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.

A sweet treat
Tired of watching your stocks creep up year after year at a glacial pace? Motley Fool co-founder David Gardner, founder of the No. 1 growth stock newsletter in the world, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, WITH YOU! It's a special 100% FREE report called "6 Picks for Ultimate Growth." So stop settling for index-hugging gains... and click HERE for instant access to a whole new game plan of stock picks to help power your portfolio.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2677463, ~/Articles/ArticleHandler.aspx, 9/29/2016 11:48:38 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 hours ago Sponsored by:
DOW 18,143.45 -195.79 -1.07%
S&P 500 2,151.13 -20.24 -0.93%
NASD 5,269.15 -49.39 -0.93%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/29/2016 4:00 PM
MDLZ $43.14 Down -0.26 -0.60%
Mondelez Internati… CAPS Rating: ****
NSRGY $79.60 Up +0.10 +0.13%
Nestle CAPS Rating: *****