KIT KAT dispute: Nestlé gets a break

On 22nd April 2013 the Intellectual Property Appellate Board (IPAB) ruled on a trademark dispute between Societé des Produits Nestlé SA, a Swiss-registered company, and Kit Kat Food Products over the use of the trademark KIT KAT.

In 1987 Nestlé filed two applications to register the KIT KAT trademark in India. Due to oppositions filed by Kit Kat Food Products, the applications could not be registered. In 1991 Kit Kat Food Products filed three applications to register the KIT KAT trademark for various products, including a traditional Indian snack known as chanachur or Bombay mix. These applications were rejected based on oppositions filed by Nestlé.

The key issue before the IPAB was whether Nestlé or Kit Kat Food Products had the right to use the KIT KAT trademark, and as a result whose applications were liable to be rejected under the Trademarks Act 1999. The IPAB decided this issue by thoroughly analysing who was the prior user of the impugned trademark in India.

The IPAB observed that the onus is always on the applicant to prove its case for registration. To this end, the applicant must prove use and must also show that if registered, the trademark would cause no confusion or deception to any third party.

The disputed Nestlé applications were filed in 1987 for a wide range of products, including the cereals used to manufacture Nestlé’s popular chocolate wafer biscuit, Kit Kat. The IPAB stated that although registration does not automatically translate into use, it relied on the submissions made by Nestlé in this regard. Nestlé started manufacturing of products in India under the impugned trademark only after 1995. However, Nestlé submitted evidence in the form of an export sales invoice dated 1st November 1987 that it had used the KIT KAT mark since 1987. In contrast, Kit Kat Food Products could not establish that it had been using the KIT KAT mark before 1991.

The IPAB also observed that Nestlé had been using the KIT KAT trademark outside India since 1935 and had registered the trademark in 1942. Moreover, the IPAB observed that Nestlé was the first in the market to use the KIT KAT trademark.

The IPAB observed that Nestlé had used its mark outside India and that its rights were to be protected. In doing so, it relied on the Supreme Court’s comment in Mulmet Oftho: “The mere fact that the respondents have not been using the mark in India would be irrelevant if they were first in the world market.”

Thus, the IPAB ruled that Nestlé was the prior user of the trademark, and consequently Nestlé had discharged its burden of proving that its use of the KIT KAT mark would not create confusion in the minds of consumers. The IPAB stated that the public would identify the KIT KAT trademark with Nestlé and not with Kit Kat Food Products.

The IPAB noted that Kit Kat Food Products could not prove that it was the prior user of the trademark and that its use of the trademark would not cause confusion in the minds of consumers. Further, the IPAB noted that the marks, the products and the trade channels of the parties were very similar. Moreover, the class of customers for the products included small children who could easily be confused by use of the trademark by Kit Kat Food Products.

The IPAB ruled that Kit Kat Food Products' use of the trademark was not in good faith and was an attempt to exploit Nestlé's goodwill. Thus, it ruled that Nestlé’s application should be accepted as it was the rightful user of the trademark.