Coca-Cola Company v All-Fect Distributors Ltd (T/as Millers Distributing Company)

[1998] FCA 1638

FEDERAL COURT OF AUSTRALIA

TRADE MARKS – Infringement – registered trade marks –  “Coke” – “Coca-Cola” – Coca-Cola contour bottle – whether confectionary in the shape of the Coca-Cola contour bottle with “Cola” inscribed on it constitutes infringement of the registered trade marks – whether marketing and sale of the confectionary constitutes “use” of a trade mark – whether confectionary deceptively similar to any of the three registered marks – whether the confectionary is likely to be taken by consumers as indicating a connection with the proprietor of the marks

TRADE PRACTICES – Passing off – whether marketing and sale of the confectionary misrepresents the existence of a connection with the applicant

Trade Marks Act 1955 (Cth)
Trade Marks Act 1995 (Cth) ss 120(1), 120(2) and 120(3)
Trade Practices Act 1974 (Cth) ss 52, 53(c) and 53(d)

Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641 – cited

Mid Sydney Pty Ltd v Australian Tourism Company Ltd (1998) 40 IPR 20 – cited

Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 – cited

Pepsico Australia Pty Ltd v Kettle Chips Co Pty Ltd (1996) 33 IPR 161 – cited

Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 – cited
Mark Foys Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190 – cited
Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 – cited
Re Coca-Cola Trade Marks [1986] RPC 421 – cited
Smith, Kline and French Laboratories (Aust) Ltd v Registrar of Trade Marks (1967) 116 CLR 628 – cited
McIlhenny Co v Blue Yonder Holdings Pty Ltd (1997) IPR 187 – considered
Nike Inc v “Just Did It” Enterprises 6 F.3d 1225 (7^th Cir. 1993) – considered
Haig & Haig Ltd v Maradel Products Inc 249 F.Supp. 575 (S.D.N.Y. 1966) – considered

THE COCA-COLA COMPANY v ALL-FECT DISTRIBUTORS LIMITED TRADING AS MILLERS DISTRIBUTING COMPANY

VG 50 OF 1998

JUDGE:        MERKEL J
PLACE:        MELBOURNE
DATE:          18 DECEMBER 1998

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	vg 50  of  1998

BETWEEN:	the COCA-COLA COMPANY Applicant/CROSS DEFENDANT
AND:	ALL-FECT DISTRIBUTORS LIMITED trading as millers distributing company Respondent/cross claimant
JUDGE:	merkel J
DATE OF ORDER:	18 DECEMBER 1998
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The application be dismissed.

1. Interlocutory judgment on the cross claim be entered for the cross-claimant for damages to be assessed.

1. Leave be reserved to the respondent to apply for damages pursuant to the undertaking given on behalf of the applicant on 6 and 13 March 1998.

1. The applicant pay the taxed costs of the respondent of and incidental to the application and the cross claim.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	vg 50  of  1998

BETWEEN:	the coca-cola company Applicant/cross respondent
AND:	all-fect distributors limited trading as millers distributing company Respondent/cross claimant

JUDGE:	merkel j
DATE:	18 DECEMBER 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

Introduction

The applicant is the manufacturer and distributor of Coca-Cola.  It is also the proprietor of three trade marks which are registered under the Trade Marks Act 1955 (Cth) and the Trade Marks Act 1995 (Cth) (“the Act”) in respect of the word marks “Coca-Cola” and “Coke” and the contour drawing of the glass bottle in which Coca-Cola has traditionally been sold (“the contour bottle”). The marks are depicted below:

COKE

The respondent is a confectionary wholesaler which imports and distributes a wide range of confectionary.  It is the exclusive Australian distributor of certain cola flavoured confectionary which is recognisable as having a shape similar to that of the contour bottle (“the cola bottle confectionary”).  The shape and appearance of the confectionary is as follows:

The present proceeding was commenced by the applicant after notice was given by the Chief Executive Officer of Customs of the seizure of two consignments of cola bottle confectionary packs pursuant to s 133 of the Act. The applicant claims that the importation, marketing and sale by the respondent of the cola bottle confectionary infringes the applicant’s three registered trade marks, constitutes misleading and deceptive conduct which contravenes ss 52 and 53(c) and (d) of the Trade Practices Act 1974 (Cth) (“the TPA”) and involves the respondent in passing off its confectionary as and for confectionary of, or connected in the course of trade with, the applicant.

It was common ground between the parties that:

• since 1938 the applicant has carried on the business of manufacturing, promoting and selling non-alcoholic carbonated beverages known as Coca-Cola throughout Australia, under and by reference to the marks “Coca-Cola” and “Coke” and the contour bottle which was a bottle of distinctive appearance;

• since at least 1938 the applicant has widely advertised its business and beverages in Australia by reference to the words marks “Coca-Cola” and “Coke” and the contour bottle;

• the business and goods of the applicant have become widely and favourably known and identified in the minds of the general public throughout Australia by means of the word marks “Coca-Cola” and “Coke” and the contour bottle;

• the business and goods of the applicant have a substantial, exclusive and valuable reputation and goodwill throughout Australia by reference to the word marks “Coca-Cola” and “Coke” and the contour bottle;

• the public throughout Australia, who have acquired or propose to acquire goods or services or otherwise transact business with any person carrying on business under or by reference to the word marks “Coca-Cola” or “Coke” or the contour bottle as a mark, intend or expect to acquire goods from or supply goods to or otherwise transact business with, persons associated with or licensed or approved by the applicant and in doing so rely upon the reputation acquired by the applicant in Australia.

The applicant contends that the extensive use, including the licensing, of the contour bottle shape as a trade mark by the applicant, both in Australia and internationally, has resulted in the appearance of the contour bottle being so well known in Australia that it was understood by the public to be used exclusively in connection with products made by, for, or with the approval or license of, the applicant.  As a consequence, so it is said, any product with that shape would be identified and recognised by the public as a product of, made for or with the approval of the applicant.

The primary relief sought by the applicant is an injunction restraining the respondent from importing, marketing or selling the cola bottle confectionary in Australia.  Orders for delivery up of the infringing confectionary and for damages are also sought.

The respondent contended that the distribution, marketing and sale of the cola bottle confectionary did not involve use by it of any of the three trade marks or marks substantially or deceptively similar to or substantially identical with those trade marks.  The respondent also denied that it had misrepresented the existence of a trade connection between the cola bottle confectionary and the applicant.

Accordingly, the respondent denied that it had infringed any of the marks of the applicant or that its conduct in importing, marketing or selling the cola bottle confectionary constituted a contravention of ss 52, 53(d) and 53(e) of the TPA or passing off. The respondent cross claimed for the loss and damage it had suffered following the seizure by the Australian Customs Service, pursuant to the seizure notices, of the cola bottle confectionary packs.

Background

1. Coca-Cola

Coca-Cola is one of the most extensively advertised products in Australia.  The contour bottle was first marketed as a container of Coca-Cola in the United States in about 1915 and, in Australia, in about 1934.  By the 1950’s the contour bottle had become so well identified that the “gracefully curved and fluted shape” (as it was described in an American packaging magazine) was said to fit “the hand so well a blind man can tell what he holds”.  The bottle was described in the packaging industry at the time as “the most perfectly designed package in use today”.

In Australia, the Coca-Cola beverage is sold in three different general types of packaging.  It is sold in glass bottles, aluminium cans and plastic bottles.  The contour bottle has been used extensively in Australia since 1938.  That continued until the early 1960’s.  During the 1960’s, sales of Coca-Cola beverage were commenced using cans as well as the glass contour bottles.  However, since the 1970’s Coca-Cola has been substantially sold in plastic bottles and cans rather than in the glass contour bottles.

Notwithstanding the subsequent sale of Coca-Cola in plastic containers and cans, the contour bottle has remained a mark or sign which is readily recognised by its shape alone as the “Coca-Cola” or “Coke” bottle.

Since 1994 a significant proportion of the marketing of the Coca-Cola beverage in Australia has used or promoted the image of the contour bottle.  Cans of the Coca-Cola beverage include a pictorial representation of the contour bottle and Coca-Cola advertisements regularly feature the bottle as a distinctive identifier of Coca-Cola products.

In 1994 the applicant decided that it could obtain greater leverage in the Australian market through the more prominent use of the contour bottle.  Some of the plastic containers for the sale of Coca-Cola beverage were modified to use the contour bottle design.  Also, since 1994 certain advertising by the applicant featured, not only the “Coca-Cola” and “Coke” word marks, but also a representation of the contour bottle.

Although there are instances where the contour bottle alone has been used to advertise Coca-Cola’s products, the evidence is that it has been, almost invariably, used to identify the applicant’s products in association with the word marks “Coca-Cola” or “Coke”.

The applicant regularly uses red and white colours as its corporate colours, in association with its advertising of the word marks “Coke” and “Coca-Cola”.  Evidence was given on behalf of the applicant that recently Coca-Cola had commenced advertising by simply utilising the image of the contour bottle without the word marks “Coca-Cola” and “Coke”.  One example was an advertisement depicting the silhouette of the contour bottle with the caption “Quick, think of a soft drink”.

The applicant has developed a comprehensive merchandising program to exploit the goodwill it has derived in respect of its trade marks in relation to a wide range of products which are unrelated to the original beverage.  That program arose as a result of the appreciation by the applicant of significant consumer demand for products bearing its trade marks outside its core business.

One of the most popular marks of the applicant in the United States, which has been used on merchandise, is the contour bottle.  That trade mark has been applied to a broad range of articles including towels, clothes, clocks, jewellery, boxes, biscuit barrels, straw dispensers, cars and other similar items.  It has also been used in a three dimensional form in products such as key rings, radios, lapel badges, magnets, salt and pepper shakers and hand held fans.

Whilst the merchandising program has been extensive in the United States, it was only initiated by the applicant in Australia in about 1994.  Products in Australia which have been licensed by the applicant featuring the contour bottle include: – a bottle opener, a tin container, a drinking mug, a fridge magnet, an ornament, a key chain, salt and pepper shakers and a sun catcher.  The products have been on sale at major retail outlets throughout Australia since 1994.

1. The cola bottle confectionary

The cola bottle confectionary is made in Germany by Efruti GMBH and Co KG and distributed in Australia by the respondent.  The confectionary, which is gelatinous and cola flavoured, has the slightly distorted and elongated shape of a Coca-Cola bottle.  The word “Cola” is inscribed on it in capital letters.

The bulk of the respondent’s sales are from warehouses at which purchasers move around the warehouse and remove tubs of the cola bottle confectionary which are in cardboard boxes for purchase.  Approximately 90% of the respondent’s sales of cola bottle confectionary are made to small wholesalers who in turn supply the confectionary to retailers.  The remaining 10% of the respondent’s sales are direct to retailers.  The evidence of the respondent was that the cola bottle confectionary has been a successful product for a number of years as part of a range of other similar, but differently shaped, products.

The confectionary is distributed by the respondent to wholesalers and retailers in a transparent plastic tub which contains one hundred pieces of confectionary.  Due to the gelatinous content of the cola bottle confectionary, the pieces lie in the container in a curled up or rolled up form.  As a consequence, the shape of the pieces in the tub is not easily recognisable as that of, or similar to, a Coca-Cola bottle until a piece is removed from the container.  The tub is clearly labelled as containing “Efruti” Cola bottles.  The label on the tub also contains a pictorial representation of two cola bottles reclining on a desert island in the sun sipping Cola.  The bottles on the label are similar to, but not recognisable as, contour bottles.  The confectionary and its representation on the label is plainly intended to convey a fun version of the contour bottle.  The colour scheme, get up and pictorial representations on the plastic tub do not suggest any association with Coca-Cola or the applicant.

In general, retailers sell the cola bottle confectionary from the Efruti tub or from a container of the retailer.  The confectionary is often placed on a counter in close proximity to the cash register and is sold at a retail price of approximately twenty cents a piece.  It is sold in milk bars, convenience stores, newsagents, petrol stations and other similar outlets as a confectionary item.

The cola bottle confectionary had been on the market in Australia for some time prior to the respondent commencing to sell it in 1992.  The respondent has sold the confectionary in Australia since that time.  A sales brochure for the cola bottle confectionary was tendered in evidence.  The brochure showed the bottle standing up in a tub and prominently featured the Efruti label.  Even when showed in the brochure as standing up, the bottles were not easily recognised as having a similar shape to that of the contour bottle.  The brochure was consistent with the fun representation of the confectionary presented on the label of the tubs.

Evidence was given on behalf of the respondent that the bottles were referred to by the respondent and its employees as “Cola bottles”, “Cola bottle lollies”, or “Cola lollies” and that no reference was made to the items as “Coca-Cola lollies” or “Coca-Cola bottles”.

A private investigator was called on behalf of the applicant to give evidence that the item was being referred to by representatives of the respondent as a “Coca-Cola bottle” or a “Coca-Cola lolly”.  The evidence relied upon were conversations between the investigator and a representative of the respondent.  It is unnecessary to detail the evidence in relation to the conversations, other than to say that in my view the probability was that the investigator initiated the description of the item as a “Coca-Cola bottle” and that it may then have been adopted in that form by the respondent’s representative.

In any event, I am not satisfied that the evidence establishes that the respondent or its representatives, in marketing or distributing the cola bottle confectionary, identify it as associated or connected with, or use the name of “Coca-Cola” or “Coke”.  Putting to one side the issue of the shape and appearance of the bottle, nothing in the get up, labelling or manner of presentation of the confectionary indicates any such association or connection.

Ultimately, the applicant relied upon the trade connection with it being established by the shape and appearance of, and the markings on, the cola bottle confectionary and the manner in which it had been manufactured to closely resemble a Coca-Cola bottle.

1. Trade connection - the cola bottle confectionary and Coca-Cola

No evidence was given by distributors, retailers, or consumers to the effect that they believed that there was any trade connection between the cola bottle confectionary and Coca-Cola.

Evidence on that topic was given on behalf of the applicant by David Fielding, the Senior Brand Manager for Coca-Cola South Pacific, which is a subsidiary of the applicant responsible for product distribution in the South Pacific region.  Mr Fielding said that it was his view that strong market recognition of the contour bottle, its distinctive appearance and the copying of that appearance in the cola bottle confectionary with the inscription of Cola on it, would lead consumers to assume and expect that the confectionary was connected with the Coca-Cola company.  He said that as the cola bottle confectionary was a product generally acquired on impulse and sold in a manner which does not invite careful scrutiny by the consumer, consumers would tend to identify the confectionary as having the shape, markings and appearance of a Coke bottle.

Mr Fielding also said that whilst the Coca-Cola company does not manufacture or sell lollies, it was consistent with market trends for a beverage maker to sell such products with the consequence that it was reasonable to assume, and expect, that the public would identify the cola bottle confectionary as being connected with Coca-Cola.  Examples of such brand extension were said to be Solo Ice, Milo Bars and Frozen Coke.  Reliance was also placed by Mr Fielding upon other examples such as the Qantas kangaroo, the Nike swoosh, the Mercedes Benz tri star and McDonald’s golden arches to demonstrate public awareness of advertising using a device mark without an associated word mark.  However, Mr Fielding conceded that the contour bottle had rarely been used without some association with one of the applicant’s word marks.

In the course of cross-examination, Mr Fielding, after agreeing that the imitation of the contour bottle was not perfect, indicated that he thought customers would be confused as to whether there was a connection.  He added that people could easily walk into a store and think that the cola bottle confectionary was a Coca-Cola product because it bears elements “which are consistent with what our trade mark is”.  In later explaining his evidence as to confusion, Mr Fielding said:

“I think the nature of the confusion from the consumers’ point of view is that as they go to purchase this, the consistencies between what they would see owned by Coca-Cola – the shape, the fluting, the traditional label panel or the cola colour – are also reflected within here.  To me the confusion may exist because it’s not a perfect representation, so that was where the confusion I thought may arise.”

The respondent called a marketing expert, Mr Foster, to give evidence on its behalf.  In substance, Mr Foster’s evidence was that the public would not perceive a connection between the cola bottle confectionary and Coca-Cola.  He based his conclusion on the following facts:

• the trade marks “Coca-Cola” and “Coke” are missing;

• the cola bottle confectionary has a significant dissimilarity, both in shape and proportion, to the contour bottle;

• there was no marketing or advertising of the product as being associated with Coca-Cola;

• it would be unlikely that Coca-Cola would endorse a product of insufficiently high quality such as the cola bottle confectionary.

Not surprisingly, the evidence was directed at the impression of the cola bottle confectionary on consumers rather than wholesalers, who were unlikely to be under any misapprehension as to the origin of the confectionary.  Whilst the expert marketing evidence was helpful in identifying the issues relating to whether consumers would be likely to perceive a trade connection between the contour bottle of the applicant and the cola bottle confectionary,  ultimately, the issue is a matter for the Court to decide on the basis of the evidence before it.

It was common ground that the cola bottle confectionary was essentially an item acquired on impulse by consumers in a retail environment such as a convenience store, a milk bar, a newsagent, a petrol station or other similar outlet.  In these circumstances, the Court is in the position of having to place itself in the mind of a potential consumer to ascertain whether at the moment a decision might be considered to purchase the cola bottle confectionary, the consumer would perceive it to have some trade or other commercial connection with the applicant.  As was pointed out in Australian Woollen Mills Ltd v F S Walton &  Co Ltd (1937) 58 CLR 641 at 654 by Dixon and McTiernan JJ, such an issue is “a question never susceptible of much discussion” as it “depends on a combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs”.

The important issue is whether the cola bottle confectionary is merely recognised by consumers as having the well known shape of the contour bottle or whether additionally consumers  might believe that, or be led to wonder if, the confectionary has a commercial connection of some kind with the applicant.

Infringement of trade mark

The applicant is the registered owner of three trade marks in respect of which it claims there has been infringement by the respondent.  The marks, which are registered as trade marks under the Trade Marks Act 1955 (Cth) and the Trade Marks Act 1995 (Cth) are:

• Trade Mark No 63697, registered as at 24 April 1934, in class 32 in respect of beverages and syrups and the manufacture of such beverages - the mark is a drawing of the contour bottle used by Coca-Cola to package its soft drink (“the contour bottle mark”);

• Trade Mark No 259964, registered as at 10 February 1943, in class 30 in respect of substances used as food or ingredients in food - the mark is of the word ‘COKE’, in Block font (the “Coke mark”);

• Trade Mark No 93487, registered as at 19 November 1947, in class 32 in respect of syrups, concentrates, essences, extracts, beverages and preparation for making beverages or for use as ingredients in beverages - the mark is of the words: ‘Coca-Cola’ in ‘Spenserian’ script with the ‘dynamic ribbon device’ (“Coca-Cola mark”).

It is submitted on behalf of the applicant that the similarity in appearance between the confectionary and the registered trade marks is an infringement of its registered marks and misrepresents to consumers the existence of a trade connection between the confectionary product and Coca-Cola.

The relevant provision of the Act relating to infringement is s 120 which provides:

“(1)A person infringes a registered trade mark if the person uses as a trade mark as sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.

(2)A person infringes a registered mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:

(a) goods of the same description as that of goods (‘registered goods’) in respect of which the trade make is registered; or

(b) services that are closely related to the registered goods; or

(c) services of the same description as that of services (‘registered services’) in respect of which the trade make is registered; or

(d) goods that are closely related to registered services.

However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.

(3)      A person infringes a registered mark if:
           (a) the trade mark is well known in Australia; and

(b) the person uses as a trade mark a sign that is substantially similar is substantially identical with, or deceptively similar to, the trade mark in relation to:

(i) goods (‘unrelated goods’) that are not of the same description as that of the goods in respect of which the trade mark is registered (‘registered goods’) or are not closely related to services in respect of which the trade mark is registered (‘registered services’); or

(ii) services (‘unrelated services’) that are not of the same description as that of that of the registered services or are not closely related to registered goods; and

(c) because the trade mark is well known, the sign would be likely to be taken as indicating a connection between the unrelated goods or services and the registered owner of the trade mark; and

(d) for that reason the interests of the registered owner are likely to be adversely affected

(4)In deciding, for the purpose of paragraph (3)(a), whether a trade mark is ‘well known in Australia’, one must take account of the extent to which the trade mark is known within the relevant sector of the public, whether as a result of the promotion of the trade mark or for any other reason.”

A trade mark is taken to be “deceptively similar” to another trade mark if “it so nearly resembles that other trade mark that it is likely to deceive or cause confusion”: s 10.  However, as was said by Hill J in Mid Sydney Pty Ltd v Australian Tourism Company Ltd (1998) 40 IPR 20 at 32 there must be “a real tangible danger” of deceptive similarity occurring. His Honour cited Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 who (at 595), in the context of the previous law, said that it would be sufficient to show deceptive similarity:

“…if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source.  It is enough if the ordinary person entertains a reasonable doubt.”

Section 17 defines a “trade mark” as follows:

“A trade mark is a sign used, or intended to be used , to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.”

The new definition is not a significant departure from s 6(1) of the 1955 Act which provided that a trade mark was a “mark” used to connote a “connexion in the course of trade”.  However, the 1995 Act does makes an important departure from the previous Act in its definition of “sign” which is significantly broader than the definition of “mark” under the 1955 Act.  A “sign” is defined in s 6, which provides:

“sign includes the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.”

In the case of infringement of registered Trade Mark No 259964 (the Coke mark), the applicant contends that the infringement arises under s 120(1). It contends that the cola bottle confectionary is substantially identical or deceptively similar to the Coke trade mark and has been used as a trade mark in relation to ‘substances used as food or as ingredients in food’ that is, confectionary.

In the case of the infringement of registered Trade Mark Nos 63697 (the contour bottle mark) and 93487 (Coca-Cola mark), Coca-Cola contends that the respondent’s infringement arises under ss 120(2) and (3) of the Act. In respect of s 120(2) it submitted that the respondent has used, as a trade mark, a sign (in this instance the cola bottle confectionary) substantially identical with, or deceptively similar to the contour bottle and the Coca-Cola marks in relation to goods of the same description as, or closely related to, the goods in respect of which those marks are registered. The applicant contended, in the alternative, that infringement of the contour bottle and the Coca-Cola marks also arises under s 120(3) by the respondent’s use of a substantially identical or deceptively similar trade marks which are well known in relation to unrelated goods (confectionary) which is likely to indicate a connection between those goods and the registered owner of the contour bottle and Coca-Cola trade marks.

Counsel for the respondent conceded that Coca-Cola owns each of the three trade marks and that each of these marks is well known.  However, the respondent disputes that the importation, distribution and sale of the cola bottle confectionary by it constitutes use of any of the three marks “as a trade mark” as stipulated by s 120 of the Act. In the alternative, the respondent contends that, in any event, its cola bottle confectionary is not substantially identical with or deceptively similar to the applicant’s marks and would not be likely to be taken as indicating any connection with the applicant.

The contested issue relates to infringement. To establish infringement, ss 120(1)(2) and (3) each require that use of the alleged offending mark as a trade mark be established.  “Use of a trade mark” in relation to goods is defined in s 7(4) as:

“…use of the trade mark upon, or in physical or other relation to, the goods (including second-hand goods).”

The “use” of a mark is actual use as a trade mark indicating origin, in the sense of a “badge of origin”: see Johnson v Johnson at 335 per Lockhart J and the cases there referred to. The “badge of origin” concept is reflected in s 17 which defines “trade mark” as a sign used or intended to be used to distinguish goods or services dealt with “in the course of trade” by a person from goods or services dealt with or provided by any other person. A trade mark is used for the purpose of infringement if the mark is presented to actual or potential consumers in a manner which has the likely effect of indicating in their minds a connection between the goods in question and the goods protected by the trade mark: see Mid Sydney Pty Ltd v Australian Tourism Company Ltd (1998) 40 IPR 20 at 29; Pepsico Australia Pty Ltd v Kettle Chips Co Pty Ltd (1996) 33 IPR 161 at 178-88; Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 333 and 342.

Establishing the requisite trade connection which distinguishes a person’s goods becomes more difficult where a mark is merely descriptive of the character, quality or function of the defendant’s goods: see Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 424-25. For example, in Kettle Chips use of the words “Kettle Cooked” on the defendant’s potato chip packaging was held not to infringe the plaintiff’s registered mark “Kettle”.  The Court (Lockhart Sheppard and Sackville JJ) held that the use of the word “Kettle” in “Kettle Chips” was not a use of “Kettle” as a trade mark, but as descriptive of the process used to make the potato chips.  Similarly, in Johnson & Johnson the alleged infringer, Johnson & Johnson, was held not to have infringed the registered mark “CAPLETS” when it sold a product named Tylenol and used the word “Caplets” in promotional material and packaging.  The Court held that such a use was not “use as a trade mark” but was descriptive of the tablets shaped like capsules.  Generally, in order for a mark to become distinctive, descriptive words must acquire a new and secondary meaning and thus cease to be purely descriptive (see Johnson & Johnson at 335-6; Kettle Chips at 170, 177-78).

The “Coke” trade mark

For the purposes of s 120(1) the respondent’s cola bottle confectionary, being a substance “used as food”, is a good of the same description as that in respect of which the Coke mark is registered. In order to establish infringement, s 120(1) requires a person to use “as a trade mark” a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods in respect of which the trade mark is registered. The respondent has not expressly or impliedly applied, or otherwise used, any mark which is substantially identical with or deceptively similar to the Coke mark. I do not accept the applicant’s contention that “the idea” of the Coke mark has been taken by the cola bottle confectionary: see Sports Café Ltd v Registrar of Trade Marks (1998) 39 IPR 527, 528-529; Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536, 538-539; Sym Choon & Co v Gordon Choons Nuts Ltd (1949) 80 CLR 65, 78. Thus, infringement of the Coke mark cannot arise under ss 120(1).

The “Coca-Cola” trade mark

The Coca-Cola mark, unlike the Coke mark, is not registered in respect of food. Accordingly, infringement cannot arise under s 120(1). However, the applicant contends that the cola bottle confectionary is a good of the same description as or closely related to the goods in respect of which the Coca-Cola mark is registered that is, syrups, concentrates, extracts, beverages and preparation for making the beverages or for use as ingredients in beverages. In that regard, the applicant submits that attention should be paid to the nature of the respective goods, their uses and the trade channels through which they are bought and sold: Southern Cross Refrigeration Co v Toowoomba Foundry Ltd (1954) 91 CLR 592, 606; Reckitt and Colman (Aust) Ltd v Boden (1945) 70 CLR 84, 94 and British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281, 296-297.

The applicant relied upon the ingredients of confection (“a sweet preparation (liquid or dry) of fruit or the like, as a preserve or sweet meat”) and the Coca-Cola beverage, which share sugar, colour, flavour and acids. However, having some overlapping ingredients does not, in my view, make the cola bottle confectionary goods of the same description or closely related goods as required. Further, the fact that both categories of goods may be sold through the same or similar trade channels, such as convenience stores, is of limited assistance to the applicant when one considers the wide range of unrelated goods sold in outlets that sell beverages, such as Coca-Cola and the cola bottle confectionary. The use to which the goods in respect of which the mark is registered are put, for example, using concentrates, extracts etc or ingredients in beverages or drinking a beverage and eating confectionary, are quite different. In my view, the cola bottle confectionary is basically a good of a different description to the registered goods and is not a closely related good for the purposes of s 120(2).

There is a further difficulty in relation to the alleged infringement of the Coca-Cola trade mark.  The respondent’s confectionary does not use the mark ‘Coca-Cola’ although the word ‘Cola’ is inscribed on the goods thereby using part of the ‘Coca-Cola’ mark.  Use of part only of a registered trade mark may constitute infringement particularly where, in the relevant context, the addition to or variation from the registered mark is not regarded as significant.  The mark “Tub Happy Cotton Fresh” was held to infringe the mark “Tub Happy”: see Mark Foys.  In Seven- Up Co v Bubble-Up Co Inc (1987) 9 IPR 163, the mark sought to be registered, “Bubble Up” was said to infringe the mark “Up” used in respect of soft drinks. In De Cordova v Vick Chemical Co (1951) 68 RPC 103, the addition of the respondent’s name to the mark “Karsote Vapour Rub” did not prevent an infringement of the registered mark “Vaporub”. Similarly, in Miss World (Jersey) Ltd v Mrs of the World Pageants Inc (1988) AIPC 90-460 (FC), registration of MISS WORLD was held not to confer a monopoly on the word “World”. Accordingly, relief was denied against a pageant using the title “Mrs World”. Where a registered mark consists of more than one component, it is necessary to determine the essential feature of the mark (Mid Sydney at 30 per Hill J).

A related difficulty arises from the fact that “Cola” is a description of a flavour, namely that of the cola nut.  In the Macquarie Dictionary ‘Cola’ is defined as “a carbonated soft drink containing the extract of the cola nut”.  “Cola”, as such, is a descriptive mark and, as pointed out above, is inherently unlikely, of itself, to distinguish goods by reference to their origin unless it has acquired a secondary meaning.  I do not accept that the extensive use of “cola” in “Coca-Cola” has resulted in “Cola” having acquired a secondary meaning.  To the contrary, it is a common description of a flavour in a number of beverages which are not regarded or likely to be regarded as having any connection with Coca-Cola, or similarity to the Coca-Cola mark, merely by reason of the use of the word “Cola” to describe such beverages.

I also do not accept the further contention of the applicant that use of “Cola” in conjunction with the confection has taken the idea of the Coca-Cola mark.  The respondent’s use of “Cola”, being part only of the Coca-Cola mark, would be understood by consumers to be merely descriptive of the flavour, rather than indicating origin, of the cola bottle confectionary.  In my view, there is not a use of cola or the confection as a mark by the respondent. I return to and explain this latter aspect in more detail in my discussion of the claim of infringement under s 120(3) in respect of the contour bottle mark. The requisite similarity to establish breach has also not been established for the purposes of s 120(2).

In summary, the conclusion that no “sign” which is substantially identical with or deceptively similar to “Coke” or “Coca-Cola” has been used by the respondent “as a trade mark” has the consequence that infringement in respect of those marks cannot arise under ss 120(1), (2) and (3). In any event, the requisite similarity between the respondent’s cola bottle confectionary and the applicant’s two word marks has also not been established.

The contour bottle mark

The applicant argued infringement of the contour bottle mark under both ss 120(2) and (3). However, essentially for the same reasons I have given in relation to the Coca-Cola mark, I do not consider the confectionary to be goods of the same description or closely related to the goods in respect of which the contour bottle mark is registered, being beverages and syrups made for the manufacture of such beverages.

The real case of infringement was that said to have arisen under s 120(3) in relation to the alleged use by the respondent of the contour bottle sign, being a well known trade mark, in relation to unrelated goods, in a manner which is likely to be taken as indicating a connection between the unrelated goods (the cola bottle confectionary) and the registered owner of the trade mark (the applicant).

The contour bottle mark is well known and, as stated earlier in these reasons, the cola bottle confectionary would be likely to be recognised by consumers as having a shape similar to that of the applicant’s contour bottle.  In these circumstances the substantial issues arising in relation to infringement are whether the contour bottle shape has been used as a trade mark by the respondents and, if so, whether that use of the mark is likely to be taken as indicating a connection between the cola bottle confectionary and the applicant.

Counsel for the respondent contended that the applicant’s contour bottle trade mark was a two dimensional drawing which cannot be infringed by a three dimensional product.  Put another way, it was contended that the importation, distribution and sale of the cola bottle confectionary, being a three dimensional product, could not constitute use of the two dimensional drawing of the contour bottle “as a trade mark”.  The respondent relied upon the decision of the House of Lords in Re Coca-Cola Trade Marks [1986] RPC 421 in support of its contention. That case concerned an appeal by Coca-Cola from a decision of the Registrar to refuse to register a trade mark of the contour bottle for use as a container for the Coca-Cola beverage. In that context Lord Templeman (at 457), in a decision concurred in by Lords Keith, Brandon, Griffiths and Oliver, said that:

“It is not sufficient for the Coca-Cola bottle to be distinctive.  The Coca-Cola Co. must succeed in the startling proposition that a bottle is a trade mark…
The word ‘mark’ both in its normal meaning and in its statutory definition is apt only to describe something which distinguishes goods rather than the goods themselves…The distinction between a mark and a thing which is marked is supported by authority.”

The above passage needs to be approached with some caution for two reasons.  Firstly, the appeal concerned registration rather than infringement of a trade mark.  Secondly, the distinction between the product itself and a mark used as a trade mark in relation to a product is less obvious as a result of the extension of the definition in the 1995 Act of a “trade mark” to mean a “sign” (which includes a shape).  This latter difficulty is exacerbated by the recent trend (to which I have referred) to use devices, which may be a product, as a mark.

However, the distinction drawn, by Lord Templeman and Windeyer J in Smith, Kline and French Laboratories (Aust) Ltd v Registrar of Trade Marks (1967) 116 CLR 628 at 639, between a mark and the product to which it is to be applied remains significant. Windeyer J said:

“…a mark for the purposes of the Act must be capable of being described and depicted as something apart from the goods to which it is to be applied, or in relation to which it is to be used.”

It can generally be accepted that the application or use of the shape of the contour bottle as a trade mark is to be distinguished from a product having the shape of the bottle which, as such, is not applied or used as a trade mark.  Although Re Coca-Cola Trade Marks makes that point, the issue arising in the present case in respect of infringement relates to whether the alleged infringing product involves use of a mark as a trade mark (ie a badge of origin), as well as, as a product.  If it does, then I see no reason why a three dimensional product cannot involve use of a mark which is deceptively similar to, and thereby infringe, a two dimensional mark.  With devices (to which I have referred) and products in the shape of the devices becoming more common as badges of origin, the two dimensional/three dimensional distinction sought to be drawn by the respondent, whilst helpful as a distinction  in some cases, is not a valid basis for concluding that a three dimensional product cannot result in infringement of a two dimensional mark.

The applicant contends that the use of the shape of the contour bottle, being so well known as the contour bottle and mark of the applicant, of itself indicates or connotes connection and, therefore, origin.  The applicant’s contentions may be summarised as follows:

• a close imitation of the shape and markings of the contour bottle was made by the respondent or its supplier;

• the product chosen by the respondent or its supplier for imitation purposes is closely related in colour and flavour to the Coca-Cola beverage – both are sugar-based and cola flavoured and would be likely to be sold to similar consumers through similar outlets;

• the manner in which the respondent’s confection is presented increases the prospect of deception – it is sold in clear tubs, separated from other confectionary items of different shapes and flavours, with the product visible in the tub;

• the applicant’s marks, including the contour bottle mark, have already been widely licensed (as to the significance of licensing see for example, Alfred Dunhill Ltd v Sunoptic SA [1979] FSR 337, 354, 356, 361, 362, 365, 368; Twentieth Century Fox Film Corp v South Australian Brewing Co Ltd (1996) 34 IPR 225, 231, 237, 239, 240, 241, 242, 243, 244 and 246).

It is then said that these similarities are such that the only inference which can plausibly be drawn is that the respondent, by choosing to cause its product to appear as it does, intended to associate its confectionary with the applicant’s marks and products.  The applicant argued that the Court will not be astute to find that the respondent has failed to achieve its intended purpose: see Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 per Lockhart J at 345 and the authorities there cited.

The applicant’s basic submission is that, by presenting and marketing its product as it does, the respondent misrepresents the existence of a trade connection with the applicant. However, the representation or use of the reputation of a well known mark does not necessarily indicate or connote connection with the proprietor of the mark. For example, in the context of a misleading and deceptive conduct claim under s 52 of the TPA, a respondent’s use of a well known name, character or concept of another corporation was held not to infringe s 52 as the use was held not to imply an association with or endorsement by the other corporation: see McIlhenny Co v Blue Yonder Holdings Pty Ltd (1997) IPR 187 at 199 and 201 per Lehane J. In that case, the respondent’s use of “Tabasco” in relation to its business of designing and constructing stands used at exhibitions and trade fairs, was held not to constitute misleading and deceptive conduct, or passing off, in relation to the applicant’s well known brand name and product, “Tabasco” sauce. Lehane J acknowledged that the respondent was aware of the applicant’s brand name and product, and hoped to take advantage of the well-known characteristic of the applicant’s sauce by applying it to its design business. His Honour (at 199) rejected the applicant’s claim of breach of s 52 of the TPA and passing off primarily on the basis that there was an absence of any representation of connection between the respondent or its services and the applicant and its product. Lehane J (at 199) concluded that:

“…without any association or permission the designer has – as the fact is – perhaps cheekily used a name which, by reference to its only other known use, conjures up ‘hot’ associations.”

The Tabasco case is an example of how commercial use of a characteristic of a product in advertising, of another product or service, does not necessarily represent a connection between the advertised product or services and the supplier of the original product.

An analogous commercial use, which has also been held to fall short of representing a trade or commercial connection, can arise when an imitation product is created as a parody.  In Nike Inc v “Just Did It” Enterprises 6 F.3d 1225, 1227-1228 (7^th Cir. 1993) the United States Court of Appeals for the Seventh Circuit said:

“Parodies date back as far as Greek antiquity…‘Parody or satire, as we understand it, is when one artist, for comic effect or social commentary, closely imitates the style of another artist and in so doing creates a new art work that makes ridiculous the style and expression of the original’…But parodies have a legal hurdle to overcome.  Federal law prohibits copies or imitations that confuse consumers…This protects trademarks as a form of intellectual property…and guards against confusion, deception or mistake by the consuming public...Whether a customer is confused is the ultimate question.  If the defendant employs a successful parody, the customer would not be confused, but amused…Thus, we agree with the district court that parody is not an affirmative defence but an additional factor in the analysis.  ‘[T]he keystone of parody is imitation.  It is hard to imagine, for example, a successful parody of Time magazine that did not reproduce Time’s trademarked red border.  A parody must convey two simultaneous – and contradictory – messages: that it is the original, but also that is not the original and is instead a parody.  To the extent that it does only the former but not the latter, it is not only a poor parody, but also vulnerable under trade mark law, since the customer will be confused’…Thus the parody has to be a take-off, not a rip-off.’”

However, as was said by Lehane J in McIlhenny (citing authority at 195-196) many cases are illustrative of circumstances:

“…where in the public mind the association between a  particular image and a particular source is so strong that the evocation of the image in the get-up or marketing of a wide range of disparate goods or services will lead people to conclude that there is a commercial connection of some kind between the goods or services and the originator (or ‘owner’) of the image.”

The authorities demonstrate that in the final analysis each case will turn on its own facts.

A number of cases in the United States have considered a similar question in the context of alleged trade mark infringement by non-competitive goods which cause buyers to be deceived or confused as their origin and trade connection.  The factors relied upon by the applicant in the present case such as distinctiveness of its mark, the similarity of marketing and merchandising channels, the likelihood that consumers would expect Coca-Cola to expand into the confectionary field and the characteristics of prospective purchasers and the degree of care they exercise, have all been recognised in United States’ cases as relevant considerations in the totality of all of the circumstances: see Kiki Undies Corp v Promenade Hosiery Mill Inc 411 F.2d 1097 (2d Cir. 1969); Polaroid Corp v Polarad Electronics Corp 287 F.2d 492 (2d Cir. 1961); Grey v Campbell Soup Co 650 F.Supp. 1166 (C.D. Ca. 1986) and the Restatement (Third) of Unfair Competition.

Generally, in the United States famous trade marks have been given broad protection against use on non-competing products.  For example, the “Rolls Royce” mark for autos and planes was enforced against “Rolls Royce” for radio tubes: see Wall v Rolls-Royce of America Inc 4 F.2d 333 (3d Cir. 1925). The “Tiffany” mark for jewellery, silver, and other expensive items has been enforced against “Tiffany” for a theatre: see Tiffany & Co v Tiffany Productions 264 N.Y. Supp. 459 (1932), a restaurant: see Tiffany & Co v Boston Club Inc 231 F.Supp. 836 (D. Mass. 1964) and ceramic tiles: see Tiffany & Co v Tiffany Tile Co 345 F.2d 214 (C.C.P.A. 1965). The “Dunhill” trade mark for tobacco, cigars, pipes, toiletries, and gift items has been enforced against “Dunhill” on scotch whisky: see Alfred Dunhill of London Inc v Kasser Distillers Prods Corp 350 F.Supp. 1341 (E.D. Pa. 1972), aff’d per curiam, 480 F.2d 714 (3d Cir. 1973).

In considering the repute of the applicant’s contour bottle mark, it may be helpful to consider that mark when apart from the beverage that it usually contains.  One United States court dealt with such an issue in a trade mark infringement case: Haig & Haig Ltd v Maradel Products Inc 249 F.Supp. 575 (S.D.N.Y. 1966).  In the Haig case, the plaintiff sold Scotch whisky called “Pinch” in a distinctive “pinched” bottle with three indented sides.  The defendant sold whisky-coloured bubble bath called “Pinchy” in a bottle that closely resembled the plaintiff’s bottle (the bottle had three indentations, a similar neck label, and a simulated tax stamp on the top of the cap).  In denying the plaintiff’s motion for an injunction, one of the factors that the court considered was the “strength” of the plaintiff’s mark.  The court commented (at 578):

“Now as to the second indicium – the strength of the plaintiff’s mark.  The bottle shape is functional, artistic and certainly more than a mark; thus, when the bottle is not filled with a whisky product, it would not seem to the be plaintiff’s forever.  The trade-mark statute itself seems to confine protection to ‘goods in connection with which the mark is used * * *’ . . . .  While the mark may be considered strong from the length of time that plaintiff has used it in connection with the selling of Scotch in this distinctive type bottle, it is weak when considered as applied solely to the bottle.  In all probability protection would issue in the form of a preliminary injunction if the bottle were used in the sale of liquor or a related commodity.  But that is not the claim here.”

The court went on to state:

“Certainly the defendant intended to copy plaintiff’s format.  They admit this as respects their product Pinchy.  But whether they intended to make the public believe Haig & Haig produced or sponsored their bubble bath liquid. . .is a different question.  Looked at from a more objective standard than intent, it is difficult to know at this stage, because of the wide difference in type of product, whether the public would believe that defendant’s product was issued by or with the blessing of plaintiff.  This is a matter for proof on the trial.”

Whilst there are significant differences between Australian and United States Trade Marks legislation, the cases in both countries amply demonstrate that ultimately the questions of connotation of origin and of the requisite trade connection involve questions of fact, of degree and of impression which are to be resolved after an evaluation by the court of the totality of the circumstances.  Notwithstanding the comprehensive submissions advanced on behalf of the applicant in the present case, the “combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs” (Australian Woollen Mills at 654 per Dixon and McTiernan JJ) revealed by the totality of the circumstances is that:

• the cola bottle confectionary, as such, does not indicate or connote origin of the goods and hence application or use of the contour bottle (represented by the confection) as a trade mark or, to put the matter in terms of s 17 of the Act, the confectionary does not distinguish the goods so as to indicate they were goods dealt with or provided by any particular person;

• whilst the cola bottle confection is recognisable as having the shape of the contour bottle, consumers would not be likely to believe or expect it to have a commercial or trade connection of some kind with the applicant by reason of having that shape;

• consumers would not be led to wonder whether it might be the case that the confectionary comes from the same source as Coca-Cola.

I can shortly state my reasons for arriving at these conclusions.  Use as a mark requires that the mark be used in such a way as to indicate or connote origin of the goods.  In my view a number of factors support the conclusion that the cola bottle confectionary does not indicate or connote origin of the goods and hence use of the contour bottle represented by the confection as a trade mark.  The inscription ‘Cola’ and the colour of the confectionary is descriptive of the flavour rather than the origin of the goods.  Further, the elongated and distorted form and appearance of the cola bottle confectionary, although generally recognisable as having the shape and basic markings of the contour bottle, is dissimilar to it in significant respects and is far from an exact copy of it.  Thus, the product itself does not present as indicating or connoting its origin.  Insofar as the packaging, labelling and get-up of the tub containing the confectionary uses a shape similar to that of the contour bottle, they do not do so in a manner that indicates or connotes origin.  To the extent origin is indicated, the predominantly blue and green label depicts the origin of the product to be “Efruti”.  Of particular importance is my impression and estimation that the cola bottle confectionary is presented as a fun product “perhaps cheekily” imitating the contour bottle but not as representing any other connection with it.  Thus, the cola bottle confectionary is merely recognisable as having the well known shape of the contour bottle but would not be likely to be believed or expected to have a trade or commercial connection of some kind with the applicant by reason of having that shape.  Likewise consumers would be unlikely to be led to wonder whether it might be the case that the confectionary comes from the same source as Coca-Cola.

The factors relied upon by the applicant were insufficiently persuasive to overcome the conclusions at which I have arrived. Those conclusions must lead to the rejection of the applicant’s claims of infringement under s 120(3) in respect of the contour bottle mark.

The Trade Practices Act claims and Passing Off

The applicant’s claim of a misrepresentation by the respondent of the existence of a trade or commercial connection between it and the cola bottle confectionary with the applicant or its products was an essential element of the claims of contravention of ss 52 and 53(c) and (d) of the TPA and passing off. As I have concluded that no such representation has been made by the respondent the claims on those grounds must fail.

Conclusion

For the above reasons:

• the application of the applicant is to be dismissed with costs;

• the respondent is entitled to an interlocutory judgment on its cross claim for damages to be assessed.

I certify that this and the preceding twenty-four (24) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel

Associate:

Dated:            

Counsel for the Applicant/Cross Defendant:	Mr R Macaw QC with Mr G Clarke
Solicitor for the Applicant/Cross Defendant:	Phillips Ormonde & Fitzpatrick Lawyers
Counsel for the Respondent/Cross Claimant:	Mr J Davis
Solicitor for the Respondent/Cross Claimant:	Norton Smith & Co
Date of Hearing:	16 and 17 September 1998
Date of Judgment:	18 December 1998