Suspension of opposition overturned in battle over colour purple

In Cadbury UK Ltd v Registrar of Trademarks ([2008] FCA 1126, August 1 2008), the Federal Court of Australia has set aside the registrar’s decision to suspend the opposition proceedings in respect of the registration of Cadbury UK Limited’s colour trademarks.

Cadbury lodged 15 applications in Australia for the registration of trademarks consisting of shades of the colour purple in relation to chocolate and related products. Three of the applications were accepted, but their registration was opposed by Darrell Lea Chocolate Shops Pty Ltd.

Cadbury also commenced an action in the Federal Court of Australia alleging that Darrell Lea was passing off its chocolate products as those of Cadbury due to its use of purple in its packaging. This action was the subject of an initial decision in favour of Darrell Lea (see Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd ((2006) 69 IPR 23); following a successful appeal by Cadbury, the matter was remitted for further hearing of wrongly excluded evidence (Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd ((2007) 72 IPR 261).

Darrell Lea subsequently requested that the registrar of trademarks suspend the opposition proceedings until the determination of the passing off action on the grounds that the findings in that action would be (in effect) determinative of any factual disputes before the registrar on similar issues. Darrell Lea submitted that it would therefore be “entirely inappropriate” to continue the opposition proceedings.

The registrar accepted that argument and suspended the opposition proceedings.

In the present case, the issue before the Federal Court was not whether the power to suspend existed (this was conceded by the parties), but whether the registrar’s power to suspend had been properly exercised. The court held that it had not been properly exercised for the following reasons:

To delay opposition proceedings for an indeterminate period (which could stretch to three years or more) amounted to a refusal by the registrar to hear those proceedings; and
The registrar was asked (and appears to have been prepared) to give too much significance to findings of fact made by the Federal Court.

The court placed considerable importance on the timely conduct of opposition proceedings, holding that:

“the effect of the Trademarks Act 1995 and the regulations is that the registrar must take all necessary steps to get opposition proceedings ready for hearing as soon as practicable and thereafter hold the hearing. The merits are determined on the evidence before the registrar and on the law as it is when the hearing takes place.”

Citing the case of Geelong Football Club Ltd v Clifford ([2002] VSCA 212), the court noted that the adjournment in that case was set aside on appeal because the trial judge had failed to “appreciate that a party is entitled to a trial of a proceeding ready for hearing unless it is clearly shown that an injustice is likely to be caused if the adjournment is refused.”

In the present case, the court accepted that there may be circumstances in which it is appropriate to delay opposition proceedings and await a court’s resolution of disputed facts that may be relevant in the opposition proceedings. The court was not prescriptive of those circumstances, but commented that they would include:

the degree of similarity of the issues involved;
the significance of the issues to the opposition proceedings;
whether the registrar had more evidence than the trial judge;
the likelihood of the judge’s findings being challenged; and
whether it might be unfair (ie, a breach of the rules of natural justice) to rely on the judge’s findings or the evidence on which those findings were based.

The court added that other matters would be taken into account in particular cases.

In the case at hand, the court held that the suspension of the opposition proceedings for an indefinite period of time amounted to a denial of justice and a refusal by the registrar to perform her duty to hear and determine those proceedings.

For background discussion of this case please see "Cadbury's purple packaging complaint put on hold", "Cadbury's purple registrable, says Trademarks Office", "Cadbury successful in appeal for new trial over Darrell Lea's use of purple" and "Cadbury loses latest battle over colour purple".

Julian Gyngell, Julian Gyngell, Wahroonga

Suspension of opposition overturned in battle over colour purple

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