Yen May and Sri Komathy discuss another battle in the chocolate war between Nestlé and Cadbury
The recent decision1
of the English High Court refusing Société des Produits Nestlé S.A (“Nestlé”) the right to register the three-dimensional shape of its four-finger chocolate wafer bar as a trade mark has reignited the chocolate war between Cadbury UK Limited (“Cadbury”) and Nestlé. The latest blow to Nestlé in the long-running chocolate war was delivered when Cadbury opposed Nestlé’s trade mark application of its four-finger bar shape in the United Kingdom.
In this instance, Nestlé had applied to register the three-dimensional shape of its four-finger Kit Kat wafer bar as a trade mark in respect of “chocolate; chocolate confectionery; chocolate products; confectionery; chocolate-based preparations; bakery goods; pastries; biscuits; biscuits having a chocolate coating; chocolate coated wafer biscuits; cakes; cookies; wafers”
on the basis that the shape had acquired a distinctive character, being first sold in the UK in 1935 under the name of Rowntree’s Chocolate Crisp shortly before being changed to Kit Kat in 1937.
Cadbury opposed the trade mark application on various grounds, in particular under sections 3(1)(b), 3(2)(a) and 3(2)(b) of the United Kingdom’s Trade Marks Act 1994 (“UK TMA”). In brief, section 3(1)(b) states that a trade mark shall not be registered if it lacks any distinctive character. Sections 3(2)(a) and 3(2)(b) preclude registration if a trade mark consists exclusively of the shape which results from the nature of the goods themselves, or the shape of goods which is necessary to obtain a technical result, respectively.
The examiner at the UK Intellectual Property Office (“UK IPO”) found that the shape of the four-finger bar had three essential features: (i) the basic rectangular shape; (ii) the presence, position and depth of the grooves running along the length of the bar; and (iii) the number of grooves, which, together with the width of the bar, determine the number of ‘fingers’. According to the examiner, the basic rectangular shape is a shape which results from the nature of the goods themselves and cannot be registered except in respect of ‘cakes’ and ‘pastries’, for which the shape of the trade mark is very different from the norms of the sector.
As the other two features are necessary to obtain a technical result i.e. to permit the product to be broken up for consumption, the examiner rejected the application for the remainder of the goods applied for. Therefore, except in relation to cakes and pastries, the UK IPO refused to register the mark in accordance with sections 3(2)(a) and 3(2)(b) of the UK TMA because it was neither distinctive nor had it acquired distinctiveness, and consisted exclusively of the shape which was necessary to obtain a technical result.
Nestlé and Cadbury appealed and cross-appealed the decision of the UK IPO respectively to the English High Court, where the judge found that the trade mark was not inherently distinctive in relation to cakes and pastries in addition to the other goods covered by the application. The English High Court sought clarification from the Court of Justice of the European Union on the issues of acquired distinctiveness and the need to obtain a technical result. Equipped with the European Court of Justice’s preliminary ruling, the English High Court ultimately found against Nestlé by dismissing their appeal and allowing Cadbury’s cross-appeal to prevent Nestlé from registering the mark even in relation to cakes and pastries.
WHAT IS A TRADE MARK?
Before analysing this case in greater depth, it is essential to understand what a trade mark is and its function. In essence, a trade mark allows consumers to identify the commercial source of goods or services bearing the mark. Put simply, a trade mark serves as a “badge of origin”.
Under Malaysian laws, the term ‘mark’ has been defined widely and it is therefore possible for a three dimensional shape to be considered as a mark.2
Examples of shape mark registrations that have been allowed in Malaysia are the Coca-Cola bottle and the triangular configuration of the Toblerone chocolate bar. While the UK TMA precludes registration of a trade mark consisting exclusively of a shape which results from the nature of the goods themselves, or the shape of goods which is necessary to obtain a technical result, respectively,3
Malaysia has no such parallel provisions.
The primary consequence of allowing Nestlé to register the four-finger shape as a trade mark will essentially be to allow Nestlé to monopolize the shape of the four-finger bar in relation to the goods applied for, e.g. chocolate and chocolate coated wafer biscuits. The English High Court also pointed out that the four-finger shape serves to obtain the technical result of permitting the break up of the chocolate product for consumption with minimum effort. In view of the foregoing, Nestlé’s trade mark application in this instance contravenes sections 3(2) (a) and 3(2)(b) of the UK TMA.
In the Malaysian context, there is no express provision that precludes the registration of shapes as a trade mark as mentioned above. However it is important to note that we have provisions on registrable trade marks.4
One of the criteria for registration outlined in section 10(1) is that a trade mark must be “distinctive” in that it must be capable of distinguishing goods or services with which the proprietor of the trade mark is or may be connected in the course of trade.5
A trade mark may be capable of distinguishing if it is inherently distinctive or if it has acquired distinctiveness by reason of use of the trade mark or of any other circumstances.6
Accordingly, it is possible for a shape to be allowed for trade mark registration in Malaysia if it is distinctive as required under our laws.
The shape of the four-finger bar may be allowed registration if there is sufficient inherent distinctiveness in respect of the goods applied for. As noted by the English High Court, the shape in question was necessary to obtain a technical result of facilitating the breaking of chocolate confectioneries for consumers’ consumption. Although there is no provision under our laws similar to the UK precluding registration of shapes which consist exclusively of the shape which is necessary to obtain a technical result, it may be an essential consideration in determining whether the four-finger shape lacks inherent distinctiveness in respect of chocolate confectioneries.
In circumstances where a trade mark such as the shape of the four-finger bar in this instance has failed to meet the threshold of inherent distinctiveness, the applicant may rely on acquired distinctiveness. Distinctive character is acquired by a mark where consumers come to rely on the mark as indicating the origin of the goods. This is true even if the mark is not visible to consumers at the time of purchase of the goods bearing the trade mark. The English High Court even referred to an old example of stamps being used by wine producers on corks in bottles of wine which functioned as a trade mark to denote the origin of the wine although the stamp would not have been visible until the wine bottle was opened for consumption by removing the cork.
In order to prove that a mark has acquired distinctiveness, the applicant will need to show evidence of use demonstrating that the shape of the four-finger chocolate bar signifies the applicant’s (i.e. Nestlé’s) goods and no other in the trade. It is insufficient for an applicant seeking registration of a trade mark to prove that the relevant class of consumers recognise the trade mark and associates the same with the applicant’s goods.
The applicant must prove that the trade mark indicates the exclusive origin of the applicant’s goods beyond any possibility of confusion which may arise due to the use of the trade mark with any other trade mark which may also be present. In arriving at its decision, the English High Court commented that the embossment of ‘Kit Kat’ on each of the fingers indicated that the applicant did not consider the four-finger bar shape as a trade mark on its own and therefore the shape could not be considered as a trade mark. At most, the shape of the four-fingers may denote the origin of its goods only in conjunction with other registered trade marks, such as ‘Kit Kat’.
REFUSAL OF THE APPLICATION BY THE COURT
The English High Court adopted the UK IPO’s reasoning for refusing Nestlé’s trade mark application for the shape in question:
(1) There was no evidence that the four-finger shape featured in any of Nestlé’s promotions for many years prior to the date of the trade mark application;
(2) The four-finger bar chocolate products were sold in opaque wrappers which did not show the shape of the goods; and
(3) There was no evidence and it does not seem likely that consumers use the shape of the goods after purchase to check whether they have chosen the product from their intended trade source.
In brief, although Nestlé managed to show that a significant proportion of consumers recognised the four-finger shape as relating to ‘Kit Kat’, it could not prove that consumers relied on the shape, by itself, to identify the origin of the goods. To this extent, the shape on its own has not acquired distinctiveness by reason of use. Although there has been long use of the four-finger shape, the use of the shape consistently together with other registered trade marks has rendered the shape to be conceived as part of or in conjunction with other trade marks which made the shape to be incapable of functioning as a trade mark on its own.
Although the battle between Nestlé and Cadbury continues as Nestlé has indicated that it will be appealing the decision, it appears that the English High Court’s decision is in line with current trade mark laws in the United Kingdom.
The decision has prevented the registration of a mark which has not been shown to be distinctive and therefore capable of serving as a badge of origin. The decision has also prevented a monopoly of the four-finger bar shape with respect to goods such as confectionery, chocolate and chocolate coated wafer biscuits. Although it is theoretically possible for Nestlé to obtain registration of the mark in Malaysia as Malaysian laws do not preclude registration of three dimensional marks, Nestlé may nevertheless face difficulty in doing so if they are unable to show that the mark is distinctive.
1 Société des Produits Nestlé S.A v Cadbury UK Ltd
 EWHC 50 (Ch)
According to section 3 of the Trade Marks Act 1976, a “mark” includes “a device, brand, heading, label, ticket, name, signature, word, letter, numeral or any combination thereof.”
Sections 3(2)(a) and 3(2)(b) Trade Marks Act 1994
Section 10(1)(e) Trade Marks Act 1976
Section 10(2A) Trade Marks Act 1976
Section 10(2B) Trade Marks Act 1976