For the Chocolate Junkies and Trade Mark Lovers

By Nicole Ockl, Senior Associate

There’s no accounting for taste. However, a long-running battle about the shape of chocolate came to an end a few weeks ago in July 2020. Germany’s highest court, the Federal Court of Justice (BGH), ruled on the trade mark dispute between Ritter Sport and Milka (BGH, 23.07.2020 I ZB 42/19, I ZB 43/19).

For the few who are not experts in the chocolate cosmos: Ritter Sport started in 1912 as a small familyowned company in the Southwest of Germany, and developed into a successful international business over the last hundred years. Well-known in Germany and worldwide for its delicious chocolate in a square shape, the company is still led by the Ritter family and its recipe for making the great chocolate remains a secret.  A principal competitor, Milka, is a Swiss-German brand of chocolate confectionary founded in 1901. It was acquired by US confectionery giant Mondelēz International (formerly known as Kraft Foods) in 1990, and is now a leading milk chocolate bar manufacturer.

People who expect the current dispute to be about registered design rights will be disappointed. However, the often underestimated and overlooked 3D trade mark, specifically German trade mark No. 398 69 970 (applied for in 1998), is the central issue here. Milka questioned the validity of trade mark rights and challenged its German monopoly in respect of its square chocolate bar shape.

Milka won the first round before the German Federal Patent Court (BPatG, 04.11.2016 25 W (pat) 78/14), arguing that the trade mark represents a packaging shape which consists exclusively of a shape resulting from the nature of the product itself. Looking back, this initial victory in 2016 generated some false hope ending in bitter setback for Milka when the German Federal Court of Justice (BGHI ZB 105/16 and I ZB 106/16 – Square Chocolate Packaging I) disagreed and referred the case back to the German Federal Patent Court to reconsider whether the shape was derived solely from the product shape, or served to indicate a commercial trade origin.

This was far from the end of the matter. Milka remained defiant, knowing that the German Federal Patent Court would follow precedent set by the German Federal Court of Justice, it dropped the original ground for cancellation and shifted the basis for the cancellation action to the legal ground that the 3D trade mark at issue consists exclusively of a shape which gives substantial value to the goods.

However, Milka was not successful in convincing the German Federal Patent Court (BPatG, 13.12.2018 25 W (pat) 79/14) and appealed to the German Federal Court of Justice which now had to decide whether the square shape provides “essential value” and is therefore invalid. The following key questions were considered:

  • Is the shape essentially different to similar chocolate products offered on the market?
  • Is there an artistic value within the shape which is essential?
  • Does the shape create a significant price difference compared to similar products?
  • Does the marketing strategy focus purely on aesthetic elements of the goods in question?

In summary, the Court was not convinced that the reason for consumers to buy the chocolate is based predominately on its square shape. However, it held that the shape has no relevant artistic or design value. Even the marketing slogan “Quality in a square”, which alludes to the shape (the original German slogan is: “Quadratisch. Praktisch. Gut.”, which translates as “Square. Practical. Good.”), was not found sufficient to put the shape foremost in consumers` minds. The Court found that the shape did not generate a price difference, nor did it influence consumers’ purchasing decisions to a high degree. Accordingly, the shape was not found to provide an essential value to the product. Finally, it is irrelevant whether the shape has become known in the market and provides a competitive advantage, as otherwise economically valuable brands would generally be ineligible for registered protection.

Without commenting on the chocolate’s taste, we see this dispute as a great lesson that 3D trade marks should not be forgotten as a valuable IP right to protect your design!