No Break in KitKat Battle as EU Court Backs Trademark Test

(Bloomberg) -- Nestle SA suffered a setback in its long-running attempt to get trademark protection for the shape of its four-fingered KitKat as the European Union’s highest court said more proof was needed that it’s distinctive throughout the 28-nation bloc.

In a boost to rival Mondelez International Inc., the EU Court of Justice on Wednesday backed a lower tribunal’s 2016 decision and the trademark’s validity will now have to be reexamined by the EU’s Intellectual Property Office under the strict conditions.

“This development will be a big blow to Nestle since it will likely lose its EU trademark for the four-fingered chocolate bar,” said Claire Lehr, head of trademarks at EIP Europe LLP in London. “Although it may not have been such a surprise since the U.K. courts have already found that the four-finger shape was not distinctive.”

Nestle’s fight to protect the shape of the KitKat has gone on since 2002. It seemed settled in 2006 when the EU’s IP office registered a trademark for the shape, but Mondelez International Inc. challenged that, leading the dispute to reach the EU’s highest court.

The Luxembourg-based court ruled on Wednesday that the lower court “was right to annul” the EU agency’s decision, “in which EUIPO concluded that distinctive character had been acquired through use of the mark at issue without adjudicating on whether that mark had acquired such distinctive character in Belgium, Ireland, Greece and Portugal.”

Nestle, based in Vevey, Switzerland, said the case will be sent back to the EU’s IP office for review but that it remains convinced of the uniqueness of its bar’s shape.

“We think the evidence proves that the familiar shape of our iconic four finger KitKat is distinctive enough to be registered as an EU trademark,” it said in an emailed statement.

In a separate case concerning the rights to protect the taste of spreadable cheese, Advocate General Melchior Wathelet of the EU top court said copyright rules couldn’t be stretched to cover such a right. There is no element in international law that would protect the taste of food as copyright, he said.

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