Chocolaterie Guylian N.V. (Guylian) last week lost its Federal Court appeal against IP Australia’s rejection of its “seahorse” shape trade mark. The Federal Court’s decision1 confirms the high hurdle to registration faced by non-traditional trade marks such as shapes and further casts doubt on the utility of survey evidence in establishing distinctiveness of shape marks.

Guylian’s Box of Chocolates  

Guylian is a Belgian manufacturer of boxed chocolates. This case concerned its range of sea shell chocolates called “Perles d’Océan” that comprise eleven marine life shapes each filled with a hazelnut praline centre and a blend of white, milk and dark Belgian chocolate. The range includes different types of shells and shell-fish, a prawn and a seahorse shape.

Guylian has sold its sea shell range in Australia for approximately 30 years through retailers such as Coles, Woolworths, K-Mart, Target, Big W, Myer, David Jones and City Convenience stores. It provided evidence of annual retail sales of this range in the order of tens of millions of dollars in Australia between 1988 and 2004 and millions more in marketing and advertising in Australia over a similar period.

In 2002, Guylian filed an application for registration of a trade mark comprised of a particular shape of a seahorse. Registration was sought in respect of pralines and chocolates.

Trade Marks and the Requirement of Distinctiveness  

If a mark is to be registered under the Trade Marks Act 1995 (Cth) (Act), it must be capable of distinguishing the applicant’s goods from those of other businesses.

An applicant can demonstrate the capacity to distinguish either by showing that the mark is inherently adapted to distinguish or that through use the mark has become distinctive in the minds of consumers so that the mark can “do the job of distinguishing” the applicant’s goods (i.e. they will in fact serve as a “badge or an indicator of origin”).

On the first issue (i.e. whether the trade mark is inherently adapted to distinguish), the High Court has made it clear that it is necessary to consider, among other things, whether traders other than the applicant may legitimately want to use the trade mark2. The second issue (i.e. whether the trade mark does in fact distinguish), is essentially a question of evidence: does the evidence establish that the mark has in fact come to distinguish the applicant’s goods?

Guylian’s Survey Evidence  

Guylian tendered evidence from a market survey in an attempt to show that the seahorse had come to distinguish its chocolates. The survey demonstrated that 40.6% of respondents associated Guylian with the seahorse; 13.3% associated another brand or manufacturer with the seahorse shape; and 46.1% did not associate the seahorse shape with any brand.

Guylian’s marketing expert gave evidence that the strength of association between the image and Guylian was “very high” compared to other brands and manufacturers.

IP Australia’s Rejection of the Trade Mark  

In support of its rejection of Guylian’s trade mark, IP Australia relied upon:

  • Searches it performed in December 2002 and April and June 2004 showing several overseas websites offering for sale shell, starfish, seahorse, turtle, crab, sharks, lobsters, fish and octopus shaped chocolates.
  • Evidence of boxed sea shell and seahorse shaped chocolates sold by other traders in Australia, similar or in some cases the same as Guylian’s range. These included Darrell Lea’s “Chocolate Shells”, which include a similar seahorse shape, prominently featured on the front of the box. These chocolate boxes were purchased in 2008.  

IP Australia found the trade mark to be “clearly recognizable” as a modification of the shape of a real seahorse. It considered “that [the] shape is not prima facie capable of distinguishing” because other traders were already using the seahorse shape “or “shapes very similar to it”.

Therefore, Guylian had to try to establish that its mark had become distinctive in fact. In short, IP Australia considered that Guylian had failed to establish that the shape had been used as a trade mark because:

  • The images on Guylian’s boxes have functioned as an illustration of the contents of the box, rather than as a marker of the origin of the chocolates.
  • The seahorse shaped boxes (used since 1999) have not functioned or been recognised as a trade mark, because the shape of the box is overwhelmed by the word “Guylian”.
  • Although the survey evidence established that Guylian has a “strong presence in the market” under the “Guylian” name, the seahorse shape itself is not capable of doing the work of distinguishing the goods from the goods of other traders, because over half the survey respondents did not even associate the shape with Guylian.  

Is the Guylian Seahorse Inherently Adapted to Distinguish?  

Sundberg J accepted that a shape, which is reminiscent of a real animal or creature, should not for that reason alone be considered not inherently adapted to distinguish.

Justice Sundberg considered that the ultimate question in determining whether Guylian’s mark is inherently adapted to distinguish is whether there is a likelihood that other traders, acting with proper motives, will think of the shape and want to use the same shape or one that is substantially identical or deceptively similar. His Honour was satisfied that with other traders already selling sea shell chocolates as at the date of Guylian’s application, it was reasonable to expect that other traders might wish to make chocolates in the shape of a seahorse. His Honour said that the absence of other seahorses on the market at that time did not mean it was unlikely that others may in the future want to depict that particular sea creature.

His Honour considered that although the Guylian mark is to some degree inherently adapted to distinguish it was not sufficiently distinctive for these reasons:

  • First, there is a danger that first impressions will be sidelined when an analysis of a shape’s individual features is undertaken. In this case, the immediate impression one has of the mark in suit is of an ordinary seahorse.
  • Second, evidence of other seahorse shapes now on the market tends to confirm that other traders wishing to depict a seahorse may have difficulty in avoiding infringement proceedings. Given the exclusivity of the rights that would be granted to Guylian upon registration, it is difficult to see how other traders will know “where to draw the line”.
  • Third, the seahorse shape is not “entirely concocted” and therefore has some general associations of which other traders may want to make use. If granted, the registration would be over the shape generally and use of it as a chocolate would be a manner of use that would be likely to infringe.
  • Fourth, the more recent evidence of similar sea shell and seahorse chocolates (six years after the application) lends further support to the view that, as at the date of the application, other traders might have wished in the future to adopt the same shape or one closely resembling it.  

Is the Guylian’s Seahorse in fact Distinctive of its Goods?  

Given the mark was not inherently adapted to distinguish, his Honour had to then consider whether Guylian had shown that its mark had become distinctive of its chocolates through use. Sundberg J considered that despite the extensive sales and marketing of pralines and chocolates bearing (or including) the seahorse, Guylian failed to clear this hurdle because:

  • First, the seahorse shape (or, rather, an image of the shape) is used on Guylian’s packaging to attract consumers and provide an example of the box’s contents.
  • Second, the “Guylian” trade mark printed on Guylian’s packaging diluted the effect of any trade mark significance that might otherwise attach to the seahorse.
  • Third, although the shape of the seahorse shaped boxes is unique and has some ability to catch the eye, both the “Guylian” trade mark and the “G” trade mark feature significantly on the front of the boxes, which diminishes the trade mark significance the image of the seahorse shape might otherwise have.
  • Finally, in relation to the survey evidence and the evidence of Guylian’s marketing expert, Justice Sundberg considered that the association demonstrated by the survey is likely to be referable to Guylian’s sale of sea shell and seahorse shaped chocolates, over a long period of time, under the banner of the distinctive “Guylian” and “G” trade marks, rather than to the shape itself being used as a trade mark. In his Honour’s view, “the survey results do not in my view confirm that consumers actually understand the shape as an indicator of the origin of the goods”.  

The Result  

In the result, Sundberg J held that the seahorse shape is not capable of distinguishing Guylian’s chocolates and therefore should not be registered. His Honour’s decision reflects the traditional reluctance of Australian courts to recognise the ability of non-traditional trade marks (such as shapes) to act as trade marks.

In effect, if his Honour’s view is correct, survey evidence is largely irrelevant to assessing whether a non-traditional trade mark is capable of distinguishing: any survey is open to the criticism that it demonstrates no more than that consumers “associate” the shape with the applicant. It cannot demonstrate that the shape is “used as a trade mark”. The enables a Court to resist registration of shape trade marks based only on the Court’s view that the shape does not function as a trade mark.

It is not yet clear whether Guylian will appeal the decision to the Full Court.