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  april 2008

intellectual property update


in this issue

Cadbury's Claim to the Colour Purple Fails in the Federal Court
On 11 April 2008 judgment in the  of Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2008] FCA 470 was handed down by Justice Heerey and Cadbury lost its bid to prevent Darrell Lea from using its "trademark" purple in connection with its chocolate confectionery business. As Cadbury has not yet obtained registration for its particular purple, its claim was not based on trademark infringement.  Instead, Cadbury tried to establish that Darrell Lea's conduct in using a particular shade of purple in connection with its chocolate business amounted to passing off or, misleading and deceptive conduct. read more...  


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Alan Chalmers t (02) 9931 4891 e achalmers@nsw.gadens.com.au
Alexia Marinos t (02) 9931 4789 e amarinos@nsw.gadens.com.au

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intellectual property update - april 2008
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Cadbury's Claim to the Colour Purple Fails in the Federal Court
by Alexia Marinos

On 11 April 2008 judgment in the  of Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2008] FCA 470 was handed down by Justice Heerey and Cadbury lost its bid to prevent Darrell Lea from using its "trademark" purple in connection with its chocolate confectionery business. As Cadbury has not yet obtained registration for its particular purple, its claim was not based on trademark infringement.  Instead, Cadbury tried to establish that Darrell Lea's conduct in using a particular shade of purple in connection with its chocolate business amounted to passing off or, misleading and deceptive conduct.

As a result of the failed claim, which is not the first, Cadbury's prospects of obtaining a trade mark registration for what they purport to be their purple are now severely diminished.

Background of proceedings

In 2003, Cadbury commenced proceedings against Darrell Lea in the Federal Court of Australia claiming that Darrell Lea's use of a shade of purple amounted to conduct that is misleading and deceptive under section 52 of Trade Practices Act 1974) and that the conduct also amounted to passing off.  The argument was that Darrell Lea’s use of a particular shade of purple in connection with its chocolate confectionary business would lead consumers to mistakenly conclude that Darrell Lea products are Cadbury products, or that there is some connection between the Darrell Lea and Cadbury's businesses.  At the original trial in 2006, Justice Heerey held certain expert evidence from Cadbury inadmissible and found in favour of Darrell Lea.  Whilst there was a significant amount of evidence submitted in support of the argument that consumers associate purple with Cadbury chocolate, a lot of evidence was also submitted by other chocolate makers  noting many other factors ) that distinguish Darrell Lea from Cadbury chocolate - such as the words "Darrell Lea" written prominently on the product.

Cadbury was successful in lodging an appeal to the Full Federal Court but only in respect of the admissibility of the expert evidence.  The Full Court remitted the matter to the primary judge, Justice Heerey, for further trial.

Re-hearing

The re-hearing revolved around the evidence of three expert witnesses who claimed that Darrell Lea’s use of purple on some of its chocolate wrapping was deceptive or misleading.

The major problem with the evidence was that the three experts engaged by Cadbury expressed their views on the issue of passing off and deception on only some of the evidence before the trial judge. In his judgment Justice Heerey stated:

"I consider it appropriate to record that in the particular circumstances of this case, which is concerned I have found the expert evidence of no real assistance. … It seems to me that evidence of opinions based on market research and expert appreciation of consumer behaviour will rarely be of assistance in litigation where the court’s primary concern is with the behaviour to be expected of, and the judgments likely to be made by, ordinary (even if it might thought, somewhat credulous) members of the community intent on making a relatively modest purchase in a conventional way."

It became apparent that Cadbury had not revealed several important matters to the experts in preparing their affidavits.  For example, one expert was not aware that Darrell Lea did not sell block chocolate.  Others did not know that Darrell Lea had used ‘boysenberry’ for ten years without objection from Cadbury, the extent of Cadbury products that do not use the colour purple (more than 50% of its sales) and the fact that Darrell Lea is very rarely sold side by side with Cadbury.

Justice Heerey made the following statement:

"The hypothetical reasonable chocolate consumer could think…Purple makes me think of Cadbury chocolate. But I know that other chocolate makers’ products such as Violet Crumble use purple. So Cadbury does not have a monopoly in the use of purple for chocolate. Seeing chocolate in a purple wrapper with Darrell Lea’s name on it in a Darrell Lea shop does not make me think it comes from Cadbury."

Cadbury is determined to push its claim for exclusive property rights in the colour in respect of chocolate. There have been two first instance hearings, two Full Court hearings, one High Court application and it is more than likely that Cadbury will appeal the most recent decision by Justice Heerey.

This publication is provided to clients and correspondents for their information on a complimentary basis. It represents a brief summary of the law applicable as at the date of publication and should not be relied on as a definitive or complete statement of the relevant laws.