The Legal Infrastructure of Business: Protecting Purple? Cadbury ...

Kraft Food Inc.?s Cadury unit officially won a four-year legal battle brought by rival Nestle SA over the color purple.? A London judge ruled that the color purple was distinctive to the packaging for Cadbury?s Dairy Milk bars. ?

Nestle, the world?s largest food company and controller of 11.1% of the Western Europe chocolate confectionary market (according to Bloomberg Industries data) challenged a trademark ruling from December 2011 when a London judge granted Kraft, the world?s largest producer of chocolate, trademark protection covering the purple color Cadbury used to package its chocolate bars and drinks.? Nestle?s basic protest was that color alone should not be protected under trademark law.? In contrast, Cadbury (in a released email statement) argued that the ?color purple has been linked with Cadbury for more than a century and the British public have grown up understanding its link with our chocolate.?? Ultimately the courts agreed with Cadbury; Judge Colin Birss found ?the evidence clearly supports a finding that purple is distinctive of Cadbury for Milk Chocolate,? noting that Cadbury had used purple for its Dairy Milk bars since 1914.?

Judge Birss did limit the scope of the trademark protection.? The court ruling restricts the use of the particular shade of purple, Pantone 2685C, to milk chocolate bars and tablets, milk chocolate for eating, as well as drinking chocolate.? Birss remarked, ?In my judgment it would not be right to say that the color purple is distinctive of chocolate generally,? explaining that the trademark will not apply to boxes of chocolates or to other products such as white or dark chocolate. ?Cadbury responded to the ruling by stating ?[the ruling] allows us to register as a trademark and protect our famous color purple across a range of milk chocolate products.?

Nestle does claim partial victory in the judgment.? Nestle spokesman James Maxton remarked that the ruling ?protects our brands by further limiting the range of goods for which Cadbury?s application may be registered.? Furthermore, the trademark does not include chocolate cakes or assortments; Nestle continues to use the purple packaging to wrap its brazil nut chocolate in boxes of its Quality Street sweets.?

Paul Medlicott, head of Fast Moving Consumer Goods (FMCG) at London-based law firm Addleshaw Goddard, commented on the ruling, ?Trademarks of names and logos are familiar to most businesses, but the high court?s ruling in favor of Cadbury shows the increasing importance of color trademarks. Cadbury sought to, and has succeeded in, trademarking its distinctive purple color used in relation to its products. It is now able to prevent its competitors using that same color. The challenge faced by Cadbury in getting the color registered as a trademark is evident when you see that their trademark application was first filed in 2004.?

This blogger, however, fails to comprehend why these two organizations would spend four years and presumably hundreds of thousands if not millions of dollars arguing over the use of the color purple.? Cadbury wasted its time and money fighting to trademark Pantone 2685C, and Nestle wasted just as much time and money trying to prevent it.? I understand that color can play a large role in brand identity, but I cannot agree that color is critical to maintaining brand identity and loyalty.? In Cadbury?s case, it is a stretch to say that consumers would be drawn away from Cadbury?s product to a competitor?s product simply because that competitor used the same color in its packaging.? Loyal Cadbury consumers would still seek out their favorite Dairy Milk bars regardless of whether they were the only purple packages on the shelves. Companies should spend more time marketing and building product awareness and brand loyalty, and less time worried about the color scheme of its competitors.

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Sources:

http://www.bloomberg.com/news/2012-10-01/kraft-s-cadbury-wins-ruling-in-nestle-suit-over-color-purple-2-.html

http://www.bloomberg.com/news/2012-10-02/astrazeneca-kraft-reggae-facebook-intellectual-property.html

http://www.thefinancepages.co.uk/companies/cadbury-wins-colour-trademark-battle/02409/

Source: http://picker.typepad.com/legalinfrastructure/2012/10/protecting-purple-cadbury-wins-suit-with-nestle-over-color-purple.html

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