TC09654 - [2025] UKFTT 01202 (TC)

The evidence available to us consisted of a bundle of documents of 441 pages. We were not referred to the majority of the bundle but notably it included confidential details of the production process and survey data to which we were referred, at least in part. We had three witness statements. Giovanni Aragone’s evidence concerned the nature of the Biscuits, their manufacture and the patent associated with them. Rosario Scarfati’s evidence addressed and introduced the correspondence with HMRC. Jennifer Culby was responsible for the procurement of a customer survey concerning the Biscuits, her evidence explained the process of the design of the survey and its results. Each of the witnesses gave sworn oral evidence and was cross examined. We found them all to be truthful and we accept their evidence.

We were also provided with the various component elements of the Biscuits.

From that evidence we make the findings of fact set out in paragraphs 6 to 12 below.

The Biscuits comprise four component parts:

The Biscuits are manufactured such that the biscuit elements (the circular biscuit cup and the biscuit disc) are baked and the final Biscuits are assembled from the component parts by reference to a patented process. We were provided with confidential evidence as to the product design, development, and manufacture. It is not necessary for us to set that evidence out in full as ultimately that evidence, whilst useful context, is not material for the purposes of our decision.

We summarise the production process as follows: the biscuit cup is filled with “nutella”. The Ring is then inserted to abut and adhere to the inner edge of the biscuit cup. The biscuit disc is then placed centrally over the “nutella” filling and the Ring which adheres to the bottom of the biscuit disc.

Visually the finished Biscuits are predominantly the baked biscuit elements; there is a 1 mm gap between the biscuit disc and the top edge of the biscuit cup through which the Ring can be seen. This represents approximately [REDACTED] of the Ring (i.e. 1mm of the outer circumference of the Ring). By design the Ring is beneath the biscuit disc and not at the same level as the upper surface of the disc. We were provided with samples of the biscuits on the hottest day in 2025 (to the date of the hearing). The packaging advises that the product should be stored at a temperature below 24° C; however, in transportation of the product to the tribunal centre conditions had greatly exceeded 24° C. Examination of all of the product available to us in the two forms of packaging in which the Biscuits are sold (see paragraph 10 below) revealed that where the Biscuits had not been stored horizontally, for a significant proportion of the individual Biscuits the “nutella” and the Ring had melted, pushing up through the gap. Counterposing the lifted area, the Ring and nutella were lower than the bottom surface of the biscuit disc. We find this movement in the filling was a consequence of the temperatures and not an intended feature of the Biscuits.

The Biscuits are marketed and sold in two styles of packaging:

The branding on the packaging is substantially similar. Predominantly white bearing the “nutella biscuits” logo and a picture in which there is a stack of Biscuits and a broken biscuit from which it can be discerned that the Biscuits have “nutella” inside them.

Included within the bundle was a copy of the patent. On the basis that both parties relied on the language used in the patent documentation and the European patents specification is publicly available information we set out below the relevant and pertinent parts of the patent. The patent reference is EP 3 369 321 B1. It was prepared by employees of the Appellant and was filed on 6 February 2018 and published on 8 July 2020:

“[0001] The present invention in general relates to the field of filled biscuits …

[0002] … A known solution of filled biscuit, which is constituted by two disc -shaped bodies made of biscuit set between which is a layer of filling, according to an overall sandwich for configuration.

[0003] This type of solution can use as filling only creams that are particularly viscous and firm, the aim being to prevent the filling from leaking out of the biscuit.

[0004] The possibility of using, instead, softer and more creamy fillings still represents a technical problem that is markedly felt.

…

[0012] In general, the filled biscuit described herein comprises container body, which defines a cavity contained in which is a filling and a cover, which closes at least partially the cavity … with the filling … inside it. The body … and the cover are both made a biscuit.

[0013] The biscuit described herein further comprises a second filling material, which is set in contact and simultaneously with the body, the cover, and the layer of filling so as to seal the cover to the body, and at the same time withhold the filling inside the cavity of the body.

[0014] The material [that referred to in 0013]] hence performs the dual function of barrier against exit of the filling, on the one hand, and, on the other, of adhesive between the body and the cover, thus ensuring a firm connection therefore.

…

[0026] The body has a mouth edge that defines a top opening larger than the overall dimension in plan view of the cover, so that the latter will rest completely on the layer of filling and between the latter and the edge a gap is created of substantially annular shape. In this case the material [referred to in [0013]] is applied along the gap around the cover.

[0027] … the material [referred to in [0013]] is in contact, laterally, with the cover and the edge of the body, and, at the bottom, with the layer of filling. It acts, on the one hand, as adhesive that holds together the cover and the body and, on the other, constitutes a barrier designed to prevent exit of the layer of filling from the cavity.”

On the basis of the patent, we find the nature of the nutella filling drove the design and manufacturing process for the Biscuits which are designed such that the biscuit elements contain both elements of the filling.

As indicated above, Ms Culby’s evidence concerned a consumer survey commissioned by the Appellant. Ms Culby was subject to extensive cross examination from which HMRC contended that the survey was incapable of presenting a statistically relevant view of the “ordinary reasonably informed person”.

We find, on the evidence provided, that the Appellant applied recognised criteria for the selection of participants in a way intended to obtain a fair outcome. As far as relevant to the issue we have to determine we note that the survey involved 201 participants who were asked to sort 10 biscuit products (one of which was the Biscuit) into two groups: those the participants considered were wholly or partly covered in chocolate or a similar substance and those that were not. The participants were provided with HMRC’s guidance on what they consider to be biscuits which were wholly or partly covered in chocolate or a similar substance, but the participants were not told that they must read it, that was a decision for them. The participants did not know the purpose of the survey or that it was the Appellant who had commissioned it.

During the hearing we expressed the view that we did not intend to place any significant weight on the results of the survey. However, in the end we have decided that we do not need to take any account of the views of the survey participants. In this regard we have gone slightly further than the Tribunal in Innocent Ltd v HMRC [2010] UKFTT 516 (TC) (Innocent) did and adopt a similar view to that taken more recently by the First-tier Tribunal in Walkers Snack Foods Limited v HMRC [2024] UKFTT 00031 (TC). We consider that the survey presents a view of how the general public sorted a range of biscuits into groups of those wholly or partly covered in chocolate and those not wholly or partly covered and no more; it is for us to apply the statutory test and we should not do so by reference to the views of 201 (or more or fewer) people. As was apparent from the survey results 5% of participants considered that a conventional digestive biscuit was wholly or partly chocolate covered and that the chocolate digestive was not. Those participants plainly sorted the biscuits incorrectly applying the statutory test.