004.

This judgment provides some clarity to brand owners required to prove their mark has acquired distinctive character. It is helpful that the CJEU has said that evidence of cross border use can be used as evidence to cover other member states. We should add that it is not clear what weight should be attributed to this type of evidence and this will need further guidance from the courts. Brand owners should also consider whether it is sensible to file national applications in key member states to obtain some protection, which Nestlé have done.

Alternatively, brand owners may wish to consider filing a registered UK or community registered design. However here other considerations will come into play, such as the disclosure requirements.  

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