Trademark Disputes: Nestlé v. Cadbury

In this article, we will discuss the trademark conflict between Cadbury, international confectioners who sought to trademark their signature purple packaging, and Nestlé, who sought blockage of the registration. The purpose of this case study is to demonstrate the importance of clearly identifying and explicitly articulating a strong, durable trademark when seeking registration, in order to avoid rejection due to ambiguity.

A trademark or service is defined as “any word, name, symbol, device, or any combination, used or intended to be used to identify and distinguish the goods/services of one seller or provider from those of others, and to indicate the source of the goods/services,” according to the United States Patent and Trademark Office. These marks form a strong perception in a consumer’s mind, even when viewed in passing, which is why a well-defined brand identity lies at the heart of the case.

Related: Can you trademark a color?

Who Is Involved:

The dispute involves Deerfield, Illinois-based Mondelez International Inc.’s Cadbury unit, whose pale mauve and gold color scheme has appeared on packaging since 1920, and Vevey, Switzerland-based Nestlé, who opposes the breadth of Cadbury’s trademark application.

What Is The Issue:

The respective chocolatiers involved have established their reputation over decades, both garnering fervent followings and establishing strong brand perceptions in the process. Cadbury’s attempt to register Pantone 2685C was met with opposition when Nestlé decried its registration as too broad. Because of the strong brand associations through which both companies generate an extraordinary amount of revenue, holding trademark laws accountable helps to maintain the reasonable competitive boundaries between the two firms in terms of packaging and product usage.

What Is The Argument:

Trademark establishes reasonable boundaries for publication and usage that, in time, allow organizations to build strong brand associations. Each industry benefits from particular associations based on the nature of the product and industry in which their mark is utilized. Because of the myriad perceptions associated with food brands, including taste, texture, mouth feel, and sentiment, these marks become an integral part of driving sales once customer eyes begin browsing shelves.

The key to understanding the dispute lies in the concept that trademark law establishes “reasonable” boundaries for use. Cadbury’s brand and associated marks have constructed a reputation over the course of decades, appropriately motivating their efforts to register these marks and protect their commercial interest. However, Nestlé felt that registering an entire color with no additional distinguishing characteristics across a broad range of products represents an unreasonable acquisition of trademark rights that reaches beyond the boundaries of Cadbury’s established commercial marks.

For the integrity of competition and operating boundaries to exist between the two organizations, Nestlé was forced to attempt blockage of the registration and then appeal the process. Vague or overreaching trademark protections can lead to unforeseen legal disputes down the road and broad interpretations of rights can be used in a predatory fashion. Therefore, the onus was with Nestlé to maintain their own commercial interest by blocking the application.

What Is At Stake:

As stated above, in a crowded chocolate market, agreeable and fair operating boundaries must be established in order for both firms to compete peacefully. Cadbury’s registration would allow a broad and all-encompassing ability to enforce potential infringement, which in the case of the application includes all replication of the signature purple color. This kind of broad scope can lead to predatory trademark enforcement and damaged commercial interest for competitors.

At the same time, the strong brand associations of Cadbury’s color scheme have generated revenue in droves for nearly a century. Cadbury’s registration, while vague, still represents a reasonable request for adequate trademark protection in order to protect vested commercial interest.

What Was Decided:

In 2012, the UK High Court dismissed Nestlé’s appeal to block Cadbury’s registration, though with concessions. An official of the court revised the registration to include only “milk chocolate in bar and tablet form, milk chocolate for eating, drinking chocolate, (and) preparations for making drinking chocolate.” This change represented a significant dial-down of the original application’s breadth of product usage. However, this victory was short-lived when an appeal by Nestlé was upheld in 2013. Judge John Mummery stated that the trademark “lacks the required clarity, precision, self-containment, durability, and objectivity to qualify for registration.”

In this case, both parties were pursuing reasonable interests, but the responsibility ultimately lay with Cadbury as the registrant to provide a sufficiently defined trademark as to not violate reasonable boundaries of competition. When pursuing your own trademark, be sure to identify which characteristics of your brand distinguish it from competitors and focus on every aspect, including font, color scheme, configuration, and scope of usage, in order to both protect your interests and legitimize your application in a legal context. Trademarking remains a viable and rational legal facility, but registration at the expense of healthy competition could compromise your well-deserved right to protect your brand image.

Continue reading: Examples of trademarked colors

Xavier Morales, Esq.

About the Author:

Xavier Morales, Esq.

Mr. Morales founded this trademark law practice in January 2007 with the goal of providing intellectual property expertise to entrepreneurs and businesses around the country. Since then, he has filed more than 6,000 trademarks with the USPTO. You can learn more about Xavier here.

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