Nestlé’s struggle to register part of its famous slogan receives a welcome boost from the European Court of Justice

22 August 2005

Jane Mutimear, Shirley McCulloch

The European Court of Justice (ECJ) ruled on 7 July 2005 that it is possible for a mark to acquire its own distinctive character even though it has only ever been used as part of a registered trade mark, or in conjunction with a registered trade mark. This is an important judgment which is relevant to all forms of non-conventional trade marks, in particular, shapes and colour trade marks which are rarely used on their own.

The case concerned the chocolate bar Kit Kat, which has been on the market since 1935. Kit Kat is a one of the UK’s best selling confectionery products and is well known around the world. UK consumers have become accustomed to a long running advertising campaign around the slogan “Have a Break… Have a Kit Kat” which has been used in the UK since the mid-1950s. Nestlé owns registered trade marks in the UK for this slogan for chocolate, chocolate products, confectionery, candy and biscuits (in class 30), but decided to apply to register HAVE A BREAK on its own in 1995.

In order to succeed, Nestlé needed to demonstrate either that the words “Have a Break” had a distinctive character per se (“inherent distinctiveness” under s3(1)(b)) or that they had acquired a distinctive character through their use to advertise Nestlé’s products (“acquired distinctiveness” under s3(1)). The application was opposed by Mars UK Limited, which argued that the registration should be refused on the basis of sections 3(1)(a)-(d).

On the question of inherent distinctiveness under s3(1)(b), the Hearing Officer (Mr Allan James) concluded that the phrase “Have a Break” was an “origin neutral invitation to consume a snack when it is used in the course of promoting a snack food product, whether its used in an advertisement or on the packaging of the product.” The mark therefore had no inherent distinctiveness.

Nestlé produced evidence to demonstrate that the mark “Have a Break” had acquired distinctiveness through its use in the course of trade (both by Nestlé’s predecessors in title (Rowntrees) as well as by Nestlé). Nestlé backed up this evidence with the results of a survey of members of the public who were shown a mock-up of a bar of chocolate featuring the words “Have a Break.” Nestlé claimed that the survey demonstrated that, due to the use of the wording “Have a Break,” a significant proportion of the relevant public would identify the mock-up bar as originating from the manufacturer of Kit Kat.

The Hearing Officer considered this evidence but concluded that Nestlé had only made minimal independent use of the mark “Have a Break.” Nestlé had mainly used the mark as part of its registered trade mark “Have a Break … Have a Kit Kat.” The slogan “Have a Break” could not therefore have acquired an independent distinctive character, as this could only arise as a result of the use of “it”, where “it” was the mark applied for, and not the mark as part of another, longer, mark. The Hearing Officer also rejected Nestlé’s interpretation of the public survey results, stating that, although the evidence indicated that a proportion of the public would identify the mock-up product with the manufacturer of Kit Kat, he did not consider that this amounted to the necessary “significant proportion.”

The application was therefore rejected on the basis that the mark “Have a Break” was devoid of any distinctive character and had not acquired a distinctive character through use.

Nestlé’s appeals

Nestlé appealed the Hearing Officer’s decision in the High Court in December 2002, but the appeal was rejected by Mr Justice Rimer. He agreed with the Hearing Officer’s application of the law to the question of inherent distinctiveness and also agreed that Nestlé would need to have demonstrated independent use of the mark “Have a Break” in order for it to acquire distinctiveness. Use as part of the registered trade mark “Have a Break … Have a Kit Kat” would not suffice.

In 2003, Nestlé appealed this decision to the Court of Appeal (Vice-Chancellor Sir Andrew Morrit LJ, Mummery and Sedley LLJ). The Court of Appeal carefully considered the authorities on inherent distinctiveness (including those cases which had been decided by the ECJ since the Hearing Officer’s and the Rimer J’s rulings) and concluded that both the Hearing Officer and Rimer J had correctly applied the law to this question.

On the question of acquired distinctiveness however, the Court of Appeal considered that the Hearing Officer and Rimer J’s decisions may have been based on a wrong view of the law. In the case of Ringling Bros – Barnum & Bailey Combined Shows, Inc (Case R 111/2000-2, 23 May 2001), the Board of Appeal had decided that the applicant for a community trade mark had demonstrated that the slogan “The Greatest Show on Earth” had acquired distinctiveness through use, even though such use had always been in conjunction with the applicant’s registered trade mark. The Board of Appeal could “well understand that a slogan-like phrase associated with a trade mark, like in this case, might by repetition over time, create a separate and independent impression.” Applying the reasoning of this judgment to the present facts might therefore mean that Nestlé would be able to succeed in demonstrating that “Have a Break” had acquired distinctiveness through use of the trade mark “Have a Break … Have a Kit Kat.”

The Court of Appeal considered that, because it is required to construe s3(1) of the Trade Marks Act in conformity with Article 3(3) of the Trade Marks Directive (which corresponds to s3(1)), the issue at hand was one of European Community law, and so referred the following questions to the ECJ:

“Whether the distinctive character of a mark referred to in Article 3(3) of the Trade Marks Directive may be acquired following or in consequence of the use of that mark as part of, or in conjunction with, another mark?”

The ECJ’s decision

On 7 July 2005, the ECJ answered this question in the affirmative. The ECJ decided that Article 3(3) of the Trade Marks Directive contains no restriction which requires that use of the mark must have been independent use. To acquire a distinctive character, the mark must simply have been used in such a manner that the relevant class of persons identify the product or service as originating from a given undertaking. Such identification may be as a result of using the mark as part of a registered trade mark, or as a component thereof, or by its use in conjunction with a registered trade mark.

Nestlé’s application for a UK trade mark for “Have a Break” will now be re-submitted to the Trade Marks Registry for a hearing officer to re-consider Nestlé’s original evidence relating to its use of the mark “Have a Break.” Nestlé hopes that this time their evidence will be found to show that the use of the registered trade mark “Have a Break… Have a Kit Kat” has conferred a distinctive character on the shorter slogan “Have a Break.”

Although the final outcome of Nestlé’s application will not be known for some time, the ECJ’s judgment clarifies the law in this important area and is a victory for Nestlé on behalf of all brand owners who seek to distinguish their products by use of distinctive shape, colour, branding and advertising.

(Bird & Bird acted for Nestlé in this action).

First published in TM World.

Authors