Societe Des Produits Nestlé SA and another v Petra Foods Limited and another

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 24 November 2016
• Neutral Citation: [2016] SGCA 64
• Plaintiff Counsel: Alvin Yeo SC and Chen Xinping (instructed), Sheena Jacob and Wang Zheng Just (Bird & Bird ATMD LLP)
• Docket Number: Civil Appeal No 200 of 2014
• Date: 24 November 2016
• Hearing Date: 31 July 2015,10 February 2016
• Subject Matter: Revocation,Well-known trade mark,Registration criteria,Trade Marks and Trade Names,Grounds for refusal of registration,Distinctiveness
• Year: 2016
• Defendant Counsel: Davinder Singh SC, Gill Dedar Singh and Gabriel Ong (Drew & Napier LLC),Prof Ng-Loy Wee Loon SC (Hon Caus) as amica curiae.
• Court: Court of Appeal (Singapore)
• Citation: [2016] SGCA 64
• Published date: 14 January 2017

Sundaresh Menon CJ (delivering the judgment of the court): Introduction

The law has tended to view attempts to obtain protection over three-dimensional marks (also referred to as “shape marks” in this judgment) with some suspicion. It was once observed that a trade mark must be distinct from the product to which it is applied; or, to put it another way, a product cannot be a mark of itself: per Lindley LJ in Re James Trade Mark, James v Soulby (1886) 33 Ch D 392 at 395. And in Re Coca-Cola Co’s Application [1986] 2 All ER 274 (“Coca-Cola”), the House of Lords described an attempt to register the shape of the Coca-Cola bottle as “another attempt to expand on the boundaries of intellectual property and to convert a protective law into a source of monopoly” (at 275). This restrained attitude to the protection of shape marks is perhaps not unjustified, given “the spectre of a total and perpetual monopoly in containers and articles” (at 276). In more recent times, the law has become somewhat friendlier towards the registration of unconventional marks such as shape marks. Courts, however, still find themselves grappling with the single recurring theme in the present appeal: when is a trader entitled to a perpetual monopoly of a shape that has been used in connection with his trade?

In Societe Des Produits Nestlé SA and another v Petra Foods Ltd and another [2014] SGHC 252 (“the Judgment”), the High Court judge (“the Judge”) dismissed, among other things, the appellants’ claims for trade mark infringement, and allowed the respondents’ counterclaims for the invalidation and/or revocation of the registration of the appellants’ trade marks as well as for groundless threats of trade mark infringement. The appellants seek to reverse those rulings, and their appeal raises significant questions of law and policy peculiar to the protection of shape marks. The shapes in issue in the present case are the two-finger shape (“the Two-Finger Shape”) and the four-finger shape (“the Four-Finger Shape”) in which chocolate bars bearing the KIT KAT trade mark, with which members of the public are well-acquainted, are sold.

Background

The material facts are set out in detail in the Judgment and it is not necessary for us to repeat them in their entirety. We confine ourselves instead to the more important facts that are pertinent to the issues raised in this appeal.

The parties

The appellants belong to the Nestlé group of companies and their chocolate-covered wafer products are distributed under the KIT KAT trade mark. The first appellant, Societe des Produits Nestlé SA, is a public company incorporated in Switzerland and the second appellant, Nestlé Singapore (Pte) Ltd, is a company incorporated in Singapore.

The respondents belong to the Petra Foods group of companies and are both incorporated in Singapore. The first respondent, Petra Foods Limited, is the parent company of the second respondent, Delfi Singapore Pte Ltd, which is the importer and distributor of a chocolate product distributed under the TAKE-IT and DELFI TAKE-IT trade marks.

The trade marks in issue

The first appellant is the registered owner of trade marks of the Two-Finger Shape and the Four-Finger Shape in Singapore. We will hereafter refer to the trade marks of these two shapes as, respectively, “the Two-Finger Mark” and “the Four-Finger Mark”. These two shape marks (collectively, “the Registered Shapes”) are as follows:

The Two-Finger Mark The Four-Finger Mark

The registration for both trade marks was specified to be for goods falling within Class 30 of the Nice Classification of Goods and Services for the Purposes of the Registration of Marks (“the Nice Classification”), namely, “[c]hocolate confectionery being chocolate coated confectionery blocks or bars and chocolate wafer biscuits” [emphasis added]. The particular features of the Registered Shapes were described as follows in their registration certificates: “[t]he trade mark consists of the three-dimensional shape of the goods, being [two or four] bars attached to one another by a thin base as shown in the representation on the [application form]” [emphasis added].

For completeness, the first appellant also claims to own the following unregistered trade mark, although it does not feature in this appeal:

The parties’ products

The appellants’ products are essentially moulded chocolate wafer confectioneries. Products bearing the Registered Shapes have been sold in Singapore since the 1950s. The four-finger Kit Kat product was launched as Rowntrees Chocolate Crisp in 1935, and was subsequently rebranded as Kit Kat in 1937. The two-finger Kit Kat product was launched in 1963. The popularity of these products is clear from the quantity sold in Singapore between 2003 and 2010, which is estimated to be more than 2.4m kg.

The respondents appear to likewise have a long history of selling moulded chocolate wafers and biscuits. According to the respondents, one of the first respondent’s subsidiaries, PT Ceres, first manufactured a moulded chocolate wafer comprising a single chocolate-coated wafer under the trade mark PATSY in Indonesia in 1951. Sometime around 1986 to 1987, PT Ceres manufactured and sold moulded chocolate wafers comprising two or three sticks of wafer joined at the base by chocolate. These were sold in Indonesia, Singapore and Dubai under the WINDMOLEN mark. Subsequently, the respondents developed a new product line consisting of two-finger and four-finger Take-It products. Like Kit Kat products, these are also moulded chocolate wafer products.

The resemblance between the Take-It and Kit Kat products is evident. The Take-It products, when unwrapped, take the following forms:

It is the appellants’ case that the Take-It products infringe their intellectual property rights. Summary of the parties’ pleadings

In the proceedings below, the appellants pursued the following claims against the respondents: trade mark infringement (product and packaging) in respect of both well-known and registered trade marks; and copyright infringement (packaging).

In response to the appellants’ trade mark infringement claims, the respondents counterclaimed under s 35(2) of the Trade Marks Act (Cap 332, 2005 Rev Ed) (“the TMA”) for groundless threats of infringement proceedings. They also sought the invalidation and/or revocation of the registration of the Registered Shapes on the grounds that: the Registered Shapes had been registered in breach of s 7(1)(a) of the TMA in that they were not trade marks within the meaning of s 2(1) of the TMA, being incapable of distinguishing the goods for which they had been registered; the Registered Shapes had been registered in breach of s 7(1)(b) of the TMA in that they were devoid of any distinctive character; the registration of the Registered Shapes should be revoked pursuant to s 22(1)(a) of the TMA as the Registered Shapes had not been put to genuine use in the course of trade in Singapore within five years following the date of completion of the registration procedure, and there had been no proper reasons for non-use; the registration of the Registered Shapes should be revoked pursuant to s 22(1)(b) of the TMA as use of the Registered Shapes had been suspended for an uninterrupted period of five years, and there had been no proper reasons for non-use; the Registered Shapes had been registered in breach of s 7(3)(a) of the TMA in that each of them consisted exclusively of “[a] shape which results from the nature of the goods themselves”; the Registered Shapes had been registered in breach of s 7(3)(b) of the TMA (also referred to hereafter as “the ‘technical result’ prohibition” where appropriate to the context) in that each of them consisted exclusively of “[a] shape … which is necessary to obtain a technical result”; and the Registered Shapes had been registered in breach of s 7(3)(c) of the TMA in that each of them consisted exclusively of “[a] shape which gives substantial value to the goods”. Many of the pleaded issues have not been pursued in this appeal, the scope of which is limited to the issues of trade mark infringement, invalidation and/or revocation of the Registered Shapes’ registration and, arguably, groundless threats of trade mark infringement.

The decision below

In the court below, the Judge dealt first with the respondents’ counterclaim for the invalidation of the Registered Shapes’ registration since the appellants’ claims for trade mark infringement would necessarily fail if the appellants had no valid legal rights to begin with. The Judge allowed this counterclaim on the basis that the Registered Shapes had been registered in breach of ss 7(1)(b) and 7(3)(b) of the TMA.

In respect of s 7(1)(b) of the TMA, the Judge found that the Registered Shapes were not inherently distinctive because the average consumer of chocolate products would not pay particular attention to the Registered Shapes as indicators of origin since they did not depart significantly from the norms and customs of the chocolate confectionery sector (see the Judgment at [160]). The Judge was of the view that even if the Registered Shapes did depart significantly from those norms and customs, it was insufficient to establish inherent distinctiveness since neither of these shapes amounted to “a fancy shape which truly in itself will denote trade origin” (see the Judgment at [162], citing the English Court of Appeal’s decision in Bongrain SA’s Trade Mark Application [2005] RPC 14 (“Bongrain”)). Further, the Judge found that the evidence did not show that the Registered Shapes had “acquired a distinctive character as a result of the use made of [them]” for the purposes of s 7(2) of the TMA. In arriving at this conclusion, the Judge accepted that the correct test for acquired distinctiveness was that set out by Arnold J in Société des Produits Nestlé...