Colour wars 2: Darrell Lea defeats Cadbury

In the latest round in the international colour wars, pint sized chocolatier Darrell Lea has defeated international retailer and bully boy Cadbury Schweppes for control of the colour purple in Australia.

In DIFFUSIONblog 25/5/07 we reported that Cadbury had won an appeal in which it claimed that since 1995 it had achieved a substantial, exclusive and valuable reputation and goodwill throughout Australia through the Pantone 2685C colour purple.

It alleged that since 2001, Darrell Lea had consistently used a colour bearing a "striking and obvious" likeness to Cadbury's purple in its signage, badging, wrapping, store fit-out and point of sale facilities.

The Australian Federal Court has now dismissed the latest application by Cadbury Schweppes that the use of purple by Darrell Lea amounted to misleading and deceptive conduct.

Justice Peter Heerey said he was not persuaded that Darrell Lea in using purple had passed off its business or products as those of Cadbury or had contravened Australia's Trade Practices Act.

"I am not satisfied that such usage has resulted, or would result, in . . . purchasers of chocolate being misled or deceived," Justice Heerey said.

Cadbury had claimed customers the use of the colour purple affected customers ability to discern the difference between the two company's products.

But Darrell Lea counterclaimed Cadbury's knowledge was limited to inspection of goods on display and physical surroundings. The claim was correct as the original evidence presented in an audit of colour use made no attempt to actually observe brand experience.

"Cadbury Schweppes has deliberately established a connection between our shade of purple and Cadbury chocolate, and many consumers associate Cadbury purple with Cadbury chocolate,'' Cadbury managing director of Mark Callaghan said in a statement.

"We remain totally committed to protecting our brand identity and Cadbury will appeal this decision.''

As we noted this the second appeal Cadbury has lost. In the original April 2006 hearing, a Federal Court judge dismissed Cadbury's claim. In the disputed hearing the court ruled Cadbury did not “own” the colour purple and that Darrell Lea's use was not likely to convey to a” reasonable consumer” that it was associated with its rival.

The field of brand identity can be somewhat murky and "locking up" what are essentially public colours without a similar attention to the impact of the rest of the identity system can be fraught with danger, as Cadbury continues to find.

Cadbury's purple passage.

Cadbury Schweppes is enjoying a purple passage after the Australian Federal Court this week handed it a win over some allegedly deceptive pratices by competitor Darrell Lea (see DIFFUSIONblog:Cadbury appeal short of a glass and a half 20/7/06).

Cadbury accused Darrell Lea of misleading and deceptive conduct by using a shade of purple which it claims bears "a striking and obvious" resemblance to its own "Cadbury Purple". All very strange because when DIFFUSION walked past the store on Thursday it seemed decidedly blue in colour.

In the original April 2006 hearing, a Federal Court judge dismissed Cadbury's claim, probably because it was more reliant on Cadbury’s claim of ownership of Pantone 2685C and Pantones that are very close to it.

In the disputed hearing the court ruled Cadbury did not “own” the colour purple and that Darrell Lea's use was not likely to convey to a” reasonable consumer” that it was associated with its rival.

However, three Federal Court justices disagreed with the previous finding and allowed Cadbury's appeal, ordering a new trial at the same court to be set (see: http://www.austlii.edu.au/au/cases/cth/FCAFC/2007/70.html)

The Court ruled that in dismissing expert evidence from three witnesses presented by Cadbury, the trial judge had erred.

Interestingly the three experts, Brian Gibbs, an Associate Professor of Marketing and Behavioural Science in the Melbourne Business School at the University of Melbourne, Constantino Stavros, a Senior Lecturer in the School of Economics, Finance and Marketing of RMIT University, Melbourne; and Timothy Riches, the managing director of FutureBrand were all called by Cadbury and presented with photo evidence it had accumulated on it's competitor's activites (let's also note that Cadbury operates no retail stores in Australia, while Darrel Lea has done so since 1927 with more than 1000 stores).

In particular, weight was attached to Gibbs’ evidence which drew attention to such factors as brand concept and brand equity, the nature and storage of brand associations in memory, the role of packaging in marketing communication and the importance and impact of colour in brand.

"It cannot be said that the disputed evidence is of so little weight that it could not influence the result of a new trial, so as to produce a different result," they said in their judgment.

Cadbury claims that since 1995 it has achieved a substantial, exclusive and valuable reputation and goodwill throughout Australia through the colour purple.

It alleges that since 2001, Darrell Lea has consistently used a colour bearing a "striking and obvious" likeness to Cadbury's purple in its signage, badging, wrapping, store fit-out and point of sale facilities.

Cadbury also claimed that Darrell Lea’s conduct constitutes passing off of its chocolate confectionary business and products as a business or products of, or connected or associated with, Cadbury.

DIFFUSION believes Cadbury has taken the route of attempting to prove passing off and by dint of this assume ownership of colour Pantone 2685C, something which it has up to now failed to do.