Quality. Chocolate. Squared. … Registrable?

Author: Margret Knitter, LL.M.

The German Federal Court of Justice decided that Ritter Sport may retain the trademark registration of its chocolate’s square packaging.

Square resulted from the nature of the product itself?

Ritter Sport had already obtained trademark protection for the packaging of its “Ritter Sport” and “Ritter Sport Mini” square chocolate bars without imprint in 1995 and 1998 respectively. At the time, the trademarks were registered on grounds of demonstrating acquired distinctive character.

Milka, a major competitor, had initially successfully appealed the registrations. In 2016, the German Federal Patent Court found that the challenged design consisted exclusively of a (packaging) shape that resulted from the nature of the product itself. It would not be permissible to monopolize such shapes for one competitor.

In 2017, the Federal Court of Justice reversed this decision arguing that a shape only resulted from the nature of the good itself if it had functional properties typical of the generic group and which consumers would also look for in competitors’ products. The square shape was not considered to be such a “material property.”

Litigation round two

Consequently, the dispute went into the second round – ending up back before the Federal Patent Court, which then examined whether the chocolate’s square shape would give substantial value to the product. The Federal Patent Court denied this, so that the registration of the trademarks was upheld.

After the competitor appealed this ruling, the Federal Supreme Court now issued a final decision on the matter by affirming the packaging’s registrability as a trademark (July 23 2020 – I ZB 42/19 and I ZB 43/19, in German). You can find the press release in German here.

Square gives substantial value to the product?

In its judgement, the Federal Court of Justice laid out the basic conditions for when a shape gives substantial value to a product: The shape would either have to exhibit an artistic value and be different from other shapes generally used on the respective market. Alternatively, there would have to be a significant price difference compared to similar products or a specific marketing strategy highlighting the respective product’s aesthetic features. None of those factors would be present in the case of the Ritter Sport square. In particular, the square would not greatly influence consumers’ purchasing decisions.

Consequences for use in practice

The decision is correct and conveys legal certainty to trademark holders. As positive as it is, however, it cannot hide the fact that it does remain fundamentally difficult to obtain trademark protection for shapes consisting only of the product itself. Even Ritter Sport packaging was only registered as trademark thanks to its outstanding recognition. Once a product has achieved this status, trademark protection with virtually unlimited protection time is possible. Manufacturers of new products, however, that are characterized by their shape alone, will have to continue to be patient and build up a certain degree of recognition prior to applying for trademark protection.

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