The European court ruled in the case Nestlé SA v Cadbury

The European court ruled in Case C‑215/14 Société des Produits Nestlé SA  v  Cadbury UK Ltd. The case concerns the following: 

 
The product at issue in the main proceedings was placed on the market in the United Kingdom in 1935 by Rowntree & Co Ltd, under the name ‘Rowntree’s Chocolate Crisp’. In 1937, the name of the product was changed to ‘Kit Kat Chocolate Crisp’, and then shortened to ‘Kit Kat’. In 1988, that company, whose new trading name was Rowntree plc, was acquired by Nestlé.
For a long period, the product was sold in two layers of packaging, the inner layer being silver foil and the outer layer being printed paper with a red and white logo bearing the words ‘Kit Kat’, but the current packaging consists of a single layer bearing that same logo. The logo’s appearance has evolved over time, but has not changed greatly.
The basic shape of the product has remained almost entirely unchanged since 1935; only its size has been altered slightly. The current appearance of the product without its packaging is shown below:
It should be noted that each finger is embossed with the words ‘Kit Kat’ and with sections of the oval shape which form part of the logo.
On 8 July 2010, Nestlé filed an application for registration of the three-dimensional sign graphically represented below (‘the trade mark at issue’) as a trade mark in the United Kingdom:
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The trade mark at issue therefore differs from the actual shape of the product in that it omits the embossed words ‘Kit Kat’.
1The application was made in respect of the following goods in class 30 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended:
‘Chocolate; chocolate confectionery; chocolate products; confectionery; chocolate-based preparations; bakery goods; pastries; biscuits; biscuits having chocolate coating; chocolate coated wafer biscuits; cakes; cookies; wafers’.
The Trade Marks Registry of the United Kingdom Intellectual Property Office accepted the application and it was published for the purposes of opposition. The view was taken that, even though the trade mark at issue had no inherent distinctive character, the trade mark applicant had shown that it had acquired distinctive character following the use made of it.
On 28 January 2011, Cadbury filed a notice of opposition to the application for registration putting forward various pleas, in particular a plea alleging that registration should be refused on the basis of the provisions of the Trade Marks Act 1994 which transpose Article 3(1)(b), Article 3(1)(e)(i) and (ii) and Article 3(3) of Directive 2008/95.
By decision of 20 June 2013, the examiner of the United Kingdom Intellectual Property Office found that the trade mark at issue was devoid of inherent distinctive character and that it had not acquired such a character following the use which had been made of it.
 The examiner found that the shape in respect of which registration was sought has three features:
–   the basic rectangular slab shape;
–  the presence, position and depth of the grooves running along the length of the bar, and
–  the number of grooves, which, together with the width of the bar, determine the number of ‘fingers’.
The examiner took the view that the first of those features is a shape which results from the nature of the goods themselves and cannot, therefore, be registered, except in respect of ‘cakes’ and ‘pastries’, for which the shape of the trade mark departs significantly from norms of the sector. Since the other two features are necessary to obtain a technical result, he rejected the application for registration as to the remainder.
On 18 July 2013, Nestlé appealed against that decision to the High Court of Justice of England & Wales, Chancery Division, Intellectual Property (United Kingdom), challenging the conclusion that the trade mark at issue had not acquired distinctive character through the use made of it prior to the relevant date. Moreover, Nestlé claims that the trade mark at issue does not consist exclusively of either the shape which results from the nature of the goods themselves, or the shape which is necessary to obtain a technical result.
By a cross-appeal filed on the same day, Cadbury challenged the decision of 20 June 2013 in so far as that court found that the trade mark at issue had inherent distinctive character in respect of cakes and pastries and that it did not consist exclusively of either the shape resulting from the nature of the goods themselves or the shape necessary to obtain a technical result.
The High Court of Justice of England & Wales, Chancery Division, Intellectual Property, takes the view, first of all, that the examiner should not have made a distinction between, on the one hand, cakes and pastries and, on the other, all the other goods in class 30 of the Nice Agreement, either in relation to the proof of distinctive character of the trade mark at issue or to the applicability of Article 3(1)(e)(i) and (ii) of Directive 2008/95.
Secondly, as regards the question of whether the trade mark at issue had acquired distinctive character through the use made of it prior to the relevant date, the referring court, after reviewing the relevant case-law, seeks to ascertain whether, in order to establish that a trade mark has acquired distinctive character, it is sufficient that, at the relevant date, a significant proportion of the relevant class of persons recognise the trade mark and associate it with the trade mark applicant’s goods. The referring court takes the view that the trade mark applicant must prove that a significant proportion of the relevant class of persons regard the trade mark (as opposed to any other trade mark which may also be present) as indicating the origin of the goods.
 Finally, so far as concerns the shape resulting from the nature of the goods themselves and the shape necessary to obtain a technical result, the referring court points out that there is little case-law relating to Article 3(1)(e)(i) and (ii) of Directive 2008/95.
In those circumstances, the High Court of Justice of England & Wales, Chancery Division, Intellectual Property, decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
(1) In order to establish that a trade mark has acquired distinctive character following the use that had been made of it within the meaning of Article 3(3) of Directive 2008/95 …, is it sufficient for the applicant for registration to prove that at the relevant date a significant proportion of the relevant class of persons recognise the mark and associate it with the applicant’s goods in the sense that, if they were to consider who marketed goods bearing that mark, they would identify the applicant; or must the applicant prove that a significant proportion of the relevant class of persons rely upon the mark (as opposed to any other trade marks which may also be present) as indicating the origin of the goods?
(2) Where a shape consists of three essential features, one of which results from the nature of the goods themselves and two of which are necessary to obtain a technical result, is registration of that shape as a trade mark precluded by Article 3(1)(e)(i) and/or (ii) of Directive 2008/95 …?
(3) Should Article 3(1)(e)(ii) of Directive 2008/95 … be interpreted as precluding registration of shapes which are necessary to obtain a technical result with regard to the manner in which the goods are manufactured as opposed to the manner in which the goods function?’

The Court decision:
1. Article 3(1)(e) of Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks must be interpreted as precluding registration as a trade mark of a sign consisting of the shape of goods where that shape contains three essential features, one of which results from the nature of the goods themselves and two of which are necessary to obtain a technical result, provided, however, that at least one of the grounds for refusal of registration set out in that provision is fully applicable to the shape at issue.
2.Article 3(1)(e)(ii) of Directive 2008/95, under which registration may be refused of signs consisting exclusively of the shape of goods which is necessary to obtain a technical result, must be interpreted as referring only to the manner in which the goods at issue function and it does not apply to the manner in which the goods are manufactured.
3. In order to obtain registration of a trade mark which has acquired a distinctive character following the use which has been made of it within the meaning of Article 3(3) of Directive 2008/95, regardless of whether that use is as part of another registered trade mark or in conjunction with such a mark, the trade mark applicant must prove that the relevant class of persons perceive the goods or services designated exclusively by the mark applied for, as opposed to any other mark which might also be present, as originating from a particular company
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