Nestlé's Two And Four-Finger Kit Kat Shape Marks Held To Be Invalid

In Société des Produits Nestlé SA v Petra Foods Ltd ([2014] SGHC 252), Nestlé brought an action against Petra Foods for trademark infringement and copyright infringement. This update deals only with the trademark infringement issue.

Nestlé owned the following trademark registrations (T0000002A and T0000003Z, collectively the 'registered shapes'):

Nestlé also claimed that it was the owner of the following artistic work:

Nestlé argued that the shape and packaging of Petra Foods' Take-It products infringed Nestlé's IP rights:

Chan Seng Onn J of the Singapore High Court declared that Nestlé's two-finger and four-finger shapes were unregistrable and ordered that they be invalidated. He also held that Nestlé was unable to prove ownership of copyright and, therefore, there was no copyright infringement.

Chan J first considered whether the registration of the two-finger and four-finger shapes were invalid under Section 7(3), read with Section 23(1), of the Trademarks Act (Cap 332). Section 7(3) states:

"7. - (3) A sign shall not be registered as a trademark if it consists exclusively of -

(a) the shape which results from the nature of the goods themselves;

(b) the shape of goods which is necessary to obtain a technical result; or

(c) the shape which gives substantial value to the goods."

With regard to Section 7(3)(b) (the 'technical result exception'), the following propositions of law were held to be well-founded and applicable:

There is public interest in preventing trademark law from granting a monopoly (potentially unlimited) on technical solutions or functional characteristics of a product; technical solutions are capable of protection only for a limited period so that they can subsequently be freely used by all (see Lego Juris A/S v OHIM (Case C-48/09 P), at 43 to 46); No amount of acquired distinctiveness through use can cure a trademark that offends the technical result exception (Lego Juris at 47); If all the essential characteristics of a three-dimensional (3D) sign are dictated by the technical solution to which that sign gives effect, the sign consists exclusively of the shape of goods which is necessary to obtain a technical result. Where a shape incorporates a major non-functional element, the sign is still registrable; A shape may be considered necessary to obtain a technical result even if the same technical result may be achieved by various solutions, such as alternative shapes, especially in situations where the solution incorporated in the shape is the technically preferable solution. Guidance was provided by Lego Juris for determining the essential characteristics of a shape mark and whether the shape is exclusively functional:

'Essential characteristics' means the most important elements of a sign, and the identification of these characteristics must be carried out on a case-by-case basis, either based directly on the overall impression produced by the sign or by examining each of the components of the sign concerned (Lego Juris at 70); After identifying the sign's essential characteristics, the court must ascertain whether they all perform the technical function of the goods at issue (Lego Juris at 72); The presumed perception of the sign by the average customer is not decisive but is at most a relevant criterion of assessment for the court when it identifies the sign's essential characteristics (Lego Juris at 76). The court also agreed that the test was an objective one and did not depend on the subjective intentions of the shape's designer.

The court thus needed to determine what the essential features of Nestlé's registered shapes were. It held that, considering the purposes underlying trademark law, in normal circumstances the presumed perception of the average consumer would be a relevant consideration (although the exact weight given to it will depend on the facts). In this case, as the mark was registered for chocolate confectionary products, Chan J held that the perception of the average consumer (who is unlikely to scrutinise the chocolate confectionary minutely) was important.

The court based its assessment of the essential characteristics of the registered shapes on the overall impression produced and agreed with the defendant's list of essential features, being:

a rectangular 'slab' shape of the registered shapes as they appear on the registration, including the relative proportions of width, length and depth - Chan J held that the overall shape was rectangular and that the visual impact of this element is especially pronounced when the registered shapes are viewed from above; the presence, position and depth of the breaking grooves arranged along the length of the bar, which effectively divides the bar into detachable "fingers" - Chan J held that the grooves are an essential feature as they catch the eye from every view except from the bottom and the long edge of the registered shapes; and The number of breaking grooves, which determines the number of fingers. The court disagreed with the plaintiff's argument that the "plinth" was an essential feature and opined that it was a minor feature which the average consumer would not have paid any notice to.

At issue was whether the technical result exception precludes registration of shapes which are necessary to obtain a...