IP Review Winter 2018/19

7 6 Protecting unusual trade marks It has generally been quite difficult to register non-traditional trade marks, for example, those marks which are characterised by shapes, colours, positions on a product and sounds. Whilst there have been well-known successes in this area, such as the distinctive shape of a Toblerone chocolate bar, the blue of Tiffany & Co.’s jewellery boxes and the roaring lion at the beginning of Metro-Goldwyn-Mayer films, many companies have failed in their own efforts to register such marks. However, there have been a number of cases which have helped to set out the requirements for registration of non-traditional marks and which have given greater clarity to applicants. A key case for this was the recent KitKat decision. Trade Marks Four strikes and you’re out An encouraging development regarding the registration of shape marks was unwrapped by the Court of Justice of the European Union (“CJEU”) in the latest KitKat decision issued in July 2018. The CJEU’s dismissal of Nestlé’s claim that its iconic four- fingered chocolate bar, pictured below, had acquired distinctiveness throughout the European Union (“EU”), thus capable of trade mark registration, appeared to be a major setback for Nestlé. On closer inspection, however, the decision provides valuable guidance to brand owners seeking to overcome the legal hurdle of obtaining an EU trade mark (“EUTM”) comprising a shape mark. Not what Nestlé bar-gained for In March 2007, Cadbury Schweppes plc (subsequently Cadbury Holdings, now Mondelez) applied to invalidate the resulting registration on the basis that it is devoid of any distinctive character and not suitable for registration. However, there is an exception for marks that have become distinctive through use. Nestlé relied on this provision. In a decision issued in January 2011, the Cancellation Division of the EUIPO declared the mark invalid. On appeal by Nestlé, the Board of Appeal (“BoA”) considered that although the mark at issue was devoid of any inherent distinctive character, Nestlé had shown through evidence of use of the four-fingered shape in 10 out of 15 EU Member States (as there were in 2002) that it had acquired distinctiveness throughout the EU. The General Court subsequently annulled the BoA’s decision, agreeing with the Cancellation Division that Nestle had not demonstrated acquired distinctiveness in Belgium, Greece, Ireland, Portugal and Luxembourg. Therefore, Nestlé could not substantiate its claim to acquired distinctiveness throughout the EU. Nestlé appealed to the CJEU, alleging that the General Court’s interpretation that it is a requirement to show acquired distinctiveness in each Member State was incompatible with the principle of the EU single market and the unitary character of the EUTM. Nestlé caught in a choc-hold The CJEU upheld the General Court’s judgment, finding that a mark absent inherent distinctive character can only be registered as an EUTM if the evidence demonstrating acquired distinctiveness is shown across - and not just for a substantial part or majority of - the EU. If the evidence of use fails to cover a part of the EU, be it insubstantial or even just a single Member State, then acquired distinctiveness cannot be made out. However, the CJEU stressed that it is not necessary to prove acquired distinctiveness in every Member State if: 1. Several Member States had been grouped together as a single market for distribution or marketing purposes; or 2. Due to a geographic, cultural or linguistic proximity between two Member States, the relevant public in Member State 1 has a sufficient knowledge of the products and services present on the national market of Member State 2. Therefore, evidence of use originating from Member State 1 should suffice. In other words, we now know that it is possible to overcome the legal hurdle for proving acquired distinctiveness throughout the EU by extrapolating evidence from one Member State to another as long as there is cross-border market comparability. Crunch time Nestlé’s case will now be re-examined by the BoA. If the BoA maintains the mark’s refusal, one solution available to Nestlé would be to ‘convert’ the EUTM into individual national trade mark applications in the countries in which sufficient evidence of acquired distinctiveness was demonstrated. Alternatively, Nestlé could re-file the same trade mark, but with revised evidence of use in light of the CJEU’s ruling. Brand owners seeking to register inherently non-distinctive trade marks, such as 3D shapes, need to remember that evidence in the form of advertising and marketing material in every Member State is not a necessary pre-condition for proving acquired distinctiveness. Instead, the evidence could be formulated around regional markets, such as the Nordics (Scandinavia, Finland and Iceland), Iberian Peninsula (Spain and Portugal), Baltic States (Estonia, Latvia and Lithuania) and CEE (Central and Eastern Europe). Based on the CJEU’s guidance, it would appear that evidence in one or two of each category of countries may well be sufficient to demonstrate acquired distinctiveness throughout the EU. Alternatively, in instances where this ‘grouping’ strategy may not suffice for a particular Member State, brand owners can rely on evidence in markets in which consumers are closely connected culturally, such as Germany with Austria. Bittersweet narrative for non-traditional trade marks Nestlé is not alone when it comes to unsuccessfully obtaining a registration for non-traditional trade marks. Colour and position marks also fall under this category and are notoriously difficult to register in the UK and enforce in the EU post-registration. Red Bull’s double stripe and Christian Louboutin’s red shoe sole are two of many high- profile cases involving a defeat for non-traditional trade marks. The very nature of trade marks is evolving in the digital era and trade mark law needs to keep up the pace (the EU now accepts multimedia files for sound and moving image trade marks and the UK is set to do the same in January 2019). As recent decisions of the UK and EU courts have provided further clarity, we are now closer to formulating the most appropriate strategy to achieve registration for those less traditional trade marks. To find out more contact Mark Caddle mcaddle@withersrogers.com Pollyanna Savva psavva@withersrogers.com In March 2002, Nestlé registered as an EUTM the following three- dimensional mark with the EU Intellectual Property Office (“EUIPO”) in respect of sweets; bakery products, pastries, biscuits; cakes, waffles in Class 30: IP review winter 2018/19