The recent Advertising Standards Authority (ASA) Directorate decision of South African Breweries Ltd v Brandhouse Beverages (Pty) Ltd, 6 February 2015, is interesting because it’s a rare example of the ASA acknowledging that colours or colour combinations can serve as a trade mark or source-identifier. It also shows that the ASA complaints procedure can, in certain circumstances, be used as an alternative to High Court proceedings in respect of what is essentially a passing-off case.
SAB had lodged a competitor complaint against Brandhouse in respect of the get-up and packaging material used for the Amstel Lite beer, a product that was introduced in South Africa in August 2014. The complaint related to the fact that the product get up was a combination of silver and green in conjunction with the word Lite.
The complaint was in terms of Clause 8 of Section II of the ASA Code, which says that a company’s advertising must not take advantage of the advertising goodwill relating to the trade name or symbol of another company. Clause 8 goes on to say that the ASA must consider the likelihood of confusion, deception and the diminution of advertising goodwill. It finally says that the ASA must also consider whether the device or concept in issue constitutes the ‘signature’ of the product, is consistently used, and is prominent in the mind of the consumer.
SAB claimed that its Castle Lite product has been on the market for over 20 years, that it was the first light beer in South Africa, and that until August 2014 it was the only premium light beer. The company also claimed that the product had consistently been sold in a colour combination of silver and green, together with the red and white Castle logo, and the word ‘Lite’. It claimed that there had been substantial sales and advertising, and that consumers identify the product with these features.
SAB submitted survey evidence which showed that in August 2014, 84% of people who were shown the Amstel Lite product with the Amstel logo removed spontaneously identified it with Castle Lite. The company further submitted technical evidence which showed that Brandhouse had for its Amstel Lite product used the exact shade of silver used by SAB for Castle Lite, and a virtually identical shade of green. This evidence also showed that the colour ratios were remarkably close – whereas SAB’s colour ratios for Castle Lite were 68.5% silver, 30% green and 1.5% red, Brandhouse's colour ratios for Amstel Lite were 62% silver, 36% green and 2% red.
SAB argued that it was relevant that very different colours are used for Amstel Lite in Europe and USA – in those territories the product is sold in a brown bottle with a colour combination of brown, red and gold, and together with the word ‘Light’.
Brandhouse, on the other hand, argued that Amstel is a very well-known brand in South Africa, that premium beers tend to be sold in green bottles rather than the brown that’s used for mainstream beers, that the colour combination of silver and green (or blue) is widely associated with light beers, and that no one company should have exclusivity in this combination. It said this: ‘Market dominance should not be confused with exclusive rights in relation to elements that are commonplace in a specific product category.’ It submitted evidence from a marketing expert to the effect that beer drinkers are brand loyal, and that trade marks and names are top of the hierarchy of product identifiers, followed by visuals like colour.
Brandhouse further argued that, as a certain foodstuffs regulation says that the words ‘light’ and ‘lite’ can be used interchangeably, there was nothing sinister about the choice of the word ‘Lite’. The company claimed that, whereas the word ‘lite’ is considered to be ‘elite, stylish, hip, masculine and neat’, the word ‘light’ is perceived to be ‘feminine and for older people’. Who knew!
The ASA Directorate was unimpressed with what Brandhouse had to say. It found that, although the colour combination silver and blue is used on a number of light beers in the international market, the only other light beer that features the colour combination silver and green is Heineken – a far cry from the fifty shades suggested by Brandhouse! As for the word ‘Lite’, the ASA said that the only other brand to use that was Miller in its product Miller Lite. Finally, as regards the local market, the only light beers on the market before August 2014 were Castle Lite, Windhoek Light and Bavaria Light, with Castle Lite being the only one to feature the colour combination silver and green.
The ASA Directorate referred to a previous decision of Amos Glue Stick v Pritt Glue Stick, a case which had involved the extensive use of the colour red for glue sticks, and one where the ASA had found that there was advertising goodwill in the get-up.
The ASA felt that SAB, with its 20 years of usage, had similarly built up an advertising goodwill in the colour combination of silver and green, in conjunction with the word ‘Lite’. It felt that Brandhouse had, through its use of the Amstel Lite get-up, destroyed the uniqueness of these features. It said that this both exploited and was likely to diminish SAB’s advertising goodwill. So the ASA issued an order requiring Brandhouse to change its packaging.
As I said at the outset, this case is interesting for two reasons. First, because the ASA has on a number of occasions shown a reluctance to accept trade mark-style rights to colour. For example, on one occasion the ASA rejected an attempt by the company IBurst to monopolise the colour orange in the telecoms space, and in another it rejected Canderel’s argument that it was entitled to exclusivity in the colour combination red and yellow in the context of artificial sweeteners - in both cases the ASA made it clear that the ASA Code seeks to protect original intellectual or creative thought rather than arbitrary things like colour. And second, because the case does show how in appropriate circumstances a difficult, slow and expensive passing-off case may be avoided by a quick and relatively more cost effective ASA complaint.
It’s worth bearing in mind.