A calorie-related dispute between Nestle and Cadbury – protection of the shape of food products

The external appearance of products is one of the most important elements in the promotion and marketing strategy employed by companies. Roundness, protrusions or indentations thanks to the legal protection they enjoy may become an exceptionally valuable part of the product. Taking into consideration the potential of appropriate product design, one electronics industry giant – Apple – was granted a protection right to the shape of its devices, i.e. a rectangle with rounded corners. In the course of the famous “patent war” between the corporation from Cupertino and Samsung, in which the appearance of the IPhone and IPad was one of the areas of dispute, the courts ruled in favor of Apple and the sale of the Samsung Galaxy Tab 7.7 was prohibited in 27 countries of the European Union (OLG Düsseldorf, 31.01.2012 – 20 U 175/11) and the sale of the Samsung Galaxy Tab 10.1. was banned in the US (judgment of District Court in San Jose). This example shows that the shape of a product and its adequate protection constitutes at present one of the most important elements in the market policy of enterprises.

A battle similar to the dispute between Apple an Samsung is currently being fought in the food industry between the biggest producers of chocolate – Cadbury UK Ltd and Société de Produits Nestlé SA. The bone of contention in this case is the characteristic shape of the Kit Kat candy bar whose protection with the Office for Harmonization in the Internal Market (OHIM) was requested by Nestle. Initially, OHIM refused to register the mark citing it had no distinctive character. In the registration proceedings, Nestle, however, managed to prove that the shape should be granted protection because as a result of its use it had obtained a distinctive character (according to Article 3 of Directive 2005/95/EC). In the course of examining the distinctive character, more than 90% of the respondents associated the characteristic shape with the Kit Kat candy bar, which ultimately succeeded in granting protection rights to trademark. A positive decision of OHIM caused an uproar – Cadbury, the producer of Crispello chocolates that in one version resembled the candy bar of Nestle, lodged an application to CJEU for the annulment of OHIM’s decision (file no. T-112/13). In the opinion of Cadbury, the shape of the Kit Kat candy bar should not be protected due to it not having a distinctive character. The rival company indicated additionally that the analysis of the distinctive character was inadmissible because each chocolate bar featured the word inscription “Kit Kat” – therefore it was natural for consumers to associate it automatically with this brand. The debate found its way to the High Court of Justice that referred the case to the Court of Justice for a preliminary ruling.

First the Court will have to answer whether in order to determine if a trade mark following its use acquired a distinctive character it is sufficient for the applicant for registration to prove that at the relevant date a significant proportion of the relevant class of persons recognize the mark and associate it with the applicant’s goods in the sense that, if they were to consider who marketed goods bearing that mark, they would identify the applicant; or must the applicant prove that a significant proportion of the relevant class of persons rely upon the mark (as opposed to any other trade marks which may also be present) as an indication of the origin of the goods.

What’s more, in the case where a shape consists of three essential features, one of which results from the nature of the goods themselves and two of which are necessary to obtain a technical result, is registration of that shape as a trademark possible? Most importantly, however, the Court has to determine whether the manufacture of chocolate products of the same shape as the Kit Kat candy bar by other producers than Nestle is admissible or not.

This is not the first dispute between chocolate giants – Cadbury attempted beforehand to obtain protection rights to the purple color featured on its packaging and in 2012 Pantone color 2685C was registered. A rival company decided to appeal the decision of UK Intellectual Property Office and as a result the aforementioned decision was repealed on September 4, 2013 by the UK Court of Appeal. The Court stated that since the purple color is used predominantly on products of the Cadbury company, it does not satisfy the conditions set out in Article 2 of Directive 2005/95/EC – i.e. is not a designation that enables distinguishing goods and services of one entrepreneur from goods and services of other entrepreneurs (Court of Appeal (Civil Division) 4.10.2013 – [2013] EWCA Civ 1174).

It should be stressed that actions taken by Cadbury and Nestle in the food industry are by no means unique. Sometime earlier, the Ladas company attempted to register three-dimensional trademarks related to sweets for its characteristic seahorse-shaped chocolates. Chocolate producer Toblerone, on the other hand, succeeded in registering the shape of its product.

As we wait for a resolution by the CJEU, we could eat something sweet, for example a Kit Kat candy bar or chocolates with a shape reminiscent of Kit Kats… until they are available on the market.

(file no. C-215/14)