TRADEMARK PROTECTION: LESSONS FROM CADBURY, NESTLE AND STEIFF

The decision of the British Court of Appeal last October to refuse the registration of Cadbury’s trademark application for a specific shade of purple used on its chocolate products, received deservedly a lot of attention from intellectual property (IP) practitioners worldwide. On the basis of lack of certainty, the Court of Appeal caused even more uncertainty by disallowing the exclusive use of a shade of purple that has traditionally been Cadbury’s prerogative.

The Court held that the trademark was too vague, touching upon a lack of ‘clarity, intelligibility, specificity, precision, accessibility, uniformity, self-containment and objectivity’. As reported, a valid trademark must not ‘take on a multitude of different appearances which would create problems for registration of the mark and give an unfair competitive advantage over competitors’. Even though the shade of Pantone 2685c is specific and its use by Cadbury over the years has been consistent, the Court reasoned that the verbal description of the mark was too broad; hence it did not satisfy the requirement of a ‘sign’ within the meaning of the EU trademark directive.

Since last year, Cadbury has turned the tables over to Nestle, who marked the end of the purple reign, by opposing the registration of the shape of Nestle’s Kit Kat bar. The matter has been referred to the EU Court in Luxembourg for guidance on EU law.  The EU directive on trademarks is unclear on the treatment of shape-registrations and unlike other jurisdictions such as Australia where the levels of distinctiveness offered are three, the EU offers only two. In another high profiled case, the General Court of the EU rejected last January Steiff’s application for a positional Community Trademark on its teddy bears for reasons of lack of distinctiveness.

While the EU directive on trademarks is in need of an overhaul, there are reportedly over 500 million trademark applications per year at both national and EU level. Only 10% of these applications are made through EU’s Office for Harmonization in the Internal Market (OHIM) in Alicante. The demand for trademark protection is high as is the necessity for certainty in the interpretation of what constitutes a valid trademark.

The function of a trademark is threefold, it identifies the origin of goods and services, it guarantees consistent quality by showing an organization’s commitment to its users and consumers, and last but not least, it is a form of communication, a basis for publicity and advertising. At a time when the exchange of information is affected at remarkable speed through social networks and platforms, it becomes all the more important for a modernized and flexible trademark registration regime that encompasses the radical growth of communication and technology.

Cyprus offers protection of trademarks at a national, an EU and an international level. With experienced human infrastructure in the registration of trademarks, a solid legal system guided by UK and EU rules and an attractive IP tax regime applicable to registered trademarks, it is no coincidence that Cyprus has witnessed a number of high-profiled IP transactions the past few years.