What happens if a competitor copies my brand colour scheme or trade dress?

Introduction:

Every brand has its visual looks and they are unique. We often recognise a brand from its visual appearance in the market, which makes it look different from other brands. Visual appearance of a brand leaves a permanent impression on the minds of its consumers. For example, if someone says "Dairy Milk" rather than thinking about the taste of chocolate, you will be thinking of a royal purple wrapper with the Cadbury wordmark and an icon of two glasses pouring milk into a rectangular chunk. There always exists a strong connection between the brand name and the dress.

But what if any competitor tries to copy the trade dress of a brand?

Copying of a brand's trade dress can be done in various ways, namely:

A. Using colour combinations of a brand: A brand uses colour combinations to create a unique visual identity in the market. The use of similar colour combinations with the same shade of colours creates confusion in the minds of consumers.
B. Using shapes or designs of a brand: A distinctive shape of a brand gives substantial value to the brand that the consumers associate with the shape. The use of a similar or identical shape that is distinctive and non-functional and belongs to any existing brand amounts to a copy.
C. Using packaging of any existing brand: Packaging includes a combination of colours, layout, and shapes used by brands to sell their products or services. Nowadays, packaging plays a crucial role in identifying a brand. Therefore, similar and identical packaging by any competitors directly impacts the original brand.

Impacts of Copying:

1. Negative effect on the identity of the brand: Copying a trade dress of an existing brand poses a threat to the distinct identity of the original brand. Such copying results in decreasing the uniqueness of the identity of the brand.
2. Similar Appearance of Both Products: Copying a brand colour scheme leads to similar looks of products and challenges the distinct looks of the product. It becomes challenging for consumers to recognise the desired brand’s product in the market.
3. Confusion to consumers: Distinguishing visuals of a brand helps customers to recognise the brand at a first glance, but when trade dress copying occurs, it creates confusion. This confusion further led ordinary consumers to end up buying the wrong product from a different brand.
4. Reduce the pride of the brand: Visual looks are the pride of a brand, which makes it different from its rival competitors. Similar or identical looks of products decrease this feeling of pride that prevails among brands and their consumers.
5. Loss of consumers: Original brands often lose customers when there is a presence of similar or identical products from different brands in the market.
6. Financial loss: Loss of consumers means fewer sales, and fewer sales mean less revenue, which automatically results in financial loss.
7. Effect of competition: Buying a product from a reputed brand gives mental contentment to consumers. But the presence of identical and similar products could lead consumers who strive to use a unique and extraordinary brand to opt for other brands providing similar services. This replacement results in the loss of a particular class of consumers and financial losses.
8. Effect on market reputation of brand: The similar visuals of a brand can reduce its market reputation and make it just an ordinary brand. This leads consumers to try other brands as they are unable to find much difference between the products of the particular brand and its competitors.

Legal Action:

Copying a brand’s colour scheme is considered an unfair competition practice and covered under the law of passing off. It must be established by the plaintiff that

i. the distinguishing trade dress is strongly associated with their brand and
ii. The defendant is trying to deceive or confuse the consumer

Once the court is satisfied that the defendant has passed off the plaintiff’s brand trade dress, it may pass an order for the following:

a. Injunction: Restrain copying the brand from production, sales, and advertisements.

b. Search and seizure: Direct authorities in charge to search and seize products and materials infringing trade dress.

c. Award compensation: Directly hold the liable brand to pay damages and legal costs to the original brand.

Case Laws:

a. Ferrero Spa & Nr. v. M/s Ruchi International & Anr.(2018)

In the instant case, the respondent sells chocolates under the name of Golden Passion with identical packaging to Ferrero Rocher, a well-known brand in the market. It was held by the court that the use of similar packaging had caused severe damage to the petitioner's trade dress and mark. Hence, it passed an order for an injunction and awarded damages.

b. Colgate Palmolive Company v. Anchor Health & Beauty Care Pvt. Ltd. (2003)

In this case, it was found that the use of the same red and white colour combination is likely to deceive consumers. It was further established by the court that the mere likelihood of confusion to consumers can also amount to passing off the trade dress.

c. Cadbury India Ltd. v. Neeraj Food Products (2007)

It was held by the court that the defendant’s mark ‘James’ was phonetically close to the plaintiff’s mark ‘Cadbury Gems’ and could deceive unaware consumers. It was admitted by the court that there is dishonest passing off of the trade dress by the respondent, and hence a passed order for an interim injunction

Conclusion:

Trade dress provides a distinctive identity to the products of a particular brand. The copying of trade dress includes using existing colour combinations, shapes or designs and packaging of any brand. Competitors often try to copy well-known brands to deceive and confuse consumers. This trade dress copying leaves adverse impacts on the original brands, causing them financial loss and depriving consumers of getting the desired brand’s product. It is considered an unfair competition practice where the court have power to pass an injunction order and award damages. There are landmark case laws where the court has interpreted the law related to the protection of trade dress, ensuring interest of both brands and consumers.