Nestle’s lips to stay luscious

Nestle’s lips to stay luscious

Nestle’s lips to stay luscious

Nature’s Blend Pty Ltd v Nestlé Australia Ltd [2010] FCA 198

A recent Federal Court decision demonstrates that just because certain words appear on product packaging does not necessarily mean those words are being used as a trade mark.

The trade mark LUSCIOUS LIPS is registered by Mark Robinson and Brenda Robinson each of whom is a director of Nature’s Blend Pty Ltd and VM Supplies Pty Ltd. The trade mark is registered for a range of goods including confectionery. In these proceedings the respondent, Nestlé Australia Ltd (Nestlé), manufactured, distributed and sold confectionery under the trade mark ALLeN’S. The product name for the confectionery was RETRO PARTY MIX and, on the rear of the product packaging, the following promotional statement was featured:

That’s right! All your favourites are back, so put on those flares and get ready to party! Up to 7 lolly varieties including…cool Cola Bottles, those radical Racing Cars, yummy Honey flavoured Bears, totally freeeekie Teeth, luscious Lips, partying Pineapples and outrageous Raspberries.

The applicants initiated action against Nestlé based on trade mark infringement under the Trade Marks Act 1995, the tort of passing off and misleading and deceptive conduct under the Trade Practices Act 1974.

In response to the claim of infringement, Nestlé argued that its use of the words “luscious Lips” did not constitute infringement – first, because the use of the words “luscious Lips” in relation to lip shaped confectionery was entirely descriptive of the product. Second, Nestlé contended that its use of the words “luscious Lips” was not use of those words as a trade mark. In considering the first line of argument advanced by Nestlé, His Honour Justice Sundberg considered that the plain meaning of the words “luscious Lips” in the context of Nestlé’s packaging would be taken by consumers as being descriptive or laudatory of Nestlé’s confectionery in the Retro Party Mix product. Turning to the second argument put forward by Nestlé, the judge said that the key question was whether the words “luscious Lips” would have appeared to consumers as possessing the character of a brand, that is to say: were the words used so as to indicate a connection in the course of trade between the respondent and the confectionery? In assessing the evidence in its entirety, the judge was not satisfied that there had been use of the words “luscious Lips” as a trade mark for the following reasons – first, the word “luscious” is descriptive and is intended to convey to consumers a laudatory, perhaps even humorous, description of such of the respondent’s confectionery contained in the Retro Party Mix Product which are shaped as lips. Second, the effect of the words “luscious Lips” on consumers is diluted by the prominence of the well known mark “ALLeN’S” on both the front and back of the packaging, along with the mark “NeSTLé” appearing on the back of the packaging.

Further, based on the evidence, the judge was satisfied that Nestlé was not aware of the applicants’ use of the words LUSCIOUS LIPS and therefore Nestlé had not acted in bad faith in relation to its use of the words “luscious Lips”. For all these reasons, the applicants’ claim for infringement under the Trade Marks Act failed.

Turning to the applicants’ claim for passing off and breach of the Trade Practices Act Nestlé was not found to have engaged in passing off or misleading or deceptive conduct. The Court held that consumer awareness of the applicants’ business and the LUSCIOUS LIPS mark was limited because the applicants’ reputation in ‘LUSCIOUS LIPS’ was not substantial. At the time of drafting and editing the ALLEN’s Retro Party Mix product packaging, Nestlé was found to be unaware of the appli- cants’ use of the words “luscious Lips”. In contrast, the court held that ALLeN’S and NeSTLé are well-known to consumers and as such, there was an insufficient likelihood that consumers would have been misled into thinking Nestlé was in any way connected to the applicants or their product.

Commentary

The lesson to be learned from this case is that trade mark infringement will only occur when a person uses a mark, which is identical or deceptively similar to a registered trade mark, to indicate the origin of goods or services. Nestlé was found not to have used ‘luscious Lips’ as a trade mark because it used those words to describe the confectionery product, not to distinguish the product from that of its competitors. The context in which words are used on product packaging is integral to the determination of whether those words have been used as a trade mark.