Cadbury started legal action challenging the special status of the four-fingered bar back in 2007...
An EU court has rejected Kit Kat's attempt to trademark the bar's distinctive four-finger shape.
This could open the door for copycats to imitate the Nestle bar.
In January of this year the UK High Court also rejected a similar attempt to protect the snack.
This legal action dates back to a request from Cadbury Schweppes (which is now owned by Mondelez International) to declare the company's trademark invalid in the EU.
Kit Kat / Facebook
Nestle has argued that consumers connect the four finger shape with the Kit Kat brand - it cited research which found that 90% of people associated a four-finger chocolate bar with the product.
In 2002, Nestlé applied to European Union Intellectual Property Office (EUIPO) for registration as an EU trade mark.
In 2006, EUIPO agreed to register that trademark in respect of the following goods: "Sweets, bakery products, pastries, biscuits, cakes, waffles."
Today's statement notes that none of the evidence presented by Nestle addresses why its shape should be trademarked in the bakery products, pastries, cakes and waffle categories.
"Consequently, EUIPO erred in law in considering that the product in question could be included in any of the categories of goods concerned," the court has ruled.
EUIPO will now re-examine the whole of the application - opening a loophole to allow the design to be used by other firms.
The company is required to demonstrate that consumers in all EU member states recognise the design as a Kit Kat.
Ireland is among the countries where the association between the design and the brand is yet to be proved by Nestlé.
The company can appeal against this ruling.