Cadbury loses latest battle over colour purple

In Cadbury Schweppes Pty Limited v Darrell Lea Chocolate Shops Pty Limited ((No 8) [2008] FCA 470, April 11 2008), the Federal Court of Australia has ruled against Cadbury Schweppes Pty Limited in its long-running battle over the use of the colour purple for chocolate and confectionery.

Cadbury claimed that use by Darrell Lea Chocolate Shops Pty Limited of a particular shade of purple in connection with chocolate confectionery during the Christmas trading period between 2000 and 2004 amounted to:

• actionable passing off at common law; and
  
  
• misleading and deceptive conduct and false representations in contravention of Sections 52 and 53(c) and (d) of the Trade Practices Act 1974 (Cth).

Justice Heerey decided the case at first instance and excluded some expert evidence. On appeal, the Full Federal Court concluded that Heerey was wrong to exclude this evidence and referred the case back to the Federal Court for further consideration of the evidence.

After considering the evidence, the court noted that Cadbury's experts had a "uniform lack of practical experience in the retail confectionery market". The court made the following key findings:

• Use of the colour purple by Cadbury was not exclusive in the marketplace; there was evidence of third-party use of purple in relation to chocolate and confectionery products. Moreover, Cadbury had entered into a specific coexistence agreement with competitor Société des Produits Nestlé under which Cadbury had agreed not to object to use of the get-ups for the Violet Crumble, Wonka, Quality Street and Polly Waffle chocolate products.
  
  
• Consumers are never presented at a point of sale with a Cadbury product without the CADBURY mark prominently displayed. Ordinary reasonable consumers are aware of this fact.
  
  
• Darrell Lea used a combination of purple and copper during the period between 2000 and 2004. Use of these colours was a relevant distinguishing feature.
  
  
• The fact that Darrell Lea's products were sold on Darrell Lea premises, coupled with the distinctive signage used by Darrell Lea in the majority of its retail points of sale, meant that consumers had a familiarity with Darrell Lea's marketing and products at a level sufficient to emphasize that Darrell Lea was a different firm from Cadbury.
  
  
• While decisions to purchase chocolate are often quick and compulsive, such decisions are not irrational and consumers are capable of distinguishing between differently branded products. The fact that Cadbury's products were price sensitive was particularly persuasive in this regard.
  
  
• Colour recognition may play an important part in chocolate-purchasing decisions, but this is a matter of common knowledge which was demonstrated through ordinary consumer experience, as well as history and literature.

In relation to Cadbury's allegation that consumers would draw a 'misinference' from use of the colour purple by Darrell Lea, the court noted that the hypothetical reasonable consumer could think along the following lines:

"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 that it comes from Cadbury."

Therefore, the court concluded that the evidence was not sufficient to support a finding in favour of Cadbury under the Trade Practices Act and the tort of passing off. Accordingly, both of Cadbury's claims failed.

It has been widely reported in the Australian press that Cadbury intends to appeal the decision.

For background discussion of this case see "Cadbury's purple packaging complaint put on hold" and "Cadbury successful in appeal for new trial over Darrell Lea's use of purple".

Lisa Ritson and Arthur Artinian, Blake Dawson, Sydney