Law360, New York (July 2, 2012, 3:35 PM EDT) -- The U.S. Patent and Trademark Office's Trademark Trial and Appeal Board ruled Thursday that The Hershey Co.'s grid-like design of its chocolate bars was distinctive and not functional as a whole, reversing an initial rejection by the agency.
In 2009, the examining attorney argued that the 12-block rectangular design of Hershey's candy bar was a functional feature and found the design was ineligible for trademark protection.
But on Thursday, the TTAB reversed the examiner's findings, ruling that while producing bars in rectangular segments could be functional, Hershey's bar as a whole had unique features, including the candy bar's layout and the raised border design.
"Thus, even if certain features found in applicant's candy bar design are functional ... it does not necessarily follow that the overall appearance of applicant's candy bar configuration is functional," the board said.
Additionally, the TTAB ruled that Hershey's design had acquired distinctiveness, saying the company had provided enough evidence to show the consumer recognition.
"After careful consideration of the evidence submitted in this case and the arguments made, we are persuaded that applicant has, at least, made a prima facie case that its mark has acquired distinctiveness," the board said.
During the 2009 examination, the examiner noted that the scoring of the bar into 12 pieces to ease consumption made the design was functional, and therefore unable to qualify for trademark protection under the Trademark Act.
"The flat rectangular shape and the 'scoring' of applicant’s candy bar into smaller pieces represent functional features which constitute an absolute bar to registration," the examiner argued at the time.
Hershey appealed, saying that the examiner improperly focused on the scoring, ignoring the other elements of the candy bar. The candymaker also argued that its design was distinctive, pointing to its $4 billion in sales between 1998 and 2010 and the attempts of other companies to cash in on the design for other products.
Following oral arguments in December, the TTAB found on Thursday that many candymakers embellish their products with decorative elements and raised borders, saying there are an extensive variety of shapes and decorative designs for candy bars, but that there was no evidence that anyone else used this design.
"We must balance these functional elements against any nonfunctional elements to determine whether the mark as a whole is essentially functional," the board said.
The TTAB remanded Hershey's application back to the examining attorney for further action consistent with the board's decision.
A representative for Hershey did not immediately respond to requests for comment on Monday.
Hershey is represented by Paul C. Llewellyn of Kaye Scholer LLP.
The case is In re: Hershey Chocolate and Confectionary Corp., serial number 77809223, before the U.S. Patent and Trademark Office's Trademark Trial and Appeal Board.
--Editing by Katherine Rautenberg.
Correction: A previously published version of this article incorrectly stated the board had found the bar functional. The error has been corrected.