How contoured is Carolina’s Waist – Coca-Cola and Pepsi Battle over bottle shapes
The Federal Court has recently handed down its decision in the battle of the bottle shapes between Coca-Cola and PepsiCo. Whilst Coca-Cola’s cola-flavoured soft drink has been sold in Australia for over 75 years in a distinctive contoured bottle, this was not enough to stop Pepsi from using another contoured bottle shape in relation to its competing cola soft drink.
This case simultaneously demonstrates the value of registration of shape trade marks and the difficulty in enforcing those trade mark rights.
The cola wars extend to shape marks
The Coca-Cola Company has sold its ubiquitous cola-flavoured soft drink in a contoured bottle shape since 1937 in Australia, and it has registered four different trade marks relating to the outline or shape of its contoured bottle.
PepsiCo Inc commenced use of its “Carolina”-shaped bottle for its Pepsi-branded cola beverage in Australia in 2007. Coca-Cola took action in 2010 against Pepsi, that Pepsi’s Carolina bottle shape infringed Coca-Cola’s registered trade marks, contravened its common law rights and related consumer protection legislation.
Coca-cola’s contour v Pepsi’s Carolina
As shape trade marks have rarely been enforced in Australia the decision has attracted much interest, especially as it follows soon after the High Court of New Zealand handed down its decision, in which Coca-Cola lost on all counts to Pepsi. The Contour Bottle and Carolina Bottle are depicted below:
Trade mark infringement – is the Carolina shape a trade mark and if so is it deceptively similar to the Coca-Cola contoured bottle?
In order to succeed in its action for trade mark infringement Coca-Cola first needed to establish that Pepsi was using the Carolina shape as a trade mark.
The Court applied the three general principles provided by Sundberg J. in Global Brand Marketing Inc. v. YD Pty Ltd  76 IPR 161, which concerned shape marks in relation to footwear, namely:
- Whether a person has used a shape or a feature of a shape as a trade mark is a matter for the Court and cannot be governed by the absence of evidence;
- Context is all-important and will typically characterise the mark’s use, either trade mark or not;
- There is a spectrum involving shapes or features that are purely functional at one end and features that are non-descriptive and non-functional, the latter of which may make a shape “more arresting of appearance and more attractive, thus providing a means of distinguishing the goods from those of others”.
The Court noted that the existence of numerous different third-party bottle shapes does not mean that consumers consider each different shape to be an indicator of trade origin. The Court also noted that the fact that Pepsi had never sought to register the Carolina Bottle shape as a trade mark did not necessarily establish that Pepsi did not intend to use the shape as a trade mark.
The Court concluded that the Carolina bottle shape is distinctive and that consumers would associate it with the Pepsi brand such that, consequently, “the overall shape of the Carolina Bottle is being used by [Pepsi] as a trade mark.”
Is the Carolina bottle shape deceptively similar to the contour bottle?
Coca Cola required the Court to consider whether the outline or silhouette of the Carolina bottle shape is being used as a trade mark separately and in addition to the overall bottle shape. The Court observed that “the fact that an aspect of a product may be seen at one point does not lead to the conclusion that consumers would see it as a badge of origin”, dismissing Coca-Cola’s claim that Carolina’s outline or silhouette alone was a trade mark.
In assessing trade mark infringement the Court firstly considered Coca-Cola’s registration Nos. 63697 and 767355, which related to a 2-D and 3-D drawing of the contour bottle, complete with fluting and a clear belt band. The Court noted that the Carolina bottle shape had neither of these features and did have a horizontal wave feature, as well as noting that the Carolina waist is more gradual and appears to extend higher up the bottle. The Court considered that these differences are significant and was not prepared to give any particularly feature prominence over other features. Once the Court considered all of the respective features of the Carolina bottle shape it did not consider that the marks were deceptively similar, noting that Carolina’s waist, horizontal wave feature and (to a lesser extent) the “frustoconical neck” are significant features of the Carolina bottle shape.
The Court moved on to consider Coca-Cola’s registration Nos. 1160893 and 1160894, which comprised much simpler images of the Contour bottle, consisting simply of an outline of the Contour Bottle and a solid version of the same shape, but absent any other distinctive indicia. The Court found that the Carolina bottle was not deceptively similar to these simple images, due to the presence the afore-mentioned features of the Carolina Bottle shape and other related features which are not part of either registration.
The Court also noted that even if it were required to consider the Carolina bottle shape outline or silhouette it would still conclude that the respective marks were not deceptively similar, due to the different features present in the outline of the Carolina bottle.
Was Pepsi engaged in misleading and deceptive conduct or passing-off?
Whilst there was some dispute as to whether Coca-Cola’s reputation was to be assessed in 2007 or 2009 this had little bearing on the overall result. It was accepted that Coca-Cola had a reputation in its Contour Bottle as a whole in August 2007. However the Court observed that it is one thing to note that a consumer would regard a bottle with numerous features such as a “pinched waist”, fluting or belt bands as being a Coca-Cola bottle and quite another to say that the consumer would make a decision to purchase having regard to those features alone, without regard to any marks or other branding present on the bottle.
The Court noted that the brands Coca-Cola and Pepsi are very well-known and are prominently displayed on the respective bottles. Although the Court was prepared to find that
“a sufficient number of consumers may well make their selection based on overall bottle shape”, the consumer would still “detect quite clearly a difference between the Contour Bottle and the Carolina Bottle … in other words if overall bottle shape is the cue, I do not think that there is any real likelihood of deception”.
In reaching this conclusion the Court did not consider that Coca-Cola had a reputation in the mere outline or silhouette of its Contour Bottle, distinguishing between overall bottle shapes and a simple outline or silhouette of those shapes.
Lessons for brand owners with reference to shape marks
- An Australian Court is prepared to recognise that shapes do indeed function as trade marks, even if they also serve a functional purpose;
- The rights provided by registration of a shape mark will be construed reasonably narrowly and will include consideration of each aspect of the shape mark, rather than one or two key features;
- In general terms the presence of branding is likely to make it more difficult to establish contravention of common law rights and/or consumer protection legislation than infringement of a registered trade mark. As such the case supports the benefits of registration of a shape mark over relying solely upon common law rights in the market.
This case is largely consistent with the recent New Zealand decision which itself is on Appeal, as is this Australian case. We await the outcome of the respective decisions in Australia and New Zealand with significant interest.