Arnold J has ruled that the shape of Nestlé's four-finger KIT KAT product (without the logo embossed) does not meet the requirements for registration as a trademark in the UK.
Expressing doubt as to whether the Court of Justice of the European Union (CJEU) had correctly understood the issue posed by the question he previously referred on acquired distinctive character, and describing the CJEU's reformulation of his question as "regrettable", Arnold J nevertheless decided in his 20 January 2015 decision ([2016] EWHC 50 (Ch)) not to refer the question back to the CJEU.
Instead, the judge concluded that it is legitimate for the English court, when assessing whether the applicant has proved that 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 (rather than any other trademark present), to consider whether such persons would rely upon the sign as denoting the origin of the goods if it were used on its own.
In view of this conclusion, questions as to the operation of the shape exclusions were not addressed.
Background
In 2010, Nestlé applied to register the above sign as a 3D shape mark in the UK (the "Trade Mark").
The Trade Mark corresponds to the shape of Nestlé's four-finger KIT KAT product except that it lacks the KIT KAT logo embossed onto each of the fingers of the actual product:
Nestlé's application was made for various goods in class 30 and was opposed by Cadbury on various grounds. In a decision dated 20 June 2013, the Hearing Officer held that:
- The Trade Mark was registrable in respect of cakes and pastries
(being inherently distinctive in respect of those goods)
- The Trade Mark was not registrable in respect of: chocolate; chocolate confectionery; chocolate products; confectionery; chocolate-based preparations; bakery goods; biscuits; biscuits having a chocolate coating; chocolate coated wafer biscuits; cookies; wafers
(the Trade Mark being devoid of inherent distinctive character, and not having acquired a distinctive character, in respect of those goods; the Trade Mark also consisting exclusively of the shape which was necessary to obtain a technical result).
Nestlé's appeal was heard in the High Court by Arnold J, who concluded, in January 2014 ([2014] EWHC 16 (Ch)), that the hearing officer was incorrect to find that the Trade Mark was inherently distinctive in relation to "cakes" and "pastries". Accordingly, the outcome in respect of all of the goods for which registration was sought rested upon acquired distinctive character being established and (except in respect of cakes and pastries) the Trade Mark not being excluded under shape exclusion(s) of Article 3(1)(e) of the Trade Marks Directive.
However, in relation to those issues the judge considered it necessary to seek clarification of the law from the CJEU, and he referred three questions. The Advocate General's (AG's) opinion and the decision of the Court were delivered in 2015 and are discussed in the linked alerts. It was not entirely clear how the English court would decide the issues in the litigation in view of the CJEU's guidance.
The test for acquired distinctive character
Arnold J's questions were not answered
Before running through what the judge concluded in his 20 January 2016 decision, it is worth noting his irritation in respect of the 'clarification' of the law provided by the CJEU.
The first of Arnold J's referred questions was:
"In order to establish that a trade mark has acquired distinctive character following the use that had been made of it within the meaning of Article 3(3) of Directive 2008/95 ..., is it
- sufficient for the applicant for registration to prove that at the relevant date a significant 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
- must the applicant 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 distinction is one which has exercised the English courts for well over a decade. In case it assisted the CJEU, Arnold J explained why, in his opinion, the correct answer is that the applicant must prove that a significant proportion of the relevant class of persons rely upon the trade mark (as opposed to any other trade marks which may also be present) as indicating the origin of the goods.
In the CJEU, the language of the proceedings was English, but the opinion of the Advocate General (AG) and the decision of the court would appear to have been written in French, drawing on translations of the referred questions made by the court. Unfortunately, it seems the translations of the referred questions were not as accurate as might have been hoped:
- In the French translation the words "rely upon" were translated as "considered that" or "regarded" ("estimait que");
- In the German translation the words "rely upon" were translated as "perceives" ("wahrnimmt").
Arnold J expressed doubt as to whether the AG and the Court had correctly understood the issue posed by the question referred. In any event, the question referred was not answered but instead re-formulated, which Arnold J described as "regrettable". He said:
"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."
What was the Court's answer?
After analysing the AG's opinion and the Court's decision, Arnold J concluded that the CJEU said that no, the test is not [a]. Rather, 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.
However, the Court did not explicitly address part [b] of the referred question. Consequently, in Arnold J's view it was not clear whether the court's answer was the same as or different to [b].
The judge's irritation was clear:
"In those circumstances, it is tempting to refer the question again. But I see no realistic prospect of a further reference yielding a materially different result. Accordingly, it is necessary to try to understand and apply the answer which the Court has given as best I can."
After doing so, his conclusion was that it was legitimate for the English court, when assessing whether the applicant has proved that 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, "to consider whether such persons would rely upon the sign as denoting the origin of the goods if it were used on its own".
Assessment of acquired distinctive character
On the facts, the hearing officer had concluded that Nestlé had shown recognition of the mark amongst a significant proportion of the relevant public for chocolate confectionery (only), but not that consumers had come to rely on the shape to identify the origin of the goods.
Nestlé submitted that the hearing officer had erred because he had required evidence of past reliance by consumers upon the Trade Mark as denoting the origin of the goods, whereas all that was required was evidence that consumers perceived the goods designated by the Trade Mark as originating from a particular undertaking.
But the judge disagreed. He said it was clear from the Hearing Officer's reasoning "that he evaluated the perception of consumers at the relevant date in [a] manner which is consistent with the legal test stated by the CJEU". Further, he was right to conclude that all the survey evidence had shown was that consumers recognised the Trade Mark and associated it with KIT KAT products.
Conclusion
Accordingly, acquired distinctive character had not been established for the Trade Mark in respect of any of the goods for which registration was sought. Nestlé's appeal was dismissed and Cadbury's cross-appeal was allowed, the result being that the Trade Mark did not meet the requirements for registration as a trade mark in the UK.
Comment
It seems unlikely that Arnold J's latest decision in the Kit Kat case will be the last that the courts will hear of the dispute.
Further, the CJEU's avoidance, for the third time, of a question of reliance posed by the English courts would appear not to be assisting in clarification of the European trade marks legislation.
Arnold J decided, in view of this avoidance, that it was legitimate for the English court to adopt the course he had recommended: and so to consider, when assessing whether distinctive character has been acquired, whether the relevant class of consumers would rely upon the sign as denoting the origin of the goods if it were used on its own.
It remains to be seen whether the Court of Appeal or the Supreme Court will support this, adopt a different interpretation of the CJEU's rulings, or find a further referral unavoidable.