As Kit Kat, Starbucks and Posh Spice rulings show, intellectual property is big but bittersweet business
Stephen Vines says as the importance of trademark protection to the global trade agenda grows, Hong Kong’s rule of law advantage over mainland China is apparent
What is the difference between Nestlé’s Kit Kat and the Toblerone bar manufactured by Mondelez?
Existential questions of taste, texture and maybe even cocoa content can obviously come into play when answering this question. But considerations of this kind are for chocolate aficionados. Here on the business pages, perhaps lamentably, less lyrical matters must be considered.
Unlike Nestlé, Mondelez had managed to trademark its “zigzag prism”-shaped Toblerone bar. Moreover, as the owner of the Leo and Kvikk Lunsj confectionery brands, offering chocolate bars that are similar in appearance to Kit Kat, Mondelez was happy to see Nestlé falter in its long-running battle for exclusive rights to the Kit Kat shape.
The court ruling is a landmark in Nestlé’s 16-year battle over Kit Kat but it is unlikely to be the end of the road as makers of branded products take trademark matters very seriously. After all, vast sums of money are at stake.
In China, global brands have been far less successful in protecting their trademarks and have ended up paying Chinese companies for the right to use the Chinese translations of their names.
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Hong Kong has better established and less complex trademark laws and rules but the local regime is hardly exemplary, as applications for trademarks are known to drag on for a long time and there seems to be a rather quixotic approach to what are regarded as being generic names, as opposed to specific names that apply to individual brands.
It’s a near certainty that smaller companies attempting registration of names like these, without the benefit of a battery of lawyers, would have a smaller chance of success in establishing their trademarks.
The issue of trademarks is one of the biggest aspects of intellectual property protection, which is climbing the agenda of both global trade talks and the concerns of individual companies.
While it sometimes appears to be amusing to observe highly paid legal experts wrangling over whether, for example, the distinctive triangular shape of a Toblerone bar is worthy of trademark protection, much is at stake.
What matters is recognition of intellectual property rights and adequate enforcement of these rights. As ever, it comes down to how far the rule of law prevails. Those who are relaxed about the convergence of the Hong Kong and mainland legal systems need to consider the breadth of implications such convergence entails.
Stephen Vines runs companies in the food sector and moonlights as a journalist and a broadcaster