Cadbury is one step closer to being free to make its own version of a KitKat, after the Court of Appeal rejected claims the four-fingered treat should be given trademark protection.
Last year a High Court judge said the shape of Nestle's chocolate stalwart could not be patented.
And today the Court of Appeal agreed with earlier ruling, leaving Nestle with one final chance to have the decision overturned. With permission the Swiss firm could appeal the ruling to the Supreme Court.
A Nestle spokesperson said it was "disappointed by the Court of Appeal judgement and is considering next steps". The spokesperson added: "This judgement does not mean that our four finger-shape is now free for use in the UK or elsewhere".
Meanwhile, a spokesperson for Mondelez, Cadbury's owner, 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 trademark in the UK.”
Sally Britton, an intellectual property lawyer at Mishcon de Reya, said today's decision "sets a high bar for the registration of shape marks".
The squabble between the two chocolate giants can be traced back to 2010 when Nestle first attempted to trademark the KitKat shape. The move was challenged by Cadbury.
The case has been heard in both English and European courts, with the most recent rulings in favour of Cadbury.
In the UK the rulings by the Court of Appeal and High Court contrast with an earlier decision made by the General Court of the Court of Justice. It concluded the shape of the KitKat was distinctive in the UK.
Read more: High Court says no to KitKat trademark
Robert Guthrie, a partner at law firm Osborne Clarke said: "It may be that the Court of Appeal was less inclined to follow the approach of the Court of Justice as a result of Brexit and that this is an early indication of the ways in which UK and EU trade mark may diverge.
"It seems likely that in the future it will be harder to register shapes as trade marks in the UK than in the EU."
Meanwhile, Britton said the latest court ruling could have wider implications.
She said: "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."