04 October 2013

The Colour Purple - Société Des Produits Nestlé S.A. v Cadbury UK Ltd.



















"The Color Purple" is a novel by Alice Walker which won its author the Pulitzer Prize for Fiction in 1983. if you have not read the book here is Wikipedia's summary of the plot.  It is a great book with a great story.

The colour purple (or rather pantone 2685C) is only slightly less gripping. It is the subject of a tussle between two of the world's largest confectionery companies the latest stage of which has just ended in the Court of Appeal ( Société Des Produits Nestlé S.A. v Cadbury UK Ltd[2013] EWCA Civ 1174 (4 Oct 2013)).

It started on 15 Oct 2004 when Cadbury Limited (“Cadbury”) applied to register "the colour purple (Pantone 2685C), as shown on the form of application, applied to the whole visible surface, or being the predominant colour applied to the whole visible surface, of the packaging of the goods" as a trade mark for the following goods:
"Class 30: 
Chocolate in bar and tablet form, chocolate confectionery, chocolate assortments, cocoa-based beverages, preparations for cocoa-based beverages, chocolate-based beverages, preparations for chocolate-based beverages, chocolate cakes."
Now a trade mark has to be capable of distinguishing goods or services of one undertaking from those of other undertakings. S.3 (1) (b) of the Trade Marks Act 1994 excludes from registration trade marks which are devoid of any distinctive character. The examiner objected to the application on that ground.  However, section 3 (1) has a proviso that, a trade mark shall not be refused registration by virtue of paragraph (b), if, before the date of application for registration, it has in fact acquired a distinctive character as a result of the use made of it. Cadbury filed evidence of distinctiveness acquired through use and the examiner allowed the application to proceed.

When the application was published the Société des Produits Nestlé S.A. ("Nestles" as I still call it) decided to enter the fray. It filed a notice of opposition on 27 Aug 2008 contending:
"i) The mark is not capable of distinguishing the goods of one undertaking from those of others within the meaning of s.3 (1) (a) of the Act because it is just a single colour, and colours are commonly used in trade;
ii) Because the mark could take numerous forms of appearance, it is not a ‘sign’ within the meaning of s.3 (1) (a);
iii) The sign is not capable of being graphically represented as required by s.3 (1) (a);
iv) The mark is excluded from registration under section s.3 (1) (b), (c) and (d) because:
a) It is devoid of any distinctive character;
b) It designates a characteristic of the goods, namely the characteristic of having purple packaging;
c) It was customary in the current language or bona fide practices of the trade, the colour purple being in common use at the date of the application in relation to the specified goods;
d) It had not acquired a distinctive character through use.
v) To the extent that the mark covers the colour specified “applied to… the whole visible surface of the goods”, the application was made in bad faith contrary to s.3 (6) because the mark was not so used, and the applicant had no intention to use it like this.
vi) It was inconceivable that the applicant intended to use the mark in relation to the broad range of goods specified in the application, and the applicant must have known of others use of purple, so the application was made in bad faith for this reason too."
Cadbury filed a counter-statement denying the grounds of opposition.

The case came before Mr Allan James.  Taking the first three grounds together, Mr. James reformulated that part of Nestles's objection at paragraph [69] as follows.
"These grounds are that the mark is not:
i) A sign;
ii) Capable of being represented graphically;
iii) Capable of distinguishing the goods of one undertaking from those of others because it is a single colour."
Some of those issues had been considered by the European Court of Justice (as it was then called) in Case C-104/01, Libertel Groep BV and Benelux-Merkenbureau  [2004] Ch 83, [2004] 2 WLR 1081, [2003] EUECJ C-104/01.

On the question of whether a colour can be a sign, the Court reasoned at paragraph [27] that a colour per se cannot be presumed to constitute a sign because a colour is a simple property of things. However it may constitute a sign depending on the context in which the colour is used.  In particular, a colour is capable of constituting a sign in relation to a product or service.  At paragraph [71] Mr. James instructed himself that:
"It is clear from paragraph 27 of the judgment that colour may constitute a sign, but that it cannot be presumed to do so. Whether colour constitutes a sign depends on the context in which it is used. In some cases it may simply be a property of the goods. For example, brown is the natural colour of chocolate. In that case, the colour may not be a sign at all when used in relation to chocolate because it conveys no information apart from the product itself. In other cases the use of colour may be incidental, such as the colour of the shoes of a child shown eating a bar of chocolate in a picture appearing on the packaging of the product. Such incidental use of colour would not send any information to the consumer. Therefore it is not serving as a sign."
In Mr. James's view Cadbury's application was in effect an application for the registration of purple or predominately purple packaging and there was no doubt that coloured packaging could constitute a sign.

As to the second ground of objection as reformulated by Mr. James, the European Court had noted at paragraph [28] of Libertel that a graphic representation within the meaning of art 2 of Directive 89/104/EEC must enable the sign to be represented visually, particularly by means of images, lines or characters, so that it can be precisely identified.  It order to fulfil its function, the graphic representation must be clear, precise, self-contained, easily accessible, intelligible, durable and objective. A swatch of the colour by itself would not satisfy that requirement as colour samples fade over the years. Neither would a bare verbal description. However, "the designation of a colour using an internationally recognised identification code" could be enough.  In Mr. James's view Cadbury's application which consisted of a colour swatch, pantone number and description of its use met the requirement of graphical representation.  Nestles had argued that the addition of the words "being the predominant colour" had introduced an element of ambiguity.  Mr. James disagreed and rejected the second ground of objection.

Mr. James dealt shortly with the third ground of objection partly because it had already been decided by the Appointed Person in AD2000 [1997] RPC 168 and partly because it was better considered with paragraph (iv) of Nestles's notice of opposition.

Next, the hearing officer tackled the last two grounds of Nestles's objection. Nestles's counsel decided not to proceed with the sixth ground which was that Cadbury had no intention of ever using the mark for the "whole visible surface….of the packaging of the goods” as there would have to be space for the names of the product and manufacturer and other information.  Mr. James considered that it would be absurd to interpret the description literally and even if a strict literal translation were appropriate Cadbury's application fell a long way short of “…of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined”, which amounts to bad faith.

Finally, Mr. James addressed the want of distinctive character point that had been raised by the examiner. The European Court had provided some guidance on the point in Libertel which the hearing officer summarized at paragraph [99] as follows:
"i) I should remember that the public’s perception of the use of a colour is not necessarily the same as it would be with a traditional word mark.
ii) However, the method of assessment of whether the mark had acquired a distinctive character remains the same, therefore:
a) The length of time and the extent of the use of the mark should be taken into account, as well as the amount spent promoting it (as a mark);
b) If a significant proportion of the relevant public have been shown to identify the goods as originating from a particular undertaking because of the trade mark, I must find that the mark had acquired a distinctive character;
c) In assessing whether the mark is distinctive as per (b) above, I may take account of statements from the trade and the results of public surveys."
In Libertel the Court had also held that the public interest should be kept in mind when deciding cases of this kind.  At the hearing Mr James had heard a lot of evidence on Cadbury's use of purple packaging including survey evidence. He did not think that there was any doubt on the evidence that there is an association of some kind in the public’s mind between the colour applied for and Cadbury. However, the question he had to address was not simply whether the colour was distinctive of the company, but whether it was distinctive of its goods, and if so, which goods.He therefore assessed the matter in relation to each of the descriptions of goods in the application.  Taking all the evidence into account, he found that the mark had acquired a distinctive character in the required sense, by the relevant date, in relation to chocolate in bar and tablet form, chocolate assortments and drinking chocolate but not chocolate confectionery at large or chocolate cakes. He therefore held that the mark should be registered for:
"Chocolate in bar and tablet form; chocolate for eating; drinking chocolate; preparations for making drinking chocolate."
As Nestles had successfully narrowed the range of specified goods, Mr. James decided to award Cadbury's only 75% of their costs on the scale set out in Tribunal Practice Notices 2/2000 and 4/2007.

Nestles appealed to the High Court on the ground that the mark applied for was "not a sign capable of being represented graphically and as such is not registerable as a trade mark" and also on the implied inclusion of plain chocolate within the specification and the description of eating chocolate.  Cadbury cross appealed for its costs.  The appeal came before His Honour Judge Birss QC as he then was in Société Des Produits Nestlé S.A. v Cadbury UK Ltd   [2012] EWHC 2637 (Ch). His Honour rejected Nestles's s.3 (1) (a) point but allowed its appeal on the specification on the basis that all the evidence of use adduced before the hearing officer related only to milk chocolate. He inserted the adjective "milk" before chocolate so that the specification read
"Milk chocolate in bar and tablet form; milk chocolate for eating; drinking chocolate; preparations for making drinking chocolate.
Nestles appealed to the Court of Appeal in on the ground that the judge made errors in relation to the requirements that a trade mark be "a sign" and that it be "graphically represented." Alternatively, Nestles submitted that, if the issues on the interpretation of the Directive were not acte clair in Nestles's favour, they should be the subject of a reference to the Court of Justice of the European Union under art 267 of the Treaty for the Functioning of the European Union.

At paragraphs [20] and [21] of his judgment, Judge Birss QC had observed:

"20. Before getting into the decided cases it may be noted that the potential problems arising from applications of this kind are not hard to see. Conventional trade marks such as trade names ("Cadbury") or logos (such as a glass and a half of milk on a bar of Cadbury's Dairy Milk) do not give rise to the same conceptual problems as what have been called "exotic" trade marks such as smells, colours per se and other things. The attraction of a trade mark registration is that provided it is used and the fees are paid, it gives a perpetual monopoly. The problem is the same as the attraction but from the other perspective. Unless the registration of trade marks is kept firmly in its proper sphere, it is capable of creating perpetual unjustified monopolies in areas it should not. This is not a new problem. In his judgment in British Sugar v James Robertson [1996] RPC 281, which related to whether the word "treat" was a valid trade mark Jacob J (as he then was) started his judgment with the well known passage from the judgment of Cozens-Hardy MR in 1909:
'Wealthy traders are habitually eager to enclose part of the great common of the English language and to exclude the general public of the present day and of the future from access to the enclosure.'
21. What was said a century ago about the great common of the English language might be said today about the world's great common of the visible electromagnetic spectrum. In that sense the case before me is really very simple. Can Cadbury, even if they have shown that the public associate the colour purple with Cadbury's chocolate, obtain a trade mark registration for that colour per se?" 
 In his judgment Sir John Mummery endorsed that observation at paragraph [13]:
"The judge recognised that unconventional or "exotic" marks, such as colours, sounds and smells, give rise to conceptual problems, which are not encountered with more conventional trade names and logos. As the registration of a trade mark creates a form of intellectual property conferring a potentially perpetual monopoly in the mark and excluding everybody else from use in various ways, the point of principle has some public importance."
Like the judge and indeed Mr. James, Sir John reviewed the case law, namely Libertel,  Case C-273/00 Sieckmann v. Deutsche Patent –und Markenamnt [2002] ECR 1-11754, Case C-49/02 Heidelberger Bauchemie GmbH v. Bundespatentgerich  ECR 1-6129 and  C-321/03 Dyson v. Registrar of Trade Marks ECR 1-687. From those cases he distilled the following principles at paragraph [15]:
"The conditions
(1) An application to register a trade mark must satisfy three conditions for the purposes of Article 2:-
(i) there must be a sign;
(ii) it must be capable of graphical representation;
(iii) it must be capable of distinguishing the goods or services of one undertaking from those of other undertakings.
Purpose
2) The purpose of the requirements is to prevent abuse of trade mark law in order to obtain an unfair competitive advantage.
Identification
(3) Identification requirements for entry of a trade mark on the public register of trade marks include clarity, intelligibility, specificity, precision, accessibility, uniformity, self-containment and objectivity.
Multitude of forms
(4) The identification requirements are not satisfied, if the mark could take on a multitude of different appearances, which would create problems for registration of the mark and give an unfair competitive advantage over competitors.
Colour without a message
(5) Colours are normally a simple property of things, or a means of decorating things. They are not normally capable of being a sign. A sign conveys a message. The sign is capable of being registered as a trade mark, if the message is about the source of goods or services.
Colour as a sign conveying a message
(6) Depending on the facts and circumstances of the case, colours, or combinations of colours, designated in the abstract and without contours and used in relation to a product or service are capable of being "a sign."
Graphic representation of colour
(7) As for the second condition of graphical representation, in a mark consisting of two or more colours designated in the abstract and without contours, qualities of precision and uniformity are required. The colours must be arranged by associating them in a predetermined and uniform way.
Colour without form/in a multitude of forms
(8) Those requirements are not met by the mere juxtaposition of colours without shape or contours, or by reference to colours in every conceivable form, so that the consumer would not be able to recall or repeat with certainty the experience of a purchase. The scope of protection afforded by such a mark would be unknown both to the competent authorities responsible for maintaining the register and to economic competitors. Registration would confer unfair competitive advantages on the proprietor of the mark."
Sir John held that both the judge and hearing officer had erred in their interpretation of the verbal description of the graphical representation of the mark for which the application was made. The problem was that the description referred not only to the colour purple as applied to the whole visible surface of the packaging of the goods, but also to the alternative "predominant colour applied to the whole visible surface..." The use of the word "predominant", in Sir John's view, opened the door to a multitude of different visual forms as a result of its implied reference to other colours and other visual material not displayed or described in the application and over which the colour purple might predominate. That made it into an application for the registration of a shade of colour "plus" other material and not of just of an unchanging application of a single colour, as in Libertel. Accordingly. the colour could not constitute a sign for the purposes of art 2 of the Directive or indeed s.1 of the Act. Were it otherwise
"The result would not be an application to register "a sign", in the accepted sense of a single sign conveying a message, but to register multiple signs with different permutations, presentations and appearances, which are neither graphically represented nor described with any certainty or precision, or at all."
He concluded at paragraph [52]:
"The appearance and number of such other signs would be unknown both to the Registrar, who is responsible for the proper functioning of the registration system and is faced with the decision whether or not to register it on a public register, and to competitors, who would not be able to tell from inspecting the register the full scope and extent of the registration. To allow a registration so lacking in specificity, clarity and precision of visual appearance would offend against the principle of certainty. It would also offend against the principle of fairness by giving a competitive advantage to Cadbury and by putting Nestlé and its other competitors at a disadvantage."
Sir Timothy Lloyd and Lord Justice Lewison delivered concurring judgments. The Court of Appeal did not see the need for a preliminary reference to the CJEU.

So where does this leave colour marks? Not entirely unregisterable, I think. but the application has to be drafted with very great care.  Had Cadbury applied simply to register wrapping foil in pantone 2658C it is hard to see how there could have been a problem. There would not have been a problem had Cadury's applied to register the outer packaging of each of its products though it is hard to see the commercial point of doing so as there us adequate protection for such products word marks and glass and half devices and other logos already. This appeal was decided on public policy grounds and that is probably not a bad thing.

    1 comment:

    Peter Groves said...

    Very interesting and characteristically comprehensive posting, Jane, but perhaps you should acknowledge that Pantone is a trade mark - and I wonder what, if anything, Pantone say about their trade mark being used in this sort of context? It must be in danger of genericide.

    I see that the trade mark application specified "chocolate", and HHJ Birss QC had limited it to "milk chocolate". My understanding is that CDM (as the advertising called it when I was a child) is not chocolate because it does not contain 25 per cent cocoa solids, but can be called "milk chocolate" in the UK (and IE) by special dispensation under Directive 2000/36/EC (Annex 1 para A sub-para (4)(d)): so if the trade mark were registered for chocolate, there could be a good faith objection, it might eventually be subject to revocation for non-use, and it could be misleading.