On 23 July 2020, the ten-year dispute over the square packaging of Ritter Sport chocolate ended. The proceedings were held in Germany, but the decision may provide guidance to courts of other states on how to interpret the notion that shape can add significant value to a product.
German Federal Court of Justice, resolutions of 23 July 2020 (cases no. I ZB 42/19 and I ZB 43/19)
In 2010, Kraft Foods (now Mondelēz) filed two applications with the German Patent and Trademark Office for cancellation of three-dimensional trademarks (nos. 2 913 183 and 398 69 970) owned by Alfred Ritter GmbH & Co KG and used for Ritter Sport and Ritter Sport Mini chocolates.
The allegations were based on one of the absolute grounds for cancellation of trademarks. Kraft claimed that the marks consisted exclusively of a shape or other property significantly increasing the value of goods and therefore cannot be a trademark (§3(2)(3) of the German Trademark Act (Markengesetz) of 11 December 2018, transposing Art. 4(1)(e)(iii) of Directive (EU) 2015/2436). Kraft argued that the marks did not have a distinctive character, as a square is a common, universal figure used as a packaging shape for various sweets and other foods available on the market.
The German authority rejected both applications, and Kraft appealed. While considering the appeal, the Federal Patent Court upheld Kraft’s arguments, finding that the contested marks consisted exclusively of the shape of the packaging resulting from the nature of the product itself. The court held it was not acceptable for any one company to hold a monopoly on such a shape, and declared both contested trademarks invalid. The dispute continued full-steam until it reached its finale before the Federal Court of Justice.
When the shape of a product gives it significant value
The Federal Court of Justice indicated that when assessing whether a mark consists exclusively of a shape or other characteristic significantly increasing the value of the goods, it must be taken into account whether the consumer’s decision to purchase the product depends to a significant extent on characteristics such as:
- The category of the goods
- The artistic value of the given shape
- Differences from other shapes commonly used in the given market
- Significant price differences compared to similar products
- Development of a marketing strategy mainly emphasising the aesthetic value of the given product.
In this respect, the German court also cited the judgment of the Court of Justice of the European Union in C-205/13, Hauck.
With regard to those characteristics, the Federal Court of Justice held that it cannot be assumed that the artistic value of the square shape of a chocolate packaging is more important to a consumer buying a chocolate than the origin of the product itself. The square packaging did not differ significantly from the shapes of other manufacturers’ chocolate bars. And even assuming that the shape of the Ritter Sport products differed from other rectangular bars with uneven side lengths, this difference did not mean that the square shape of the chocolate had any artistic value.
In the decision, the court also cited the slogan “Square. Practical. Good” used to advertise Ritter Sport chocolate since 1970. The court found that the producer of Ritter Sport chocolate had pursued a marketing strategy specifically related to the contested shape of the product or packaging. However, in the context of the overall assessment of the marks at issue, the fact that the contested shape corresponded to the basic shape of a chocolate bar prevailed, and it could not be concluded that such an advertising slogan was decisive on whether there was an absolute ground for cancelling the marks.
Moreover, it cannot be assumed that consumers buy chocolate bearing the Ritter Sport and Ritter Sport Mini trademarks just because they want to buy a square-shaped chocolate bar. In this context, it is also irrelevant whether the shape of the goods constitutes a special economic value for the proprietor of the trademark, since that mark had been established in the course of trade as a mark of origin of the goods.
The court concluded that the Ritter Sport trademarks did not consist solely of a square shape. The dispute, which lasted ten years, was thus successfully concluded in favour of Alfred Ritter. The court dismissed both applications for cancellation.
Other chocolate disputes
- Kit Kat bars
For years, we have observed numerous trademark disputes among sweets producers on the international arena. In 2007, Cadbury filed an application for cancellation of a three-dimensional Nestlé trademark (no. EUTM-002632529), which had the shape of a Kit Kat wafer. When Cadbury made its application, it probably did not expect to start one of the most famous and longest-running disputes in the history of food products.
In 2011, the Cancellation Division of the European Union Intellectual Property Office (then OHIM) granted the application and cancelled the contested trademark. Following an appeal by Nestlé, the Second Board of Appeal of EUIPO annulled the cancellation decision, and that ruling was challenged in turn by Cadbury. The General Court (part of the CJEU) set aside the decision of the EUIPO board of appeal in its entirety, finding that the board of appeal had not effectively examined the trademark’s acquisition of a distinctive character, as the board did not make a finding on the perception of the mark by the relevant audiences, especially in Belgium, Greece, Ireland and Portugal, and did not analyse the evidence submitted by Nestlé in relation to those member states. The court held that the board of appeal must re-examine some of the evidence to determine whether the contested trademark had acquired distinctiveness through use. In 2018, the Court of Justice upheld the position of the General Court and dismissed the appeals of both parties against the judgment of the General Court (Société des produits Nestlé SA v Mondelez UK Holdings & Services Ltd, Joined Cases C-84/17 P, C-85/17 P and C-95/17 P). Thus, the judgment of the General Court became final and binding and the case was remanded to the EUIPO board of appeal (case no. R1843/2018-1).
- Lindt Easter bunnies
Nor have chocolate Easter bunnies been spared their day in court. Chocoladefabriken Lindt & Sprüngli AG and Terravita sp. z o.o. were parties to two court disputes in Poland. Both companies produced figures of chocolate bunnies. The Lindt bunny is wrapped in gold foil with the producer’s logo and has a corrugated red ribbon around its neck with a bell suspended from it. The Terravita bunny is wrapped in silver or gold foil and has a ribbon printed on the foil. Lindt decided to take legal action against Terravita in two court proceedings, alleging unfair competition and seeking to protect its Community trademark. In both proceedings, the court ruled in favour of Terravita.
Lindt’s chocolate Easter bunny was also the subject of proceedings before the Court of Justice of the European Union. In 2004, Lindt applied to the Office for Harmonisation in the Internal Market (OHIM, which became EUIPO in 2016) for a Community trademark (no. EUTM – 003844446), representing a bunny.
By decision of 14 October 2005, an OHIM expert rejected the application, declaring the mark in question devoid of any distinctive character. The Fourth Board of Appeal of OHIM, which examined Lindt’s appeal, took the view that none of the elements making up the mark (that is, the shape, the gold-plated foil, or the red ribbon with a bell) could confer a distinctive character on the mark. A bunny is a typical shape for chocolate products, especially during Easter. In 2008, Lindt’s appeal was dismissed.
Lindt then challenged the OHIM decision before the General Court. The court held that the characteristics of the combination of shape, colour and pleated ribbon with a bell did not differ sufficiently from the basic shapes often used as packaging for chocolate products, namely chocolate bunnies. The court found that the appellant had not succeeded in rebutting the notorious facts and circumstances established by OHIM or proving that the mark had inherent distinctiveness. The ruling by the General Court was then appealed to the Court of Justice, which affirmed the judgment of the General Court and ruled that the contested mark (EUTM – 003844446) did not possess inherent distinctiveness (Chocoladefabriken Lindt & Sprüngli AG v OHIM, Case C-98/11 P). Thus, protection for the mark was ultimately denied.
- Toblerone chocolate
It is also worth mentioning another case which, unlike the ones discussed above, did not end in a court judgment. The appearance of Toblerone chocolate is a registered trademark (including under no. EUTM – 000031237).
In 2017, Poundland intended to launch a chocolate bar called Twin Peaks on the English market. Toblerone’s producer thought that the shape of Poundland chocolate was confusingly similar to Toblerone chocolate, as both bars were in the form of narrow rectangles with characteristic triangular ridges. Poundland claimed that the shape it used was inspired by The Wrekin, a hill, near Poundland’s headquarters in Shropshire, England.
The producers managed to reach an agreement and settle the dispute. Poundland modified its chocolate to use asymmetrically distributed slopes instead of mountain peaks.
The producer of Toblerone agreed that Poundland could sell its existing stock of half a million chocolate bars with the original look, at a price of £1 each.
As one can see, registering trademarks in the world of sweets may be quite challenging. Fortunately, there is no shortage of Polish and EU case law providing numerous indications on what to watch out for when registering a trademark or deciding to produce sweets of a certain shape.
Pamela Szwedko, Intellectual Property practice, Wardyński & Partners