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Thursday, 2 March 2017

"Kit Kat" finger shape marks: this time in Singapore


The Singapore Court of Appeal in Societe Des Produits Nestlé SA and anor v Petra Foods Limited and anor [2016] SGCA 64 recently affirmed a previous High Court decision that Nestlé’s two-finger and four-finger shape marks (the “Shape Marks”) are not registrable. This decision comes after the English Courts had similarly refused the registration of the same Shape Marks in the United Kingdom. Kat Friends, Lau Kok Keng and Nicholas Lauw. partners, and Leow Jiamin, associate, of Rajah & Tann Singapore, have kindly shared their thoughts on this decision.

The Applicant, Societe Des Produits Nestlé SA (“Nestlé”) are the manufacturers of “Kit Kat” chocolate. Nestle had registered its Shape Marks in Singapore in January 2000 on the basis of having “acquired distinctiveness through use since the 1970s”. The Respondents were Petra Foods Limited (“Petra”), and its Singapore subsidiary Delfi Singapore Pte Ltd (“Delfi”), the importer and distributor of the two-finger and four-finger “Take-It” chocolate product. Nestlé had commenced suit against the Respondents for, inter alia, infringing the Shape Marks, and in 2014 the High Court 2014 dismissed the action. The two-finger and four-finger Shape Marks in question are:

The Singapore Court of Appeal held as follows:

(1) The Shape Marks lacked inherent distinctiveness and had not acquired distinctiveness.

(2) The Shape Marks were not registrable under s 7(3)(b) of the TMA as each essential feature was necessary to obtain a technical result.

(3) Even if the Shape Marks were validly registered, they were never put to genuine use and the Shape Marks are liable to be revoked for non-use under s22(1) of the TMA.

(4) Since the Shape Marks were not registrable under s7 of the TMA, they could not be protected as well-known trade marks.

We summarise some of the more salient principles enunciated by the Court of Appeal.

Inherent distinctiveness

The Court of Appeal laid down some general principles regarding how to assess inherent distinctiveness. First, it must be assessed by reference to the goods / services for which registration is sought and the appearance of the mark must convey trade mark significance. The question is whether the average consumer would appreciate the trade mark significance of the mark, without being educated, that it is being used as a trade mark. Here, the Court of Appeal held that the Shape Marks were not inherently distinctive. There was no evidence that traders in the chocolate confectionery sector differentiated their products by varying the shapes of their products, nor that the average customer appreciated that the Shape Marks conveyed trade mark significance.

Acquired distinctiveness

For a mark to acquire distinctiveness through use, mere association of the sign with the trader is not sufficient. The question is whether the average consumer treats the sign in question as a guarantee of origin. A consumer does not see the actual shape of Kit Kat until he or she purchases the product and opens the wrapping, although a representation of the shape of the product is printed on the wrapping. The Court of Appeal opined that trade mark law does not shut out signs that are not visible at the point of sale, and 2D representations of a 3D shape mark on the product packaging and marketing materials may facilitate awareness of the shape mark if the essential features are present.

The Court of Appeal also made a reference to “limping” marks (i.e., marks that have been always used alongside other marks). Without expressly finding that the Shape Mark was a “limping mark”, the Court of Appeal stated that where “limping” marks have never been used as a sole badge of origin, this tends to lead to the inference that the trader does not depend on the mark standing alone. To overcome this, the trader would have to show that the “limping” mark had acquired distinctiveness. This seems to be a difficult hurdle to overcome. The Court of Appeal pointed to the Australian case of Chocolaterie Guylian NV v Registrar of Trade Marks [2009] FCA 891, where customers who were shown the seahorse shape had related the shape to Guylian, but the Federal Court of Australia held that it was not sufficient evidence that the seahorse shape performed the function of distinguishing Guylian’s chocolate.

Survey evidence

To prove its case, Nestlé had conducted market surveys for each of the Shape Marks. The Court of Appeal had some concerns with the surveys conducted, and offered some useful guidance. Firstly, the Court of Appeal agreed with the High Court’s criticism that the surveys had been confined to those who (amongst other things) “ate chocolate covered wafer in the past week and also at least on a weekly basis”, even though the relevant consumer of the goods would be the general public. Further, leading questions were asked in the survey.

Secondly, the Court of Appeal indicated that merely showing a mock-up of the Shape Marks and asking participants of a survey what “came to mind”, or “what this product makes [one] think of”, failed to show that consumers regarded the Shape Marks as indicators of origin. Such questions at best only show that the consumers associate the Shape Marks with Kit Kat and/or Nestlé, which is insufficient to establish acquired distinctiveness.

Technical evidence

Under s 7(3)(b) of the TMA, a trade mark shall not be registered if it consists exclusively of the shape of goods which is necessary to obtain a technical result (the “technical result” prohibition). Petra and Delfi argued that the “plinth” (i.e., the base of the Shape Marks) of the Shape Mark fell under this prohibition.

There are two steps in ascertaining whether a shape mark is caught by the “technical result” prohibition– first, the essential features must be identified, and second, a determination of whether each and every essential feature performs a technical function. The key point made by the Court of Appeal was that essential features are identified by a simple visual analysis of the sign from the perspective of the average consumer, and not from technical evidence from experts.

The “technical result” prohibition

Nestlé argued that the “technical result” prohibition only prevented registration of marks whose essential features perform technical functions attributed to the functionality of the goods. However, the Court of Appeal agreed with the Respondents, who maintained that because the essential features of the Shape Marks performed a technical function not in the functionality of the goods, but in the process of manufacturing the product, the Shape Marks fell within the “technical result” prohibition. The Court of Appeal stated that since patent law already protected products and manufacturing process, such processes should not be protected by trade mark law.

In response to this Court of Appeal decision, the Intellectual Property Office of Singapore recently issued a circular (Circular No. 2/2017 dated24 February 2017) stating that from 1 March 2017, applicants of shape marks may be requested to state what the essential features of the shape mark are and provide relevant information on whether the identified essential features would be necessary to obtain a technical result.

Trade mark use

The Court of Appeal found that the Shape Marks were never put into genuine use in the course of trade because they were concealed in opaque packaging. In particular, the Court took issue with the fact that the Shape Marks were never used on their own at the point of sale, in advertising and promotional materials. While Nestlé argued that the Shape Mark was used in advertising and promotional materials, the Court rejected this on the basis that the word “Kit Kat” featured prominently on the product when the product was unwrapped in such situations.

Well-known trade mark

It is common to rely on well-known trade mark protection as an alternative to registered trade mark protection. The Court of Appeal clarified that a sign that is inherently unregistrable under the trade mark regime (i.e., a sign that does not constitute a trade mark) cannot be protected as a well-known mark. Here, since the Shape Marks were not registrable, as every essential feature was necessary to obtain a technical result, the Shape Marks could not be protected as well-known marks.

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