Cadbury v Néstle: Recognition and Distinctive Character
In 2010, Néstle filed a 3D UK application for the shape of its KIT-KAT chocolate bar. Cadbury opposed, claiming that a) the mark was devoid of distinctive character and had not acquired a distinctive character through the use that Néstle had made of it and b) the shape of the mark resulted from the nature of chocolate bars and was necessary to obtain a technical result.
The grounds for refusing shape applications in the UK are to prevent parties obtaining monopolies on technical solutions or functional characteristics of a product. Trade marks will be refused registration where the essential features of the shape are only attributable to a technical result. Arbitrary features that make no real impact on consumers will not prevent the ground of refusal applying if the essential features of the shape are required to obtain a technical result.
The hearing officer held that the essential features of the KIT-KAT bar were:
- the rectangular shape of the bar;
- the ‘fingers’ of the bar; and
- the number of grooves present on the bar which determine the number of ‘fingers’ in the bar.
The hearing officer concluded that for moulded chocolate bars or moulded chocolate biscuits sold in bar form, the shape of the KIT-KAT bar was an easy and cheap way to produce a chocolate bar. The fact that other chocolate products are not presented as “a rectangular slab” does not mean that the shape of the KIT-KAT bar is not the basic shape of moulded chocolate products. Therefore, Cadbury’s objection was upheld because the shape of the KIT-KAT bar results from the nature of moulded chocolate goods.
Further, the grooves of the bar were found to have a technical function because their purpose is to enable the bar to be broken into ‘fingers’. The grooves do not add any arbitrary function to the bar, because the shape of the KIT-KAT bar is unknown until the product has been unwrapped. Further, the product is designed to be broken up and the ‘fingers’ split and Néstle’s own marketing campaigns promoted the breakability of the bar.
Cadbury’s evidence showed that in July 2010, other parties were using 2 finger versions of the KIT-KAT bar. Other chocolate products which enabled ‘fi ngers’ to be separated by grooves had also been found to exist. Accordingly, the hearing officer held that the shape of the KIT-KAT bar fell within the norms and customs of the confectionery sector, and so for chocolate products, the shape was not inherently registrable.
Further, it was found that the shape of the KITKAT bar had not acquired a distinctive character through Néstle’s use. He acknowledged that the KIT-KAT bar makes up around 1-2% of the chocolate products market and that it is one of the more popular chocolate products in the UK. He also found that the KIT-KAT bar had been used in the UK for more than 75 years. It was also accepted that at least 50% of people surveyed by Néstle recognised the shape of the bar as a KIT-KAT product. However, he held that the evidence did not show that these consumers rely on the shape as identifying the origin of the goods, which is necessary for a fi nding of acquired distinctive character. Néstle had not used the shape of the bar in promotion of its goods prior to 2010, and it was accepted that the shape of the bar was only visible to consumers once the product had been opened. It did not seem likely to the hearing officer that consumers would use the shape of the KIT-KAT bar post-purchase to check that they have chosen the right product. The 3D shape mark of the KIT-KAT bar was therefore refused for chocolate products because it was neither inherently registrable nor had it acquired a distinctive character through use.
Most UK consumers would recognise the 3D shape of the KIT-KAT bar, but Néstle failed because its trade mark is functional and consumers do not rely on the shape of the bar to buy a KIT-KAT or Néstle product. The shape of the mark is not what drives consumers to purchase the chocolate bar. The outcome may have been different if Néstle had demonstrated stand-alone use of the 3D shape without reference to KIT-KAT, much like Polo did in marketing their “mint with a hole”.
It is likely that Néstle will appeal. We may also see a new advertising campaign from Néstle where use of KIT-KAT takes second place to prominent advertising of the 3D shape we all know to be the KIT-KAT bar.