The Meaningful Chocolate Company redesigned its purple advent box after a warning from its lawyers.
The advice followed Cadbury's victory in a dispute with rival Nestle over its rights to purple packaging.
But Rt Revd Stephen Cottrell said the confectionary giant should not be "so precious over purple".
Cadbury said it was protecting its trademark from other chocolate firms.
Bishop Stephen spoke out out after the Warrington-based Fairtrade chocolate company designed chocolate Christmas tree decorations with stickers telling the story of Christmas.
The decorations were to come in an advent purple box bearing a picture of Mary and Jesus on the front.
Bishop Stephen urged Cadbury to "relax", adding: "Cadbury should reflect that before they even existed, the colour purple was around and - perish the thought - after they have gone, it will still be here.
"Fighting some battles, even ones you win, can actually be demeaning. Far better to be generous, then no one loses," said Bishop Stephen.
David Marshall, of the Meaningful Chocolate Company, said: "We have been legally advised that we were on dodgy ground this year because we were using 'advent purple' for our Christmas products and 'advent purple' now belongs to Cadbury.
"For this reason we have changed the packaging of our religious Christmas Tree Decorations. This year advent is a warm red," said Mr Marshall.
Cadbury said its dispute with Nestle was to protect the Cadbury purple associated with its milk chocolate.
"We are not seeking to trademark 50 shades of purple, it is about making sure that the consumer is not confused into thinking this is a Cadbury product - that is the nature of a trademark," a spokesman for Cadbury said.
"We are not seeking to be precious about the colour purple," he said.
A legal row between Cadbury and a small confectioner over the use of the colour purple on packaging was "demeaning", a senior Essex church figure has said.