Societe des Produits Nestlé SA v Petra Foods Ltd  SGCA 64
In this comprehensive decision, the Court of Appeal ("the Court") provides practitioners with useful guidance on assessing distinctiveness of shape marks and the application of the "technical result" prohibition in the Trade Marks Act (SG). In seeking registration of shapes in Singapore an applicant should:
- consider the norms and customs of a particular industry in determining if a mark is distinctive;
- exercise caution in preparing market surveys to ensure they assess whether consumers rely on the shape in making purchasing decisions rather than merely associate the shape with a trader;
- contemplate whether other forms of protection, such as designs or patents, are more appropriate; and
- ensure that the shape is being used as a trade mark.
The matter concerns Nestlé and its local subsidiary's ("the Appellants") unsuccessful infringement claim against Petra Foods Ltd and its subsidiary Delfi Singapore Pte Ltd ("the Respondents") in respect of their two-finger and four-finger “Take-It” chocolate confection. The allegations were based on Nestlé's two-finger and four-finger marks ("the Shapes") as follows:
At first instance, the Respondents defended the infringement claim by counter-claiming to have the Shapes revoked on the basis that they were devoid of distinctive character and also fell-foul of the "technical result" prohibition.
Ground 1: do the shapes lack distinctiveness?
The Court firstly affirmed the test for inherent distinctiveness in the Bongrain1 decision which confirms:
- the critical question is whether the average consumer would appreciate the trade mark significance of the shape without education; and
- it is insufficient for the mark to consist of an unusual, new or visually distinctive shape, rather the shape in itself must convey trade mark significance.
Applying these principles, the Court was satisfied that the Shapes do not significantly depart from the norms and customs of presenting chocolate to consumers. Secondly, there was no evidence that the average consumer of confectionary appreciates that shapes convey trade mark significance. Accordingly, the Shapes were held to lack inherent distinctiveness.
Have the shapes become distinctive through use?
The Appellants proceeded to argue that the Shapes had acquired distinctiveness. The Court initially contemplated the relevant test for assessing acquired distinctiveness, ultimately endorsing the primary judge's adoption of the Reliance Test, enunciated by Arnold J in Nestlé (EWHC)2. This requires the evidence to demonstrate that consumers rely on the sign to indicate origin, rather than merely associate the shape with a particular trader.
Nestlé sought to demonstrate distinctiveness through survey evidence. The survey was considered fundamentally flawed by the primary judge as:
- the category of respondents was too narrow, rather than being "the general public";
- it included leading questions;
- a brown wax model of the Shapes was used in the survey, although the registrations were not restricted to colour; and
- the Appellants had not disclosed the primary material for review.
The Court was not convinced that the Appellant's arguments gave reason to disturb the primary judge's conclusions. In any event, they found the survey fell-short of establishing that consumers rely upon the Shapes, noting the Appellants "…always sold the Kit Kat chocolate bar in a wrapper affixed with the Kit Kat logo".
Ground 2: are the shapes caught by the ‘technical result’ prohibition?
The Court firstly explained the policy behind the prohibition is to safeguard against perpetual monopolies in technical solutions, typically protected by other forms of intellectual property. The Court then turned to considering the appropriate test, affirming the approach in Lego Juris3 which involves:
- firstly, identifying the essential characteristics of the mark; and
- secondly, determining whether the essential characteristics perform a technical function.
The Appellants contended the primary judge had erred in failing to consider the trapezoidal shape of each finger and the plinth as essential features. However, the Court disagreed, noting the lack of explanation as to why the trapezoidal shape was striking and that neither this, nor the plinth, appeared in the description of the Shape appearing in the registrations.
The Appellants then argued that to fall foul of the prohibition:
- the essential features of the Shapes must serve only a technical function and not add aesthetic appeal to the product;
- technical results obtained in the manufacture were irrelevant and the focus of the prohibition is on whether the final product performs a technical result; and
- only the graphical representation of the mark should be considered and not "invisible elements".
The Aesthetic Appeal Argument
The Appellants relied on a Philips (ECJ)4 which required the technical result to be the sole purpose of the essential element. However, the Court endorsed the Rimer J interpretation of the Philips (ECJ) decision in Philips (HC)5 which accepted that an essential feature could still fall-foul of the prohibition, even if it made some aesthetic contribution. Moreover, the Court endorsed the ECJ's approach in Lego Juris, which concluded “minor arbitrary elements” would not suffice to take the shape outside the ambit of the prohibition.
Manufacturing Process/Graphical Representation Arguments
The Court then considered the conflicting approaches as whether advantages shapes afforded in manufacturing were relevant. The Respondent argued the position taken by Arnold J in Nestlé (EWHC)6 should apply. In that decision it was concluded that the prohibition encompassed both the final function of the goods and manufacturing advantages. The Court preferred this approach over the more restricted interpretation adopted in Nestlé (ECJ)7, where consideration of manufacturing advantages was excluded. This preference was cast in policy terms, as being consistent with facilitating technological advancement and competition.
The Court was also not convinced by the Appellant's reliance on the Simba Decision8 in support of the prohibition only being assessed by reference to the visible elements in the graphical representation of a mark.
Unfortunately for the Appellant, the Simba Decision was overturned in Simba (ECJ)9 shortly prior to this decision being written. Ultimately, the Court saw no controversy in the scope of the protection afforded to a shape mark being determined by its graphical representation. However, this did not inevitably lead to the conclusion that the technical result must be obvious from graphical representation of the shape.
Having established the decision matrix, the Court held that the evidence showed the Shapes performed a technical result in facilitating minimal wastage, ease of packaging and ease of consumption and were captured by the prohibition.
Ground 3: should the shapes be revoked for non-use?
The Court agreed with primary judges ruling that the Shapes had not been put to genuine use. The evidence showed that at point-of-sale, the Shapes were concealed in opaque packaging, and even when the bars were unwrapped for consumption, the word mark “Kit Kat” featured prominently. The Shapes were also not used on their own in promotional materials and were portrayed on product packaging in highly modified form.
Accordingly, the Court concluded that even if the Shapes could have been validly registered, they have not been put to genuine use.
Issue 4: are the shapes nevertheless well-known trade marks?
The final issue considered was whether a trade mark deemed incapable of registration may never-the-less attract protection as a well-known trade mark. The Court concluded that it could not have been Parliament’s intention to confer well-known trade mark protection on signs that are barred from registration on absolute grounds. As such, the Appellants' claim for well-known trade mark status also failed.