Product shape and acquired distinctiveness: possible registration of the KIT KAT trademark

On 16 September 2015, the Court of Justice of the European Union (CJEU) delivered its long-awaited judgment (case C-215/14) on the referral for a preliminary ruling made by the High Court of Justice of England & Wales concerning whether it was possible to register the shape of Kit Kat chocolate wafers as a trademark: 

Nestlé had filed an application for registration of the mark with the UK Trademark Office.  However, the Office accepted an opposition lodged by Cadbury and refused the application on the grounds that it had not been sufficiently demonstrated that the mark had acquired distinctive character.  It considered that the shape that had been applied for had three features, as follows:  

• The basic rectangular slab shape; 
• The presence, position and depth of the grooves running along the length of the bar; and
• The number of grooves which, together with the width of the bar, determine the number of ‘fingers’.

According to the UK Office, the first of those features was a shape that derived from the very nature of the goods claimed (with the exception of cakes and pastries), and the other two were necessary to obtain a technical result.

That decision was appealed to the High Court of Justice, which found that there was not enough case-law from the Court of Justice in respect of the issues that had been raised, and therefore made a referral for a preliminary ruling.  In its judgment, the CJEU changes the order of the three questions that had been referred to it, and first of all examines the question concerning the possibility of cumulatively applying the bar to registration of signs consisting of the shape of goods where that shape is imposed by the nature of the product and where it is necessary to obtain a technical result.  The reasoning behind this change of order is that a sign to which that ground for refusal applies can never acquire distinctive character through use. 

In that regard, the CJEU reiterates the legal doctrine established in the recent Hauck judgment, C 205/13, EU:C:2014:2233 (Tripp-Trapp chair), in the sense that the three particular grounds for refusing to register product shapes operate independently of one another. Therefore, in the Court’s view it is irrelevant whether a certain shape could be denied registration on the basis of a number of grounds, and it will suffice for just one of those grounds to be fully applicable to the shape in question in order for registration to be denied.

As the Advocate General had explained in points 65 and 66 of his Opinion of 11 June 2015, what the CJEU had precluded in the Hauck judgment was the possibility of applying the three different grounds for refusal in combination, but not the possibility of applying them cumulatively, provided that at least one of those grounds fully affects the sign in question.

A new Patent Act … In two years' time? (I)

Publication this summer of the new Patent Act, Act no. 24/2015 (in Spanish) of 24 July 2015, in the Official State Gazette (BOE) has resulted in the appearance of a flurry of urgent commentary and reviews in a wide range of different media outlets. This reaction comes as a bit of a surprise: while all law reform is newsworthy, what we have in this case is an Act that will not come into force until … 1 April 2017!!

This unusually protracted vacatio legis (22 months) highlights the far-reaching scope of the revision while at the same time likewise attesting to prudence on the part of lawmakers.

Not only will industry need some time to adapt, because certain changes (e.g., the change-over to a single system for grant involving the preliminary examination of all patent applications) will require major adjustments to current thinking and practice, but implementing the changes will require the Administration to undertake its own re-organization, with no room for improvisation.

For once the government is to be commended for not rushing headlong to put a law on the statute books when enforcement will hinge on a particularly arduous process of setting up the requisite implementing regulations. The painful examples of other, premature reform attempts (copyright, for instance?) are still with us.

The delay, amply justified as it is for the broad sweep of administrative adjustments needed by the Patent Office, is more vexing when it comes to other areas. As it evolved, the new Patent Act came to contain more and more changes bearing on legal proceedings and procedure. In the end, unexpectedly, the Act ushers in a whole aggiornamento addressing patent litigation proceedings (with collateral effects extending to other types of industrial property), so it will be bound to resonate. It is indeed unfortunate that we will be kept on tenterhooks for so long awaiting the tantalizing prospects for legal proceedings that the Act holds out to us.

ELZABURU will be reviewing and assessing the new Act in a series of posts that will be appearing on our blog in the coming weeks for our clients, colleagues, and friends. Until then, we can look forward with expectation to this new Act, that will be so long in coming, like a long-awaited dish of a favourite food.

Blog entries dealing with the new Patent Act:

I. A new Patent Act … In two years' time? (Antonio Castán)

II. 180º turn in Spain's system of granting patents  (Francisco J. Sáez)

III. The importance of professional advice (Francisco J. Sáez)

IV. Lawsuits under the new Patent Act (Antonio Castán)
V. Utility models under the new Patent Act (Pedro Saturio)

Author: Antonio Castán

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Good news for owners of reputed trademarks

TRADEMARKS HAVING A REPUTATION IN CERTAIN EU COUNTRIES MAY ALSO BE ENFORCED IN COUNTRIES WHERE THEY DO NOT HAVE A REPUTATION

In its judgment of 3 September 2015 in the matter of Iron & Smith kft/Unilever (Case C-125/14), the Court of Justice of the European Union ruled on an interesting question referred by a Hungarian court concerning the territorial effect of the reputation of a Community trademark under Article 4.3 of Directive 2008/95 (refusal of a trademark application conflicting with an earlier Community trademark having a reputation but covering different goods). At issue was whether the reputation of a Community trademark in certain EU countries could also be relied on and have legal effect in other EU countries in which the mark was not reputed.

Happy-go-lucky European citizens will lose no sleep over the question raised by the Hungarian court, but to IP practitioners the issue is intriguing, since it is directly related to those two pillars of the EU trademark system, namely, the unitary character of the Community trademark and the co-existence of that system with the various national systems.

These two principles are firmly enshrined in the Community Trade Mark Regulation and underpin the EU's trademark system, but day-to-day practice can give rise to interesting, hard-to-assess issues like the one raised by the Hungarian court in its referral, since grand principles and doctrines tend not to be so clear-cut and helpful when it comes down to dealing with individual cases in the context of local market realities.

The unitary character of the Community trademark means that it shall have equal effect throughout the European Union, as expressly laid down in Article 1 of the Community Trade Mark Regulation. The wording "equal effect" should mean not only that a registration as such is formally in force in the 28 Member States of the European Union but also that the rights conferred on its owner, jus prohibendi chief among them, are equally effective throughout the European Union.

In the case at hand, the Court of Justice was asked to rule on whether the prohibitive rights of action emanating from the reputation enjoyed by a Community trademark reputed in certain countries could also be wielded in other EU countries in which the mark did not have a reputation. In the case before the Hungarian court that referred the question for a ruling, an earlier Community trademark opposing a later trademark application had a reputation in the United Kingdom and Italy but not in Hungary, where the new application had been filed. As the Hungarian court adroitly noted, the question displayed certain similarities with the controversy surrounding the issue of Community trademark use and the territorial scope of use that was to be deemed sufficient, a question on which the CJEU had already ruled, chiefly in the Leno Case (C-149/11). The Court has held that a trademark's reputation needs to be assessed on its own terms, not necessarily the same ones used to assess use.

The Court's judgment is tightly argued and clearer than usual. So, setting aside its customary vagueness, the Court has ruled straightforwardly that:

1. If the reputation of an earlier Community mark is established in a substantial part of the European Union, which may in some circumstances coincide with the territory of a single Member State, the said earlier Community trademark is to be held to have a reputation in the European Union as a whole.
2. The principles concerning genuine use of Community trademarks laid down by the case law are not necessarily relevant for the purpose of establishing the existence of a reputation.
3. A Community trademark having a reputation may benefit from the extended protection specified for reputed marks in the Directive, even in a Member State in which it does not enjoy a reputation, where it is shown that a commercially significant part of the public is familiar with the mark and makes a connection between it and a later national mark and there is either actual and present injury to the Community trademark or there is a serious risk that such injury enjoy may occur in the future.

A Community trademark having a reputation can thus enjoy the extended protection conferred on reputed trademarks even in those countries in which it is not considered reputed, provided that certain conditions relating to actual and present injury are fulfilled, as the case law has in fact already been requiring even in those territories in which the reputation of an earlier mark is beyond question, as, for instance, in the judgments in the General Motors (C-375/97) and Royal Shakespeare (T-60/10) Cases.

Author: José Ignacio San Martín

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