CHOCOLATE WARS: to trademark or not to trademark?

Raise your hand who doesn’t love chocolate. Which comes in a load of shapes, and flavors, and colors. We all recognize the chocolate from the taste: one can debate about how good it is, if it’s better dark or milk (or even white, which is not really chocolate for your information); but can you recognize a chocolate brand from its shape? Spoiler: Yes, you can!

Ritter Sport vs Milka (1-0)

At least, that’s what arises from a sentence issued in July 2020 from the Germany's Federal Court of Justice on a dispute involving German chocolate bar maker Ritter Sport and US-owned Milka. Marketed as "square, practical, good", Ritter Sport's chocolate bars come in a squared package. The company protected the 3D trademark firstly in 2001. 

In fact, three-dimensional shapes can in principle be protected as trademarks, if the shape is not an “essential characteristic of the product”.

Milka, owned by US giant Mondelez, back in 2016 argued that the square shape of the Ritter Sport bar was an essentially functional feature of the product: it fits very well in a sports jacket, unlike a traditional bar, and its structure does not break easily. Ritter argued otherwise that the shape was not technical, but had (only / mainly) fancy and distinctive character.

According to Article 3 of the German Trade Mark Act sign, including 3D signs must be  “capable of distinguishing the goods or services of one enterprise from those of other enterprises” and for 3D marks "the shape shall exclusively results from the nature of the goods themselves; being necessary to obtain a technical result; or give substantial value to the goods".

What matters here is that the square shape does not result “from the nature of the goods themselves” (i.e. the chocolate itself), it does  not give the product a significant value nor is necessary to obtain a technical result.

Mondelez is not new to chocolate-related legal battles: being one of the biggest multinationals in the world, that’s not surprising. It owns many chocolate brands, like Cadbury, Toblerone and Kvikk Lunsj, all the tree involved in IP issues.

Kvikk Lunsj vs KitKat (1-0)

You might not be familiar with the Norvegian Kvikk Lunsj, which is only sold in Norway, Sweden, and Denmark: but this chocolate snack won a 3D trademark dispute in Europe against KitKat (owned by Nestle) on the trademark for the four-stick shape.

Many countries, including Germany, Australia and Canada have granted a trademark to the distinctive shape, which prevents other confectioners from producing a chocolate-covered wafer in the KitKat's shape. But not all countries.

The first KitKat was produced in 1935 by British manufacturer Nestle. The Norwegian equivalent came to the market in 1937. The case hinged on whether the public relied on the shape of a KitKat alone to identify it, which would confirm its status as a badge of origin.

In August, 2018, the European Court of Justice in Luxembourg ruled that the shape was not sufficiently distinctive in all EU countries, and the EU 3D trademark covering all member states was therefore not granted.

Poundland vs Toblerone (1-1)

Both recalling a mountain shape, Poundland and Toblerone got into a legal dispute on the shape of the chocolate bar in 2017, after Toblerone redesigned the product for the UK market, altering the bar's signature shape. The redesign was poorly received, with consumers labeling it "wrong" and "austerity Toblerone". Poundland began developing Twin Peaks in response to the customer reaction against Toblerone.

Shortly after Toblerone's redesign, legal experts warned it might have the effect of weakening the bar's trademark protection, which is famously hard to secure for the shape of designs. 

Eventually, Poundland entered into negotiations with Mondelez and released a modified bar with asymmetrically arranged sloped hills instead of peaked mountains.

Riegelein vs Lindt (1-0)

Chocolate is serious business for trademark lawyers on a country-by-country basis. Back in 2006, a case involving gold chocolate bunnies asked similar questions to the KitKat saga.

In 2013, after 12 years of battles, a federal court in Germany ruled that Lindt & Spruengli, the Swiss chocolatier, could not trademark its gold-foil wrapped Easter bunny chocolates, which are iconic in many countries – but not in all countries.

The Austrian company Hauswirth, in 2012, which also was in the battle against Lindt, lost the battle and had to stop making chocolate Easter bunnies that looked like those made by Lindt.

But in Germany, the Riegelein company also made gold-wrapped bunnies, and the case made it to both European and German courts – where Lindt eventually lost. 

Rabbits, in fact, were part of the typical range of shapes of chocolate products, the judges had judged in relation to the 3 D mark sought, especially as an Easter bunny. And the elements of the mark applied for (shape, gold foil and red ribbon with bells) could not give the mark any distinctive character.

Recently, in August 2020, Lindt tried in vain to protect the gold of the golden Easter bunny as a color mark. The gold color shown on the packaging foil of the chocolate bunnies is so well known through years of intensive advertising and use that this gold color is generally associated with the Lindt Golden bunny. 

The Regional Court Munich admitted that abstract color trademarks can be protected as usage trademarks if they have gained recognition in the market. 

However, to the extent that a trade acceptance of an abstract color mark has been assumed in the case law up to now, these were cases in which the companies have used a certain color as a corporate color for various products of the goods or service sector for which color mark protection was claimed and not only for a specific product.

One could think that, under this rule, it is better to have a protection of the color for all the products, instead only one. But the case of Cadbury purple seems to declare the opposite.

Cadbury vs Nestlé (0-1)

Cadbury trademarked the "predominant" use of its signature Pantone 2685C purple, which it had been using for over 100 years, for "chocolate in bar or tablet form" in 1995 in United Kingdom.

However, in 2004 Cadbury attempted to expand this non-traditional trademark to cover other products (drinking chocolates, broader chocolate range and cakes), but found the opposition by Nestlé, claiming that this trademark could threaten its products (like the Quality Street decoration and the chocolate called My Purple). The case ended up in courts for several years and different judgements in favor of (2012) and against Cadbury (2013).

The last word though was from the London Court of Appeal, which in 2018 ruled that the description of the trademark was too broad: "The mark consists of the colour purple (Pantone 2685C) […] applied to the whole visible surface, or being the predominant colour applied to the whole visible surface, of the packaging of the goods." 

In the Judge opinion, this description “falls foul of the requirements of clarity and precision”: furthermore, “it would be a potentially far-reaching step to allow the consequent lack of clarity to be read, instead, as an attempt to register a number of marks”.

Mondelez International, owner of Cadbury, admitted that they are "disappointed with the decision", but decided to stop fighting to keep the registration.

Trademark law is constantly evolving, and owners of non-traditional marks should review from time to time their portfolios to ensure that older registrations remain valid (and re-file if necessary).

It is also worth keeping in mind what other rights might be used to protect a product, such as design rights or copyright, which are sometimes better instruments to deal with particular issues.