Toblerone row: Chocolate bar not distinctive enough to trademark, says Poundland

Defending its right to launch its Twin Peaks bar - based on Shropshire's own Wrekin hill - Poundland cites Toblerone's own chocolate bar which was brought out with fewer chunks last year as a reason why.

Poundland, which was launched in the West Midlands by businessman Steve Smith, who now lives near Bridgnorth, has claimed Toblerone’s shape is no longer distinctive enough to be a valid trademark, in legal documents defending its right to launch a copycat bar.

Last month, the budget chain was forced to delay the launch of its Twin Peaks bar, which has two humps rather than the single peaks of Toblerone, after a legal warning from the brand’s owner, a Swiss division of Mondelēz.

The new design is based on The Wrekin and nearby Ercall.

Documents seen by a national newspaper are said to reveal the legal wrangle has escalated, with a claim and counter-claim filed at the high court.

Toblerone is one of Poundland’s most popular products, with 11 million bars sold last year.

But the retailer says it decided to bring out Twin Peaks “in response to the unfavourable reception” that greeted Toblerone’s new version with fewer chunks, launched last year.

Speaking at the time of the launch, Poundland’s trading director, Barry Williams, said it had created an alternative with “a British taste, and with all the spaces in the right places”.

In legal defence documents filed earlier this week, Poundland says the triangular prism shape of the Toblerone bar, which was registered under an EU trademark in 1997, is no longer distinctive partly because of the existence of the new version.

It claims that any good reputation enjoyed by the Toblerone bar trademark has been “irretrievably abandoned” by the launch of the product with bigger gaps between its nine chunks, which the public “consider unfavourably in comparison”.

Poundland also says the 12-chunk registered version is no longer on sale in the UK, where an 11-chunk bar has been sold since about 2010.

The legal row echoes Nestlé’s long-running battle with rival Cadbury, also owned by Mondelēz, to trademark the shape of the KitKat bar in the UK. In the latest round, the court of appeal ruled that the four-finger design of Nestlé’s product had “no inherent distinctiveness”.

Sally Britton, an intellectual property lawyer at Mishcon de Reya, said the Toblerone battle covered the same issue of whether a shape could be distinctive enough to function as a trademark.

“A trademark is something that distinguishes your goods and services from others. The more you use a mark consistently, the stronger your rights should be. There is an argument that Toblerone is weakening its rights by changing the shape of its bar,” Britton said.

She said Toblerone clearly was a distinctive shape and, unlike KitKat, already registered as a trademark, which was why Mondelēz was so keen to prevent its mark from becoming generic.

“If other businesses are selling chocolate bars of an identical shape to Toblerone it could be argued that its shape is losing its distinctiveness and is not functioning as a trademark. That’s why Toblerone is taking action,” Britton said.

Mondelēz claims Poundland and its supplier Walkers Chocolates have infringed its trademarks on the overall shape of the bar, the pyramid-shaped chocolate chunk or “peaks”, prism-shaped gold Toblerone packaging and the Matterhorn mountain logo.

It says Poundland’s Twin Peaks bar is “deceptively and confusingly similar” to Toblerone to the extent that shoppers may believe it is produced by Mondelēz or has been otherwise approved by the company.

The claim by Mondelēz says it made £17m in net revenues from Toblerone in the UK last year and spent £4.3m on marketing.

The company is seeking damages in relation to trademark infringement and “passing off” against Poundland and Walkers Chocolates. Although the Twin Peaks bar was flagged in an ITV documentary and promotional bars were sent out to journalists, it has never reached store shelves.

Mondelēz and Poundland declined to comment.