KitKat crunched at the Court of Appeal!

Confectionary giant, Nestlé, has lost the latest stage in its legal battle with Cadburys to secure trade mark protection in Britain for its four-fingered chocolate bar, the KitKat.

 The IP battle between the Swiss confectioner and Cadburys’ US owner,Mondelēz International, spans almost a decade, since Cadburys first appealed against Nestlé’s registration of the three-dimensional shape of its four-fingered chocolate bar.

This week the Court of Appeal upheld a ruling in favour of Cadburys, stating that there is insufficient evidence that consumers rely on the shape to identify the milk chocolate-coated wafer bar.

“Trade marks are intended to permit consumers to make informed choices between the competing goods of different undertakings in the course of trade,” wrote Lord Justice David Kitchin, one of the three judges involved in the case.

“The shape of the KitKat bar has not been used to promote or market KitKats in recent times. It has nothing, therefore, to do with the informed choices that consumers make between similar products.”

Rather than concede defeat, a statement issued by Nestlé said that the company was “considering its next steps”.

A spokesperson for Nestlé added: “This judgment does not mean that our four finger-shape is now free for use in the UK or elsewhere.

“KitKat is much loved around the world and its four finger-shape is well known by consumers.

“Nestlé’s four finger-shape has been granted trademark registration in many countries of the world, for instance Germany, France, Australia, South Africa and Canada, further protecting it from imitations”.

Demonstrating, however, the complexity of cross border trade mark protection, in December last year, the EU’s General Court chose to annul an earlier ruling by the EU Intellectual Property Office (EUIPO) that granted Nestlé a trade mark in various EU countries.

But the EU’s General Court did acknowledge that the shape had acquired distinctiveness in the UK.  The decision of the Court of Appeal this week is at odds with that, raising the question whether going forward it will be harder to register shapes as trade marks in the UK, than it is in the EU.

Commenting on the UK’s Court of Appeal ruling this week, a spokesperson for Mondelēz International said: “We are pleased with the Court of Appeal’s decision today and welcome their conclusion. As we have previously stated, we do not believe the shape of the KitKat bar should be protected as a trade mark in the UK.”

Roz Goldstein, founder, Goldstein Legal said: “As branding becomes ever more sophisticated, trade mark protection becomes ever more complex.  This latest ruling shows that increasingly, for a company to successfully protect the unique elements of its brand, such as shape, smell, colour or sound, they need to demonstrate that their customers rely on these attributes to be able to identify the origin of the product.

“But this may not be the end of the story for the KitKat case.  Nestlé may well now take it to the Supreme Court, given how valuable they feel the four-fingered shape is to the KitKat brand, so we will watch this space closely.

“As this case shows, your brand could be your most valuable asset, and we urge business owners to take the necessary steps to protect their IP, including trade marks, from the outset. There is no substitute to taking advice from a legal professional in this regard.”

If you’re looking for advice on how to best exploit and protect your company’s IP,  speak to one of our expert commercial lawyers today.