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Kit Kat trade mark faces further challenges

25 April 2018

Advocate General Wathelet has advised the European Court of Justice (CJEU) in the latest round of the long-running dispute between Nestlé and Cadbury over Nestlé’s four-fingered chocolate biscuit trade mark.

The shape of Nestlé’s Kit Kat was registered as an EU trade mark in 2002, but Cadbury (now Mondelez UK Holdings and Services) applied to invalidate it in 2007, initially without success but subsequently succeeding on appeal to the General Court.

Much of the dispute has focussed around whether the shape mark has acquired ‘distinctive character’ throughout the EU, sufficient to allow it to remain on the register. The General Court found distinctiveness in 10 countries but held that this was not enough.

In his Opinion published on 19 April 2018, the Advocate General recommends that the CJEU reject the appeal brought by Nestlé and the EUIPO, which submits that the General Court was wrong to hold that a proprietor of an EU trade mark must show that the trade mark has acquired distinctive character through use in each member state separately.

Nestlé had argued that, by focussing on individual national markets, the General Court’s interpretation is incompatible with the unitary character of the European trade mark and the existence of a single market.

The Advocate General interpreted existing case law as requiring there to be sufficient use throughout the EU in order to establish acquired distinctive character in an EU trade mark. He explained that a quantitative and geographical representative sample of the whole of the EU was required and that account must be taken of the geographical size and the distribution of the regions in which acquired distinctive character has been positively established. This need not necessarily be established through showing use in each member state separately, but if there is no evidence (or insufficient evidence) of acquired distinctiveness in some parts of the EU, then this may defeat the ability to protect an EU trade mark on the basis of acquired distinctiveness.

While the Advocate General observed that Nestlé provided evidence of use for the majority of member states (14 of the 15 at the relevant time), the evidence of use provided for Belgium, Ireland, Greece and Portugal was insufficient. The fact that Nestlé had not sought to show that the acquisition of distinctive character through use in those markets could be extrapolated from their evidence of use in other national/regional markets, meant that there was part of the EU for which acquired distinctiveness had not been demonstrated. As such, despite having established acquired distinctive character as part of its four-finger biscuit in some markets, this was not enough for it to argue that its EU mark was valid.

Mondelez also appealed the General Court’s finding of acquired distinctive character in the 10 territories, while obviously not seeking to reverse the decision by the General Court to invalidate the trade mark.

Advocate General Wathelet proposed that Mondelez’ appeal should be dismissed for procedural reasons, since Mondelez was not challenging an unsuccessful outcome below or seeking to set aside the actual decision of the General Court.

The Advocate General’s opinion is not binding and we await the CJEU’s decision on Nestlé’s appeal. The bar for proof of acquired distinctive character is always going to be high. But the decision under appeal leaves open questions ripe for another CJEU reference as to how a quantitative representative sample of use might support distinctive character throughout the EU in the right circumstances.

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