Mondelez Sees Red Over the Color Purple

Since 1939, school buses in the U.S. have been painted one color: "national school bus glossy yellow." The color pink is so closely identified with its fiberglass insulation that Owens Corning was able to trademark it. And chocolatier Cadbury, which wanted to pay tribute to Queen Victoria 100 years ago, officially adopted the color Pantone 2865c -- what mere peasants like us might call royal purple -- and it has ever since been identified with its signature chocolate bars.

But the reign of the chocolate company, which was acquired in 2009 by the old Kraft company that eventually became Mondelez International (NASDAQ: MDLZ  ) when it was spun off from Kraft Foods Group, was dealt a blow when the U.K.'s court of appeals ruled that it couldn't trademark the color, handing rival Nestle  (NASDAQOTH: NSRGY  ) a victory in a decades-old battle.

Back in 2004, Cadbury sought to trademark the specific purple hue, and over the 10-year period was successful in challenging all attempts to undermine it. However, the appeals court narrowly held that the application the chocolatier filed was unclear when it said the packaging was the "predominant colour," so it rejected Cadbury's right to exclusively use it. 

While Nestle can now use Pantone 2865c on their own chocolate bars, Cadbury still has the right to sue it or anyone else that tries to pass off their bars through packaging that's too close to its own.

Companies regularly and ferociously protect their signature trademarks, and rightly so, though like Cadbury, they're not always successful. Handbag maker Coach, for example, recently lost a trademark case against a small upstart called E&D Trading, which was using a stylized symbol similar to Coach's "CC" design, though it was a lowercase "dp." McDonald's lost a case against a family-run restaurant in Kuala Lumpur that called itself McCurry.

FTI Consulting says some 3,500 trademark cases are filed in U.S. district courts every year, and while they include esoteric things like Coca-Cola's "wave" or Nike's "swoosh," it appears there are limits to what can be protected. 

"Our color purple has been linked with Cadbury for a century," the chocolatier said after the ruling, "and the British public has grown up understanding its link with our chocolate." That it lost the case and will unlikely have the ability to appeal higher has Mondelez seeing red at the moment.

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