Bathbombs, 'greek' yoghurt and the colour purple – the impact of getting IP wrong

We discuss the commercial impact of recent big name cases and their contentious battles of trademarks and country of origin labelling.

Bath Bombs and Adwords

A recent High Court decision held that Amazon’s use of Lush’s trade mark as a keyword for the Google AdWords service infringed the cosmetic company’s rights.

When a Google internet search was made for the trade mark “Lush”, the results would produce sponsored advertisements for Amazon. Amazon also made use of the word Lush within its UK website whereby Amazon search facility users would be prompted to click on Lush search options, which would then direct the user to alternative products to Lush. Amazon was not authorised to make use of the Lush trade mark in this way and did not stock or offer for sale Lush products.

Lush complained that Amazon’s use of the trade mark had a detrimental impact on its reputation and affected the essential origin, advertisement and investment functions of the trade mark. The Court had little difficulty in finding that Amazon’s use of the trade mark constituted infringement. This was on the basis that the average consumer reading Amazon’s sponsored link would expect to find Lush products for sale on Amazon’s website. In addition, when browsing Amazon’s site, the average consumer would be unable to identify that the goods identified were not good of, or connected to Lush.

Considerations for businesses:

  • It is unlawful to make use of keywords which are identical to a third party’s trade mark, where the result leaves the consumer unable to easily identify whether the products or services advertised originate from, or are connected to, the trade mark owner.
  • Advertisers can use third party trade marks as a keyword so long as the resulting sponsored advertisements do not incorporate those marks. This is because consumers are familiar with sponsored adverts from competitors.
  • Online advertisers are less likely to infringe if they can demonstrate that a consumer’s attention is simply being directed towards their competing product or services, and that there is no likelihood of consumer confusion as to the origin of that product. A notice or warning that the trade mark owner’s product is not sold by the advertiser may assist in diluting the potential for consumer confusion.

The colour purple

In the latest battle to register the colour purple as a trade mark, Nestlé defeated Cadbury in the Court of Appeal.

Cadbury has used the shade of purple known as Pantone 2865c for over 100 years for its chocolate bar packaging and advertising. To qualify for registration as a trade mark, a mark must be capable of graphical representation and must distinguish goods or services from one company to another. In its original trade mark application, Cadbury included a description that its colour is “applied to the whole visible surface, or being the predominant colour applied to the whole visible surface, of the packaging of the goods”.

The Court of Appeal has found that this description implied that other colours and other visual material, not described or included on the application form may be present which created uncertainty. The Court of Appeal concluded that Cadbury’s trade mark application lacked “the required clarity, precision, self-containment, durability and objectivity to qualify for registration”.

Commercial impact

  • It is still possible to register a colour mark, but a business must ensure that it files sufficient evidence that shows that the colour truly distinguishes its goods or services from another.
  • Be absolutely clear about the extent to which the colour is used on any packaging and/or logo. You may wish to consider whether to define the extent that the colour is used by reference to a percentage colour coverage.
  • Even without a registered trade mark, businesses can still rely upon passing off to obtain an injunction to prevent competitors using copy packaging.

It’s all Greek to me

In recent high profile litigation, the Court of Appeal has held that “Greek Yoghurt” could only be promoted and sold as such if it was actually made in Greece.

The claim for passing off was brought by Fage, the owner of the Total yoghurt brand, against an American company, Chobani, which marketed its yoghurt in the UK as Greek yoghurt despite it being manufactured in the USA.

Fage relied upon the law of extended passing off and a series of cases in which it has been established that a geographical name had become distinctive of a particular type of goods made in that territory. On this basis, the use of the geographical name to describe goods which do not originate from that location amounts to a misrepresentation which causes damage to traders in the location.

In granting an injunction against Chobani, the judge made the following key points:

  • Yoghurt producers in the UK have uniformly followed a labelling convention for the last 25 years which respects that Greece, as the place as manufacture, is relevant to consumers.
  • Greek yoghurt can be sold for a premium price and the consumer perception that Greek yoghurt is always thick and creamy, covered something more than just territorial origin i.e. that it is special and the phrase Greek yoghurt created “pulling power” for consumers.
  • The use of small print on the back of Chobani’s yoghurt pots to indicate that it was manufactured in the USA was not enough to prevent consumers believing that the yoghurt it marketed as Greek did not originate in Greece.
  • It was unfortunate that Chobani did not follow through with a proposal to place a more conspicuous statement that the yoghurt was actually manufactured in the USA.

The case follows similar decisions for products such as “Champagne”, “Scotch Whiskey”, “Swiss Chocolate” and “Sherry”. Under both food law and intellectual property law, food manufacturers need to be wary when marketing products that have geographical connotations, and should consider using references such as “Greek-Style” and clearly stating the place of manufacture.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.