23 May 2017
After months of deliberating the Court of Appeal this week refused Nestlé’s attempt to trade mark the shape of its four-fingered KitKat bar, upholding the High Court’s prior ruling. The 16,000 word judgment is the latest development in this long-running dispute with its rival Cadbury and is a big blow to Nestlé.
The Court did not accept Nestlé’s arguments that the shape of the bar is unique and has acquired distinctiveness. The judges noted that the shape of the bar had not been central to Nestlé’s marketing of the product for many years, meaning that the shape was unrelated to decisions made by consumers about whether to purchase the KitKat bar.
Cadbury’s arguments were bolstered by the existence of a Norwegian chocolate bar called Kvikk Lunsj, which also has a four fingered rectangular design. The Kvikk Lunsj bar has been on the market since the 1930s.
Nestlé’s frustration at the judgment will lie with the fact that other manufacturers and supermarkets will have greater chances of selling copycat chocolate bars at lower prices without Nestlé being able to stop them. This could impact Nestlé’s sales and profits.
The case highlights the high threshold for the registration of trade marks in the form of shapes, despite shape registrations becoming of increasing importance to brand owners. There must be clear evidence that consumers rely on the shape of a product to identify its origin before a Court will grant such monopoly rights.
However, this is unlikely to be the last stage of this saga, as Nestlé may appeal to the Supreme Court. Nestlé’s representatives have already expressed their disappointment in the ruling and said that the company is considering its options.
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