Trademark

Choco Wars: The Trademark Menace – Part II


This is the second part of Prateek’s two part post on whether colours can be trademarked.

Cadbury-claims-purple-reign-in-Nestle-color-mark-dispute_strict_xxl

In Part I, I had written about the problems of allowing trade marks of colours in the abstract (multiple formulations). In Part II, I am going to be writing about the concerns with allowing trade marking of colours in general.

In an earlier piece on the blog, on the overruled UK High Court judgment in the Cadbury case, Ms. Basu rhetorically questioned if there was any merit in disallowing registration of a colour mark as long as it fulfilled the basic function of a trademark (of indicating its source). It is this very question that I intend to address and I will try to drive home the point that the Indian trademark regime needs to be cautious while dealing with applications for colour trademarks.

First, let us examine Ms. Basu’s claim that a colour mark can fulfill the basic role of a trademark. For a mark to be a trademark, it needs to act as a “badge of origin”. Note that at this stage we are not concerned with whether a particular colour points towards a particular company or not, but whether the public views the colour of a product (in general) as a indicator of its manufacturer.

Generally, a colour is seen as a natural property of a product. It is not normally viewed as serving the function of a trademark, unlike a logo. Therefore, one can safely conclude that colour is not inherently “distinctive” (used to distinguish one manufacturer’s product from another’s), but that does not mean that colour trademarks are incapable of acquiring distinctiveness. That is, over time, the public can begin to view a particular colour as being indicative of its origin and consequently, use it to distinguish between products. In such a scenario, colours may be viewed as fulfilling the role of a trademark.

Therefore, I concede that colours are, in certain scenarios, capable of fulfilling the role of a trademark. In the rest of the piece, I will be arguing that despite this possibility, there are other countervailing reasons that warrant caution.

Absence of Functionality Safeguard in India

The functionality test ensures that features which serve ‘any’ function (technical or aesthetic) are not trademarked. According to it, features that serve a function (like tyres of a car) cannot be trademarked though they could be patented. Even though the functionality test does not apply to colours in India, it is significant for us to note the consequences of not having such a test. In other words, it is not the presence, but the absence of such a test that makes it significant for us.

In my opinion, such a test should apply to trademarks of all types, including colours. Considering that trademarks can be registered for eternity (unlike patents), manufacturers will be inclined to protect functional features of a product through trademark registration. Therefore, in India, especially in the context of products that are coloured for functional purposes ( eg. black to absorb heat), there is every possibility of abuse of the law because registering a functional feature as a trade mark would eternally restrict competitors from making use of such a feature. But this is a more general concern surrounding functional features, rather than solely colour marks. When I get to my  “Elements and Compounds” theory, I shall enumerate upon why this this problem is exacerbated in the case of colour marks.

Prior to moving to the “Elements and Compounds” theory, let me discuss the Dyson case:

In the Dyson case(C-321/03, [2007] ECR 1-687), Dyson (a company) had acquired a patent over a particular feature. As a result of this patent, Dyson was the only company whose products had this particular feature and over time, the public started using this feature to distinguish Dyson’s products from others. The court ruled against Dyson for reasons which are not our concern in this context, but what we need to note over here is the potential for abuse. Therefore, as far as possible marks which have any function other than indicating the product’s origin should not be allowed to be registered as trademarks, in the interest of fair competition.

I intend to take this argument a little further. In my opinion, not only should the functionality of a mark be taken into consideration, but also the scope for functionality or further use should be accounted for. The “Elements and Compounds” theory essentially argues that base building blocks should not be registrable. Courts should look into the extent of usability of a particular mark in subsequent trade marks or functional features and ensure that there isn’t too much of a restriction on the freedom of competitors. A similar principle was espoused in the British Sugar case ([1996] RPC 281), where the word “treat” was not allowed to be registered. Closer home in Cipla Limited vs M.K. Pharmaceuticals(MIPR 2007 (3) 170), the Delhi HC held that a company did not have the right to gain monopoly over the colour orange.

Despite these problems, I believe there is a middle ground. Where a colour serves a technical purpose, the appliation should not be entertained. But considering that colours inherently serve an aesthetic purpose, the aesthetic limb of the functionality test can be relaxed in the interest of protecting the company from mischievous competitors.

The competing interests over here are those of the parent company and those of its competitors. Where the application for registration:

  • is for a colour that does not serve a technical purpose,
  • is for a colour that the public uses for distinguishing products and
  • is of a single formulation and is not for the colour in the abstract,

I believe it is a fair infringement on the competitors’ freedom to protect the rights of the company. The concerns of the “Elements and Compounds” test are also met because only one single formulation is being registered. Competitors are free to use the colour in other formulations.

In India, as stated earlier, the functionality rule does not apply to colours. If such is the case, then there is an incredibly high chance of abuse of trademark law. Therefore, in status quo, allowing registration of colour marks would be incredibly problematic. Apart from the functionality test, there is another concern that needs to be addressed.

Anti-Competitive Consequences of the Infringement Principle

Let us consider the colour depletion theory. The argument that lies at the heart of the theory is that registration of a colour allows for a monopoly over it and consequently, competitors will be unacceptably restricted in their choice of colours. This argument is considerably weakened by the counterargument that the registration of a mere point on the spectrum of colours can hardly be considered to be a restriction on the freedoms of competitors. But what I wish to bring to your notice is that the counterargument fails to take into account the functioning of infringement suits.

Upon alleging infringement, courts take a judgment call on whether the allegedly infringing mark is confusing or misguiding the public regarding the origin of the product. If such a test is used for judging infringement, then a whole swathe of colours other than the registered colour would be protected. This is because a regular customer will hardly be able to see the difference between colours that lie close on the spectrum.

Registration would effectively result in a monopoly over a series of colours for the company and I believe that is too much of a restriction on the freedom of competitors and is against the principles of fair competition.

Conclusion

Though colour marks may be used for distinguishing products, allowing them to be registered would lead to two primary concerns:

  • Occurrence of Anti-competitive practices as a result of absence of the functionality test in India. It is to be noted that this not a concern with every single application. The application can overcome if certain conditions (discussed above) are met.
  • The Depletion of the Colour Spectrum for competitors. This cannot be overcome, unless the functioning of the infringement principle is altered. So, the current legal regime is inadequate to accommodate colour marks.

Indian Trademark law, though cautious, is not averse to registration of colur marks. But in most judgments that support single colour trade marks, such as the Colgate Palmolive case (2003 (27) PTC 478 Del), the analysis is restricted to whether a colour mark can fundamentally play the role of a trademmark. What these judgments fail to inculcate is that there are other countervailing reasons for rejecting such marks. In the interest of justice, courts should stop having such a one dimensional approach and consider other factors such as those discussed above.

Chief References:

Dr. Dev Gangjee’s piece

Image from here

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