The court followed an earlier judgement by the High Court and rejected Nestlé’s appeal – ruling in favor of Cadbury owner Mondelēz International.
Nestlé has a right to appeal the case to the UK Supreme Court.
Nestlé dissapointed by decision
A spokesperson for the KitKat maker said the company was dissapointed and was "considering its next steps".
“This judgment does not mean that our four finger-shape is now free for use in the UK or elsewhere. KitKat is much loved around the world and its four finger-shape is well-known by consumers.
"Nestlé’s four finger-shapes has been granted trademark registration in many countries of the world, for instance Germany, France, Australia, South Africa and Canada, further protecting it from imitations”.
Mondelēz welcomes the judgement
The Court of Appeal said the KitKat shape alone – without branding – had failed to gain distinctiveness to be registered as a shape mark.
Nestlé first applied to register the mark in 2010, but was later opposed by Cadbury UK, now a subsidiary of Mondelēz International.
A Mondelēz spokesperson said: “We are pleased with the Court of Appeal’s decision today and welcome their conclusion. As we have previously stated, we do not believe the shape of the KitKat bar should be protected as a trade mark in the UK.”
Lawyers' view
Sally Britton, intellectual property lawyer at Mishcon de Reya, said: "The court's decision sets a high bar for the registration of shape marks.
"This case is interesting as it examines the type of use and consumer recognition required to obtain monopoly protection over a shape mark. Businesses seeking to protect non-traditional trade marks such as shapes or packaging will need to provide evidence that consumers are relying on that trade mark to identify the origin of the product."
Kate Swaine, a partner at Gowling WLG, said:"While the Court of Appeal acknowledged that the shape of the KitKat is well-known, the court was not convinced that the shape of the bar alone would indicate to consumers the source of the product.
"In fact the Court found that Nestlé itself had never sought to promote KitKats by only referring to the shape. The case is being watched by many brand owners with interest as a trade mark is a valuable form of protection that could extend their monopoly over the appearance of their products. However this result reaffirms the real challenge facing anyone seeking to protect the shape of a product with a trade mark."