Click here to read the outcome of this case.
What do the words HAVE A BREAK mean to you when used on a chocolate product? Do they mean, take a rest and eat the chocolate? Alternatively, do they provoke the response, “Have a Kit Kat”, the well known chocolate bar produced by Nestlé?
This was one of the questions considered by the Court of Appeal in July this year in the ongoing dispute between Nestlé and Mars as to whether or not Nestlé can register the slogan HAVE A BREAK as a trade mark.
As a result of the Court of Appeal decision, the dispute will now move to the European Court of Justice in Luxembourg which has been asked to give a ruling on whether a mark can acquire the distinctive character necessary to be registrable when it is not used alone but is used as part of another mark or together with another mark. The answer to this question is important, not only to Nestlé (which relied on its use of the phrase HAVE A BREAK as part of the slogan “Have a break.…Have a Kit Kat”) but also in general to those who wish to register marks comprising shapes or who wish to register a subsidiary mark. Such marks are seldom used independently and there could be difficulties in establishing distinctiveness through use if the only use which counts is the use of the shape mark or subsidiary mark by itself.
There will no doubt be much interest in the case as it goes through the wheels of the European Court of Justice (ECJ). In the meantime, brand owners must take decisions on use of their marks knowing that the issue remains up in the air.
The slogan “Have a break.…Have a Kit Kat” and the name KIT KAT are registered trade marks of Nestlé in respect of chocolate, chocolate products; confectionary; candy; biscuits (all in Class 30). In September 1976 the proprietors of the marks, as they were then, sought unsuccessfully to register the words HAVE A BREAK as a trade mark. When the Trade Marks Act 1994 (which heralded a new regime for registered trade marks) came into force, Nestlé made a second application to register the mark HAVE A BREAK in Class 30. Mars opposed the application and it was refused by the Trade Marks Registry Hearing Officer whose decision was upheld by the High Court. The Court of Appeal gave permission for Nestlé to appeal on the basis that it was appropriate for the Court of Appeal to consider the registrability of phrases such as “Have a break”.
The two questions to be decided by the Court of Appeal were:
is the mark HAVE A BREAK “devoid of any distinctive character” (see section 3(1)(b) of the 1994 Act - Inherent Distinctiveness")? and if so,
has the mark HAVE A BREAK before 28 March 1995 (the date of Nestlé’s application to register the mark) “in fact acquired a distinctive character as a result of the use made of it”. (see proviso to section 3(1) of the 1994 Act - "Acquired Distinctiveness")?
Having reviewed a number of judgments on the issue of inherent distinctiveness, the Court of Appeal stated that the relevant principles are now well established and there was no need to make any further reference to the ECJ on the point. The Court of Appeal emphasised that relevant distinctiveness is that which identifies a product as originating from a particular undertaking. The Hearing Officer had considered, on the evidence, that the mark did not have the requisite distinctive character. The Court of Appeal agreed that the Hearing Officer had applied the law correctly and concluded therefore that the mark HAVE A BREAK was not inherently distinctive. To succeed, Nestlé would have to establish acquired distinctiveness under the proviso to section 3(1).
The Hearing Officer and the High Court Judge, Mr Justice Rimer, had found against Nestlé on acquired distinctiveness because Nestlé had not established any material use of HAVE A BREAK as an independent trade mark prior to the date of the application. Nestlé’s case depended on the use it had made of the phrase HAVE A BREAK as part of the full slogan “Have a break.…Have a Kit Kat”. Rimer J agreed with the Hearing Officer that because there was no material use of the mark HAVE A BREAK as an independent trade mark, Nestlé had failed to establish its case under the proviso.
The Court of Appeal decided however that it was not entirely clear how to interpret the proviso properly. When the proviso refers to a mark acquiring a distinctive character “as a result of the use made of it”, does the word “it” refer only to the mark as used independently or does it also encompass use of the mark with or as part of another mark? The Court of Appeal concluded that this point could give rise to reasonable differences of opinion and referred the issue to the European Court of Justice for an authoritative ruling.
Effect of ECJ Ruling
If the ruling is in Nestlé’s favour - namely that distinctive character may be acquired through use of a mark as part of or together with another mark – the case will be sent to a different Hearing Officer to reconsider the evidence in light of the ECJ’s decision on the law. It will also provide comfort to applicants for shape and subsidiary marks that they may rely on non-independent use of such marks to establish acquired distinctiveness.
If, however, the ECJ rules against Nestlé, its appeal will fail and the HAVE A BREAK application will be refused. From a wider perspective, such a ruling would affect brand owners who wished to apply to register shape or subsidiary marks. If there were potential difficulties with inherent distinctiveness, such brand owners would have to consider whether the marks could be used independently with a view to establishing acquired distinctiveness.
This article was also published in the October 2003 issue of Brand Strategy.
Important - The information in this article is provided subject to the disclaimer. The law may have changed since first publication and the reader is cautioned accordingly.