The chocolate company's use of the particular purple shade, Pantone 2685C, in the sale of chocolate bars, chocolate in tablet form and eating and drinking chocolate products showed sufficient "distinctive character" to merit trade mark protection, registrar Allan James said in his ruling.
James upheld complaints by Nestlé in determining that the association between the colour and Cadbury's chocolate cakes, chocolate assortments and some confectionery chocolate was not strong enough to have built enough of a distinctive character in those products to merit protection under trade mark law.
Cadbury first applied to register the Pantone shade as a trade mark in 2004, but it was not until 2008 before the Trade Mark Registry approved it for protection.
In its application Cadbury had described the mark as being the particular purple shade "applied to the whole visible surface, or being the predominant colour applied to the whole visible surface, of the packaging of the goods". Those goods included a number of chocolate products, including those "in bar and tablet form", chocolate confectionery, cakes and assortments and chocolate and coca-based drinks.
Nestlé challenge the granting of protection on a number of grounds under the UK's Trade Marks Act, but those were only partially upheld by James following a hearing.
"Subject to any appeal, the mark will be registered for chocolate in bar and tablet form; eating chocolate; drinking chocolate; preparations for making drinking chocolate. Both sides have achieved a measure of success, Cadbury more so than Nestlé," James said in his ruling (41-page / 297KB PDF).
Catrin Turner, expert in trade mark law at Pinsent Masons, the law firm behind Out-Law.com, said that coloured packaging was a "powerful" marketing tool that created problems for companies unable to use it.
"Colour of packaging, for example from yellow or silver for butter, to purple or red for chocolate, create powerful connections for consumers," Turner said.
"Having the colour monopoly granted by a registered trade mark creates real practical barriers for competitors wanting to sit within a class of products which consumers expect to be coloured a particular way" she said.
"The use of a registered trade mark right helps the brand owner to keep a distance apart from rivals and prevent 'me too' products copying the look and feel of the brand leader. These cases become a fight of evidence about which came first – the colour associated with that type of goods or the brand leader. Cadbury's win maintains their position as the only chocolate bar that can be packaged in purple Pantone 2685C," Turner said.
Nestlé had argued that Cadbury's trade mark should be revoked for a number of reasons under UK trade mark law, including that the mark did not constitute a trade mark-able sign, that it lacked distinctive character and that Cadbury had filed its application in "bad faith".
In the UK, trade mark protection can be obtained by registering signs with the Trade Marks Registry at the UK's Intellectual Property Office. Under the Trade Marks Act "any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings" can be registered subject to certain conditions.
The Act states that trade marks may consist of words (including personal names), designs, letters, numerals or the shape of goods or their packaging and must not be registered if they are "devoid of any distinctive character" or if they "consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services". This would include a colour that was generally associated with a category of goods. Trade marks must also not be registered if the application has been made in "bad faith".
A trade mark can also be revoked if it is used in a way that might mislead the public "particularly as to the nature, quality or geographical origin of those goods or services", according to the Act.
Generally, colours are only capable of registration as trade marks if the owner can establish that the colour has acquired distinctive character through use. Cadbury had to provide substantial evidence of the use of the purple colour on its packaging as well as association by the public of this colour with Cadbury to demonstrate that purple Pantone 2685C had acquired distinctiveness. Colour marks must also be capable of graphic representation and so usually must be registered by reference to a particular Pantone colour.
Mark owners may also obtain 'goodwill' rights to unregistered marks, including colours, giving them legal protection under the laws of 'passing off'. If mark owners can prove that their use of a trade mark has established 'goodwill' in the business associated with that trade mark protection to that mark may apply. Goodwill is essentially a reputation in the mark. If another trader 'passes off' their services as being those of mark owners and appear to claim that their services are theirs or that they are in some way connected or have been endorsed, then mark owners can take action. Mark owners can claim damages or seek an injunction to prevent that use, so long as they can show that they have or are likely to suffer damage as a result of the use.
James rejected Nestlé's claims that Cadbury's purple-shaded trade mark generally lacked distinctive character. James said that, although he had given consideration to the "public interest" in ensuring that a "monopoly" on the use of a finite number of colours did not occur, there was no doubt Cadbury's use of purple had acquired sufficient goodwill to build up distinctive character in the sign.
James reviewed each product description included in Cadbury's trade mark application and said that major advertising campaigns had helped Cadbury distinguish its purple shaded mark for chocolate bars and chocolate in tablet form from other brands and that its built-up reputation had engendered distinctive character into the mark when used on packaging for those goods.
Cadbury also built up distinctive character in other "eating chocolate" goods, James said. These goods were distinct from cooking chocolate, he said. The trade marked purple shade is distinctive with Cadbury's chocolate "per se", because brands like 'Twirl' and 'Buttons' have existed sufficiently long without "direct competition" and because 'Dairy Milk' and other Cadbury bar and tablet brands have helped those brands build the distinctive character, he said.
However, James said Cadbury had not proven that it had built distinctive character in all "confectionery chocolate" to merit trade mark protection on such broad scope. James said. He also said Cadbury had not built up enough of a distinctive character to qualify for protection for the use of its purple-shaded mark in relation to blended "chocolate assortments", such as in packaging for its 'Roses' chocolates.
James said there was enough market evidence to suggest that Cadbury had built distinctive character around its use of the Pantone shade in "drinking chocolate" products in 2004 when its application was made, but that the company had "not shown that the mark had acquired a distinctive character for chocolate cakes at the relevant date".
Nestlé had also argued that Cadbury's mark should be revoked because the mark's description allowed for the possibility of it being used on multiple products and meant that it could constitute more than one sign. James rejected Nestlé's claim.
"The potential for the application of the sign to the goods to vary from product to product, in terms of the proportion of the visible surface of the packaging covered by the colour, is not a reason to conclude that the mark itself is made up of an infinite number of signs. The mark itself – the colour purple Pantone 2685C - is fixed and stable," James said.
Nestlé had also claimed that Cadbury's mark was "not capable of being graphically represented" due to vague wording on Cadbury's application, but James said the wording was sufficiently clear. James further rejected Nestlé's claims that the mark was not trade mark-able because, as a colour, it was "not capable of distinguishing the goods" from other chocolate products. James said that tested European case law had shown that colours were capable of being trade marked.
James also rejected Nestlé's argument that Cadbury had registered the mark in bad faith as "absurd". Because Cadbury did not use or intend to use the trade marked colour across all of its packaging at the time it was registered the mark should be revoked, Nestlé had argued, claiming that the appearance of brand names on Cadbury packaging proved its point.
"I do not think that the description used by Cadbury could reasonably be taken to exclude the possibility of the use of brand names on the packaging of the product," James said.
"To interpret the words so literally would be absurd. Further, even if this ultra literal interpretation of the words is correct, it is farfetched to suggest that the use of the words '….applied to the whole visible surface..' etc. ... can properly be characterised as Cadbury having fallen short '…of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined', which is the measure of bad faith adopted by the English courts," he said.