An unpalatable decision for Nestlé…

The Court of Justice of the European Union (CJEU) yesterday handed down its judgment in the long-running dispute between Nestlé and Cadbury; a decision that demonstrates again the difficulties of registering a shape mark across the European Union.

This decision is the result of over 15 years of legal wrangling, starting in 2002 when Nestlé applied to the EUIPO to register its 4 finger three-dimensional Kit Kat shape. The registration was granted, but in 2007 Cadbury Schweppes (now Mondelez UK Holdings and Services) applied to the EUIPO to invalidate the mark. The EUIPO rejected the Mondelez application on the basis that Nestlé had successfully established that the shape had acquired distinctiveness through use across the EU.

Mondelez then applied to the General Court of the European Union to annul the decision of the EUIPO, arguing that it was incorrect to conclude that acquired distinctiveness had been established across the EU when Nestlé and the EUIPO only considered acquired distinctiveness in 10 out of the 15 EU member states that existed at the time of registration. The General Court agreed with Mondelez, but none of the parties were entirely satisfied with its decision and so each of the EUIPO, Mondelez and Nestlé appealed, leading to yesterday.

We now know that the CJEU agrees with the General Court: that in order to register an EU mark which is devoid of inherent distinctiveness a trade mark owner must show that the mark has acquired distinctiveness throughout the EU and not just a substantial part of it. It has directed the EUIPO to consider, in light of this judgment, whether Nestlé's registration still stands.

This decision is not unexpected, but it reiterates the difficulty of registering shape marks, which are often considered to be devoid of any distinctive character. In such circumstances, applicants may have to think carefully about how they can adequately demonstrate acquired distinctiveness, and whether they are able to produce enough evidence across markets to establish evidence across the EU as a whole.

One proprietor that is having more success with its shape marks is Mondelez itself, which successfully registered and continues to defend its registration of its Toblerone peaks. For Nestlé the battle continues; it may lose its 4 finger Kit Kat shape mark registration following yesterday's decision, but this is unlikely to be the last we hear on the subject. Nestlé is unlikely to take its own advice to take a break from it all.