Mondelez UK Holdings & Services v EUIPO (T-112/13)

Kitkat

This trade mark decision of the General Court is the latest in a long line of cases regarding the 3D KitKat EU trade mark (see below), which began in 2006 when Mondelez (formerly Cadbury) opposed the mark’s registration at the EUIPO (or OHIM as it was then).

Nestlé, who is the intervener in this case, first applied for the above mark in 2002. Mondelez has opposed the registration of this mark in respect of all of the goods originally applied for in class 30, which over time has included chocolate, chocolate products, confectionery, candy, sweets, bakery products, pastries, biscuits, cakes and waffles.

In 2011 the EUIPO’s Cancellation Division had sided with Mondelez and cancelled Nestlé’s EU trade mark. In 2012 the Second Board of Appeal of the EUIPO upheld an appeal and annulled the Cancellation Division’s decision. The Board of Appeal found that the shape of the KitKat bar was not precluded from registration because the 3D mark did not consist exclusively of the shape of the product and because the evidence filed by Nestlé was sufficient to establish that the 3D mark had become distinctive through use in the relevant parts of the EU territory. This case was then appealed up to the General Court by Mondelez.

Firstly, Mondelez argued that the Board of Appeal had no evidence to establish use of the mark for four of the products claimed by Nestlé, namely bakery products, pastries, cakes and waffles. The General Court said that it cannot be held that the KitKat product, as marketed, also falls under the categories of goods consisting of bakery products, pastries, cakes and waffles. None of the evidence taken into consideration by the Board of Appeal established use of the 3D mark in respect of those goods. In that regard, the composition of the product in question and its normal manufacturing process are not relevant for the purposes of establishing how the mark was used when that product was marketed. Therefore, use of the 3D mark in respect of a product which may reasonably be classified as a sweet or a biscuit cannot entail protection for other categories of goods such as bakery products, pastries, cakes and waffles.

Second, Mondelez argued that the 3D mark was not being used in the form in which it was registered and that the 3D mark’s distinctive character actually derives from its use in conjunction with the KitKat word mark. The General Court said that the fact that the shape of a product or the appearance of its packaging has always been used in conjunction with a word element does not mean that that shape or appearance may not be perceived as an indication of commercial origin. Further, the approach adopted by the Board of Appeal in this case was also properly consistent with the concept of use of the mark as a trade mark, i.e. the use of the mark for the purposes of the identification by the relevant class of persons of the product or service as originating from a particular undertaking. Accordingly this appeal point was rejected.

Third, Mondelez claimed that Nestle failed to provide sufficient evidence to establish that the 3D mark had acquired distinctive character through the use that had been made of it, as the surveys submitted by Nestle had not asked the relevant questions and had led to misleading results. The General Court noted that for a mark to have acquired distinctive character through use, it is necessary that at least a significant proportion of the relevant public, by virtue of that mark, identifies the goods or services concerned as originating from a particular undertaking.

In assessing whether a mark has acquired distinctive character through use, account must be taken of factors such as the market share held by the mark; how intensive, geographically widespread and long-standing use of the mark has been; the significance of the investments by the undertaking to promote it; the proportion of the relevant class of persons who, because of the mark, identify the product as originating from a particular undertaking; and statements from chambers of commerce and industry or other professional associations. Those factors must be assessed globally. If, on the basis of those factors, the relevant class of persons, or at least a significant proportion of them, identifies the product as originating from a particular undertaking because of the mark, it must be concluded that the requirement for registering the mark is satisfied. Upon examining the survey evidence submitted by Nestle, the General Court found that it constituted relevant evidence which, when assessed globally, is capable of establishing that, in the eyes of the relevant public, the contested trade mark is perceived as an indication of the commercial origin of the goods in question.

Fourth, Mondelez interpreted the ECJ judgment in the 2015 KitKat decision (C‑215/14), as meaning that the mere recognition of a mark was no longer a sufficient basis for distinctive character acquired through use of that mark. Mondelez argued it is necessary to show that that mark is perceived as indicating that the goods which it designates originate exclusively from a particular undertaking and from no other undertaking. Proof of mere recognition or association establishes only awareness of the use of the shape in question. The General Court noted that the ECJ’s conclusion was that regardless of whether the sign was used as part of a registered trade mark or in conjunction with the registered trade mark, the fundamental condition was that, as a consequence of that use, the sign for which registration as a trade mark was sought could serve to identify, in the minds of the relevant class of persons, the goods to which it related as originating from a particular undertaking. Therefore the General Court found that the approach adopted by the Board of Appeal, taking into account for the purposes of proving the distinctive character acquired through use of the 3D mark, surveys showing the immediate and spontaneous attribution of the 3D mark to the product (bearing the word mark KitKat or Nestlé) must be upheld. The General Court added that it is not necessary, in order to assess whether a mark has acquired distinctive character through use, for the shape to appear on the packaging of the product or to be visible at the time of sale. A mark may acquire distinctive character through use that is visible in advertisements or when the product is consumed.

The final and most interesting issue in this decision was whether Nestle had properly proved acquired distinctiveness in the relevant Member States of the EU. The General Court first stated that in order to be accepted for registration, a sign must have distinctive character, whether inherent or acquired through use, throughout the EU. If a sign lacked inherent distinctiveness across the EU, acquired distinctiveness needed to be shown for the entire EU. In Louis Vuitton Malletier v OHIM it was stated that, relying on the Lindt case, while it would be unreasonable to require proof of acquisition of distinctive character through use for each Member State, since such acquisition had not been established for 12 of the 27 Member States constituting the EU at the date of filing the trade mark application, that mark could not be regarded as having acquired distinctive character through use throughout the EU.

The Board of Appeal had previously found that because Nestlé had submitted survey evidence for the largest Member States proving acquired distinctiveness, that acquired distinctiveness had been proven throughout the territory of the EU. However, the General Court said that this was not allowed. A lack of recognition of the sign as an indication of commercial origin in one part of the territory of the European Union cannot be offset by a higher level of awareness in another part of the EU. The Court assessed the survey evidence submitted by Nestlé and concluded that the shape of the KitKat chocolate bar had acquired distinctive character through use in Denmark, Germany, Spain, France, Italy, the Netherlands, Austria, Finland, Sweden and the United Kingdom. However, even if the population of those states represented almost 90% of the population of the EU in the 15 countries that needed to be assessed, it could not make conclusions about EU-wide acquired distinctiveness without assessing the evidence regarding the perception of the 3D mark by the relevant public in the other Member States such as Belgium, Republic of Ireland, Greece and Portugal. The decision of the Board of Appeal was therefore annulled.

The case now goes back to the EUIPO to re-evaluate the case in accordance with these principles. This line of KitKat cases will continue for a long time yet. Arnold’s January 2016 High Court judgment is likely to go to an appeal hearing if not settled, and this decision by the General Court will likely end up in the ECJ if previous decisions are anything to go by. Interestingly, the General Court found that in the territory of the UK, the shape had acquired distinctiveness through use. This is contrary to Arnold J’s finding in his judgment of January 2016 that it had not.

Link to Judgment:

Judgment Date: 15 DECEMBER 2016

Territories Cannot be Merged When Assessing Acquiring Distinctiveness in the EU

 

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