On 27 April 2006, Justice Heerey of the Australian Federal
Court handed down his decision in Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty
Ltd (No 4).

Take home

To quote Justice Heerey “Cadbury does not
own the colour purple and does not have an exclusive reputation in purple in
connection with chocolate in Australia. Darrell Lea is entitled to use purple, or
any other colour, as long as it does not convey to the reasonable consumer
the idea that it or its products have some connection with Cadbury.”

Comment

In his decision, Justice Heerey
reproduced a long list of confectionary and chocolate products packaged in
the colour purple. It appears that a
number of the listed products have been launched since Cadbury first started
attempting to enforce IP Rights in purple.

One might suggest that this is
copying which underscores the value of the colour to Cadbury and reinforces
their enforcement attempts. However,
on another view, perhaps the competitor companies (such as Darrell Lea and
Nestlé) have moved to make it more difficult for Cadbury to build a monopoly
in the colour by adding to the number of purple products on the market and
detracting from its ability to distinguish the product as coming from Cadbury.

In an unusual step, Darrell Lea
has foreshadowed that they will make an application for indemnity costs
against Cadbury.

Background

In the latest of a long list of attempts by Cadbury to assert
intellectual property rights in the colour purple, Cadbury had sued Darrell
Lea pursuant to allegations of misleading and deceptive conduct in contraventions
of ss 52 and 53(c) and (d) of the Trade Practices Act and the common law tort of
passing off.

It was common ground between
the parties that Darrell Lea products in fact have no sponsorship, approval
or connection with Cadbury or its products, and that Darrell Lea’s
business is entirely unconnected with that of Cadbury. Consequently, the critical issues in this
case related to the representations that, Darrell Lea by its conduct would
convey to a hypothetical ordinary and reasonable member of the class
constituted by prospective purchasers of chocolate products: Campomar v
Sociedad Limitadav Nike International Limited (2000) 202 CLR 45 at [102]-[105].

The court held that the
evidence warranted the following findings (amongst others):

There is wide awareness amongst
Australian consumers of the use by Cadbury of a dark purple colour (i) in
connection with the marketing, packaging and presentation of certain
chocolate products particularly Cadbury Dairy Milk and other block milk
chocolate products, and (ii) as a corporate colour.

Cadbury does not have an exclusive
reputation in the use of this dark purple colour in connection with
chocolate. Other traders have, with Cadbury’s knowledge, for many years
used a similar shade of purple. Cadbury has not consistently enforced its
alleged exclusive reputation. In relation to its chief competitor Nestlé,
Cadbury has, for its own commercial reasons, permitted a use of purple in
relation to popular chocolate products.

Cadbury markets many chocolate
products which have little or no purple in their packaging.

Cadbury products, regardless of the
presence or absence of purple in the packaging, always bear the Cadbury name
in a distinctive script.

Cadbury’s use of purple in
marketing advertising and promotion is, and is seen by consumers to be,
inextricably bound up with the well known name Cadbury in its distinctive
script. Cadbury never uses the colour purple in isolation as an indicium of
trade.

The names Darrell Lea and Cadbury are
quite distinct in sound and appearance (especially with the respective scripts
the parties have adopted) and not likely to be mistaken for each other.

Darrell Lea did not adopt the colour
purple with the intention of leading consumers to believe its products were
Cadbury products or that it, or its products, had some kind of association
with Cadbury.

Most of Darrell Lea’s retailing
occurs in premises which its owns or occupies. Other retailing occurs from
separate stands or displays in retail premises, such as newsagents,
pharmacies, convenience stores and video stores. Darrell Lea has only a minor
presence in supermarkets and only, in the past, to a very limited and
transient extent in the major chains. Its products are not presented for sale
in close proximity to Cadbury’s.