The Advocate General’s opinion on KitKat case

The Advocate General of the European Court issued an opinion regarding the following joined cases C‑84/17 P, C‑85/17 P и C‑95/17 P,  Nestlé  v  Mondelez. These cases concern the following:

On 21 March 2002, Nestlé applied to EUIPO for registration of a three-dimensional mark for its ‘Kit Kat 4 fingers’ product, which consists of four trapezoidal bars aligned on a rectangular base:

Registration was sought in respect of 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. EUIPO raised an objection with regard to some of the goods in respect of which registration had been sought, namely: ‘chocolate, chocolate products, confectionery, candy’. Following that objection, the abovementioned sign was registered as an EU trade mark on 28 July 2006 in respect of goods in Class 30 corresponding to the following description: ‘Sweets; bakery products; pastries; biscuits; cakes; waffles’ (‘the trade mark at issue’).

On 23 March 2007, Cadbury Schweppes plc (subsequently Cadbury Holdings Ltd, now Mondelez) filed an application with EUIPO for a declaration of invalidity in respect of the registration on the basis, in particular, of Article 7(1)(b) of Regulation No 207/2009. On 11 January 2011, the Cancellation Division of EUIPO upheld that application and declared the trade mark at issue invalid.

On appeal by Nestlé, the Second Board of Appeal of EUIPO, by the decision at issue, annulled the decision of the Cancellation Division. The Second Board of Appeal considered, in particular, that although the trade mark at issue was, indeed, devoid of any inherent distinctive character in relation to the goods for which it had been registered, Nestlé had shown, in accordance with Article 7(3) of Regulation No 207/2009, that that trade mark, through the use which had been made of it, had acquired such a character in relation to those goods.

By application lodged at the General Court Registry on 19 February 2013, Mondelez brought an action seeking the annulment of the decision at issue. In support of its action, it raised three pleas in law. The General Court examined only the first plea in law, alleging infringement of Article 52(2) of Regulation No 207/2009, read in conjunction with Article 7(3) thereof, and divided into four parts.

In paragraphs 21 to 44 of the judgment under appeal, the General Court analysed and upheld the second part of Mondelez’s first plea in law. As can be seen from paragraphs 41 to 44 of the judgment under appeal, the General Court took the view that the Second Board of Appeal was wrong to consider that Nestlé had established use of the trade mark at issue in respect of bakery products, pastries, cakes and waffles. Consequently, the General Court analysed the other parts of Mondelez’s first plea in law only with regard to sweets and biscuits.

In paragraphs 45 to 64 of the judgment under appeal, the General Court analysed and rejected the first part of Mondelez’s first plea in law, concerning the lack of use of the trade mark at issue in the form in which it was registered.

In paragraphs 65 to 111 of the judgment under appeal, the General Court examined and rejected the third part of Mondelez’s first plea in law, concerning the lack of use of the trade mark at issue as an indicator of origin and the insufficient evidence provided in that respect. In this regard, on the one hand, in paragraph 94 of the judgment under appeal, the General Court noted that the evidence of genuine use of the trade mark at issue, submitted by Nestlé before EUIPO, constituted relevant evidence which, when assessed globally, was capable of establishing that, in the eyes of the relevant public, that trade mark was perceived as an indication of the commercial origin of the goods in question. On the other hand, in paragraph 107 of that judgment, the General Court indicated that the Second Board of Appeal ‘carried out an examination of whether the … trade mark [at issue] had acquired distinctive character by virtue of that mark and specifically substantiated its conclusions regarding that acquisition so far as Denmark, Germany, Spain, France, Italy, the Netherlands, Austria, Finland, Sweden and the United Kingdom are concerned’.

Finally, in paragraphs 112 to 178 of the judgment under appeal, the General Court analysed the fourth part of Mondelez’s first plea in law. In paragraphs 142 and 143 of that judgment, it stated that the Second Board of Appeal had erred, in concluding, in essence, that, for the purposes of proving distinctive character acquired through use of a mark throughout the European Union, it was sufficient to show that a substantial proportion of the relevant public in the European Union, merging all the Member States and regions, perceived a mark as an indication of the commercial origin of the goods designated by that mark and that it was not necessary to prove the distinctive character of a mark acquired through its use in all the Member States concerned.

Nevertheless, as can be seen from paragraphs 144 and 145 of the judgment under appeal, the General Court took the view that it was possible that, despite having erred in setting out the assessment criterion for the purposes of proving the distinctive character of a mark acquired through its use throughout the European Union, the Second Board of Appeal had applied that criterion correctly when examining the evidence submitted by Nestlé. The General Court therefore considered that it was necessary to examine the Second Board of Appeal’s assessment of that evidence.

Following an examination of the evidence relating to Denmark, Germany, Spain, France, Italy, the Netherlands, Austria, Finland and Sweden, as well as the United Kingdom, the General Court concluded, in paragraphs 146, 148, 151, 153, 155, 158, 159, 164 and 167 respectively, that the Second Board of Appeal was correct to consider that it had been established that the trade mark at issue had acquired a distinctive character through use in all of those Member States.

However, in paragraph 173 of the judgment under appeal, the General Court noted that the Second Board of Appeal had not explicitly answered the question of whether it had been established that the trade mark at issue had acquired distinctive character in Belgium, Ireland, Greece and Portugal, nor had it included those Member States among those in which it took the view that such acquisition had been proven.

In paragraph 176 of that judgment, the General Court considered that the Second Board of Appeal had erred in concluding that the trade mark at issue had acquired distinctive character through use in the European Union, given that such acquisition had been proven for only a part, indeed a substantial part, of the territory of the European Union.

In paragraphs 177 to 179 of the judgment under appeal, the General Court held that the fourth part of Mondelez’s first plea in law must be upheld and that the decision at issue must be annulled in its entirety, since the Second Board of Appeal could not validly conclude its examination of the distinctive character of the trade mark at issue acquired through its use without coming to a conclusion regarding the perception of that mark by the relevant public in, inter alia, Belgium, Ireland, Greece and Portugal and without analysing the evidence adduced in respect of those Member States.

The Advocate’s opinion:

For the purposes of that extrapolation, although account must not be taken of the territories of the Member States as such, (23) the existence of the single market within the European Union does not imply the non-existence of national or regional markets. It is common for economic operators like Nestlé, when distributing their goods or services, to group together certain national markets for a number of reasons, such as their geographical proximity, the existence of historical links between them, or even a common language, customs or practices. In that sense, against that background and depending on the goods at issue, the evidence provided for certain national markets could, on the basis of what Mondelez called ‘market comparability’ at the hearing, be sufficient to cover other markets omitted from the evidence or for which quantitatively sufficient evidence has not been provided. For example, it might be that, for certain goods or services and on account of the comparability of the markets in question, the evidence provided for the Spanish market is also sufficient for the Portuguese market, or the evidence provided for the United Kingdom market is sufficient for the Irish market, and so on.

To provide quantitatively and geographically sufficient evidence of the acquisition of a distinctive character through use throughout the European Union, account must be taken, for each product or service, of this diversity within the European Union. In that sense, a trade mark cannot be an EU trade mark with a unitary character if the relevant public in part of the European Union does not perceive it as an indication of the commercial origin of the goods or services which it covers.

In this regard, it should be added that the regions or parts of the European Union in which the acquisition of distinctive character must be shown are not predetermined, but must be established, whenever an application for registration is filed, for the goods and services covered by the trade mark in question.

Contrary to what EUIPO argues, this does not mean that the absence of evidence in relation to Luxembourg alone would be sufficient to exclude the acquisition of distinctive character, when evidence has been provided for the other Member States. If, for the goods or services covered by the trade mark in question, Luxembourg is part of the same market as Belgium, France or Germany, and sufficient evidence has been provided for one such country which is part of the same market as Luxembourg, it would not be necessary to provide specific evidence for Luxembourg. That, in my opinion, is the meaning to be given to Article 7(2) and (3) of Regulation No 207/2009 and to paragraphs 60 to 63 of the judgment of 24 May 2012, Chocoladefabriken Lindt & Sprüngli v OHIM (C‑98/11 P, EU:C:2012:307).

Even though the General Court was, in principle, required to examine that question, Nestlé confirmed at the hearing that it had not included in the case file evidence seeking to establish that, with regard to the product covered by the trade mark at issue, the evidence provided for the Danish, German, Spanish, French, Italian, Netherlands, Austrian, Finnish, Swedish and United Kingdom markets also applied to the Belgian, Irish, Greek, Luxembourg and Portuguese markets or could act as a basis for extrapolating the acquisition, by the trade mark at issue, of distinctive character through use in those countries. In that sense, Nestlé had not established, in respect of the product concerned, the comparability of the Belgian, Irish, Greek, Luxembourg and Portuguese markets with some of the other national markets for which it had provided sufficient evidence.

In the absence of such evidence, the General Court had no option but to annul the decision of the Second Board of Appeal of EUIPO, which it did.

In view of the foregoing considerations, I propose that the Court dismiss the appeals brought by Nestlé and EUIPO.

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