Wednesday, January 7, 2015

The double-edged sword of notoriety: Court Dismisses Coca-Cola Claim Against Pepsico Over Bottle Shape Infringement

Coca-Cola have been using a “Contour” shape bottle for many years, for which they have already registered several trade mark registrations, including shape trade mark registrations.

In October 2009, Frucor Soft Drinks Limited, the bottler and distributor of PepsiCo products in New Zealand, launched a new 300ml bottle on the market. Frucor dubbed this the “Carolina” bottle. The new Carolina bottle design was intended for PepsiCo’s main line of soft drinks, such as Pepsi, Pepsi Max and 7UP.

The new bottle design wasn’t promoted or advertised and were only released to the market on a small scale, but Coca-Cola took notice and saw similarities between the Carolina bottle and their own Contour bottle:

Image comparison presented to the court  
In 2010 Coca-Cola sued PepsiCo for passing off, trade mark infringement, and breaches of the New Zealand Fair Trading Act 1986 with regard to several of their registered trade marks for the Contour bottle. Equivalent proceedings were commenced in Australia also in 2010.

Coca-Cola’s trade mark infringement case was dismissed by New Zealand’s High Court, while the judgment for the Australian proceedings were handed down in early December 2014.

In the Australian proceedings, Besanko J accepted that PepsiCo was using the Carolina bottle shape as a trade mark, but did not find the use to be infringing on Coca-Cola’s trade mark registrations.

Besanko J noted that even though the shape of the bottle is one of the first things that a person will see, it was not enough to confuse or deceive consumers due to a couple of factors:

a.) all bottles have an outline or silhouette and bottles with a “waist” are not exclusive to soft drinks
b.) consumers of soft drinks focus more on word marks, logos, and brands instead of the bottle shape when approaching the refrigerator or cooler.

With both Coca-Cola and PepsiCo’s products having popular logos and brands, the shape of the bottle becomes irrelevant and unlikely to cause confusion among consumers.

Besanko J also found that the Contour bottle and the Carolina bottle have differences that are significant enough that they can’t be considered as deceptively similar. For instance, while the Contour bottle has fluting on the top and lower portions and no fluting in the central section, the Carolina bottles did not have any flutes nor a clear band – it instead had a horizontal “wave” feature and a waist that is extended higher up the bottle. Besanko J stressed that there was no likelihood of confusion or deception, as even if the bottle shapes were similar, consumers will not be deceived into buying the wrong product because they can easily distinguish specific products based on other factors. In his own words:

“The difficulty for [Coca-Cola Co] is that, even accepting that and accepting that both bottles will contain dark brown cola and be sold within a similar, if not the same, context, I do not think that such a consumer would be misled or deceived, or would be likely to be misled or deceived, in the case of overall bottle shape because I think he or she would detect quite clearly the difference between the Contour Bottle and the Carolina Bottle. The most noticeable difference between the two bottles is that the Contour Bottle has the very distinctive fluting and the Carolina Bottle has the distinctive horizontal waves. Other noticeable features are the different shaped neck and shoulders and the fact that the waist on the Contour Bottle is lower and more pinched. In other words, if overall bottle shape is the cue, I do not think that there is any real likelihood of deception. “

The effect of notoriety of a brand has been the subject of other discussions in trade mark disputes in Australia. In Citigroup Inc v City Index Limited [2014] ATMO 36, the hearing officer stated:

“Precedent on this issue is missed. As stated by the Delegate in Flight Centre Pty Ltd v World Flight Centre Pty Ltd:
“Reputation in a trade mark can thus be a double-edged sword and may either reinforce or mitigate the effect of differences.”

…In Ana Laboratories Ltd’s Application (‘ Ana Laboratories ’) it was argued that in relation to petroleum jelly ‘Vaseline’ could be regarded almost as a household word, and that the extensive reputation which it enjoyed in this connection would prevent deception or confusion arising from any similarity to the mark ‘Vanildene’. The Assistant-Comptroller stated:

Upon this point, reference might well be made to the case of Smith Hayden & Coy. Ld’s Application (1946) 63 RPC 97. This was an appeal from a decision of the Registrar, and Counsel for the appellants (opponents) contended that the Registrar had partly based his decision upon what was in effect the proposition that the likelihood of a particular used mark being confused with another mark was in the inverse ratio to the reputation enjoyed by that particular mark. Evershed, J. (as he then was) found ... that the Registrar had not so misdirected himself, thus implying that if he had advanced such a proposition in his decision, it would have been a misdirection upon his part. And in these proceedings, I am not prepared to take the view that, because of the extensive notoriety achieved by the mark ‘Vaseline’, deception or confusion is the less likely if a resembling mark should begin to be used in the same market.”

The approach taken in Ana Laboratories can be contrasted with that taken in Flight Centre where Mr Williams stated:

“[I]t may be that the more widely the opponent is known, nationwide, as FLIGHT CENTRE, plain and simple, and the more widely recognised are those words seen to be its trade mark, the less likely is it that clearly different trade marks will be seen as denoting the same trade source.”

I am of the view in this instance that the reputation acquired by the Opponent’s trade marks will not militate against deception or confusion arising.”

Yet in Multiplex Ltd v Eastcoast Holdings Pty Ltd [2005] ATMO 39 (29 July 2005); the hearing officer said:

“The fact that the opponent is arguably the pre-eminent building company in Australia would, in my opinion, lessen the likelihood of confusion in the marketplace.”

This new decision from Besanko J seems to resolve the issue (unless there is an appeal). Notoriety will lessen the prospect of confusion.

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