Chocolates – a personal matter, where we all have our individual preferences. Whether it be Cadbury’s Dairy Milk or Snickers, Nestle’s KitKat has always been one of the nation’s favourites. However, a recent decision by the European Court of Justice (ECJ), held that this lunchbox snack staple does not merit trademark protection.
But why isn’t the chocolate covered wafer bar worth the protection it seeks?
The ruling of the EU’s highest court settles the 11- year struggle between Nestlé and Mondelēz, the owner of Cadbury. The legal battle began in 2007, five years after Nestlé was initially granted trademark protection for KitKat. This decision was challenged by Nestlé’s rival, who alleged that the KitKat design was not distinctive enough and was but in fact homogeneous to its Norwegian treat Kvikk Lunsj.
Perhaps the most successful trademarking of a chocolate bar is Toblerone, which crucially demonstrated its triangular shape is ubiquitous in every European market.
Though KitKat is available to purchase in more countries than its chocolate confectionery competitors, the ECJ has said that it is still not notorious enough within all EU member states, thus undeserving of a pan-European trademark. Trademarks can provide a noteworthy business benefit through awarding significant brand value, which explains why so many popular brands have become entangled in long-lasting court cases when competitors challenge a trademark’s validity.
This long running spat is not the first legal tussle between these two global food super powers and appears to be merely the latest example of the inter-corporate enmity between Nestlé and Mondelēz. The two giants duelled before when Nestlé endeavoured to block Cadbury’s effort to seek trademark protection for the shade of purple it uses on its chocolate wrappers.
So, is embroiling your business in a costly legal challenge and locking your legal department in years of courtroom battles really worth it?
Litigation initiated to challenge another brand does not always put reputations at risk. In fact, in this instance the outcome has been to raise the profile of KitKat as well as less familiar brands such as Mondelēz’s Kvikk Lunsj and Milka Leo chocolate bars. It seems, therefore, that both chocolate makers have benefited from the increased media attention.
It is fair to say that “positive” media coverage raises brand awareness, but does that necessarily mean that “negative” news must have the same correlation?
International corporations frequently find themselves involved in court cases and the subsequent increased coverage can expose them to significant reputation damage. As “negative” as an issue may seem, the way a legal dispute or crisis is handled is crucial in protecting a firm’s ‘reputation dividend’. Legal skirmishes handled correctly do not always end up carrying the expected reputation risk.
It is fair to say that Nestlé’s persistence by focusing its energy on handling the challenges to its reputation through the European Courts prove that as a global company it will not simply stand by while its reputation is challenged.
It is safe to say that trademark or not, the nation will not be taking a break from KitKat.
Thanks to Sadia Barry (one of our City University Law School Micro-Placement Students) who contributed to this article