BRUSSELS: Nestlé risks seeing competitors imitate its Kit Kat brand after the European Union's second highest court annulled a 2006 ruling that granted the FMCG giant a trademark for the four-fingered shape of the chocolate bar.
The EU General Court concluded that the EU Intellectual Property Office (EUIPO) "erred in law" by not determining whether Kit Kat's shape had acquired distinctiveness in every EU member state, the Financial Times reported.
It said that when Nestlé applied for a trademark in 2002, it did not prove that Kit Kat had already gained distinctive character through use in all member states, which numbered 15 countries at that time.
It was not enough for Nestlé "to show that a significant proportion of the relevant public throughout the EU, merging all the member states and regions, perceives a mark as an indication of the commercial origin of the goods designated by the mark," the court said.
The General Court added that EUIPO had found that Kit Kat had acquired distinctive character in ten countries – Denmark, Germany, Spain, France, Italy, the Netherlands, Austria, Finland, Sweden and the UK – but not in countries including Belgium, Ireland, Greece and Portugal.
The ruling marks the latest development in a long-running dispute between Nestlé and Mondelēz International, its US rival that owns UK confectionery firm Cadbury Schweppes, which took legal action in 2007 to invalidate the EUIPO's original decision.
Nestlé is allowed to appeal against the decision in a higher court within two months and a spokesperson for the company said it would review the findings and consider its position.
"The four-finger shape has been used throughout the EU by Nestlé for decades and is known by consumers as being a Kit Kat," the spokesperson said in comments reported by Law Gazette.
"The judgement sets a high threshold for trademark applicants to register shapes as EU trademarks by requiring evidence of acquired distinctive character in all EU states."
Data sourced from Financial Times, Law Gazette; additional content by Warc staff