Thursday, 9 September 2010

Seeing red

The popularity of the Advertising Standards Authority as an alternative forum for what are essentially trade-mark and unlawful competition disputes is growing steadily. This is understandable from a practitioner’s point of view – it is much quicker, much less expensive, and tedious legal formalities can be dispensed with. From a more general perspective, two issues stand out.

The first is that the decrease in trade-mark litigation results in fewer decisions which could be valuable future precedents (understandably, this is not a point to run past a client when discussing which route to take).

The second is more important for all concerned – the possible conflation of legal precepts with a non-binding code of practice. A perfect illustration of this is the recent Henkel AG v Trefoil Manufacturing (Pty) Ltd ruling by the ASA final appeal committee (available here).

Henkel is the manufacturer of the Pritt glue stick - the judgment refers to sales of 2.5 billion such sticks worldwide over the past 40 years, which translates to a scary number of school projects! Since it was patented 40 years ago, the tubular shape and red colour have remained unchanged. Although other companies produced tubular glue sticks after expiry of the patent, none used the same red colour on their products.

Trefoil has marketed a glue stick for about ten years, first in a green/yellow colourway, but for the past two years in a red colour. According to the ruling, this is not the only similarity between the two glue sticks. The general get-up is similar, as both have similar packaging, are the same shape and size and contain characters (Mr Pritt? and an equivalent). Paragraph 9 of the ruling identifies three prominent visual features; the red cap, the red tubular packaging and a character. Paragraph 13 also refers to intentional copying of ‘in-store point of sale pillar boxes’. The committee was clearly correct in finding that clauses 8.1 Exploitation (advertisements may not take advantage of the advertising goodwill relating to the trade name or symbol of the product or service of another … ) and 9.1 Imitation (an advertiser should not copy an existing advertisement, local or international, or any part thereof in a manner that is recognisable or clearly evokes the existing concept and which may result in the likely loss of potential advertising value…) of the ASA code had been breached.

The facts also show that, had passing-off proceedings been instituted, it is likely that the court would have granted an interdict against Trefoil.

So far, so good. The problem arises when the ruling ventures into the field of single colours as registered trade marks. In paragraph 5 of the ruling, the committee refers to their previous decision where they held that only in very exceptional circumstances could adoption and use of a single colour be ‘a creative advertising concept which will result in advertising goodwill’. This appears to be such an instance (paragraph 9). Then, in paragraph 11, the committee confirms that, while this is not a trade mark or passing off case, authorities in these areas are useful in deciding whether there has been a breach of the ASA code. It then cites a number of trade-mark decisions in various jurisdictions about registrability as trade mark of a single colour.

This seems completely inappropriate. Eligibility for registration as trade mark requires that completely different criteria be met to those for either ‘creative advertising concepts’ or ‘advertising goodwill’. It also seems an unnecessary excursus. The ASA finding did not rest on colour alone, but on the general get-up of the two products.

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