Kit Kat shape cleared for registration
Societe Des Produits Nestlé S.A. v ALDI Stores (A Limited Partnership)  FCA 218
On appeal to the Federal Court, the decision of the Registrar’s delegate to refuse registration of the KIT KAT shape mark1 has been set aside and the trade mark will now proceed to registration.2 The appeal proceedings are unusual in the sense that the parties, Aldi Stores (Aldi) and Societe Des Produits Nestlé SA (Nestlé), agreed to resolve the appeal by consent.
Trade Mark Application No 822780, in the name of Nestlé, was for a trade mark for the shape of chocolate confectionery, being chocolate-coated confectionery blocks or bars and chocolate-coated wafer biscuits. Aldi opposed the registration of the mark. The delegate found Aldi had made out a ground of opposition under section 41 of the Trade Marks Act (1995) and refused to register the trade mark. Nestlé appealed against the delegate’s decision and thereafter, the parties agreed to resolve the appeal by consent, asking the Court to allow the appeal so that the trade mark may proceed to registration. Nestlé produced to the Court a copy of a letter from the Deputy Registrar of Trade Marks which indicated that the Registrar had no objection to the decision of his delegate being set aside.
The basis upon which the delegate’s decision was set aside is interesting. His Honour Justice Nicholas was referred to appeals in patent matters where there had been formal acceptance of a patent and where the Commissioner of Patents would have been obliged to grant the patent but for an opposition to the grant of the patent – that is, the patent would have proceeded to grant were it not for the opposition. Taking into account the Registrar’s agreement that the delegate’s decision be set aside, His Honour Justice Nicholas said that there was nothing before the Court leading to a conclusion that the KIT KAT shape mark should not be registered and, that being so, His Honour was satisfied that the delegate’s decision be set aside and that the shape mark proceed to registration.
It is not clear from the Reasons For Judgement why the Registrar acquiesced so readily in the delegate’s decision being set aside. Obviously the Registrar – like the Court – was influenced by the parties’ agreement to resolve the appeal by consent. Like the Court, the Registrar appears to have accepted that the trade mark, having been formally accepted, and published for opposition, would have proceeded to registration were it not for the opposition lodged by Aldi.
However, it may be the case that other factors influenced the Registrar in consenting to the trade mark proceeding to registration and a re-reading of the delegate’s decision provides some possible reasons for the Registrar’s willingness to consent to the registration of the trade mark. In the first place, in the opposition proceedings before the delegate Nestlé placed some emphasis on a decision of the Assistant Commissioner of Trade Marks in New Zealand in relation to the alleged functionality of the KIT KAT shape mark3. In the New Zealand proceedings, the Assistant Commissioner concluded that the features of the KIT KAT shape were not entirely functional. Said the Assistant Commissioner, “to my eye the shapes … incorporate an element of style … (C)onsequently I do not regard the shapes in question as being incapable of distinguishing or as being inherently generic … and I consider that (they) qualify as trade marks …” Notwithstanding the Trans-Tasman harmonisation project the delegate appears to have disregarded the unequivocal finding of the New Zealand Assistant Commissioner that the KIT KAT shape was not entirely functional and that the shape qualified as a trade mark.
Another issue of note in the delegate’s decision is the criticism of the evidence tendered by Nestlé in support of the application. In the first place, the delegate specifically accepted that the survey relied upon by Nestlé was professionally conducted and that it was statistically reliable4. Secondly, having set out the criticisms made of the evidence by Aldi, the delegate then made the following statement – “It might be said, even so, that 77% remains a fairly impressive figure” – that is, 77% of respondents did make the connection between the shape and Nestlé.5
A further aspect of the delegate’s decision – and by far the most telling factor in the decision – related to whether the shape had been used as a trade mark. The authority relied upon by the delegate was Philmac Pty Ltd v Registrar of Trade Marks6 and the following passage, cited in the delegate’s decision, is instructive:
Whether or not there has been use as a trade mark involves an understanding from an objective viewpoint of the purpose or nature of the use, considered in its context in the relevant trade. How the mark has been used may not involve a single or clear idea or message. The mark may be used for a number of purposes, or to a number of ends, but there will be use as a trade mark if one aspect of the use is to distinguish the goods or services provided by a person in the course of trade from the goods or services provided by any other persons, that is to say it must distinguish them in the sense of indicating origin …7
It is not unreasonable to contend that the Registrar’s delegate did not place sufficient weight on His Honour Justice Mansfield’s statement that the use may not involve a single or clear idea or message or that a mark may be used as a trade mark for a number of purposes or to a number of ends. In the context of the KIT KAT shape mark, these statements appear to favour Nestlé’s contention that the KIT KAT shape did indeed function as a trade mark – that is, the purpose and the nature of the shape, despite having functionality, also served to indicate the source of the product.
Lastly, there is the issue of the shape of the product not being visible at the time the goods are available at point of sale. Even here, the delegate is quick to say8 that the invisibility “would not negate the use of the shape as a trade mark”.
In summary, we suggest that Nestlé’s shape trade mark should have been considered for registration in terms of section 41(5) rather than section 41(6). Inter alia, the comments by the New Zealand Assistant Commissioner of Trade Marks that the shape is not entirely functional are persuasive. Furthermore, the delegate’s views regarding the “commonality” of the four “finger” shape is not convincing. The delegate’s further assessment of the applicant’s evidence and the use of the shape as a trade mark are likewise unconvincing. It is too simplistic in cases of this type to revert to whether or not the public have been “educated” to see the shape as a trade mark. The correct test for whether there has been use as a trade mark is the test formulated by His Honour Justice Mansfield in the Philmac case. Very pertinently, that test does not refer to whether or not the public have been educated to see one sign as a trade mark. For all those reasons, the Registrar’s consent to the registration of the trade mark was justified for reasons over and above the parties’ agreement to allow the trade mark to be registered.
As with all non-traditional trade marks, the fact situation in this case highlights the fundamental need to demonstrate that such works – whether shapes, colour, sound or scent – are used in a trade mark context, that is, that the shape or colour or sound or scent functions to distinguish the applicant’s goods or services. There are a number of practical ways in which this can be established. Inter alia, the distinguishing function of the sign can be reinforced by statements or advertisements that focus attention on the shape or colour or sound or scent – for example “CATS PREFER PURPLE” for cat food or “THINK PINK” for insulation bats. Effective use of the ™ symbol is also helpful as are statements that the shape or colour or sound or scent is a trade mark of the applicant.
1 Aldi Stores v Societe Des Produits Nestlé SA AIPO 27 August 2008
2 Societe Des Produits Nestlé SA v Aldi Stores  FCA 218.
3 Societe Des Produits Nestlé SA v Horizon Biscuit Company Ltd and Cadbury Confectionery Limited (2002/45)
4 Aldi Stores, above n 1 at para. 25
5 ibid, para 30
6 56 IPR 452
7 at para. 77
8 (Aldi Stores, above n 1 at para. 38