+61 2 8297 1100 mail@finns.com.au

When designing branding for a client, don’t rely too heavily on the use of a particular colour as a brand, especially if that colour might be functional rather than decorative.

Functional colours (such as yellow for discount services, black for heat absorption, or khaki, brown and green for camouflage) are less likely to distinguish one trader’s products or services from another’s, and this could leave your client open to ‘copycat’ competitors.

Traders may legitimately want to make use of similar colours to take advantage of their functional attributes, which may bear some resemblance to each other without infringing each other’s rights (think of the colours used with, Bing Lee and Harvey Norman (blue), or the black and white of major department stores, or the yellow of discount chemists).

In fact, even if another trader deliberately borrows the colours, features or ‘trade indicia’ of a rival, to such a degree that consumers might actually be confused as to the identity of that trader, it may still not be enough to support a claim for misleading and deceptive conduct.

When Chemists Collide

The owners of Chemist Warehouse recently discovered this to their detriment when they brought claims of misleading and deceptive conduct and trade mark infringement against Direct Chemist Outlet (DCO), alleging DCO had used ‘get-up’ (including heavy use of a garish yellow colour), allegedly causing consumers to think DCO stores, their catalogues and websites were those of Chemist Warehouse, or associated with it.1

However, in a lengthy judgment handed down in March 2015, the Federal Court rejected Chemist Warehouse’s claims, deciding that, although DCO had ‘undoubtedly copied many of the ideas and concepts’ of Chemist Warehouse, they did not do so with the an intention to mislead and deceive, or to pass off their stores as being associated with those of Chemist Warehouse.

Further, the Court decided that the ‘get-up’ of Chemist Warehouse stores was not sufficiently similar to DCO stores, particularly since both companies had made prominent use of red logos which looked so different that the Court held consumers would not be misled as to the identity of the stores.

The Function of Colour

The Court noted that colour schemes may play an important role in the marketing of a product or service and it’s possible for a trader to establish a reputation in things other than names and logos, such as the colour purple for some famous chocolates!

Once a trader develops a ‘secondary reputation’ in its trade indicia – meaning the trader can be identified independently through particular colours or features – the adoption of those indicia by another trader will be regarded as misleading or deceptive by a court, unless that trader can show that it has adequately distinguished its own goods and services by use of some other indicia than the mere colour in question. If, for example, Chemist Warehouse had developed such a reputation in the colour yellow, the result may well have been very different.

What does this mean for you?

Unless you are absolutely sure that your client’s colours have acquired a ‘secondary reputation’, you should be careful not to over-emphasise the use of colour in your client’s branding, and rather rely on a distinctive logo or name to distinguish your client’s brand.

If you have any doubts, contact Finn Roache Lawyers for advice on the best strategies to protect your client’s brand.

 

1 Verrocchi v Direct Chemist Outlet Pty Ltd [2015] FCA 234