Kit Kat quandary: have the media and the majority got it wrong?

Something in common: both Kit Kat and LEGO
have come up before the CJEU for a trade mark
ruling. LEGO definitely lost.  But Nestlé ?

At the very end of August, this weblog hosted a guest comment by a German attorney, Thomas Farkas, in which he gave a strikingly positive slant to the deeper meaning of Advocate General Wathelet's Opinion in the controversial Nestlé v Cadbury dispute over registration of the three-dimensional shape of the Nestlé Kit Kat chocolate biscuit bar.  Last week the Court of Justice of the European Union (CJEU) gave its definitive ruling, noted by fellow Kat Eleonora here. The media instantly concluded that it's the end of the road for Nestlé's quest for registration, and the uncertainties as to what precisely the Court meant have led to this blog's sidebar poll on what the referring judge, Mr Justice Arnold, should do.  Meanwhile, Thomas Farkas has sprung up again to offer a further, highly positive interpretation of the words of the CJEU, arguing that the Nestlé application should now be allowed to succeed.  This is what he writes:

"There have been a number of controversial comments on the interpretation of last Wednesdays‘ judgment of the Court of Justice of the European Union (CJEU) on the KitKat shape (judgment of 16 September 2015, C-215/14). Some comments even view the judgment as a setback for Nestlé (see eg BBC here and City AM here). This guest contributor believes that those commentators have misunderstood the judgment.

First, the CJEU clearly strengthens the position of owners of non-traditional trade marks by confirming in the answer on question 2 that the registration of a shape can only be refused if one of the grounds of refusal of Article 3(1)(e) of the Trade Mark Directive (TMD) is fully applicable, thereby rejecting the position that a shape consisting of three essential features can be denied registration if feature 1 results from the nature of the goods and features 2 and 3 are necessary to obtain a technical result.

Further, the CJEU answers question 3 in favour of the trade mark owner. The CJEU clearly holds that the manufacturing method is not decisive in the context of the assessment of the essential functional characteristics of the shape of the goods either. The CJEU ruling is therefore that trade marks for product shapes cannot be denied registration under Article 3(1)(e)(ii) TMD on the ground that the shape is necessary to obtain a technical result with regard to the manner in which the product is manufactured.

With those answers to questions 2 and 3 the CJEU removes two obstacles of registration of Nestlé’s KitKat four-finger shape construed by the UK IPO.

Finally, on question 1 the CJEU rephrased the question of Mr Justice Arnold without any reference to the “reliance” criterion and it answered without any reference to “reliance” either. In this way, the court made clear that the reliance criterion is not a requirement which is relevant under harmonized trade mark law. In answering the question, the CJEU restated the principles established in its earlier jurisprudence, in particular the Colloseum case (judgment of 18 April 2013, C-12/12). I had indicated already in my comment of 30 August 2015 on the opinion of AG Wathelet, that Colloseum is the key to this case too. 

A read of paragraphs 64-66 of the KitKat judgment now reveals, that, as in Colloseum, it will suffice that the mark for which registration is sought is – in real life – one of multiple indicators of origin. A product shape mark will have acquired distinctiveness if it is demonstrated that the mark enables the consumer to attribute the product to a particular manufacturer. If, in the case before the UK IPO, the survey taken related to the mark applied for on its own, with a picture of the four-finger shape in the absence of any markings other than the shape, and a relevant proportion of the consumers were able to identify the product in the that shape as coming from one particular company, the proof as required by the CJEU in its answer to question 1 should be established."