On 2 June 2006, the Supreme Court of Canada handed down its
decision in Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22.

Take home

In Canada,
the mere fame of a famous trade mark will not protect it from registration by
another company filing in respect of dissimilar goods or services. In coming to its conclusion, the Canadian
Supreme Court reiterated that this is a factual question to be assessed in
each case, and held that there was no likelihood of confusion between the
marks even though they were similar in appearance.

This obviously has important ramifications for trade mark
infringement cases involving famous marks in Canada as it clearly indicates
that the mere fact that a trade mark is famous is not enough to establish
confusion for a good or service in another class (see the text of section 20 of the Canadian Trade Marks Act).

Comment

Registrability of ‘famous’ marks for dissimilar
goods

Registrability of a mark is determined by specific
application of the test in section
6(5) of the Canadian Trade Marks Act
which assesses:

(1) The Inherent Distinctiveness of the
Trade-marks or Trade-names and the Extent to Which They Have Become Known;

(2) The Length of Time the Trade-marks and
Trade-names Have Been in Use;

(3) The Nature of the Wares, Services or
Business;

(4) The Nature of the Trade;

(5) The Degree of Resemblance Between the
Trade-marks or Trade-names in Appearance or Sound or in the Ideas Suggested
by Them; and

(6) Other Surrounding Circumstances.

The fame of
the mark is merely a ‘surrounding circumstance’ to be taken into
account along with all of the other factors.

Background

The dispute

The
proprietor of the chain of ‘Barbie’s Restaurants’ had
sought trade mark protection for ‘Barbie’s’. Mattel opposed the registration on the
grounds of likely confusion with ‘Barbie’ in respect of its doll
and related products due to their fame:

“The
appellant opposes the respondent’s application to register its
“Barbie’s” trade-mark and a related design in
association with “restaurant services, take?out services,
catering and banquet services” on the basis that some marks are so
famous that “marks such as . . . BARBIE may not now be used in Canada
on most consumer wares and services without the average consumer being led to
infer the existence of a trade connection with the owners of these famous
brands”.

The trade-marks
Opposition Board of the Canadian Intellectual Property Office had accepted
the respondent’s argument that its use of the “Barbie” name
since 1992 for its chain of Montreal restaurants was unlikely to create
confusion with the appellant’s ‘Barbie’ trade-mark.
The Board held that ‘Barbie’s’ fame was restricted to dolls
and accessories for them.

The Federal
Court, the Federal Court of Appeal and now the Supreme Court have upheld the
Board’s decision.

Click here for the
IPKat’s comments.

See the CTV’s news item“The owner of the restaurant, Spiro Christopolous, said he used the name
Barbie because he wanted to combine the words bar and barbecue.”

On 5 May 2006 the Provincial High Court of Madrid handed
down ruling 89/2006 in Merck
Sharp & Dohme DE Espana S.A. v Bexal Farmaceutica, S.A
.

Take home

Contrary to concern by many over Spain’s
slow implementation, the Bolar Provision under Article
10.6 of Directive
2004/27/EC of the Community Code
is alive and well in Spain. This result is a win for generic
pharmaceutical firms who until now had not known where they stood on this
issue in Spain.

Comment

(Thanks to David for passing this on to me.)

Presumption of infringement in process patent cases

Before applying the presumption of infringement in process
patent cases in Spain
there must at least be a finding of fact that the defendant is offering a
product with the same features as those of the product which results from
patented process. This was not the
case in Merck v Bexal, for several
reasons, including that there had been no ‘offer’ by virtue of
the operation of the Bolar defence.

(A similar presumption exists in other jurisdictions, for example
Japan.)

Pharmaceutical
industry ‘tug-of-war’

In
explaining its ruling, the Court made the following interesting comments:

‘In
the context of this struggle [between generic and innovator companies], the courts
must only take strict action to grant interim injunctions when there is an
action that unequivocally infringes the patent… to ensure observance of
the exclusive right granted, temporarily and subject to certain restrictions,
to the party that carried out the research and development, but they should
not be used to aid attempts at the exaggerated exercising of rights that
would lead to a restriction on free competition between companies that should
benefit consumers.’

Generic pharmaceutical companies will clearly take comfort
from these comments which will only increase the difficulty of obtaining
interim injunctions in Spain.

The European Bolar Provsion

Article 10.6 of Directive 2004/27/EC of the
Community Code states:

“6. Conducting the necessary studies and trials
with a view to the application of paragraphs 1, 2, 3 and 4 and the
consequential practical requirements shall not be regarded as contrary to
patent rights or to supplementary protection certificates for medicinal
products.”

Background

The Merck v
Bexal dispute

This was an
appeal from a judgment of Madrid Commercial Court Number 1 of 4 November
2005, which rejected the interim injunction sought by Merck in relation to Bexal’s application to
market a Finasteride pharmaceutical product (to treat benign prostatic hyperplasia and androgenetic
alopecia
). (Bexal is a subsidiary
of German based Hexal
AG.)

Merck
brought the injunction application based on infringement allegations in
respect of four patents: ES 540 745 (synthetic process);
ES 2 052 476 (synthetic process), ES 2 072 848
(synthetic process) and ES 2 105 774 (use to treat androgenetic
alopecia with 5-alpha reductase inhibitors).
Merck’s injunction application was denied at first instance.

On appeal
Merck argued (amongst other things) that the presumption of infringement
(Article 50.1.C of the Spanish Patent Act) should have been applied with the
result that the injunction should have been granted. The Provincial High Court rejected this
argument as inapplicable as there was no relevant conduct since:

(a) no
samples had been submitted to the Regulatory Authority;

(b) even if
samples had been submitted, a previous ruling by Division 15 of the
Provincial High Court of Barcelona on 21 July 2005 applied (which held in
effect that such merely ‘administrative’ actions do not
constitute infringement);

(c) the
experimental use defence under article 52.1.b of the Spanish Patent Act may
apply; and

(c) in any
event, the Bolar defence applied.

Text of the
ruling

‘We
reject the appeal brought by the representatives of MERCK & CO., INC and
MERCK SHARP & DOHME DE ESPAÑA SA against the judgement laid down on 4
November 2005 by Madrid Commercial Court number 1, in proceedings number
370/2005 from which this case arises, awarding the costs of the appeal
against the appellant.’

This is one for those in the
pharmaceutical industry and an interest in the USA. It has potentially enormous implications
for strategy in this industry in the US, and about zero application
otherwise.

The FDA has appealed summary
judgment at first instance (Ranbaxy v Leavitt, 30 April 2006 – Federal District court for the
District of Columbia) which held that it should have re-listed Merck’s Zocor (simvastatin) patents
in the Orange
Book
in response to citizen’s petitions filed by Ivax (now part
of Teva) and Ranbaxy in 2005. Ivax and Ranbaxy had filed paragraph IV
certifications in 2000 and 2001 and Merck had declined to sue within the
allowed 45 day period. Thus, under the
Hatch-Waxman legislation, Ivax and Ranbaxy were to be granted a 180 day
generic exclusivity. However, this
opportunity was taken away when the FDA granted Merck’s unusual request
(in 2003) that the relevant patents be delisted.

Comment

Why did Merck
request delisting?

It’s interesting to
contemplate why Merck sought to have the patents de-listed in the first
place. Conventional wisdom holds that
the generic exclusivity also assists the innovator company in the situation
where multiple generic players are preparing to launch. (This must almost certainly be the case
here as Zocor is the world’s second biggest selling drug (behind
Pfizer’s Lipitor)). The thinking
goes that the 180 generic exclusivity provides the innovator company with an
extra six months of limited competition.

Perhaps Merck has licensed an
authorised generic which will not be selling under the original New Drug
Application (NDA).

An interesting
twist

In an interesting twist, a law
firm which made no mention of acting on behalf of a client also wrote to the
FDA requesting delisting of the relevant patents. While some might say that this firm may
have been acting for Merck, a more plausible suggestion is that it acted on
behalf of a competitor generic company that stands to be out of the market
during the 180 day period.

Ivax
(Teva)’s generic simvastatin about to be approved

A press
release
on Teva’s website states that it expects to gain FDA
approval for its generic simvastatin product on 23 June 2006. Consequently, the parties have agreed to an
expedited appeal schedule.

Greater
certainty

It’s
a good thing that the decision has been appealed as the higher the court which
decides on this issue, the greater the certainty for all in the future.

Background

(I
apologise, as I have assumed a lot of knowledge in the above.) If you want to know more about the Orange Book,
paragraph IV certifications, the Hatch-Waxman legislation, etc, then the best
place to start is the judgment, above.
Please also click on any of the links in this article, or simply send
me an email.

Click here
for Aaron Barkoff’s excellent write up on this case.

On 19 May 2006, Mr Justice Pumfrey of the UK
High Court (Patents Court) handed down his decision in Mayne Pharma v
Debiopharm SA & Sanofi-Synthélabo
[2006] EWHC 1123 (Pat)
.

Take home

Mayne Pharma had sought revocation and declarations of
non-infringement in relation to EP0943331 and EP1308454 owned by Sanofi and Debiopharm
respectively. Both patents were held
not-infringed and revoked.
An important aspect of the case was the nature of the skilled
addressee of the patents and the testimony given by expert witnesses for each
side.

Comment

As is always the case, the
nature of the skilled addressee was largely driven by the associated common
general knowledge that they would bring to the construction and validity of
the relevant patents.

Naturally, Sanofi argued that
the skilled addressee was a general organometallic
chemist, while Mayne argued that the addressee had at least knowledge of
other platinum-based anti-cancer compounds.

Mr Justice
Pumfrey commented:

‘…this is one of those
cases where it is important to bear in mind that those primarily interested
in the invention will be employees of pharmaceutical companies interested in
improving, or making for the first time, pharmaceutical compositions
containing oxaliplatin…’

“…It is not sensible
not to attribute to the skilled person the common general knowledge of those
presently engaged in the manufacture and formulation of platinum-based
pharmaceuticals.”

As a result,
Mr Justice Pumfrey held that Mayne’s characterization of the skilled
addressee was correct and proceeded on the basis that Mayne’s expert
was well qualified to give evidence on the perspective of such a person. In contrast, Mr Justice Pumfrey appears to
have been unimpressed by the testimony of Sanofi’s leading expert and
stated in relation to one contention about the obviousness of EP ’454
— ‘I remain surprised and unconvinced by the contention he
advanced,…’

Mr Justice
Pumfrey repeated several sizeable sections of the expert’s
cross-examination transcript in the judgment to explain his conclusions.

Background

The patent dispute relates to Sanofi-Aventis’ leading
oncology drug – Eloxatin® (Oxaliplatin).

Mayne had
originally sought revocation and declarations of non-infringement of ten
patents. By the time that evidence was
exchanged, the scope of the dispute had narrowed to four patents, and in
respect of two of those Sanofi declined to file any evidence. Consequently,
the issues of infringement and validity were to be decided by Mr Justice
Pumfrey in respect of EP(UK) 0943331 (“’331”) and EP(UK)
1308454 (“’454”).

It became
apparent during the trial that it would be difficult for Sanofi to maintain
the allegation of infringement in relation to the ‘331 patent and it
was formally withdrawn. Accordingly, the judgment deals with the validity of ’331 and with both infringement
and validity of ’454.

On 4 May 2006, the European Court of Justice handed down
its decision in Case C-431/04 in relation to the grant of Supplementary
Protection Certificates (SPCs) for certain types of combination products.

Take home

An SPC can not be granted for these types of formulation
patent. To paraphrase the European
Court of Justice — an SPC will not be granted for a product which has a
combination of two substances in which only one of the substances has a
therapeutic effect while the other acts to make possible this therapeutic
effect.

In other words, a substance which makes the therapeutic
effect of another substance possible, but has no therapeutic effect of its
own, is not an ‘active ingredient’ within the meaning of the
regulation.

Comment

There has been a lot of controversy over this case. Many saw it as a chance for innovator
companies to obtain SPCs for formulation patents. While this closes the door on one of the
most promising attempts to broaden the classes of patents for which SPCs are
granted, this is quite unlikely to be the end of such attempts.

Some countries outside Europe
will grant patent term extensions based on the same policy rationale (see below). However, interestingly, in some
circumstances the relevant patent need not be restricted to claiming only a
pharmaceutical active ingredient. See
for example the recent Australian Federal Court decision in Pharmacia Italia SpA v Mayne Pharma Pty Ltd [2006] FCA 305
(29 March 2006)
. US patent term extensions (under 35 USC §156) are
similarly uninhibited.

Background

Supplementary
Protection Certificates

SPCs are designed to compensate
developers of new drugs for delays in obtaining regulatory approval by
granting a maximum of
15 years monopoly on marketed drugs.

An SPC is not a patent
extension – it only comes into effect after expiry of the relevant
patent. An SPC may last for up to a maximum of five
years. The SPC is not an automatic
right and has to be applied for in each individual state.

The length of an SPC period is calculated by calculating
the time difference between the date of first marketing approval in the first
EU State and the patent application date and then subtracting five
years. If the result is more than five
years, then the maximum five year term is granted.

The case

Massachusetts
Institute of Technology
holds a European patent for Gliadel Wafer, which is implanted into the cranium for
the treatment of recurrent brain tumours. The mechanism of action consists of
slow release of carmustine, a highly cytotoxic active ingredient, by the
action of polifeprosan, which acts as a bio-erodible matrix. MIT has licensed the patent to Guilford
Pharmaceuticals Inc., a U.S.
biotechnology company owned by MGI Pharma Inc.

The case concerned interpretation of Article 1(b) of Council Regulation (EEC)
No 1768/92 of 18 June 1992. Article 1 provides:

‘For
the purposes of this regulation:

(a)
“medicinal product” means any substance or combination of
substances presented for treating or preventing disease in human beings or
animals and any substance or combination of substances which may be
administered to human beings or animals with a view to making a medical
diagnosis or to restoring, correcting or modifying physiological functions in
humans or in animals;

(b) “product” means the
active ingredient or combination of active ingredients of a medicinal
product;

(c) “basic patent” means a patent
which protects a product as defined in (b) as such, a process to obtain a
product or an application of a product, and which is designated by its holder
for the purpose of the procedure for grant of a certificate;

(d) “certificate” means the
supplementary protection certificate.’

Article 3 sets out the conditions
for obtaining an SPC and provides:

‘A
certificate shall be granted if, in the Member State
in which the application referred to in Article 7 is submitted and at the
date of that application:

(a)
the product is protected by a basic
patent in force;

(b)
a valid authorisation to place the
product on the market as a medicinal product has been granted in accordance
with Directive 65/65/EEC or Directive 81/851/EEC, as appropriate …;

(c)
the product has not already been the
subject of a certificate;

(d)
the authorisation referred to in (b) is
the first authorisation to place the product on the market as a medicinal
product.’

Click here for
a handy guide to SPCs from the UK Patent Office.

For the IPKat’s thoughts
and associated comments, click here.

For commentary from Patent
Baristas, click here.

On 15 May 2006, the US Supreme Court handed down its much anticipated
decision in eBay Inc. et al v MercExchange, L.L.C. 547 US_(2006).

Take home

The US Supreme Court agreed with eBay that the traditional four-factor
equitable test (see below) to determine whether to grant a permanent
injunction applies in patent cases.
There is nothing special about patent disputes which would allow a
departure from the principles of equity.

The Supreme Court has not decided whether a permanent
injunction should be awarded in this case, but has remitted to the
first instance court — the District Court for the
Eastern District of Virginia to decide.

While this is a factual question, it appears unlikely that
a permanent injunction will be issued by the District Court against
eBay. Instead, they will be paying a
royalty to MercExchange until expiry of US 5,845,265.

Comment

Intellectual
Property Strategy

It is probably safe to say that
it is harder to obtain an injunction in the US than in most other
countries.

Depending on the economics (and
whether there is a chance of willful infringement), patentees may wish to
settle earlier for a reasonable royalty, as this may be all they will get in
any event.

Defendants, however, may be
happy to take their chances where they might not have otherwise, knowing that
(depending on willfulness and the four-factor test), the worst case scenario
is merely a reasonable royalty.

The
CAFC’s ‘general rule’ — overruled

As a consequence of this
decision, the
judgment of the Court of Appeals of the Federal Circuit

(‘CAFC’) was vacated. The
CAFC has previously operated under its ‘general rule that courts will
issue permanent injunctions against patent infringement absent exceptional
circumstances’.

This general rule applies in
almost all other jurisdictions in relation to permanent injunctions.

The
four-factor test

To obtain a permanent
injunction, a patentee must prove:

(1) that it has suffered an
irreparable injury;

(2) that remedies available at
law, such as monetary damages, are inadequate to compensate for that injury;

(3) that, considering the
balance of hardships between the plaintiff and defendant, a remedy in equity
is warranted; and

(4) that the public interest
would not be disserved by a permanent injunction.

Four-factor
test to be applied in light of modern circumstances

In an interesting signal to
lower courts, the joint concurring judgment of Justice Kennedy (with Justices Stevens, Souter, and Breyer)
highlighted recent developments which will affect whether permanent
injunctions will be granted in future cases.

“When the patented invention
is but a small component of the product the companies seek to produce and the
threat of an injunction is employed simply for undue leverage in
negotiations, legal damages may well be sufficient to compensate for the
infringement and an injunction may not serve the public interest. In addition injunctive relief may have
different consequences for the burgeoning number of patents over business
methods, which were not of much economic and legal significance in earlier
times. The potential vagueness and
suspect validity of some of these patents may affect the calculus under the
four-factor test…”

“…For these reasons it
should be recognized that district courts must determine whether past
practice fits the circumstances of the cases before them.”

Interim
injunctions

As an aside, slight variations
of the four-factor test are applied in many jurisdictions in the context of
interim (or interlocutory) injunctions — ie an injunction granted
pending full resolution of infringement and validity by the court.

The Supreme
Court’s reasoning

For those interested in US
patent law jurisprudence, the judgment rewards a detailed consideration. For example, it explains the CAFC’s
general rule (taken from ‘the right to exclude’ in 35 U.S.C. §261
and §154(a)(1)) but explains that (a) the creation of a right is distinct
from the provision of remedies for violations of the right, (b) the
attributes of personal property are subject to the provisions of the Patents
Act (35 U.S.C.), and (c) the provision for injunction relief is permissive
— ie it states that injunctive relief ‘may’ issue only
‘in accordance with the principles of equity’: 35 U.S.C. §283.

Background

For those who haven’t
been tracking this case, MercExchange
had first offered a license of US patent 5,845,265
to eBay and then sued for patent
infringement in the District Court for the Eastern District of Virginia. A jury found that the patent was valid and
infringed and that an award of damages was appropriate but denied
MercExchange’s motion for a permanent injunction.

The Court of Appeals for the
Federal Circuit reversed and applied its so called ‘general rule that
courts will issue permanent injunctions against patent infringement absent
exceptional circumstances’.

The latest newsletter from the team at Steinhauser
Hoogenraad
foreshadows some interesting developments in the Netherlands
from 1 July 2006.

Take home

Factors including relatively low cost and good prospects of
success have meant that the Netherlands is one of the most
popular jurisdictions in which to enforce IP rights. The latest round of amendments to the
civil procedure will support this trend.
They include:

Exp
parte
interim injunction proceedings.
(An injunction without the defendant having the opportunity to be heard on
the application — see below).

Descriptive seizure.
(This is basically a civil search and is similar to (but not the same as) Anton Piller Orders as discussed in
the my article of 5 May 2006.)

The patentee may take possession of
equipment used to commit patent infringement or demand that they be removed
from circulation or have them destroyed.

The patentee may require middlemen who
are being used by third parties as part of the infringing activities to cease
undertaking such activities.

The new provisions will only
apply to proceedings commenced after 1 July 2006.

Comment

Exp
parte
interim injunction proceedings.

This
procedure has been used in Germany for some years and to great effect. Under the German system, the defendant has
the opportunity to challenge the grant of the interim injunction within a set
period. As pointed out in the Steinhauser Hoogenraad newsletter,
the Netherlands
version provides for compensation to the defendant should the injunction be
revoked.

Descriptive seizure.

This sounds
very similar to the Saisie Contrefaçon which
is almost always granted at the commencement of patent litigation in France (Belgium
and Italy
have similar procedures). Click here
for a great summary of European procedures for obtaining evidence prior to
commencing litigation. (The article is
by Jochen Bühling of Krieger Mes
& Graf v der Groeben
and appeared in iam’s ‘IP
Value 2006’).

Possession, removal from circulation
or destruction of equipment.

These are
common remedies in many countries today.

Remedies against middlemen

This presents
an intriguing possibility as the Court may in many circumstances be ordering
a prohibition (or injunction) against a person (or company) who is not party
to the proceedings.

On 2 May 2005, Mr Justice Pumfrey of the UK High Court
(Patents Court) handed down this interesting interlocutory decision in Baxter v
Abbott [2006] EWHC 919 (Pat)
.

Take home

This is the latest round of global litigation concerning
Abbott’s Ultane (Sevoflurane) anaesthetic. The proceedings were commenced by Baxter
for a Declaration of Non-Infringement in respect of Abbott’s patent EP
(UK) 0 967 975
. Abbott sought
better particulars of Baxter’s Product and Process Description
(‘PPD’). Mr Justice
Pumfrey refused the application, stating in effect that Abbott had been in
possession of the relevant information for some time (in an Abbreviated
New Drug Application
which they had neglected to show their own experts).

Comment

An unusual aspect of this case is that the patentee, Abbott
has not counter-claimed for patent infringement. Instead, as Mr Justice Pumfrey has pointed
out, the pleadings filed by Abbott (the Defendant in this case) merely state:

“The
Defendants raise no positive case of infringement within this action. The
burden is on the Claimants to prove non-infringement of claims 2 to 4 of the
patent.”

Thus, Abbott would presumably not be entitled to the
remedies which would normally flow from a finding of infringement (such as an
injunction or damages), and would be unable to later commence infringement
proceedings in relation to the same product or process (due to Issue Estoppel or Res Judicata).

The question arises as to why Abbott have taken this course
of action and Mr Justice Pumfrey’s comments on Abbott’s
difficulty in proving infringement shed some light:

‘It is plain that Abbott have confronted
difficulties in attempting to demonstrate that Baxter’s sevoflurane is
stabilised by water, and it is equally obvious from the emphasis on the epoxy
lining to the aluminium container that every possible source of Lewis base
has been investigated in the hope of demonstrating infringement. The difficulty
is made still more clear by Abbott’s steady refusal to make any assertion of
infringement in the present proceedings, stating themselves content to rely
upon the burden of proof.’

For a
link to the IPKat’s article on this case from 3 May, click here.

The Australian Federal Court has just issued new Federal
Court Rules which codify the procedure for obtaining Marevaand Anton Piller orders.
Click here for a copy of the new Federal Court Rules.

Take home

These Orders may be obtained ex parte, impose draconian requirements on
the Defendant and are not handed down lightly by the Courts:

a MarevaOrder (from Mareva Compania Naviera SA v International Bulkcarriers
SA (The Mareva)
[1975] 2 Lloyd’s Rep 509) is
intended to freeze the assets of the party subject to the Order with the aim
of preventing
frustration or abuse of the process of the Court (ie,
so that they don’t move the assets out of the jurisdiction of the
Court);

an Anton Piller
Order (from Anton Piller KG v Manufacturing
Processes Ltd
[1976] Ch 55) is basically a civil search warrant with a
number of important restrictions on the searching party.

This is a great development for
litigants in Australia,
as it creates more certainty and simplifies the process of obtaining these
Orders which are both very prevalent in Intellectual Property
litigation.

The Chief Justice has issued Practice Note
No 23
and Practice Note
No 24
to complement the new Orders (25A and 25B).

Background

For those who are interested,
the Court has power to make such orders (and ancillary orders), under s 23 of the Federal Court of Australia Act 1976
(Cth).

For a leading High Court case on MarevaOrders – Cardile v LED Builders Pty Limited [1999] HCA 18 (6 May
1999)

For a recent Full Federal Court decision concerning

Anton Piller

Orders — see: Maniotis v J H
Lever & Co Pty Ltd ACN 008 220 666 [2006] FCAFC 7 (17 February 2006)

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.

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