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European court rules on banks' use of red in marketing

Colors are key in the world of branding and marketing because they are supposed to help you distingish between one brand and another. Why both sides in a colorful dispute in Germany think they have the upper hand.

Europe's highest court ruled Thursday that it is possible for a bank to copyright a primary color, independent of its application, and declare it off limits to competitors.

But it also said the company must prove that a large majority of consumers already associate the company with a particular shade of that color to enjoy that protection.

Only in this case, the color is red. A color long sought after for its signal properties by flowers, political parties, soft drinks manufacturers and tobacco marketers.

The European Court of Justice in Luxembourg's judgment is the latest in a long-running dispute between the German Savings Bank Association (DSGV), on the one side, and Spain's Santander bank and Austria's Oberbank on the other.

Germany's well-established savings banks, which are typically publicly owned, have used red since the 1960s for everything from balloons to savings books. They only got around to patenting the hue in 2007.

Identical shades

Deregulation of financial services in Europe brought with it lots of foreign banks who are now doing business in Germany. And at least two of them, Santander and Oberbank, use an almost identical shade of red in their corporate identity schemes as the German savings banks.

Neither of them sees any reason to change their colors just to do business in Germany.

So the DSGV took them to court, and won in 2012. The foreign banks then asked the German patent office to retract DSGV's claim on red on the basis that red has nothing intrinsically to do with a bank, and that red was far too important a color for anyone to stake exclusive claims to it.

The patent office refused, and that's how the case ended up the European Court of Justice.

Both sides feel in the pink after the Luxembourg ruling. The DSGV says the ruling confirms their position that national authorities cannot make it nearly impossible to protect a color for marketing purposes, and that they expect the patent court to reject the foreign banks' case.

But Santander says it is on the way to winning the case now that it is back in the patent court. That's because DSGV now has to prove that a large majority of Germans automatically think of their local savings banks... every time they see red.

kpc/uhe (Reuters, dpa)