The EU General Court has held that an EU trade mark (EUTM) registration of the three-dimensional shape of the four-finger KitKat chocolate bar was invalid for lack of acquired distinctiveness in all EU member states.
Article 7(1)(b) of the EUTM Regulation (207/2009/EC) (2009 Regulation) (Article 7(1)(b)) provides that trade marks which are devoid of any distinctive character shall not be registered as EUTMs. However, Article 7(3) of the 2009 Regulation (Article 7(3)) provides an exception for signs that have become distinctive through use in relation to the goods or services for which registration is requested.
Article 1(2) of the 2009 Regulation states that an EUTM has a unitary character, and has equal effect throughout the EU.
It is not possible to register marks which consist exclusively of the shape of goods which is necessary to obtain a technical result (Article 7(1)(e)(ii), 2009 Regulation) (Article 7(1)(e)(ii)).
N registered the three-dimensional shape of a KitKat bar as an EUTM for sweets, bakery products, pastries, biscuits, cakes and waffles. N's competitor M applied for a declaration that the mark was invalidly registered.
The EU Intellectual Property Office (EUIPO) declared the registration invalid, holding that it was devoid of distinctive character in relation to the goods in question under Article 7(1)(b). N appealed.
The EUIPO Board of Appeal allowed the appeal. It held that the mark had acquired distinctive character through use. It based this finding on evidence of use relating to 14 of the 15 countries that were member states when the trade mark application was filed. It also held that the shape was not the shape of goods which was necessary to obtain a technical result, and was therefore not barred from registration under Article 7(1)(e)(ii).
M appealed on the issue of acquired distinctiveness.
The court allowed the appeal. It held that the EUIPO Board of Appeal had failed to apply the correct test to determine whether the mark had acquired distinctiveness throughout the EU.
In considering the territorial scope of acquired distinctiveness, the question was whether N was required to prove acquired distinctiveness in all 15 relevant member states. Lack of acquired distinctiveness in a single member state would suffice to render a sign non-regis trable, and lack of inherent distinctiveness existed in every member state. So, acquired distinctiveness had to be demonstrated in every member state, sufficiently proven in quantitative terms and not necessarily using the same type of evidence for each country.
The EUIPO Board of Appeal had added together the populations of the ten countries for which survey evidence was available (representing 83% of the total EU population) and assessed that the rate of immediate recognition of N as the origin of the product shape was almost 45%. From this it had concluded that almost 50% of the EU's population recognised the mark as being N's.
This approach was incorrect. It was not enough to show sufficient use of the mark in a substantial part, or the majority, of the EU. If the evidence failed to cover a part of the EU where distinctiveness was lacking, even if that part was insubstantial or consisted of one member state, then the applicant would have failed to demonstrate acquired distinctiveness. The relevant question was not whether it was shown that a substantial proportion of the public in the EU, merging all the member states and regions, perceived the mark as an indication of commercial origin, but whether, throughout the EU, it was proved that a significant proportion of the relevant public perceived the mark as an indication of the commercial origin of the goods designated by that mark. A lack of recognition of the sign as an indication of commercial origin in one part of the EU could not be offset by a higher level of awareness in another part of the EU.
This decision provides useful guidance on the level of evidence required to prove acquired distinctiveness throughout the EU, including the degree to which market recognition in one member state may be assumed in another member state with similar market share but for which no survey evidence is adduced. It is also interesting for its discussion of whether distinctiveness must be proved in every country that was a member state at the time when a contested trade mark was filed.
Case: Mondelex UK Holdings & Services Ltd v EUIPO, T-112/13.
First published in the January & February 2017 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.