Two of the world’s largest food producers have been locked in litigation for years. The battleground? Chocolate. Kit Kats to be more specific. Swiss Giant Nestlé, owner of the Kit Kat® brand, already has trademark protection around the world for the Kit Kat logo and packaging. (The U.S. rights to use the “Kit Kat” brand are
licensed by the Hershey Company.) In a move likely calculated to further extend their “Kit Kat” brand protection,
Nestlé applied for trademark protection in the U.K. in 2010 for the three-dimensional shape of its Kit Kat® chocolate covered wafer biscuit.
Dating back to 1935, Kit Kats were first sold in the U.K. under the name “Rowntree’s Chocolate Crisp”. By 1937 the name had morphed to “Kit Kat Chocolate Crisp”, eventually becoming only “Kit Kat”. In 1988, the Kit Kat brand was acquired by Nestlé.
Initially accepted by the United Kingdom’s Trade Marks Registry, Nestlé’s application to register as a trademark the shape of its Kit Kat® bars was quickly opposed by Cadbury UK Ltd.—a subsidiary of American-based Mondelēz International. Nestlé and Mondelēz have been
fighting an intellectual property proxy war for years, such as when Nestlé’s
successfully opposed Cadbury UK’s attempt to register a particular shade of purple used by Cadbury in marketing milk chocolate. This latest round, however, seems likely to favor Mondelēz.
The Kit Kat case made its way to the High Court of Justice of England & Wales which, in light of the controversy surrounding shape-based trademarks, referred the central question of the dispute to the European Court of Justice. Comprised of judges from each EU country, the European Court of Justice interprets EU law; ensuring juridical uniformity amongst member nations. The European Court of Justice is aided by nine “advocates-general” who help the Court by presenting impartial opinions.
Last week, the Advocate General in the Kit Kat case issued an opinion against registering the shape of the Kit Kat bar. While the Advocate General’s opinion is not binding, the European Court of Justice appears to typically follow such recommendations; leading the BBC to conclude that the opinion “effectively ends” Nestlé’s bid to register the shape of the Kit Kat bar. In Court, Nestlé argued that
90% of the people in a street survey who were shown a picture of a Kit Kat bar without its wrapper
mentioned “Kit Kat” in identifying the chocolate. The Advocate General, however,
argued that it was “not sufficient for the applicant…to prove that the relevant class of persons recognizes the trade mark…and associates it with the applicant’s goods or services. He must prove that only the trade mark…as opposed to any other trade marks which may also be present, indicates, without any possibility of confusion, the exclusive origin of the goods or services at issue.”
A fascinating question raised by some commentators but apparently not covered by the Advocate General’s opinion is what might be called the “container” issue. Kit Kats are sold in a wrapper which itself contains the stylized “Kit Kat” trademark. Apart from the generally rectangular outline of the packaging, the shape of the candy itself is not visible to a consumer at the time of purchase. The question, then, is whether the shape of the candy is source-identifying (like, for example, a Coca Cola bottle) or whether it is merely incidental to purchase (with the wrapper alone providing the source-identification for consumers). Could a sort of post-sale confusion argument be made; where consumers who open a Kit Kat wrapper would become confused were they not to find a bar with Kit Kat’s “four fingers”? Open questions which will undoubtedly be explored by courts around the world.
This new and exciting area of tactile and shape-based trademarks continues to evolve; offering new opportunities for brand protection and extension. If your company is considering whether to protect its brand by seeking shape-based trademark protection in the U.S. or abroad, call us today for a free consultation.
