Intellectual Property – Trade Marks – Distinctive Character Test – Landmark Decision

The recent decision by the European Court of Justice ("ECJ") in Societé des Produits Nestlé SA v Mars UK Ltd [2005], makes it easier for trade mark owners to satisfy the distinctive character test when applying for registration of their trade marks. The ECJ decided that the necessary distinctive character required for a trade mark registration can be acquired as a consequence of its use as part of another registered trade mark provided that an average, well-informed consumer would deem it to be distinctive of its trade origin.

Nestlé owns the UK registered trade marks, KIT KAT and HAVE A BREAK... HAVE A KIT KAT in class 30 in respect of chocolate, confectionary, candy and biscuits. In 1995, Nestlé applied to the UK Trade Marks Registry to register the phrase HAVE A BREAK as a separate trade mark in class 30 in respect of chocolate, confectionary, candy and biscuits. The mark HAVE A BREAK was accepted by the Trade Marks Registry and published for opposition purposes. The mark was opposed by Mars UK Limited on the grounds that the mark was devoid of distinctive character relying in particular on art 3(1)(b) of First Council Directive (EEC) 89/104 ("the Directive") (to approximate the laws of the member states relating to trade marks).

Art (3)(1)(b) of the Directive, (as well as s3(1)(b) of the Trade Marks Act 1994) provides that trade marks devoid of distinctive character shall not be registered. An exception arises where "... before the date of application for registration and following the use which has been made of it, the mark has acquired a distinctive character (Art 3(3))".

As a result, the opposition was upheld and Nestle's application for registration of the mark HAVE A BREAK was rejected. Nestle appealed to the High Court. This appeal was dismissed and Nestle appealed to the Court of Appeal. The Court of Appeal had to consider:-

 Whether the expression HAVE A BREAK was devoid of inherent distinctive character under art 3(1)(b) of the Directive rendering the expression unregistrable.

 Whether registration of HAVE A BREAK might occur only on the basis of art 3(3) of the Directive, subject to proof of distinctive character acquired through use i.e. whether the mark HAVE A BREAK had acquired distinctiveness through the use of the mark HAVE A BREAK... HAVE A KIT KAT. This meant that if the mark had acquired distinctiveness as a result of its use, then it would be registrable.

 The Court of Appeal highlighted that the application had been rejected on the ground that the phrase HAVE A BREAK was essentially used as part of the registered mark HAVE A BREAK... HAVE A KIT KAT and not, genuinely, as an independent trade mark.

 Nestle's submission that this decision could have serious consequences for trade mark owners seeking to register marks comprising shapes since such marks were seldom used by themselves, and considered that a slogan-like phrase associated with a trade mark might, by repetition over time, create a separate and independent impression and thus acquire distinctive character through use.

 As a result, the Court of Appeal decided to stay proceedings and refer to the Court of Justice of the European Communities for preliminary ruling the question whether the distinctive character of a mark referred to in art 3(3) of the Directive might be acquired following or in consequence of the use of that mark as part of or in conjunction with another mark.

The ECJ ruled:

 The distinctive character of a mark referred to in art 3(3) of the Directive might be acquired in consequence of the use of that mark as part of or in conjunction with a registered trade mark.

 Whether inherent or acquired through use, distinctive character had to be assessed in relation, on the one hand, to the goods or services in respect of which registration was applied for and, on the other, to the presumed expectations of an average consumer of the category of goods or services in question, who was reasonably well-informed and reasonably observant and circumspect.

 In relation to acquisition of distinctive character through use, the identification, by the relevant class of persons, of the product or service as originating from a given undertaking had to be as a result of the use of the mark as a trade mark. In order for the latter condition, which was a central issue in this case, to be satisfied, the mark in respect of which registration was sought need not necessarily have been used independently.

 Art 3(3) of the Directive contained no restriction in that regard, referring solely to the 'use which has been made' of the mark. The expression 'use of the mark as a trade mark' had therefore to be understood as referring solely to the use of the mark for the purposes of the identification, by the relevant class of persons, of the product or service as originating from a given undertaking. Such identification, and thus acquisition of distinctive character, might be as a result both of the use, as part of a registered trade mark, of a component and of the use of a separate mark in conjunction with a registered trade mark.

 In both cases it was sufficient that, in consequence of such use, the relevant class of persons actually perceived the product or service, designated exclusively by the mark applied for, as originating from a given undertaking.

Comment:

 The main points arising from the decision that trade mark owners should be aware of are:

o A mark could acquire the necessary distinctive character when used as part of another phrase or trade mark;

o Distinctive character must be assessed in relation to the goods and services concerned and the presumed expectations of an average, well-informed consumer;

o Art 3(3) contains no restriction on the way in which any mark has gained its distinctive character; and

o It is therefore possible for this distinctive nature to be achieved through the use of the phrase HAVE A BREAK as part of the larger mark HAVE A BREAK... HAVE A KIT KAT.

 The decision must be applied to the facts by the Court of Appeal. However, the ECJ has made it clear that there is no requirement for a mark to be used independently in order for it to obtain a sufficient level of distinctive character to be registered as a trade mark.

 This decision has completely changed the English court's approach to the question of distinctiveness when marks are used together. The English court's approach was problematic for owners of non-conventional marks such as slogans, shapes or colours which are rarely used on their own. Use of the combination will now be taken into account when judging whether any individual element is registrable. This decision will be applied in all European Union Countries.

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© RT COOPERS, 2005. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.

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