Chocolate makers see red over the colour purple ...

Marketers and advertisers have long been aware of the power of colour in triggering consumer recognition and response to a brand. It seems the law may be catching up with marketers, after Cadbury recently won an appeal against Darrell Lea over the use of the colour purple.

In the original case, Cadbury accused Darrell Lea of misleading and deceptive conduct (under the Trade Practices Act) and passing off (under the general law) by using a shade of purple that closely resembled its own “Cadbury Purple”. Cadbury alleged that it had “substantial, exclusive and valuable goodwill” in its chocolate business, with all its variants branded in purple, and that Darrell Lea should not be entitled to use the same colour to promote its company.

The Federal Court dismissed Cadbury’s claim, finding that Cadbury did not own the colour purple and that Darrell Lea was entitled to use the colour as long as it didn’t convey to the reasonable consumer that it had some connection with Cadbury. The Court was satisfied that a consumer seeing a Darrell Lea chocolate would be unlikely to confuse it with a Cadbury chocolate.

Darrell Lea’s success however was bittersweet, because in May 2007, the Court allowed an appeal by Cadbury. Pivotal to the appeal was the question of whether the original judge was incorrect in refusing to admit evidence from marketing experts regarding the importance of colour in marketing activities. The evidence suggested that Darrell Lea’s use of the colour purple allowed it to take advantage of the positive associations that Cadbury had attached to the colour and that this would undoubtedly weaken Cadbury’s marketing position.

In the original case, the judge concluded that the expert evidence was inadmissible because expert evidence is only allowable if it provides the court with information that is outside the experience and knowledge of a judge or jury. He held that the issues in this case concerned the ordinary human behaviour involved in buying chocolate – something most of us do. On appeal, the Court found that the original judge was incorrect, because an expert may still be of assistance to the Court in an area in which most people have some knowledge. Accordingly, the Court allowed Cadbury’s appeal and ordered a new trial.

Businesses have previously sought exclusive use of colours to promote their brands. For example, the Court has recognised that customers identify BP’s service stations by the colour green, and has upheld BP’s trademark registration for green as the dominant colour for petrol stations. However, the BP case was based on trademark law, not trade practices law, which is the basis for the Cadbury case.

As such, it’s difficult to predict how the Court will rule in the new Cadbury trial. Given the press coverage the case has generated, it’s clear we’ll all be hungrily waiting to hear the Court’s next decision.

In the meantime, where a marketer’s brand has a strong reputation associated with a colour, advertisers must ensure that competing products are not marketed in a way that may confuse the ordinary consumer. Even under the original judge’s approach, this may result in misleading or deceptive conduct.

Article by Debbie Marczak, Solicitor, and Stephen von Muenster, Principal, von Muenster Solicitors & Attorneys, www.vmsolicitors.com.au, (02) 8221 0933. von Muenster Solicitors & Attorneys is an associate member of the AFA.