Cadbury Schweppes v Darrell Lea - round Full Court


Cadbury Schweppes has succeeded in its appeal to the Full Federal Court in its trade practices claim against Darrell Lea relating to the use of purple get up. The Full Court has remitted the matter to the primary judge for further trial.

Bearing in mind the particular colour of my spectacles, I am just going to limit myself to two aspects.

Kim Weatherall had commented on the decisions under appeal here and here.

First, Heerey J had ruled inadmissible evidence by a marketing expert about the use of the colour purple by Cadbury in the context of contemporary marketing theory and practice and the effects of Darrell Lea's conduct.

Heerey J considered that expert evidence permitted under s 79 of the Evidence Act 1995 (Cth) was limited to opinions about issues outside the knowledge or experience of ordinary persons. However, the marketing expert's opinion, while based on his expertise, was directed to the making of consumer decisions for the purchase of everyday items. As the case concerned the impressions of retail purchasers of chocolate - not something outside the experience of ordinary persons, therefore, the evidence was ruled inadmissible as a matter of law.

The Full Court (Black CJ, Emmett and Middleton JJ) ruled that, having regard to the abolition of the rules against evidence on the ultimate issue or common knowledge by s 80 there was no such rule of law and, provided the evidence otherwise met the requirements of s 79, it should have been admissible.

57 The primary judge concluded, however, that it is a condition of the admissibility of opinion evidence that the opinion relates to an issue that is outside the knowledge or experience of ordinary persons. In so far as that was the reason for concluding that the opinions of Dr Gibbs were inadmissible, his Honour erred. The fact that an opinion is expressed concerning the making of consumer decisions for the purchase of everyday items of commerce does not disqualify the opinion from being admissible, so long as s 79 is satisfied.

Thus, it is now permissible to lead evidence about marketing theory and practice relating to consumer behaviour.

As a fall back, Darrell Lea had successfully argued that the evidence should be excluded in any event under the general discretion to exclude evidence provided by s 135 of the Evidence Act. The Full Court pointed out that s 135 called for a balancing exercise - assessing the probative value of the evidence and whether that was substantially outweighed by the danger that the evidence might be prejudicial, misleading or confusing or result in an undue waste of time.

76 In the present case, the balancing exercise that is called for by s 135 required an assessment of time that would be unduly wasted by the evidence of Dr Gibbs. The primary judge does not appear to have been asked to embark on any assessment of the time that might be taken by the disputed evidence, much less of the time that might be wasted by the disputed evidence.

Here, the original trial estimate of 20 days had been reduced to 10 to 15 days at a time when the admissibility of the expert's evidence had not been determined and no indication of any reduction in trial time had been provided if his evidence were excluded.

The second issue concerns what the extent of reputation that a plaintiff in a passing off or trade practice claim must prove. Heerey J had considered that:

while there is a wide awareness amongst Australian consumers of the use by Cadbury of a dark purple colour, Cadbury does not own the colour purple and does not have an exclusive reputation in purple in connection with chocolate.

The Full Court rejected a requirement to show an exclusive reputation in either passing off or trade practices:

at [96] in relation to passing off

96 In any event, the principles relating to passing off do not necessarily require Cadbury to establish an exclusive reputation in relation to the use of the colour purple. More significantly, it certainly does not follow that there cannot be a contravention of the Trade Practices Act simply because Cadbury does not establish that it has an exclusive reputation in relation to the colour purple. The question is whether Cadbury can establish facts that demonstrate that a particular use by Darrell Lea of the colour purple is likely to mislead or deceive consumers into believing that there is some relevant connection between Darrell Lea and Cadbury or their respective products.

and at [99] in relation to trade practices

99 Whether or not there is a requirement for some exclusive reputation as an element in the common law tort of passing off, there is no such requirement in relation to Part V of the Trade Practices Act. The question is not whether an applicant has shown a sufficient reputation in a particular get-up or name. The question is whether the use of the particular get-up or name by an alleged wrongdoer in relation to his product is likely to mislead or deceive persons familiar with the claimant’s product to believe that the two products are associated, having regard to the state of the knowledge of consumers in Australia of the claimant’s product.

The Full Court's decision Cadbury Schweppes Pty Ltd v Darrell Lea Pty Ltd [2007] FCAFC 70 here.

Posted: Wednesday - 30 May, 2007 at 05:53 PM         |

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