Cadbury purple to be put on hold
The most recent development in a protracted legal battle between two chocolate heavy weights, Cadbury Schweppes and Darrell Lea, is a decision by the Trade Marks Office (copy available HERE) to suspend three pending opposition proceedings which relate to some trade mark applications made by Cadbury for certain shades of the colour purple. The oppositions have been suspended pending final determination of a related passing-off proceeding in the Federal Court.
Background (in Brief)
In February 2003, Cadbury commenced proceedings against Darrell Lea in the Federal Court of Australia claiming that Darrell Lea's use of a shade of purple in connection with its chocolate confectionary business amounted to conduct that was misleading and deceptive, and also constituted passing off ("the passing off proceeding"). For those who have, understandably, lost track of the course of these proceedings, a comprehensive summary of the numerous court decisions is provided by the Delegate at paragraph 50 of the present decision. The next stage in the passing off proceeding will be mediation likely to be followed by a further hearing before Heerey J., if it does not settle.
In a separate proceeding, Cadbury and Darrell Lea are also in dispute over the registration of series trade mark application No. 779336. In April 2006, a decision by the Registrar of Trade Marks gave Cadbury permission to register the colour mark, albeit for only one shade of purple and only in respect of moulded block chocolate and boxed chocolates. Darrell Lea has appealed this decision and Cadbury has cross-appealed ("the Federal Court opposition"). A decision in this proceeding is not expected any time soon.
The present Trade Marks Office decision relates to an application by Darrell Lea requesting suspension of opposition proceedings for Cadbury's trade mark application No's 1120614, 11206155 and 1120621('the present oppositions') each of which seeks to protect a discrete shade of purple for goods in Class 30. Worth noting is that Cadbury has applied for a further 11 trade marks for different shades of purple covering various chocolate goods.
Submissions of both Parties
Darrell Lea sought to have the oppositions suspended pending final determination of the passing off proceeding and/or the Federal Court opposition. They made submissions based on the similarities between the passing off proceeding and the three present oppositions, pointing out that findings of fact which concern Cadbury's reputation, at a similar time, in the colour purple 'will very likely be determinative of similar issues of fact before the Trade Marks Office'.
Darrell Lea also argued that the result of the Federal Court opposition may render the present oppositions pointless and that findings of fact in that proceeding would be relevant in a determination of factual distinctiveness in the present oppositions.
Additionally, Darrell Lea sought to rely on both evidentiary concerns (costs and time restraints), as well as third party interests (avoid duplication of evidence), to support their suspension application.
As expected, Cadbury argued that the passing off proceeding was not sufficiently relevant to the present oppositions. They made submissions as to differences in the nature of each proceeding as well as the fact that resolution in the passing off proceeding may be some time off.
With respect to the Federal Court Opposition, Cadbury made the point that actual differences between the trade marks the subject of the present oppositions and trade mark application No. 779336, most relevantly an 8 year time gap, meant that the Federal Court opposition would not resolve the issue of factual distinctiveness in the present cases. A real prejudice to their interests caused by grant of a suspension was also raised.
The Decision
In determining the issue of whether the three oppositions should be suspended using its powers under Regulation 5.16 Trade Marks Regulations 1995 , the Delegate considered the 'balance of convenience' between Darrell Lea and Cadbury measured by the degree to which both the passing off proceeding and the Federal Court opposition are relevant. The crucial issue in the three oppositions was whether the Cadbury marks had acquired factual distinctiveness by June 2006.
Regarding the Federal Court opposition, the Delegate acknowledged that 'a finding that trade mark application No. 779336 was factually distinctive of Cadbury by 25 November 1998 would influence any decision regarding factual distinctiveness' of the present later applications. However, of greater significance was the fact that 'final determination of the Federal Court opposition may contribute little or nothing to the resolution of the present opposition'. That is, a finding against factual distinctiveness in the Federal Court opposition would only be of limited value or potentially the issue of factual distinctiveness may not be considered.
The Delegate also raised the prospect of considerable delay in the Federal Court opposition and concluded that the Federal Court opposition does not warrant suspension of the three pending oppositions.
On the other hand, in considering the significance of the passing off proceeding the Delegate found that the 'balance of convenience' favoured Darrell Lea. The fact that the passing off proceeding was likely to be resolved relatively soon (the further hearing is set for March) was a factor in the Delegates decision. But of greater weight was the Delegate's view that the passing off proceeding would assist in deciding the three oppositions.
"The determination of passing off or breach of the Trade Practice Act would not bind the Registrar in the determination of the present oppositions. However, the trial judge must investigate the reputation of Cadbury in the colour purple. This enquiry necessitates an investigation into similar evidence which would be useful in establishing factual distinctiveness for section 41(6) of the Trade Marks Act".
Suspension would also ensure a more efficient administration of the trade marks register and 'avoid inconsistent fact finding'.
Other relevant outcomes:
- that evidence properly served and filed in relation to opposition proceedings for any one of trade mark application No's 1120614, 11206155 and 1120621 would be considered as evidence in each (but not necessarily evidence for the potential oppositions which may arise from Cadbury's further 11 purple applications);
- that evidence filed in the opposition proceeding before the Registrar in relation to trade mark application No. 779336 be taken as served and filed in the present oppositions; and
- that evidence adduced in the passing off proceeding be considered evidence in the present oppositions, with restrictions.
And so the battle goes on as Cadbury continue to relentlessly seek protection for that sacred purple wrapping.
