We often hear about the power of the brand. There was no better reminder of the lengths a company will go to protect their brand than the on-going battle by Cadbury’s to own the colour purple so prominent in their packaging and advertising. We asked our legal advisors Debbie Marczak and Stephen von Muenster to summarise and offer advice on using competitor’s colours.
In a sweet victory for Darrell Lea, the Federal Court recently ruled that Darrell Lea’s use of the colour purple did not amount to misleading or deceptive conduct under the Trade Practices Act, as had been alleged by Cadbury.
To summarise a 5-year dispute, in 2003 Cadbury initiated proceedings against Darrell Lea, alleging they engaged misleading or deceptive conduct and passing off by using a shade of purple that closely resembled its own “Cadbury Purple”. In 2006, Justice Heerey of the Federal Court dismissed Cadbury’s claim, finding that Cadbury did not own the colour purple and as such, Darrell Lea was entitled to use the colour as long as it did not convey to the reasonable consumer that it had some connection with Cadbury. Cadbury then appealed the decision on the basis that the original judge was incorrect in refusing to admit evidence from marketing experts regarding the importance of colour in marketing and sales activities. In 2007, the Full Court upheld Cadbury’s appeal and the case was remitted to the original trial judge for further hearing.
In the further hearing, the expert evidence was permitted and Cadbury adduced evidence from three experts in the field of sales and marketing, who discussed the important role of colour in consumers’ chocolate-purchasing decisions and the value of colour in developing brand equity. Having considered the additional evidence Justice Heerey, held that Darrell Lea had not breached the Trade Practices Act or engaged in passing off as their use of the colour purple would not result in consumers being misled or deceived.
The judge highlighted that conduct which results in mere confusion or consumers being “caused to wonder” does not amount to misleading or deceptive conduct under the Act. He said consumers know that other chocolate makers use purple and that the reasonable consumer could see chocolate in a purple wrapper with Darrell Lea’s name on it in a Darrell Lea shop and not be confused into thinking it was a Cadbury product.
However, the 5-year battle between Cadbury and Darrell Lea may not be over yet, with Cadbury indicating that it will appeal. We’ll keep you posted on any new developments to this long-running saga.
In the meantime, although you (or your clients) may be tempted to start using certain colours on your packaging or marketing that are used by your competitors, please remember that each case turns on its own facts. In this case, the facts supported Darrell Lea’s case. For instance, it was noted that many of Cadbury’s products feature little or no purple; purple was never used by Cadbury in isolation but was always combined with the “Cadbury” script; the names “Darrell Lea” and “Cadbury” are quite distinct; most of Darrell Lea’s retailing occurs on its own premises; other competitors such as Nestlé’s Violet Crumble use purple, and the list goes on.
So although Darrell Lea won the day in this instance, there is no guarantee that you will too if you use a specific colour in a way that could mislead the ordinary consumer, particularly where your competitor has a strong reputation associated with that colour.
The case also serves as a reminder that companies will often act aggressively to protect their brand identity. So if your marketing materials and packaging are similar to that of a competitor, you may be up for expensive and time-consuming litigation, regardless of who a court may determine is the ultimate winner.
For further information go to www.vmsolicitors.com.au, (02) 8221 0933.