Intellectual property – Trademarks – Proof of distinctive character – Historical decision

The recent decision of the European Court of Justice (“ECJ”) in Societé des Produits Nestlé SA v Mars UK Ltd [2005], makes it easier for trademark holders to meet the distinctiveness test when applying for the registration of their trademarks. The ECJ decided that the distinctive character necessary for the registration of a trademark can be acquired as a result of its use as part of another registered trademark, provided that a well-informed average consumer considers it distinctive of its commercial 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, confectionery, sweets and biscuits. In 1995, Nestlé applied to the UK Register of Trade Marks to register the phrase HAVE A BREAK as a separate trade mark in class 30 in respect of chocolate, confectionery, sweets and biscuits. The HAVE A BREAK brand was accepted by the Trademark Registry and published for opposition purposes. Mars UK Limited contested the mark on the grounds that the mark was devoid of distinctive character based in particular on Article 3(1)(b) of the First Council Directive (EEC) 89/104 (“the Directive”) (to approximate the laws of the member states regarding trademarks).

Section (3)(1)(b) of the Directive (as well as section 3(1)(b) of the Trade Marks Act 1994) provides that trade marks devoid of distinctive character shall not be registered. An exception arises when “…before the date of the application for registration and after the use made of it, the mark has acquired a distinctive character (art. 3(3))”.

Consequently, the opposition was upheld and Nestlé’s application for the registration of the HAVE A BREAK trademark was rejected. Nestlé appealed to the High Court. This appeal was dismissed and Nestlé appealed to the Court of Appeal. The Court of Appeal had to consider:-

 If the expression HAVE A BREAK lacked inherent distinctiveness under Article 3(1)(b) of the Directive, which makes the expression not registrable.

 Whether the registration of HAVE A BREAK could occur solely on the basis of Article 3(3) of the Directive, subject to proof of distinctiveness acquired through use, i.e. whether the mark HAVE A BREAK had acquired distinctiveness through the use of the trademark HAVE A REST… HAVE A KIT KAT. This means that if the mark has acquired distinctive character as a result of its use, then it would be registrable.

 The Court of Appeal noted that the application had been rejected on the basis that the phrase HAVE A BREAK was used essentially as part of the HAVE A BREAK…HAVE A KIT KAT trademark and not genuinely as a stand-alone mark .

 Nestlé’s assertion that this decision could have serious consequences for trademark owners seeking to register marks comprising shapes, as such marks are rarely used by themselves, and considered that a slogan-like phrase associated with a trademark could, by repetition over time, create a separate and independent impression and thus acquire distinctive character through use.

 Consequently, the Court of Appeal decided to suspend the proceedings and refer to the Court of Justice of the European Communities for a preliminary ruling on the possibility of acquiring the distinctive character of a trademark referred to in article 3(3) of the Directive following or resulting from 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 Article 3(3) of the Directive can be acquired as a consequence of the use of that mark as part of or together with a registered mark.

 Whether inherent or acquired through use, distinctiveness had to be assessed in relation, on the one hand, to the products or services for which registration was sought and, on the other, to the presumed expectations of an average consumer of the category of goods or services in question, who was reasonably knowledgeable and reasonably attentive and insightful.

 In relation to the acquisition of distinctive character through use, the identification, by the relevant class of persons, of the product or service as originating from a certain company had to be the result of the use of the mark as a registered trademark. For this last requirement to be met, which was a central issue in the present case, the mark for which registration is sought does not necessarily have to have been used independently.

 Article 3.3 of the Directive did not contain any restriction in this regard, referring only to the ‘use that has been made’ of the mark. Therefore, the expression “use of the mark as a trademark” should be understood as referring solely to the use of the mark for the purposes of identification, by the relevant class of persons, of the product or service as originating from a certain company. Such identification, and therefore the acquisition of distinctive character, can be the result of both the use, as part of a registered mark, of a component and the use of a separate mark together with a registered mark.

 In both cases it was enough that, as a consequence of said use, the class of persons in question actually perceived the product or service, designated exclusively by the trademark applied for, as coming from a specific company.

As:

 The main points derived from the decision that trademark owners should be aware of are:

o A mark could acquire the necessary distinctiveness when used as part of another phrase or registered mark;

o Distinctiveness must be assessed in relation to the goods and services in question and the assumed expectations of an informed average consumer;

o Art. 3(3) does not contain any restriction on the way in which any mark has acquired its distinctive character; and

o Therefore, it is possible that this distinctive nature is achieved through the use of the phrase HAVE A BREAK as part of the larger brand HAVE A BREAK… HAVE A KIT KAT.

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

 This decision has completely changed the approach of the English court on the issue of distinctiveness when marks are used together. The English court’s approach proved problematic for owners of unconventional marks, such as slogans, shapes or colours, which are rarely used on their own. The use of the combination will now be taken into account when judging whether any individual item is registrable. This decision will apply in all countries of the European Union.

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