NESTLE VS. CADBURY: A Study of Distinctiveness of a Trademark in the Three Dimensional Shape of Kit-Kat

It is a well-known tradition to serve sweets and desserts on an auspicious occasion. Today, the old tradition continues but the marketable demand of chocolates has replaced traditional sweets to a great extent. When we look around there are a variety of options available to devour the sweet-tooth and you know what tops the list of the most popular chocolate brands in the world; they are Cadbury and Nestle’s Kit-Kat. When we talk about these brands we can visualize their shape and colour which is an important facet of Trade Mark.[i]

To our shock, these two most popular brands are undergoing long-running legal battle before the Court of law in Société Des Produits Nestlé Sa Vs. Cadbury Uk Ltd.^[ii] where Nestlé’s three-dimensional trademark has been refused registration on the objection raised by Cadbury.

FACTS OF THE CASE

1. The matter at hand concerned about the application filed by Nestlé for its registration of the three-dimensional shape of Trademark on the four-fingered shape of Kit-Kat before the UK Trade Mark Registry under class 30 of the Nice Classification of Goods[iii] (pertains to coffee, tea, cereals, bread, pastries, cakes, confectionery, etc).
2. Cadbury questioned the registration on the ground that this particular trademark lacks the distinctive character which is a pre-requisite for the registration of any trademark.
3. The Hearing officer examined the application of Nestlé and held that the Trade Mark is lacking the distinctive character for cakes and pastries and had failed to acquire a distinctive character for other goods under the classification. It was reasoned that the logo of Kit-Kat is inherently distinctive and known to the public but the shape of Kit-Kat cannot be granted trademark based on distinctiveness, which can only be acquired through commercial use.
4. Nestlé filed an Appeal before the High Court of the UK to sustain its contentions. Where it sought to prove that a substantial proportion of customer recognizes the 3-D shape of Kit-Kat and understands its origin.

(Source: Nestlé’s Trademark on the four-fingered shape of Kit-Kat Chocolate Bar)

JUDGMENT OF THE COURT

The appeal was filed Before the High Court of UK,[iv] where the two-judge bench of the court dismissed the appeal of Nestlé. The court held that in this case we are concerned with the three-dimensional shape of a chocolate product that has no inherent distinctiveness, as the shape of this kind does not prove that the public can identify the origin of the product. Even if a highly distinctive brand, sells a very large scale of this product under its brand name then the public will not necessarily take it as an origin from a particular source. They would simply take 3-D shape as a characteristic of the product of that kind and not as a Trade Mark.

• To prove the distinctiveness of a Trade Mark it is sufficient to show that a relevant class of people identifies the product as originated with this particular trademark.[v]
• The community law does not preclude any authority from bringing an opinion poll where the question of distinctiveness is hard to analyze. [vi]
• The court emphasized on the fact that if the relevant class of persons can identify Trademark as a result of which they are capable of distinguishing the concerned product of that brand, then the mark can be said to hold distinctive character. [vii] 
• It was further held by the court that Nestlé has failed to prove that a substantial group of consumers are well aware of the 3-D shape of Kit-Kat which is put for registration, as the 3-D mark does not in itself contains any Trade Mark.

To know more about types of Trademark in India, watch the video- 

ANALYSIS OF THE CASE

The case of distinctiveness under the Trade Mark Directive of UK revolves around two very important provisions, which are as follows:

1. Article 3(1) (b) of the Trade Mark Directive provides that if the mark does not possess distinctive character then it cannot be granted registration. This provision requires that the consumer or certain class of geographically widespread people must identify the product and its origin.
2. Article 3(3) of the Trade Mark Directive provides that if the trademark has already acquired distinctive character before the date of application for registration then the registration shall not be refused. This provision encourages the registration of a trademark that is already known to the community at large.

A distinctive character[viii] must include the following features:-

• Market share held by the mark
• Geographically widespread
• Long-standing use of the mark
• Amount invested for promoting the mark
• The relevant class of persons identifying goods as originating from a particular undertaking because of the mark; and
• Statements from chambers of industry and commerce or other professional and trade associations.

Hence, merely statistical data, general view, and predetermined percentages cannot determine the distinctiveness of the mark. The significance lies in the considerable value of the three-dimensional shape of a trademark.

In a hypothetical case, where a third party uses this Four-Fingered, three-dimensional mark for the same class of goods then the Proprietor Nestlé need not even show the likelihood of confusion, as the same will be presumed to be an infringement of Nestlé’s trademark where the 3-D image can be associated with the logo inscribed in the packaging. And the rights of the trademark will be sustained.

On the contrary, when the consumer cannot correlate the shape of the product with the origin of the brand, then the whole procedure will be ineffectual and the protection given by trademark registration will be unjustified. Also, when a mark is used in connection with another mark, it becomes difficult to perceive. Similarly, in this particular case, the three-dimensional trademark of Kit-Kat will be examined in connection with the trademark of Nestlé as given in the packaging of the product and not otherwise.

1. Public’s perception is not necessarily the same in the case of 3-D marks. The consumers tend to remember the trademark of the packaging. But in the case where the trademark in the form of word or graphic or figurative mark is absent in a three-dimensional mark then it is difficult for a consumer to assume the origin of the mark. Henceforth, the public may not recognize the trademark when it is not carved on the product.
2. Secondly, the shape of the product is too common to be adopted by other brands under the same class.
3. Thirdly, this must be assured that the relevant class of public has seen the mark on the product in an advertisement to have a purchasing decision.[ix]

CONCLUSION

After the years of battle, Nestlé has failed to register its trademark for the three-dimensional shape of Kit-Kat in Europe. Despite being the most recognized brand in the world, Kit-Kat did not meet the requirements of distinctiveness. Besides that, Nestlé has successfully registered its three-dimensional shape of trademark of Kit-Kat in the countries like Canada, France, Africa, Australia and Germany. Nestlé must have lost the case of distinctiveness but it will continue to remain our favorite sweet spot.

SUBMITTED BY: SOUMYA SONI