Date: 27 July 2020
Ritter Sport, maker of the iconic square chocolate bar, has just won a ruling before the German Federal Court in favour of its trade mark on square chocolate bars. A dispute was triggered in 2010 when Milka started selling square chocolate bars.
Trade mark law assumes that consumers make purchasing choices on the basis of how a product appears. This could apply to the packaging or characteristics of the product itself. Chocolate is not limited by physical limitations that demand it to be in a certain shape. Therefore the choice of which shape to present the product is, in principle, an important branding decision.
The choice of shape can target a particular market, type of consumer, or occasion on which the chocolate should be consumed. Consider the famous Lindt chocolate bunnies, wrapped in foil and adorned with a little red ribbon and bell. The rabbit shape appeals to children and reminds consumers of the Easter rabbit. The specific shape used has also become extremely recognisable and associated with Lindt.
These principles also apply to Ritter Sport. The iconic shape of their chocolate bars was conceptualised in 1932 by Clara Ritter, owner and co-founder of the company. She is reported to have said: "let's make a chocolate bar that fits in everyone's jacket pocket without breaking and weighs the same as a normal long bar."
This choice of shape was very important. The idea developed from the perspective of practicality, but the shape of the chocolate was so distinctive, it came to signify the brand. For consumers, this meant they could rely on the square shape to deliver a certain flavour and quality.
Ritter Sport continued to consolidate their square-shaped branding. Their logo is the company’s name in a square; and their slogan “quadratisch, practisch, gut” is translated into English as “quality chocolate, squared”. The company also trade marked their three-dimensional square chocolate shape in 1993.
Milka applied for the cancellation of Ritter Sport’s trade marks on the basis of article 3(2) of the German Trade Mark Act:
All signs… three-dimensional designs, [and] the shape of goods… may be protected as trade marks if they are capable of distinguishing the goods or services of one enterprise from those of other enterprises.
Signs consisting exclusively of a shape
1. which results from the nature of the goods themselves,
2. which is necessary to obtain a technical result, or
3. which gives substantial value to the goods
This provision stipulates that three-dimensional marks that reflect the nature or function of the product cannot be registered. In other words, the functional aims and essential nature of a product should be separated from its aesthetic features.
To illustrate this, we can use the example of a bottle. There are certain shape characteristics a bottle should have in order to fulfil its definition of a ‘bottle’. It should have a narrow opening, possibly secured with a lid, and it should surround negative space with the ability to hold something, possibly liquid. However, the choices a producer makes as to whether the bottle is round, square, has ribbed sides, is able to stand up independently etc. are design considerations.
In an earlier decision in 2017 (I ZB 105/16 and I ZB 106/16), Milka succeeded in having Ritter Sport’s trade mark cancelled. The German Federal Court held that the square shape of Ritter’s bars was an essential feature of the product itself, and therefore could not be trade marked. The cancellation request was not successful and the matter was referred back to the German Federal Patent Court.
The case appeared before the German Federal Court once again. This time, the court followed a different line of reasoning. The fundamental question that they answered is whether the consumer's purchasing decision is largely determined by the feature in question.
The answer is dependent on a variety of factors specific to the market in question:
In the most recent decision (I ZB 42/19 and I ZB 43/19 of 23.7.2020), the German Federal Court ruled that the square shape of the chocolate does not confer any significant value as an essential feature of chocolate. As we explained previously, the shape of chocolate is largely independent of its function which is to be eaten. The Federal Court agreed with this view.
The judges decided that the square shape has a negligible effect on its essential function of being consumed, and therefore should be considered a design aspect of the product.
This case brings to light several very interesting aspects of trade mark law and concepts of consumer decision making. Ultimately, the strength of Ritter Sport’s iconic branding was acknowledged. The decision underlines the importance for brands to focus on what they are known for, and to prosecute any infringing activity.
If your business or product is subject to similar infringing activity, our trade marks team in the UK and Germany can help. Our team is highly experienced in all aspects of brand protection and trade mark portfolio management. Please contact a member of our team to discuss any of the issues raised in this article: Trade Marks & Brand Protection