Case: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 3) [2007] FCAFC 119
Outcome: cited
After hearing further argument the Full Court made orders in relation to costs of the appeal: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 3) [2007] FCAFC 119 ( Full Court III ). The Full Court ordered that Darrell Lea pay Cadbury's costs other than its costs of and associated with grounds 1-14 inclusive, 17 and 18 of the amended notice of appeal, and that Cadbury pay Darrell Lea's costs of and associated with those grounds. 7 Their Honours in Full Court III noted at [8] that at the hearing of the appeal some grounds of the amended notice of appeal were abandoned by Cadbury, namely grounds 3, 4, 5, 6, 8, 13, 14, 17 and 18, and that grounds 1, 2, 7, 9, 10, 11 and 12, which raised challenges to substantive findings of the trial judge, were pressed only formally at the hearing of the appeal and were rejected by the Court. 8 On the further hearing Cadbury called its three experts and they were cross-examined by senior counsel for Darrell Lea. Darrell Lea had filed an affidavit by an expert in the same area, a Mr Hall, but did not read his affidavit. 9 Against that background, an initial question has been raised as to the findings made in the earlier judgment under the heading Summary of Findings at [95] to [112] as follows (I have added cross-references indicating grounds in Cadbury's amended notice of appeal which challenge the finding or seek a different finding on the same topic): 95 The evidence warrants the following findings. 96 There is wide awareness amongst Australian consumers of the use by Cadbury of a dark purple colour (i) in connection with the marketing, packaging and presentation of certain chocolate products particularly Cadbury Dairy Milk and other block milk chocolate products, and (ii) as a corporate colour. [Grounds 1, 2] 97 Cadbury does not have an exclusive reputation in the use of this dark purple colour in connection with chocolate. Other traders have, with Cadbury's knowledge, for many years used a similar shade of purple. Cadbury has not consistently enforced its alleged exclusive reputation. In relation to its chief competitor Nestl&eacute;, Cadbury has, for its own commercial reasons, permitted a use of purple in relation to popular chocolate products. [Grounds 1, 2] 98 Cadbury markets many chocolate products which have little or no purple in their packaging. 99 Cadbury products, regardless of the presence or absence of purple in the packaging, always bear the Cadbury name in a distinctive script. [Ground 2] 100 Cadbury's use of purple in marketing advertising and promotion is, and is seen by consumers to be, inextricably bound up with the well known name Cadbury in its distinctive script. Cadbury never uses the colour purple in isolation as an indicium of trade. [Ground 2] 101 Cadbury products, with insignificant exceptions, are not sold at retail level at premises owned or occupied by Cadbury. [Grounds 6, 7, 8] 102 Cadbury's marketing of chocolate heavily emphasises specific products and in particular Cadbury Dairy Milk block chocolate. [Ground 8] 103 Darrell Lea is a name well known in connection with chocolate in those parts of Australia where it operates, even though not as well known as Cadbury. [Ground 10] 104 The names Darrell Lea and Cadbury are quite distinct in sound and appearance (especially with the respective scripts the parties have adopted) and not likely to be mistaken for each other. [Grounds 10, 11, 12] 105 Darrell has since at least Christmas 2000 used in its marketing, packaging, promotion and point of sale presentation a purple colour much like that used by Cadbury. There has been particular use at Christmas 2000 to 2004 inclusive and also uses at other times. Such usage has diminished and purple has been to a significant extent replaced by blue since 2004. [Ground 12] 106 Darrell Lea did not adopt the colour purple with the intention of leading consumers to believe its products were Cadbury products or that it, or its products, had some kind of association with Cadbury. [Grounds 3, 4, 5] 107 Most of Darrell Lea's retailing occurs in premises which it owns or occupies. Other retailing occurs from separate stands or displays in retail premises, such as newsagents, pharmacies, convenience stores and video stores. Darrell Lea has only a minor presence in supermarkets and only, in the past, to a very limited and transient extent in the major chains. Its products are not presented for sale in close proximity to Cadbury's. [Grounds 6, 7, 8] 108 Darrell Lea's marketing gives less emphasis to particular products than does Cadbury. [Grounds 8, 10, 11, 12] 109 Darrell Lea does not sell moulded block chocolate. [Grounds 10, 11, 12] 110 Darrell Lea uses its name in a distinctive script widely and consistently in marketing, packaging and point of sale presentation. [Grounds 10, 11, 12] 111 Colour recognition or attraction can play an important part in consumer decisions to purchase chocolate. [Ground 9] 112 Consumer decisions to purchase chocolate are often made quickly and on impulse but not necessarily irrationally. Price and brand recognition can play an important part. [Ground 9] 10 After analysing Cadbury's case I reached the following conclusions (again, references to the grounds in the amended notice of appeal are inserted): 121 The findings above lead to these conclusions. Cadbury and Darrell Lea are competitors in the retail chocolate market, yet they each have distinctive product lines which are sold from different sorts of premises under distinctive trade names. [Grounds 8, 9, 10, 11, 12] They have distinct identities in the market place. [Grounds 11, 12] Cadbury does not own the colour purple and does not have an exclusive reputation in purple in connection with chocolate. Darrell Lea is entitled to use purple, or any other colour, as long as it does not convey to the reasonable consumer the idea that it or its products have some connection with Cadbury. I am not satisfied that this has occurred, or is likely to occur.