The U.K. Court of Appeals agreed with Mondelez, the owner of chocolate market Cadbury, when it argued that the KitKat’s design, with four separate sections of equal length, “lacked distinctive character.” The Appeals Court ruling upholds a January decision that challenged Nestle’s attempt to trademark the bar in 2010.
“Nestlé is disappointed by the court of appeal judgment and is considering next steps,” the company said in a statement. “KitKat is much loved around the world and its four-finger shape is well known by consumers. Nestlé’s four-finger shape has been granted trademark registration in many countries of the world, for instance Germany, France, Australia, South Africa and Canada, further protecting it from imitations.”
The U.K. verdict is the latest in a series of setbacks for the Swiss-based food group to protect the KitKat brand, which it acquired from Rowntree & Co. in 1998. The European Court of Justice rejected Nestle’s argument that the four-fingered bar’s shape was distinct to consumers, even without its red-and-white packaging, and thus deserved trademark protection.
Nestle shares were marked 0.5% lower at Sfr81.90 in late Zurich trading, trimming their year-to-date advance to just over 12%. Mondelez shares were trading 0.3% lower at $45.32 each by 10:00 am in New York and have risen just 2.3% so far this year.