Friday, 22 July 2016

Arnold J rules that shape of KitKat chocolate bar cannot be registered as a trade mark

Picture 1
The shape of discord
Can the shape of the KitKat chocolate bar be registered as a trade mark on grounds that it has acquired distinctiveness through use? What is required to prove that a trade mark has acquired distinctiveness through use? 

As IPKat readers will remember, these were some of the very issues that Arnold J had to address in the context of litigation between Nestlé and Cadbury over the shape of the (in)famous chocolate bar that the former had already attempted in vain to register as a UK trade mark in Class 30. 

The sign for which registration was sought corresponded to to the shape of Nestlé's four-finger KitKat product except that it lacked the KitKat logo embossed onto each of the fingers of the actual product.

Following a reference for a preliminary ruling to the Court of Justice of the European Union (CJEU) [here], the case got back to the High Court of England and Wales with the learned judge having to apply a ruling [noted here] that has raised more than an eyebrow and looks fairly ambiguous. This is so particularly particularly with regard to what is needed to prove acquired distinctiveness of a trade mark. 

Among other things, Arnold J had asked the CJEU whether it is sufficient that a relevant proportion of the relevant class of persons recognise 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 whether, instead, the application must 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 indicating the origin of the goods.

The CJEU did not really answer said that distinctive character may be acquired through use. 

In this respect ‘use of the mark as a trade mark’ "must be understood as referring solely to use of the mark for the purposes of the identification, by the relevant class of persons, of the goods or services as originating from a given undertaking" (para 63). It is "in consequence of such use, [that] the relevant class of persons actually perceive the goods or services, designated exclusively by the mark applied for, as originating from a given undertaking" (para 64). "[A]lthough the trade mark for which registration is sought may have been used as part of a registered trade mark or in conjunction with such a mark, the fact remains that, for the purposes of the registration of the mark itself, the trade mark applicant must prove that that mark alone, as opposed to any other trade mark which may also be present, identifies the particular undertaking from which the goods originate." (para 66)

Is this a good thing
for EU's highest judicature?
The CJEU concluded that "in order to obtain registration of a trade mark which has acquired a distinctive character following the use which has been made of it within the meaning of Article 3(3) of Directive 2008/95, regardless of whether that use is as part of another registered trade mark or in conjunction with such a mark, the trade mark applicant must prove that the relevant class of persons perceive the goods or services designated exclusively by the mark applied for, as opposed to any other mark which might also be present, as originating from a particular company." (para 67)

Yesterday Arnold J gave judgment in this saga (Nestlé v Cadbury [2016] EWHC 50 (Ch)), and dismissed Nestlé's appeal.

WTF?!? ... Mind your language, please!

Before addressing the merits of the case, the learned judge engaged in a discussion of the CJEU reference and noted at the outset how the French and German translations of his question on acquired distinctiveness - notably the phrase "rely upon" - were not really correct. 

Arnold J then noted how the Advocate General (AG) in this case, ie Melchior Wathelet, delivered his Opinion [discussed here and here- in French, and the judgment itself was likely drafted in French since the rapporteur was Judge François Biltgen.

So did both the AG and CJEU answer the same wrongly translated question? Apparently so.

Reformulating questions, but did the CJEU understand them in the first place?

Arnold J then criticised the practice of the CJEU to reformulate the questions referred by national judges: "While it is understandable for the Court to do so on occasion, since experience shows that questions referred by national courts for preliminary rulings can be badly worded, in this case the question was worded with precision. The result of the Court's reformulation of the question I asked is that its answer to that question is unclear, save that it rejected the first of the two alternatives posed" (para 45).

Arnold J did not suggest that because the CJEU rejected the first alternative regarding acquired distinctiveness, it was bound to accept the second alternative. However, "If a referring court asks whether the answer to a question is A or B, the [CJEU] is perfectly entitled to say that the answer is neither A nor B, but C. After all, it is for the [CJEU] to determine issues of European law, not the referring court. The problem in the present case is that the [CJEU] has said that the answer is not A, but C. Since the Court has not explicitly addressed B, however, it is not clear whether C is different from B." (para 46)

It would seem that Arnold J had thought of referring the question again, although he concluded that there could be "no realistic prospect of a further reference yielding a materially different result" (para 48).

And now you also know what you need
 to prove acquired distinctiveness
Applying the CJEU test, which is one of "because of"

Following these remarks, Arnold J deciphered the CJEU judgment and - by relying upon [no irony intended] on the AG Opinion, and the CJEU judgment at paras 64 and 67 - concluded that:

"in order to demonstrate that a sign has acquired distinctive character, the applicant or trade mark proprietor must prove that, at the relevant date, a significant proportion of the relevant class of persons perceives the relevant goods or services as originating from a particular undertaking because of the sign in question (as opposed to any other trade mark which may also be present)." (para 57)

The submission made by Nestlé that association is sufficient to demonstrate the acquisition of a distinctive character was thus deemed incorrect. 

As such, Nestlé had failed to pass the CJEU test on acquired distinctiveness, and Arnold J confirmed that the shape of the KitKat chocolate bar, having acquired no distinctive character through use, is not eligible for registration.

[Originally published on The IPKat on 21 January 2016]

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