A ruling by the European Court of Justice (CJEU) in July 2018 confirmed that applicants trying to obtain an EU trade mark (EUTM) based on use must prove distinctiveness in every Member State. The ruling arose in connection with Nestlé’s four finger product shape, but it is relevant whenever an applicant is relying on acquired distinctiveness, for example in relation to a descriptive mark.
Registration based on use
As brand owners are all too aware, marks which are not considered distinctive enough in themselves cannot in principle be registered as trade marks. They may, however, be saved by proving that they have in fact become identified with the applicant in the market through use (‘acquired distinctiveness’). Product shape marks - such as the four fingered KitKat in issue in this case - are particularly vulnerable to objections of lack of distinctiveness, because customers may regard them as characteristics of the goods rather than as indicating trade origin.
Evidence of use
Preparing evidence of use is a major undertaking which requires the gathering of information from across the business, the preparation of witness statements and, in some cases, surveys. The task has grown exponentially in the case of the EUTM where the market now covers all 28 (shortly 27) Member States.
Brand owners are unlikely, therefore, to welcome this recent decision, which confirms that the applicant must provide evidence to show that the mark has acquired distinctive character throughout the European Union, and “not only in a substantial part or the majority” of that territory. The evidence does not necessarily have to be provided separately for each Member State. The Court made it clear that it might be provided globally for all the Member States or for groups of Member States, for example where distribution and marketing networks span more than one country or where the geographic, cultural or linguistic proximity between two countries means that the public in one has sufficient knowledge of products and services in the other. However, the evidence must be capable of establishing distinctiveness in every Member State, and applicants will be well advised to make it absolutely clear in their submissions how this is achieved.
Importance of the case
The case provides greater certainty for trade mark applicants by clarifying the nature of the evidence required, a subject about which there had been some uncertainty. It makes it clear, however, that the evidential burden is very high. This may affect filing strategies in the future by encouraging applicants to focus on national marks in key markets where evidence is likely to be easier to produce.
Background to the KitKat case
The case in question involved the KitKat four finger mark. In March 2002, Nestlé had filed an application for registration of the three-dimensional four finger mark at the EUIPO for, among other things, sweets and biscuits. It submitted survey evidence covering 10 of the 15 Member States at that time and the mark was registered in July 2006. However, in March 2007 Cadbury (now Mondelez) filed an application for invalidity arguing that the evidence of use had been insufficient. Crucially that evidence does not appear to have covered Belgium, Ireland, Greece or Portugal. The case now goes back to the Board of Appeal for reconsideration.
Readers may be aware that Nestlé had also submitted a parallel UK national application for the four finger mark. This was rejected by the UK Intellectual Property Office (IPO), and the English Court of Appeal upheld the IPO’s decision in July 2017, finding that the evidence submitted did not establish distinctiveness in the UK. It is interesting that this conflicts with the view at the EUIPO, which held the UK to be one of the countries where distinctiveness had indeed been established. This may be a reflection on the subtle nature of the test for acquired distinctiveness in the case of product shapes where the applicant must show that members of the public perceive the shape as a badge of origin, a difficult point to adjudicate.