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European Court's Bite into Kit Kat® Leaves Nestlé with a Sour Taste

By: Ira Cohen, Esq., Partner, Henkel & Cohen, P.A., Miami
Republished from The IP Legal Browser, Spring 2019

“We have not journeyed across the centuries, across the oceans, across the mountains, across the prairies, because we are made of sugar candy.” 1

People of all ages have been greedily gobbling candy since ancient times. Traced from its dulcified roots in the form of Egyptian fruit, nut, and honey treats dating back to around 1,500 B.C., and the early Greeks’ candied fruits and flowers, the modern candy market has become a caramelized industry. Indeed, analysts expect U.S. retail sales to reach a value of $19.6 billion by 2025.2 Yet, quite apart from the sweet and syrupy sides of candy, serious businesses do gel and grow. Such business enterprises are often weighed down by, or mired in, sticky legal issues.

Chocolate bars, for their part, are a much more recent confectionary concoction, with many accounts attributing their dulcet debut to England’s Joseph Fry around 1847.3 As for the humble beginnings of the famous KIT KAT® bar, that chocolate-covered wafer bar confection dates back to around 1911, made by Rowntree’s of York in the U.K. The 4-fingered KIT KAT® bar dates back to 1935 when the treat was called Rowntree’s Chocolate Crisps.4 Later, in 1937, the candy bar was renamed Kit Kat Chocolate Crisps.5 Today, KIT KAT® rights are owned by Nestlé (worldwide) and The Hershey Co. (U.S.)6

Nestlé’s Attempt to Secure Trademark for Shape in the EU

In 2002, Nestlé endeavored to trademark the shape of the KIT KAT® bar (shown below) in the European Union (“EU”).7

In 2006, Nestlé obtained the EU trademark in connection with sweets, bakery products, pastries, biscuits, cakes and waffles.8 However, in 2007, Cadbury Schweppes plc (subsequently Cadbury Holdings, now Mondelez), a competitor which owns among other companies, Cadbury®, and makes, among other things, a Norwegian candy clone of the KIT KAT® bar called the “Kvikk Lunsj” (“Quick Lunch”) bar, filed an application with the EU’s Intellectual Property Office (“EUIPO”) to declare Nestlé’s registration invalid.9 In 2012, the EUIPO rejected Mondelez’s application and ruled that Nestlé’s mark had acquired distinctiveness through use in the EU.10 Mondelez then sued to annul the EUIPO’s decision in the General Court.11 On December 15, 2016, the General Court annulled the EUIPO’s decision. To be sure, in a matter of seemingly Everlasting Gobstopper® duration, the Nestlé case has been baking in the courts for well over a decade.

On July 25, 2018, the highest court in the EU swallowed the arguments of Mondelez ruling that, while the KIT KAT® shape was viewed as distinctive in many EU nations, consumers in Belgium, Ireland, Greece, and Portugal did not recognize it.12 The court, therefore, directed the EUIPO to reconsider its original 2006 grant of the three-dimensional mark of the KIT KAT® bar, thus, stretching out Nestlé’s licorice length war over its allegedly exclusive rights to the famous chocolate bar’s distinctive (4-fingered) shape. The tribunal’s main issue was that acquired distinctiveness was not determined in certain EU countries.13 According to the ECJ, distinctiveness must be shown “throughout the Member States” of the EU.14

The case is Joined Cases C-84/17 P Société des produits Nestlé SA v. Mondelez UK Holdings & Services Ltd, formerly Cadbury Holdings Ltd and EUIPO, C-85/17 P Mondelez UK Holdings & Services Ltd, formerly Cadbury Holdings Ltd v. EUIPO, and C-95/17 P EUIPO v. Mondelez UK Holdings & Services Ltd, formerly Cadbury Holdings Ltd.

Third Party Efforts to Trademark Candy Shape

The Nestlé case is not the first challenged attempt to protect the shape of a chocolate product. For example, in 2012, Switzerland’s Lindt & Spruengli unsuccessfully attempted to protect the shape of its chocolate Easter rabbits (which were encased in a gold foil and decorated with a red ribbon).15 Registration there was refused because the three-dimensional design lacked distinctive character.

Under U.S. trademark law, of course, a mark that consists of product design is never inherently distinctive and is not registrable on the Principal Register unless the Applicant can establish that the mark has acquired distinctiveness (i.e., secondary meaning).16 Nevertheless, in the U.S., a number of trademarks have been granted for the shapes (a.k.a. product configurations) of candies. Some of the prime examples are Tootsie Rolls®,17 Hershey’s Kisses®,18 Ring Pops®,19 M & M’s®,20 Pez®,21 and Toblerone®22 pyramidal-shaped chocolate bars. However, not all attempts to register a candy product’s shape have been successful. For example, in the U.S. case of Jelly Belly’s jelly beans, renowned jelly bean maker Jelly Belly Candy Company of Fairfield, California filed an application with the United States Patent and Trademark Office (“USPTO”) in 2015 to register the shape of its jelly beans as a mark, for candy, in International Class 30.23

The product’s shape was described to the USPTO as “a candy with a rounded squat kidney-like shape, with one longer side being a continuous arc and the opposite side have a slight depression or dimple in its arc, the center diameter and height of the candy being approximately half its length.”24 However, the USPTO refused registration, primarily on the ground that the product design was non-distinctive.25 Unable to secure registration, in 2017, the Jelly Belly Candy Company ultimately eschewed its efforts and abandoned the application.26

Conclusion

Returning to the KIT KAT® (k)ase, Nestlé is not left without any remedy. For example, it could try to register the KIT KAT® candy’s shape as a trademark on a nation-by-nation basis. That will, to be sure, be costly. However, Nestlé knows the recipe for success as it already owns such marks in Canada, France, and Australia (though its application was, in fact, chewed to pieces in Britain). Nestlé, if it so desires, can binge on trademark applications in multiple jurisdictions and, in that manner, puff up its KIT KAT® intellectual property portfolio. As the legendary Jackie Gleason might say, “how sweet it is!”

Postscript

On the eve of publication, it appears that Hershey® history is being made. This summer, a limited run (only 25 million) of chocolate bars will feature 25 emojis crafted into the rectangular “pips” of the popular candy; this is the first alteration of the iconic Hershey® bar in its 119-year run.27 Where will the candy craze stop? The next thing you know, they will have chocolate band-aids, chocolate cigars, chocolate coins, and chocolate crayons. Wait…they already do.28 What’s in your candy jar?

Ira Cohen, Esq., B.A., J.D., LL.M., is a partner of Henkel & Cohen, P.A. of Miami, FL. He is a member of the Florida and New York Bars and has been practicing law for over 36 years. He is on the Board of the IPLS of the FBA. He is rated AV® PREEMINENT by Martindale Hubbell®. Ira served as Judicial Law Clerk to the Honorable Harold J. Raby, United States Magistrate Judge for the Southern District of New York (1982-85). He is a proud Sustaining Member of the Federal Bar Association, as well as a Fellow of the Foundation of the Federal Bar Association.

Endnotes:

1Sir Winston Churchill to the Canadian Parliament (Dec. 30, 1941).

2See “U.S. Candy Market Size Worth $19.6 Billion by 2025,” www.grandviewresearch.com/press-release/us-candy-market-analysis (last visited July 31, 2018).

3See, e.g., “The Origins and History of Candy,” www.candyhistory.net/candy-origin (last visited July 31, 2018).

4See “Kit Kat,” www.nestle.com/investors/brand-focus/kitkat (last visited July 31, 2018).

5Id.

6See Wikipedia definition for Kit Kat, at https://en.wikipedia.org/wiki/Kit_Kat (last visited Aug. 3, 2018).

7See Judgment in Joined Cases C-84/17 P, C-85/17 P and C-95/17 P (July 25, 2018) (“2018 Judgment”) at p. 4, at http://curia.europa.eu/juris/document/document_print.jst?doclang=EN&text=&pageIndex=0&mode=doc&docid=204401&occ=first&dir=&cid=326966 (last visited July 31, 2018) (EU registration sought on Mar. 21, 2002).

82018 Judgment, at p. 4.

92018 Judgment, at p. 4.

10See Court of Justice of the European Union, Press Release No. 116/18, “EUIPO must reconsider whether the three-dimensional shape of a ‘4 Finger KitKat’ can be retained as an EU trade mark,” at https://curia.europa.eu/jcms/upload/docs/application/pdf/2018-07/cp180116en.pdf (last visited Aug. 3, 2018).

11See id.

12See id.

132018 Judgment, at p. 13 (“the Board of Appeal found that the mark at issue had acquired distinctive character through use . . . without adjudicating on whether that mark had acquired such distinctive character in Belgium, Ireland, Greece and Portugal.”)

142018 Judgment, at p. 12 (stating that a mark can be registered “only if it is proved that it has acquired distinctive character through use throughout the territory of the European Union . . . the evidence submitted must be capable of establishing such acquisition throughout the Member States of the European Union.”)

15See “Chocolatiers Lindt Loses Final Appeal to Trademark Golden Easter Bunnies,” at www.npr.org/sections/thetwo-way/2013/03/28/175595080/chocolatiers-lindt-loses-final-appeal-to-trademark-golden-easter-bunnies” (last visited July 31, 2018).

16

17U.S. Trademark Reg. No. 1516573.

18U.S. Trademark Reg. No. 3028381.

19U.S. Trademark Reg. No. 1846873.

20U.S. Trademark Reg. No. 3352029.

21U.S. Trademark Reg. No. 4036685.

22

23USPTO App. Serial No. 86/851526, filed Dec. 16, 2015 (abandoned Aug. 16, 2017).

24See tsdr.uspto.gov, App. Serial No. 86/851526 filed Dec. 16, 2015.

25See tsdr.uspto.gov, Office Action dated Feb. 15, 2017 (“Registration is refused because the applied-for mark . . . does not function as a trademark to indicate the source of applicant’s goods and to identify and distinguish them from others.”).

26See tsdr.uspto.gov, Notice of Abandonment dated Sept. 14, 2017.

27See “Hershey’s is changing the look of its candy bar for the first time in history,” Valinsky, Jordan, CNN Business, https://www.cnn.com/2019/05/15/business/hersheys-chocolate-emoji-redesign/index.html, retrieved May 15, 2019.

28See website of Candy Concepts, Inc. of Pewaukee, WI, www.candyconceptsinc.com/Shaped-Candy_c_1794.html, retrieved May 15, 2019.

 

About Henkel & Cohen

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