Taxi for Nestlé…

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The High Court has ruled on two cases: Société Des Produits Nestlé SA v Cadbury UK Ltd, and The London Taxi Corporation Ltd (t/a The London Taxi Company) v Frazer-Nash Research Ltd on the validity of 3D trade marks.

In both cases a shape that many people would have considered instantly recognisable failed to make the grade for registration as a trade mark.

In the first case the High Court gave consideration to an appeal by Nestlé to register a 3D trade mark which reflected a four-fingered chocolate bar and a cross-appeal by Cadbury who opposed the application on a number of grounds. Its ruling also went against the opinion of the hearing officer that the mark was devoid of distinctive character and not acquiring a distinctive character in relation to all the goods covered by the application except cakes and pastries. The High Court subsequently referred a particular question in relation to acquired distinctiveness to the ECJ for a preliminary ruling. The ECJ subsequently delivered its ruling.

Nestlé’s appeal was dismissed by the High Court who allowed Cadbury’s cross-appeal, and the parties adamantly disagreed on the effect of the ECJ’s answer on acquired distinctiveness. Consequently, Arnold J interpreted the ECJ’s ruling as follows:

  • To demonstrate that a sign had acquired distinctive character, the applicant or trade mark proprietor must prove that, at the relevant date, a significant proportion of the relevant class of persons perceived the relevant goods or services as originating from a particular undertaking because of the sign in question (as opposed to any other trade mark which might also be present).
  • It was legitimate for the competent authority, when assessing whether the applicant had proved that a significant proportion of the relevant class of persons perceived the relevant goods or services as originating from a particular undertaking because of the sign in question, to consider whether such persons would rely upon the sign as denoting the origin of the goods if it were used on its own.

On one hand, the first part of Arnold J’s interpretation of the ECJ’s ruling (that to show acquired distinctive character, consumers must perceive the goods or services as originating from a particular undertaking because of the sign) appears to be consistent with, and may even have sharpened, the ECJ’s ruling, but on the other hand the additional reliance-based test suggests that a higher threshold needs to be reached requiring consumers to have gone out and made purchasing decisions in reliance on the mark.

It is fair to say that his judgment has somewhat created confusion as to the correct test where before when considering the ECJ’s ruling alone (or at least the first part of Arnold J’s interpretation of it) there would have been none.

In the second case the High Court held that UK and Community 3-D trademarks representing the shapes of London taxis were invalid because they were devoid of distinctive character, whilst consisting exclusively of the shape which gave substantial value to the goods. Arnold J found that the trademarks would have been regarded by the average consumer as a mere variation of the typical shape of a taxi, and would not have been perceived as designating the origin of the goods, so that the marks lacked inherent distinctiveness, and that they had not acquired distinctiveness.

He held that the marks were also invalid because they consisted exclusively of the shape which gave substantial value to the goods, and further held that, in any event, even if the marks were not invalid, they had not been infringed by the defendant’s new Metrocab taxi, since there was only a low degree of similarity with the marks and the marks had only low distinctive character, so that there was no likelihood of confusion. He also rejected the claimant’s claim for passing off.

Arnold J applied the ECJ’s guidance in the Nestlé case and he found that, in order to demonstrate that a sign had acquired distinctive character, the applicant or trade mark owner had to prove that, at the relevant date, a significant proportion of the relevant class of persons perceived the relevant goods or services as originating from a particular undertaking because of the sign in question (as opposed to any other trade mark which might also be present). It was found that the trade marks would have been regarded by the average consumer as a mere variation of the typical shape of a taxi, and would not have been perceived as designating the origin of the goods, so that the marks lacked inherent distinctiveness. They had not acquired distinctiveness because there was no evidence that the average consumer perceived taxis embodying the marks as emanating from the trade mark owner because of their shape, as opposed to conventional word and trade marks on the taxis.

Although he could find no authority on the point, Arnold J held that the relevant date for assessing whether the marks acquired distinctiveness was the date of the counterclaim, and not the date of the trial, since otherwise the assessment could depend on how quickly the case was tried.

In summary, the above cases illustrate the difficulties arising in attempting to register and/or enforce a trade mark registration in respect of the shape of goods. Arnold J’s analysis of whether the trade marks consisted exclusively of the shape which gave substantial value to the goods so as to be invalid is also of interest.

Forbes Solicitors has experience in advising commercial clients in relation to a range of commercial matters including registering trademarks and dealing with intellectual property disputes. If you would like advice on these issues please contact Daniel Milnes.

Nat Avdiu

About Nat Avdiu

Nat Avdiu is a Paralegal in the Contracts and Projects team at Forbes Solicitors. Nat provides updates for clients on a range of issues including: governance, data protection and freedom of information, procurement and charity law.
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