Colour trademarks: a powerful weapon in the war of food brands

12-Oct-2008 - Last updated on 13-Oct-2008 at 11:17 GMT

Strong brands are a powerful weapon in a company's armoury, and when new rules emerged in the 1990s allowing colours to be registered as a trademark, the fight for brand recognition stepped up a gear, encapsulated in the ongoing case in Australia that sees confectionery giant Cadbury defending the colour purple.

In April this year, Cadbury lost the latest round in a protracted legal battle that has pitched the UK confectioner against Australian chocolate maker Darrell Lea over the use of the colour purple.

The Federal Court of Australia ruled that Darrell Lea had not 'passed off' its products as those of Cadbury's, or breached the Trade Practices Act by selling chocolates in purple packaging.

The judge said he was not satisfied that Darrell Lea's use of the purple packaging "has resulted, or would result, in a hypothetical ordinary and reasonable member of the class constituted by prospective purchasers of chocolate being misled or deceived."

Cadbury has vowed to fight on, stating at the time that it would appeal the judge's decision.

And as Cadbury continues to dip into its treasury chest to meet mounting legal costs to protect the colour purple in Australia, absolutely implicit is the true value a colour trademark now represents in the fight for sales and market share.

The move by Cadbury to spend "100s of 1000s of pounds", according to Gary Assim, head of intellectual property at Shoosmiths solicitors in the UK, that acts for a swathe of food firms on trademark issues, "sends a signal that they are fiercely defensive of their colour purple. The move itself has inherent value as a deterrent."

Value is key, and the value of a brand is, arguably, worth fighting for. For while, in times of yore, companies only listed physical assets on their balance sheets, today a brand could be the main financial asset of a company.

And in fiercely competitive times, the brand value - the power of the brand in the mind of the consumer - can bring much-needed leverage in the marketplace, as well as propping up shareholder value.

A recent report, for example, on the top 100 global brands from research agency Millward Brown Optimor valued Coca-Cola with a massive brand value of $58.2 billion. For Cadbury, defending the colour purple is a means to protect such brand value.

And recent legislation introduced in 1994 in the UK, and 1995 in Australia, is a legal tool to further protect a brand. The new rules now allow colours (and smells) to be registered as a trademark, using the international pantone colour reference.

As brand assets have grown to shadow physical assets, so has public policy shifted.

"IP rights have only taken hold over the last 30 to 40 years," Assim tells ConfectioneryNews.com. "Public policy has recently changed for colours; governments were lobbied by firms to change the law to accept colours as trademarks," he continues.

According to Assim, European law on intellectual property is "quite harmonised". In the EU, the OHIM is the official agency responsible for registering trade marks and designs that are valid in all 27 countries of the EU.

When a firm successfully registers a Community Trade Mark (CTM), this single registration procedure grants to the owner an exclusive right in the EU-27 bloc, preventing third parties, who do not have permission, from using it in the same marketing context or, as the OHIM states "using in the course of trade the same or similar signs for identical or related goods and/or services as those protected by the CTM."

This is not a patent for a blanket use of a specific colour across all manner of products, but protects the use of a specific pantone registered colour in a certain marketing context.

Firms that have registered a colour trademark include the UK's Easy Jet for a specific orange tone, petrol behemoth BP has done the same for its distinctive green, and, apparently, McDonalds has trademarks on specific shades of red and yellow.

Cadbury has "obtained trademark registrations for the colour purple in more than 20 countries (including the UK and Ireland)," the firm tells ConfectioneryNews.com, without disclosing specific details regarding the pantone numbers registered.

In 1998 Cadbury applied to register the colour purple as a trademark in Australia. An application that, to date, has yet to be successful. Assim tells ConfectioneryNews.com that while the UK firm was going through the process of the trademark registration, Darrell Lea, in 2003, registered an opposition to the application by Cadbury.

The registry, in turn, said that they would not deal with the opposition until the separate court case regarding Cadbury and Darrell Lea had finished. A "logical" move by the registry, says Assim, "because the outcome of the case could be useful evidence for the registry."

So, Cadbury is effectively fighting two separate colour battles: the first for the trademark on the colour purple; and the second, appealing against the judge's decision in the recent court case that Darrell Lea had not 'passed off' its products as those of Cadbury's, or breached the Trade Practices Act by selling chocolates in purple packaging.

"At the moment, Cadbury currently has uncertainty as to whether it can enforce its colour purple in Australia," concludes Assim.