The latest in Nestlé’s attempts to trademark its iconic four-finger chocolate is at odds with EU Law.
Back in 2012 we reported in our blog Can you trademark a colour? that Cadbury had managed to secure a trademark for its signature purple colour after a lengthy battle with Nestlé. If you have been following the race for confectionary supremacy between Nestlé and Cadbury, you will know that in 2013 Nestlé successfully blocked Cadbury from maintaining its trademark rights in the colour purple ‘pantone 2865c’ for its Dairy Milk chocolate bar.
Cadbury’s application did not meet the criteria of a trademark, namely that ‘predominantly’ purple was not specific enough and lacked objectivity for the purpose of registration. See here.
Nestlé are set to see a similar fate in the latest turn of events.
What does this mean for the future of 3D shape marks?
Yesterday it was reported that the Advocate-General (AG) has advised that the Nestlé’s application for the three-dimensional ‘Kit-Kat’ shape is not compliant with EU law. Although not an official ruling, it poses a serious threat to the future of three dimensional trademarks.
Life in 3D
Three dimensional trademarks are notoriously difficult to register. Why? Because a registered trademark grants perpetual monopoly rights and, because, the registration of these marks provide an enormous advantage in highly competitive markets where products are homogenous or differ only by a few features.
Having a trademark means that no one else can use the same or similar shape for the same or similar goods. This is generally considered anti-competitive.
To this extent, shape marks play a crucial role in the multi-dimensional aspect of a brand’s distinctive character. A trademark acts as an agent of a commercial strategy, and shapes are one of the foundations to a successful marketing campaign.
In our piece about ‘Coca Cola Bottle Granted Trademark Protection in Japan’ we mentioned the Coca-Cola bottle, which seems to be one of the few shapes on the market which has been able to achieve trademark protection in many different countries. It only takes a few moments to think of that bottle and realise how many international campaigns, advertisements and references are based on this one shape.
To be or not be?
In a recent article by the Guardian, Iain Connor, head of Pinsent Masons’ contentious IP practice, stated that the AG’s “opinion is entirely consistent with the court’s previous refusal to grant trademark protection for Lego bricks and so comes as no surprise.”
It is not so clear cut, however. The general rules are that you can’t register a 3D mark, even if it has acquired a level of distinctiveness, if:
1. The shape results from the nature of the goods, i.e. you’d have a hard time registering the shape of a banana for bananas;
2. The shape is necessary to obtain a technical function; and
3. The shape adds substantial value to the goods. (What this value is, is inconclusive).
Lego had failed to register its toy bricks because the shape was necessary to connect one brick to another. Philips had failed to register its 3 headed shaver for similar functional reasons. On the other hand, the triangular Toblerone pack enjoys trademark protection which, arguably, makes it easier to package the confectionary in bulk. Is that not a technical function? Chrysler were also able to register the front ‘seven slot’ grill of their Jeep vehicle which, in the author’s opinion, serves the technical function of cooling the engine. The court’s interpretation of these ‘exotic’ trademarks is therefore far from consistent.
To draw the distinction is a conceptually difficult task. For instance, the shape of a chocolate bar with ridged indents is no less necessary to break the fingers off than a Toblerone is good for stacking; a Cola bottle is useful for containing Coca-Cola; and the holes in the front of your car prevent your engine from exploding.
The argument put forward by Cadbury was that without the branding and logo the shape was not distinctive enough to warrant a trademark. However, a street survey revealed that 90% of consumers recognised the chocolate bar (without its packaging) as a ‘Kit-Kat’.
If it is all about packaging, however, then the court offers no less abstract guidance. Last summer, Apple Inc. were able to trademark the layout of their store. The CJEU came to the conclusion that, somehow, the Apple store is equivalent to ‘packaging’. See here at para. 16.
The author’s view is that the ruling (whilst a coincidently accurate metaphor for corporate culture) defies the whole point of specificity and objectivity. Not all Apple stores are the same, and if the design alone is such that it presents the services provided, then does Cadbury’s ‘predominantly’ purple ‘packaging’ or Nestlé’s four-finger chocolate bar not present ‘Dairy Milk’ and ‘Kit-Kat’ in much the same way?
The ‘certain’ circumstances for registration 3D trademarks are not so certain after all.
Shape marks are construed narrowly because of the commercial power which they yield. However, to what extent does a company have to sacrifice its distinctiveness for the good of its competitors?
Modern advertising and marketing practices now incorporate far more than your standard bill-board and infomercial. Companies are awakening to the fact that the most powerful advertiser is the consumer himself. The one who is inadvertently a brand ambassador carrying ‘lifestyle’ products for the world to see.
The shape of a product is therefore more important than ever before. It helps preserve the individuality of the product and uniqueness of its brand and it creates something completely different from the myriad of the commonplace. Sooner or later, a reform of trademark law will need to take into consideration this new function of trademarks.