Guylian sunk in chocolate seahorse trade mark appeal

Guylian, Belgian’s most widely known chocolatier, have lost an appeal before the Federal Court of Australia against the decision of the the delegate of the Registrar of Trade Marks denying their application to have their praline shaped seahorse chocolates registered as trade marks.

The Federal Court in Chocolatiere Guylian N.V v Registrar of Trade Marks, held that the chocolate seashell shape was not sufficiently inherently distinctive to satisfy the requirements of S41(3) of the Act, and didn’t distinguish the origin of the goods as being exclusively associated with Guylian in the sense required by S41(5) of the Act.

The premium chocolate maker manufacturer’s boxed chocolates  are sold in over 132 countries, with an  $8 million annual advertising budget. The seashell remains the company’s number one product, accounting for 65% of all sales and was created with gift giving in mind.

Guylian’s  sea shell chocolates  are sold in boxes of various sizes and configurations, comprising an assortment of sea shell and other marine shapes, including the seahorse shape.  Guylian has been marketing and selling its sea shell range, including the seahorse shape, in Australia for almost 30 years in Australia through supermarkets and specialty confectionary outlets catering to the sophisticated chocolate consumer.

Prior to obtaining their registration in Australian Guylian had obtained a Benelux registration of it’s chocolate seahorse shape as a trade mark pursuant to the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks 1989, known as the Madrid Protocol.

The Madrid Protocol streamlines the process for the registration of trade marks in multiple countries through the filing of one single international application with the International Bureau of the World Intellectual Property Organisation. Applicants make an Application through their own state office which is then transmitted to the International Bureau. The ‘International Registration Designating Australia’ was duly transmitted to the Australian Trade Marks Office for  examination. Guylian’s international application sought to extend their trade mark registration over the seahorse shape to a three dimensional shape mark in Australia in respect of class 30, comprising chocolates and confectionary.

The Registrar rejected the application on the grounds that the seahorse shape was not inherently capable of distinguishing the goods under S41(3) and under S41(5) of the Act. On the latter point, the Registrar didn’t find that  Guylian had used the sign ‘as a trade mark’ in the sense required by the Act and case law.

Evidence was put before the delegate at the hearing of rival traders having already sold chocolates in the shapes of other marine life long before the priority date of Guylian’s registration. There was evidence demonstrating sales of starfish, crabs, sharks, lobsters, fish, octopus and seahorse shapes. This evidence was contested by Guylian.

Guylian appealed the decision of the Registrar under S31 to the Federal Court of Australia.

The Appeal to the Federal Court

In the appeal to the Federal Court Sundberg J had to assess whether the trade mark satisfied the requirements of S41(3) or S41(5) of the Act.

Prior to the commencement of the Trade Marks Act 1995  (Cth) shape trade marks were not expressly recognised by statute as being capable of registration.  However it was still possible to register a trade mark under the predecessor Act, the  Trade Marks Act 1955 (Cth).  In 1995 the ability to register a shape mark was expressly recognised in the Act within a  category amongst other non-conventional trade marks. The definition of ‘signs’  as defined in S6 of the Act, including colour, scent,  sound and shape amongst other things.

There have been a number of contentious decisions in Australia concerning the registrability of shape trade marks including Koninklijke Phillips Electronics N.V v Remington Products Australia Pty Ltd, in which it was held that the trade mark cannot be the article itself without evidence of substantial use, unless the mark was inherently distinctive under S41(3).

Trade marks have both functional and formative aspects, considerations which have been acknowledged in litigation over the registrability of shape trade marks in the previous Federal Court case of Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks .  In the Kenman Kandy case, the Federal Court of Australia allowed the registration of a piece of confectionary as a trade mark, being a highly imaginative and inventive stylised  three-dimensional six legged insect.

Sundberg J addressed the issue of whether there is a presumption of registrability of trade marks under the Trade Marks Act 1995 (Cth). The Judge acknowledged that under S33 of the Act there is a presumption of registrability of trade marks which applies when considering the registration of a trade mark. However once it is determined that a trade mark doesn’t meet the requirements set out in S41(3), the presumption of registrability no longer applies.

The focus of the enquiry then shifts to whether the trade mark has acquired trade mark status by virtue of S41(5) or S41(6), the onus resting with the Trade Mark Applicant to demonstrate the criteria for registrability of the trade mark have been satisfied on the balance of probabilities.

Registrability under S43(1)

Guylian contended that it’s seahorse shape was inherently distinctive, in a similar way to the Kenman Candy bug.

Guylian argued that whilst it’s seahorse was designed with a real seahorse in mind, it’s highly imaginative and unique rendition of the seahorse was only reminiscent of a seahorse found in nature. The contours of it’s design and it’s overall configuration resulted in a fanciful stylised version of a seahorse,  radically different from a real seahorse.

Just like the bug shaped confectionary in Kenman Candy, Guylian contended their seahorse wasn’t a representation of a real seahorse and couldn’t be mistaken for one.  Their reasoning was that normal seahorses are elongated, not chunky in appearance, and their tails extend out downwards and forwards, rather than being curled up behind them. According to Guylian their seahorse represented a depiction or modification of a real seahorse, and it’s registration shouldn’t stop other chocolate manufacturers being able to legitimately adopt shapes recognisable as or reminiscent of seahorses.

Whilst Sundberg J acknowledged that Guylian’s chocolate seahorse shape was to some extent inherently distinctive, he held it was not sufficiently so to the degree that is required by section 41(3) Trade Marks Act 1995 (Cth). In  response to Guylian’s argument that its seahorse shape was imaginary or concocted, the Court noted Guylian’s rendition did have distinctive features with a level of  “stylisation or abstraction”.

However these relatively minor differences, did not have any significant impact on the ordinary association or signification that the shape establishes in the mind of the observer. The Court stated that the shape before it was different than the shape before the court in the Kenman Candy case, in that the seahorse conveyed a particular meaning, and was not entirely imaginary.

Guylian contested the evidence that there were other seahorses which were being sold as at the priority date of their earlier registration. It argued no other traders were in fact using such a shape prior to the relevant date.

Guylian submitted that the Court should discount the evidence  adduced by the defendant of traders using the seahorse shape in 2008, as this use wasn’t motivated by good faith traders. Guylian asserted that the traders who had used the seahorse shape had in fact  copied their design, and were therefore driven by improper motives, in trying to assert a connection between their goods and those of Guylian.

Sundberg J accepted that other manufacturers were  presently selling chocolates in the shape of a seahorse either identical or very similar to Guylian’s seahorse chocolate, and at the very least the evidence of traders selling similar shapes since 1990 was evidence that other traders may have wanted to use a similar shape as part of a novelty marine shell range.

The Court considered extensive evidence adduced by Guylian, including corporate marketing documents, brochures, annual sales figures and survey evidence containing market research data demonstrating the perception and understanding of ordinary consumers. This survey evidence is often  designed to establish the level of recognition of a particular trade marks in the minds of consumers.

The Court concluded that the survey evidence presented did not demonstrate that the chocolate seahorse shape was capable of distinguishing the relevant goods from those of other traders, and could not be regarded as sufficient to demonstrate use as a trade mark. The evidence didn’t satisfy the court that the chocolate seahorse shape had acquired trade mark status such that it constituted a badge of origin.

The Court also agreed with the delegate’s finding that the use of the shape on the chocolate’s packaging, including the prominence of a stylised G on the packaging and other marketing materials had the effect of diluting or detracting from the trade mark significance which might have otherwise attached to the shape itself. The Judge said “any distinctiveness the shape has acquired is attributable to its use alongside the traditional Guylian trade marks, rather than as a trade mark itself“.

The survey evidence put before the Court by Guylian was  extensive, and demonstrated a high level of association in the minds of the consumers surveyed between the chocolate seahorse shaped shells and Guylian.  Forty percent of consumers sampled identified the seahorse presented to them as sea horse shaped chocolates made by Guylian without prompting from the persons conducting the survey. Other brands accounted for only 13% of the sample, with the highest being Lindt which reached only 1.7%.

However, the Judge was still not persuaded that the high level of association was sufficiently high to render the trade mark distinctive, based on previous case law. The association must be shown to have arisen from the use of the seahorse as a trade mark, rather than  just use. The level of association between the image and Guylian must lead to a conclusion that a particular shape mark has in fact become capable of distinguishing Guylian’s goods from those of others.

This case highlights the practical difficulties and limitations in successfully registering shape trade marks for food products, demonstrating the high threshold of distinctiveness required, whether in terms of the inherent adaptation to distinguish or by way of trade mark usage.  As with all trade mark cases it highlights the role that survey evidence, if flawed, can play in being able to demonstrate use of a trade mark to demonstrate origin under S41(5). There were some comments made by the Judge as to the conditions under which the survey evidence was collected which cast doubts upon it’s reliability.

By way of contrast in Japan in Chocolaterie Guylian NV v Commissioner of Japan Patent Office 2008, the Intellectual Property High Court of Japan found that the three dimensional  shape was inherently distinctive.

Other chocolate/confectionary trade mark cases

There have been a host of other similar applications for trade marks over chocolate products in other countries, such as the registration of the triangular peaks of  Toblerone chocolate, the 3D shape of Cadbury’s Freddo frogs and Arnott’s teddy bear biscuits.

Mars’ registration of it’s three dimensional European community trade mark was overturned and deemed invalid, having earlier obtained a registration over the bar for it’s rounded edges and three decorative arrows or chevrons appearing on it’s top. It was successfully argued before the European Court that the trade mark was devoid of distinctive character.  The company opposing the registration prevailed before the Court with it’s argument that chocolate bars are in fact typically bar-shaped with rounded edges.

The recent Bounty case in 2009 is the second chocolate bar ruling of the European court, following upon the Lindt chocolate bunny ruling which has been remitted back to an Austrian court for a final decision.

Other shape marks which have been refused registration include Nestle’s application for its symmetrical trapezoid shaped bar, (“four chocolate bars attached to one another with a thin base“).  A delegate of the Registrar of Trade Marks found that the bar didn’t qualify as a trade mark in the sense that it designated origin, but served a functional purpose.

Aldi successfully opposed the registration arguing that there were other chocolate products on the market that ‘have a break’ or, put more simply, could be divided up into small sections or bars,  plainly just a matter of consumer desirablity and convenience. One of these was it’s Dairy Fine Double Time Wafer Bar. This element of convenience, Aldi successfully pointed out,  meant  consumers wouldn’t be left with one large ungainly block of crumbly water material, an argument which found favour with the decision maker.

Nestle had wanted the exclusive trade mark rights to use the four bar shape for chocolate.  Nestle claimed albeit unsuccessfully, that  consumers were aware of the advantageous shape of the applicant’s products, which readily snapped into convenient finger-like portions, but that this perception was merely a co-incidental discovery made by an earlier generation of consumers long after the shape had been adopted in Australia in 1948. The shape was, it was argued, at the time of its adoption in England in 1935, and subsequently in Australia, a coined shape, worthy of trade mark status.  The delegate  however agreed that the four fingered shape was merely a functional aspect of the product, upholding Aldi’s opposition to the registration by Nestle.

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