IP expert Gill Grassie discusses the English Court of Appeal’s refusal to register Nestlé’s KitKat shape.

Nestlé, as owner of the KitKat brand, has lost its latest battle in a seven-year war to obtain a UK trade mark registration for the shape of its four-finger chocolate bar. The English Court of Appeal yesterday upheld the High Court’s previous decision and refused the mark on grounds that it lacked acquired distinctiveness – essentially finding that consumers do not rely on the shape as informing their choice to buy it.

Registration of shape marks has been possible for a long time now but it is not an easy goal to achieve. Why should someone be able to monopolise a shape even if only for a particular type of product?

Toblerone is one example that succeeded. However there have been many other failed attempts such as the Rubik’s Cube shape. Its trade mark was invalidated by the Court of Justice of the European Union last year, albeit for different reasons – its shape involved a technical solution and was excluded from qualifying. Essentially, for Nestle’s case to succeed the shape alone must be demonstrated to be the brand and to flag to the consumer that the product is a KitKat.

Consumers must rely on it to make their choice to buy it as opposed to other products. According to the court, the evidence did not demonstrate that this is the case and showed that KitKat had never used the shape alone to promote the wafer bar.

This latest decision means that competitors can now market lookalike four-finger chocolate bars with less fear of being sued. However, Nestlé may well not give up and could pursue an appeal to the UK Supreme court if there are grounds to do so.

Interestingly, this decision flies in the face of one recently made by the EU General Court which, although it too refused to grant a European Union trade mark for the shape mark, did find that Nestlé had established that the evidence showed that it had met the test for acquired distinctiveness in the UK. That decision was not, of course, binding on the UK courts but shows an inconsistency in the approach.

This long-running case demonstrates just how valuable trade marks can be to a business given the sheer amount of litigation and costs that it must have taken to get to this stage. As good trademarks can potentially last forever they can be the most valuable asset on a balance sheet and are a significant monopoly right.