Nestlé has suffered a major blow in its efforts to protect the unique shape of its Kit Kat bars, after an EU court ruled in favour of rival Cadbury’s attempt to challenge its trademark.
The ruling by the General Court in Luxembourg, the second-highest court in the EU, annuls a 2012 decision by the European Union Intellectual Property Office (EUIPO) to reject an appeal by Cadbury, now owned by Mondelez, to have Nestlé’s EU trademark for the shape invalidated.
It means Nestlé is likely to now lose its EU-wide trademark for the four-fingered shape, which would potentially open up Kit Kats to imitation from other chocolate manufacturers in Europe.
Cadbury first tried to block Nestlé’s trademark for the Kit Kat shape in 2007, just a year after EUIPO agreed to register it in respect to sweets, bakery products, pastries, biscuits, cakes and waffles. EUIPO rejected Cadbury’s appeal on the basis that Nestlé’s mark had acquired “distinctive character” through its use in the EU.
However, the General Court ruled that EUIPO had “erred in law” with that decision, because it had failed to take into account public perception in all 15 relevant EU members states.
Nestlé had only demonstrated that the trademark had “acquired distinctive character through use in 10 countries”, it argued, and EUIPO could not “validly conclude” the mark had distinction throughout the EU without taking into account the other five member states.
“In the case of a mark which, like Nestlé’s mark, does not have inherent distinctive character throughout the EU, the distinctive character acquired through use of that mark must be shown in all the member states concerned,” the court ruling stated.
The trademark was also too wide-ranging, the court found, because “none of the evidence taken into consideration by EUIPO establishes use of the mark in respect of bakery products, pastries, cakes and waffles.”
EUIPO must now “re-examine” whether the four-fingered shape can be maintained as an EU trademark for sweets and biscuits, based on whether there was proof it had “acquired distinctive character” across all 15 relevant member states in 2002, when Nestlé made its initial registration.
Nestlé, which has two months to appeal the ruling to a higher court, said it would “continue to review the findings and consider our position”, noting the judgement set a “high threshold” for registering trademark applications for shapes in the EU.
The company was “pleased” the court had acknowledged the four-finger shape had distinctiveness in 10 member states of the EU, including the UK, a spokesman added.
“The four-finger shape has been used throughout the EU by Nestlé for decades and is known by consumers as being Kit Kat.”
Nestlé lost an appeal to register the four-fingered shape as a trademark in the UK in January, after the Intellectual Property Office ruled in favour of Cadbury’s efforts to block the move.
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