Sugar and Spice and Trademarks Are Nice
Candy Bar Shape Trademark: No-Function Junction
First up, you may remember my summary of the Trademark Trial and Appeal Board (TTAB) hearing that addressed the issue of whether this shape:
is functional (i.e., the shape is useful for the product) for Hershey’s milk chocolate bars. The verdict? No. Although the TTAB acknowledged that segmenting or scoring chocolate does serve a useful purpose (e.g., making it easier to break apart for S’Mores!), itdistinguished Hershey’s applied-for mark, which included several details like “raised-border ridges” and “recessed rectangles,” from a simply-segmented chocolate bar design. The TTAB also concluded that the chocolate bar’s shape had acquired distinctiveness, which means customers recognize the shape as belonging to a Hershey bar. So, the TTAB let Hershey register the design of its chocolate bar as a trademark.
The Cadbury-Nestlé Wars: Gimme A Break!
Hershey isn’t the only one who wants to protect the shape of its candy bars. Can you identify this one? (Try not to read the brand name imprinted on the chocolate.)
Did you recognize it as a Kit Kat™ bar? If not, you’re part of a minority, at least according to a European Union (EU) trademark board. Nestlé attempted to register the shape of the candy bar in the EU in 2002. In 2006, The EU trademark registration entity, called the Office of Harmonization for the Internal Market, (OHIM) granted Nestlé a registration for the shape in connection with sweets, bakery products, cakes, waffles, and biscuits (interestingly, the registration was denied for chocolate, confectionary, and candy, but, according to the EU trademark attorney, Kit Kat™ bars can fall under the description of “chocolate-covered biscuits.”)
In 2009, Cadbury challenged the registration, saying that the shape wasn’t distinctive, and that the shape itself hadn’t acquired distinctiveness because Nestlé had never used it without the words “Kit Kat” imprinted on each of the chocolate wafer fingers. Initially, Cadbury won the appeal, but the OHIM Board of Appeals recently overturned that decision because it found that Nestlé has been using the shape long enough and widely enough in the EU that customers would recognize it as a Kit Kat™ bar. On top of that, Cadbury has to pay Nestlé’s appeal costs (which is not uncommon in Europe, the loser generally pays over there).
Nestlé clearly got a break in this case.
You Must Remember This… A Kiss (for Trademark Issues) is Just a Small Candy
Hershey might have won the day at the TTAB, but it had less luck at the district court. Last week, the U.S. District Court for the District of New Jersey stated its opinion that SWISSKISS chocolate candies don’t infringe Hershey’s KISS trademark rights. The parties have been litigating since 2005, first at the U.S. Patent and Trademark Office and then at the District Court. But interestingly, Hershey’s loss didn’t mean a victory for the other side.
Promotion in Motion (PIM), the (now-former) owner of the SWISSKISS trademark, hasn’t had an easy time protecting its candy brand. Its trademark application at the PTO was initially denied registration as potentially deceptive concerning geographic origin, since the chocolates with which SWISSKISS is associated aren’t made in Switzerland. Then PIM had to fight off an opposer (besides Hershey) who was concerned that the mark would also be used for non-Swiss chocolate. PIM narrowed its description from “chocolate” to “chocolate of Swiss origin” to resolve that dispute. Hershey didn’t oppose registration of the mark at the PTO, and the mark was allowed in 2004.
In 2005, though, Hershey petitioned for cancellation of the trademark registration at the PTO. Then, in 2007, it initiated this lawsuit in the District Court. PIM decided not to market or sell SWISSKISS chocolates while the trademark litigation was ongoing.
Hershey argued that customers were likely to confuse SWISSKISS with its KISSES marks because both marks contain the word “KISS” and both are used for small chocolate candies. But the court said that no likelihood of confusion exists because of the significant differences in packaging and appearance: the SWISSKISS product looks like this:
while Hershey’s KISSES look like this:
Plus, the “KISS” part of the SWISSKISS mark is at the end of the word, which contributes to the different sound and appearance of the marks.
Finally, the court found that KISS isn’t a strong trademark. Despite the immense popularity of the candy, the term “kiss” has been used to describe small pieces of candy since the 19th century, before Hershey began selling its iconic chocolates in 1907. And Hershey’s efforts to register the mark in the 1920s and 1970s were unsuccessful based on descriptiveness; Hershey didn’t get a registration until 1996, after showing that the trademark had acquired distinctiveness.
The court considered the other likelihood of confusion factors as well, and ultimately concluded that Hershey had not shown likelihood of confusion between the two trademarks.
Kiss Your Trademark Lawsuit Goodbye
But PIM’s success was bittersweet. Remember how PIM decided not to sell SWISSKISS products until its legal troubles were resolved? Well, that means that PIM hadn’t used the mark in commerce since 2007. It’s now 2013, and a legal presumption that an owner has abandoned a mark arises after 5 years of nonuse.
Hershey argued that SWISSKISS’s only “use in commerce” since 2007—a single shipment of 50 cases to one company—was “mere token use for the purpose of securing a trademark.” The court said this use is de minimis—it doesn’t count as “bona fide use” sufficient to protect the trademark from an abandonment determination. Also, the court said that just because PIM included the product in the Candy Buyer’s Directory wasn’t evidence of an actual sale during that time period. So, because PIM had no bona fide use of the mark in the last 5 years, the court ruled that it had abandoned its mark, and PIM’s registration then melted away.
What the chefs say is true—both culinarily and trademark-wise, chocolate is a difficult ingredient.