Mondelez vs. Nestlé: EU Kit Kat Form trademark protection is on trial

Will Nestlé lose EU-wide brand protection for the shape of its four-finger Kit Kat bar? Competitor Mondelez has been trying to soften the protection of the 3D trademark since its registration with the EUIPO. In 2016, Mondelez was already a partial success before the European Union Court of Justice. (ECJ). EU Advocate General Melchior Wathelet has now assessed the objections of Nestlé and EUIPO.

ECJ 2016: Entry by EUIPO incorrect

In 2002, the Swiss-based food giant registered its three-dimensional “Kit Kat 4 Finger” sign with the EUIPO (European Union Intellectual Property Office) as an Union trademark. The registration took place in 2006 for the products “sweets; bakery products, fine bakery products, small pastries; cakes, waffles”. A year later, Mondelez, then still known as Cadbury Schweppes, applied for annulment of the Nestlé Union trade mark for the first time. However, the EUIPO rejected the application in 2012 on the ground that the mark was distinctive within the Union because of its use. In the next step, Mondelez went to the Court of Justice of the European Union (ECJ) and demanded the annulment of the EUIPO ruling.

On 15 December 2016, the European Court of Justice ruled that the EUIPO’s decision was incorrect because the distinctive character of the Union trademark was demonstrated for only part of the territory of the Union. In particular for the Member States Belgium, Ireland, Greece and Portugal, no examination of the perception of the trademark in the relevant public had been carried out. According to the ECJ ruling, the EUIPO had thus not been able to complete a legally valid examination.

Both Nestlé, Mondelez and EUIPO are not satisfied with the verdict

Both Mondelez and Nestlé and EUIPO have appealed the decision of the European Union Court. Mondelez does not agree with the ECJ’s finding that the 3D trademark has become distinctive in the Union countries of Denmark, Germany, Spain, France, Italy, the Netherlands, Austria, Finland, Sweden and the United Kingdom through use.

Nestlé and EUIPO, on the other hand, see the judgement as jeopardising the principle of uniformity of the Union brand and the single market. In the view of those two parties, it is not necessary for Union trade mark proprietors to prove the distinctive character of each Member State.

Advocate General Wathelet advises the European Court of Justice

Advocate General Melchior Wathelet of the European Court of Justice has now considered the facts of the case and the appeals lodged and sent his recommendation for a decision to the Court of Justice.

In his Opinion of 19 april 2018, he first referred to the Mondelez complaint. This is inadmissible because the Statute of the Court of Justice only allows appeals to be lodged by parties whose applications are wholly or at least partially unsuccessful.

Regarding Nestlé’s and EUIPO’s complaints, Wathelet notes that, in addition to the single EU market within the Union, there are still national and regional markets. Although it would not be necessary to provide explicit proof of the distinctive character of the mark for each individual market, it would have to be demonstrated that the proof of the distinctive character of the mark, which is intended to determine the distinctive character for the entire Union, corresponds to a geographically representative sample.

In the Advocate General’s opinion, therefore, evidence provided for certain national or regional markets may be sufficient to cover other markets for which no evidence has been provided. Conversely, this does not mean that the lack of proof of distinctiveness in an individual Member State can be taken as an indication of a lack of distinctiveness throughout the Union.

Nestlé fails to provide evidence for valid sample

In the present case, Nestlé disclosed information on the perception of its “Kit Kat 4 Finger” bar in the relevant public at the time of filing the Union trademark application for almost all Member States (Luxembourg only was missing). For Belgium, Ireland, Greece and Portugal, however, no explicit evidence of the distinctive character of the 3D chocolate bar mark could be provided.

According to the arguments set out in the previous paragraph, this does not, in principle, preclude the possibility of a Union-wide assessment of distinctiveness. However, Nestlé should have demonstrated that the evidence of distinctive character found in Denmark, Germany, Spain, France, Italy, the Netherlands, Austria, Finland, Sweden and the United Kingdom would also apply to the Belgian, Irish, Greek and Portuguese markets or would be valid as a sample for the rest of the Union. However, this proof was not provided.

Advocate General Melchior Wathelet therefore concludes in his opinion that the Court’s ruling is correct and proposes that he also dismiss the appeals brought by Nestlé and EUIPO.

Although the Advocate General’s recommendations are not binding on the Court, it follows them in most cases.