Kit Kat trademark battle looms over its shape

Cadbury and Nestle are at it again, embroiled in a legal dispute over the shape of Nestle’s Kit Kat chocolate bar.

SmartCompany has previously reported on Nestle and Darrell Lea’s trademark dispute over Cadbury’s bid to trademark the colour purple.

Now Cadbury has turned the tables on its Swiss rival and is opposing a similar attempt by Nestle to protect the shape of the Kit Kat.

The dispute flared up after the UK 3D trademark registration for the shape of Nestle’s Kit Kat was accepted by the UK trademark registry on the basis the mark was in fact distinctive.

Judge Richard Arnold in London has now referred the case to the European Union Court of Justice in Luxembourg for guidance on EU law.

The judge has now handed down his decision in which he considered exactly how much recognition a shape mark must have in order to be registered as a trademark.

Bill Ladas, special counsel at King & Wood Mallesons, told SmartCompany under Australian law the requirement is that a trademark in fact distinguished the goods as at the date of the application, through the use made of it.

However, unlike the European provisions, shape marks are not expressly dealt with.

“If you have a product or service offering on the market, and part of the branding around it is shape, or the colour of packaging or of advertising, then you can potentially register those branding elements as trademarks,” Ladas says.

“Australia has a favourable scheme in terms of registering these kinds of marks. Certainly it is more favourable than Europe. We have three potential levels of distinctiveness, whereas in Europe they only have two.”

Ladas says sweets have not had the greatest run of luck in terms of decided cases where reliance was placed on factual distinctiveness.

Guylian’s seahorse-shaped chocolates failed, as did Ferrero’s Tic Tac container, but the shape of the Toblerone has been protected.

The ultimate test in Europe is whether consumers recognise the shape and colour as indicating that a trademark owner is the trade source of the goods, and Ladas says the issue considered in the Kit Kat case is what standard of proof is needed.

“This is usually obvious for words, but it must be the case with modern advertising practices that consumers have come immediately to recognise some shapes as branding, or that they will at least come to this recognition through promotion of that brand over the course of time,” he says.

Ladas says businesses should be aware that they can protect these valuable aspects of their branding, and should consider using the trademark registration process for existing brands.

“If the brand is new, then the other side of the coin is to make sure that – by adopting colours and shapes in their branding – they are not treading on the toes of other traders who have already registered or used these branding elements,” Ladas says.