Protection of Product Shapes Remains Difficult in the EU

By Maria A. Savio

We chocoholics in the U.S. surely recognize the three-dimensional shape of a chocolate-covered wafer bar confection having the form of two or four trapezoidal fingers as a “Kit Kat®” chocolate bar, even if it seems that the shape is not registered as a trademark in the U.S. After all, the product is sold globally and has been sold in Britain since 1935, albeit under a different brand name initially.

Even if the Kit Kat® brand name itself is both registered and well known, Nestle, the global owner and producer of the KitKat® bar (except in the U.S. where the product is made under license by Reese’s, a Hersey Company), has had a very difficult time protecting the shape of the product itself in Europe. The 4 fingered Kit Kat shape which is the subject of Nestle’s registration in the EU (split in half) is shown below:

Although it first filed to register its rights in the shape in 2002 for “Sweets; bakery products; pastries; biscuits; cakes; waffles,” Nestle did not obtain a registration until 2006 after it made a showing of acquired distinctiveness before the European Union Intellectual Property Office (EUIPO, then OHIM) to get the registration. Like in the U.S., product shapes are not inherently distinctive and acquired distinctiveness must be shown.

Mondelez International (the new name of the company owning the former Kraft’s snack foods brands, including the Cadbury, Oreo and Milka brands), which is protecting its Norwegian KVIKK LUNSJ “Quick Lunch” product and its Belgian Leo bar branded under the MILKA label, was not pleased with the issuance of the product shape registration to Nestle and asked the EUIPO to declare Nestle’s registration invalid. Mondelez’ chocolate confections are both very similar in shape and shown below:

The EUIPO refused to expunge the registration because it was of the view that the shape had acquired distinctive character through the use that had been made of it in the EU.

Mondelez continued its challenge and in 2016 prevailed in the General Court of the EU, which ordered the EUIPO to annul its decision. It considered that the EUIPO erred in law in finding that the mark at issue had acquired distinctive character through use in the EU, when use had only been proven for part of the territory of the EU, namely only in Denmark, Germany, Spain, France, Italy, the Netherlands, Austria, Finland, Sweden, and the UK. The General Court said Nestle also had to  show distinctiveness in Belgium, Ireland, Greece and Portugal.

Nestle, Mondelez and the EUIPO all appealed the General Court’s opinion to the European Court of Justice (ECJ).  In its decision, the ECJ technically rejected Mondelez’ appeal but in fact favored its position. As a result of its decision in late July 2018, while Nestle maintains its registration for the time being, the ECJ has ruled that Nestle must also make a showing before the EUIPO that the product shape is distinctive in Belgium, Greece, Ireland and  Portugal. What is odd is that the distinctive character need not be established by separate evidence in each individual member state of the EU. Rather, for certain goods and services, “the economic operators have grouped several Member States together in the same distribution network and have treated those Member States, especially for marketing strategy purposes, as if they were one and the same national market. In such circumstances, the evidence for the use of a sign within such a cross-border market is likely to be relevant for all Member States concerned.”

The story goes that the Kit KAT ® “chocolate crisp” confection was invented to make it more affordable for the working man, and that the wafer was added to “fill” the product and keep the price below that of a solid chocolate bar. The wafer took on a life of its own and changed the sensory experience from one of eating chocolate to one of eating a chocolate wafer cookie, and so its popularity grew and grew. Billions of bars are made and consumed each year. Who knew that so many legal dollars would be spent to protect and defend against a “more affordable” shape?