Color Matters: Design: Who Owns Hues?

Marketing research indicates that over 80% of visual information is related to color. In other words, color conveys information and/or provides the user with some other operational benefit.

The use of distinctive colors to identify products can be seen everywhere, from pharmaceutical items to industrial equipment. Some products are packaged in a variety of distinct colors. For example Kodak’s film comes in a yellow and black box and Fuji’s, green. Other products tend to be packaged in variations of the same two or three colors in different designs. For example, laundry detergents are typically solid in blue, orange and/or yellow packaging. The actual design of the container or label may be quite different, even though the colors are the same. On the other hand, a more confusing situation may confront a consumer. Right next to your favorite brand of cough syrup, sits another brand in similar colors. Even the labels are oddly similar, so much that you might even confuse the two and pick up the wrong one by mistake.

Until recently, the importance of color as a brand identity wasn’t a big legal issue and the courts were lenient. It was an open question whether trademark law protected distinctive colors that had become strongly associated with a particular product or manufacturer. Today a color war is exploding and the use of color is generating unprecedented lawsuits.

Consider the fact that colors are in limited supply. Would allowing companies to appropriate a single color or a color combination lead to the "depletion" of all of the attractive colors in each product line?

Here are four examples of true “color” trademark infringement lawsuits. The first list contains a simple description of the four lawsuits. Decide how you would rule if you were the judge. The second list contains how the courts ruled. See if you agree!
 

Ambrit, a frozen food company, had sold their frozen desserts in a royal blue packaging. Kraft Foods followed suit and used the same color on their packaging for frozen desserts. Ambrit sued to prevent Kraft from using blue. Does Ambrit - who first used this color - own the rights to blue on frozen desserts?

Dap, a building supply company, sold their ceramic tile mastic in a red three-gallon bucket for many years. When Color Tile Mfg. Inc. packaged their mastic in a red bucket, Dap sued. Does Dap have exclusive rights to use red on their adhesive containers?

Life Savers, a well-known candy company, has used a multi-colored striped background on the wrapper for its multi-flavored hard candies. Later, Curtiss Candy Co. introduced their brand of hard candies in a multi-colored striped background wrapper. Life Savers sued. Do they have the right to get a permanent injunction against Curtiss to stop their use of a multi-colored striped label? Note: In this case, the issue is several colors and a striped design.

Dap, a building supply company, sold their ceramic tile mastic in a red three-gallon bucket for many years. When Color Tile Mfg. Inc. packaged their mastic in a red bucket, Dap sued. Does Dap have exclusive rights to use red on their adhesive containers?

A federal district court ruled in favor of Dap and granted protection to their red packaging. They found that "secondary meaning" was attached to DAP's red plastic bucket for its tile mastic the color red was not a functional feature of the tile product. Red had nothing to do with the color of the adhesive, the ceramic tile industry, or the product’s performance. In other words, there was no logical reason for red, such as a red fire extinguisher's functionality related to red fires. Dap used the color solely as a unique color for brand identity.

Since there was no logical reason for a competitor's copying DAP's packaging "save an attempt to realize upon secondary meaning that is in existence." (In other words, using the same red color was seen as exploiting the identity of Dap’s products and creating confusion for the consumer. )

The precedent-setting example of "secondary meaning" of a color was the basis for the Federal Court's ruling that Owens-Corning was entitled to trademark protection for its pink insulation. The ruling stated "A pink color mark registers for fibrous glass insulation does not confer a 'monopoly' or act as a barrier to entry in the market. It serves the classical trademark function of indicating the origin of the goods, and thereby protects the public."

The court denied Life Saver protection of their striped colors, citing that no trademark infringement or unfair competition had been established. They found that it was a "general practice of the trade" for hard candy manufacturers to sell their candy in packages with multi-colored backgrounds for their assorted flavored discs, and labels with single colored background for their packages containing one flavor of candy discs." They concluded that the multi-colored background was in fact descriptive and served as a ready identification of the flavor of the candy in the package. Once again, an example of functional color.

In 1997 the Supreme Court of Austria ruled that the use of a color on products of a color previously established to identify the goods of another party violated Section 9 of the Unfair Competition Act. The decision prohibited the defendant from publishing law books in the same shade of red as the plaintiff's legal treatises. It is interesting to note that the defendant proved that a number of publishers in other countries, for example, in Germany, publish their law books in the same shade of red. The Supreme Court nevertheless held that the plaintiff was entitled to protection in Austria.
 

Due to the impact of colors on sales, many businesses have taken steps to protect their color identity. The principle that a single color may receive trademark protection is now the law of the land. This development manifests itself not only in national statutes, but also in the international Agreement on Trade-Related Aspects of Intellectual Property Rights, including Trade in Counterfeit Goods of the TRIPS Agreement.

On the other hand, the courts recognize that colors are in limited supply and that allowing companies to appropriate colors will soon lead to the "depletion" of all of the attractive colors in each product line.
Although the courts tend to view that preventing the use of a color would put a competitor at a significant disadvantage, the color must pass the functionality test.
Functionality can be defined by multiple criteria. Here’s a simplified list:

• Psychological Effects (symbolism, associations)
  When a color’s associations relate to the product in a literal or abstract way, this is considered to be functional. For example, green is frequently used in packaging of organic, healthy and natural products because if the association with trees, grass and nature. Another example is blue fertilizer (indicating the presence of nitrogen).
  
• Aesthetic Effects (attractive and effective design)
  Many color combinations can be considered to be harmonious and “pleasing to the eye.” For example, green and yellow are harmonious since they are closely related to each other (analogous). Functional design effects may also include perception of size and weight. For example a black outboard motor appears smaller than motors in other colors.
  
• Visual Effects (eye catching, text legibility)
  The human eye reacts to color in many different ways. Some colors are advancing (and grab attention), others receding. Some color combinations render text legible; others are problematic.

In conclusion, in spite of precedent setting lawsuits, the laws of color ownership are in flux. Prior rulings are frequently reversed by subsequent lawsuits. Consequently, companies continue to take legal action and millions are spent to defend the rights to color. Could all the colors of the rainbow be confiscated in a marketing war? It’s a wake-up call for everyone who cares about color.