Kraft Foods Group Brands LLC v Bega Cheese Limited - [2020] FCAFC 65

FEDERAL COURT OF AUSTRALIA
Kraft Foods Group Brands LLC v Bega Cheese Limited [2020] FCAFC 65

Appeal from: Kraft Foods Group Brands LLC v Bega Cheese Limited (No 8) [2019] FCA 593

File number: VID 597 of 2019

Judges: FOSTER, MOSHINSKY AND O'BRYAN JJ

Date of judgment: 14 April 2020

Catchwords:
CONTRACTS – construction of agreements relating to the restructure of the Kraft Foods Inc group in October 2012 – where two independent public companies were created: a global snacks business (SnackCo) and a North American grocery business (GroceryCo) – where certain intellectual property rights were allocated to the intellectual property company of the SnackCo group (SnackCo IPCo) and certain such rights were allocated to the intellectual property company of the GroceryCo group (GroceryCo IPCo) – whether rights in relation to certain get-up used by an Australian company for peanut butter products manufactured and sold in Australia (the Peanut Butter Trade Dress) were allocated to SnackCo IPCo or GroceryCo IPCo – construction of various definitions used in the agreements – consideration of commercial purpose or object of the agreements

CONSUMER LAW – misleading or deceptive conduct – whether either party engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law (or passing off) by applying the Peanut Butter Trade Dress to peanut butter products – whether the respondent engaged in misleading or deceptive conduct in relation to its television and radio advertisements – whether the appellants engaged in misleading or deceptive conduct in a press release and by use of the slogan “Loved since 1935”

TRADE MARKS – infringement – where primary judge found that the respondent had infringed the appellants’ trade marks by supplying certain peanut butter products in ‘shippers’ bearing the Kraft hexagon logo – whether the respondent used the Kraft hexagon logo trade mark (or the “Kraft” trade mark) “as a trade mark” within the meaning of s 120(1) of the Trade Marks Act 1995 (Cth)

Legislation:
Competition and Consumer Act 2010 (Cth), Sch 2, Australian Consumer Law, ss 18, 29

Trade Marks Act 1995 (Cth), ss 7, 120

Cases cited:
Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640

Barefoot Contessa Pantry, LLC v Aqua Star (USA) Co (U.S. District Court, S.D. New York, 15-CIV-1092 (JMF) 26 February 2015)

Bodum v DKSH Australia Pty Ltd (2011) 280 ALR 639

Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424

Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397

Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304

Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45

Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107

Commissioner of State Revenue v Placer Dome Inc (2018) 93 ALRJ 65

Commissioners of Inland Revenue v Muller & Co.’s Margarine Ltd [1901] AC 217

ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302

CPA Australia Ltd v Dunn (2007) 74 IPR 495; [2007] FCA 1966

Defiance Button Machine Co v C & C Metal Products Corp, 759 F2d 1053 (2d Cir 1985)

Dental Manufacturing Co Ltd v C de Trey & Co [1912] 3 KB 76

E&J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144

Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd (1966) 116 CLR 254

Federal Commissioner of Taxation v Murry (1998) 193 CLR 605

Geraghty v Minter (1979) 142 CLR 177

Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435

Henry Clay & Bock & Co Ltd v Eddy (1915) 19 CLR 641

Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd (2018) 264 FCR 422

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216

Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41

Inland Revenue Commissioners v Muller & Co’s Margarine Ltd [1901] AC 217

JT International SA v Commonwealth (2012) 250 CLR 1

Kosciuszko Thredbo Pty Ltd v ThredboNet Marketing Pty Ltd (2014) 223 FCR 517

Lacteosote Ltd v Alberman [1927] 2 Ch 117

Marshak v Green, 746 F2d 927 (2d Cir 1984)

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104

Optical 88 Ltd v Optical 88 Pty Ltd (2011) 197 FCR 67

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191

Pioneer Kabushiki Kaisha v Registrar of Trade Marks (1977) 137 CLR 670

Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491

Re GE Trade Mark [1969] RPC 418

Re McGregor Trade Mark [1979] RPC 36

Revlon Inc v Cripps & Lee Ltd [1980] FSR 85

State Government Insurance Corporation v Government Insurance Office of New South Wales (1991) 28 FCR 511

Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177

Visa USA Inc v Birmingham Trust National Bank, 696 F2d 1371 (Fed. Cir. 1982)

Woodtree Pty Ltd v Zheng (2007) 164 FCR 369

Date of hearing: 6, 7 and 8 November 2019

Date of last submissions: 22 November 2019

Registry: Victoria

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: Regulator and Consumer Protection

Category: Catchwords

Number of paragraphs: 270

Counsel for the Appellants and Cross-Respondents: Mr JT Gleeson SC with Mr BN Caine QC, Mr IP Horak and Dr B Kremer

Solicitor for the Appellants and Cross-Respondents: Jones Day

Counsel for the Respondent and Cross-Appellant: Mr A McGrath SC with Mr CH Smith

Solicitor for the Respondent and Cross-Appellant: Addisons Lawyers

ORDERS

VID 597 of 2019

BETWEEN:
KRAFT FOODS GROUP BRANDS LLC

First Appellant

H.J. HEINZ COMPANY AUSTRALIA LIMITED

Second Appellant

AND:
BEGA CHEESE LIMITED

Respondent

AND BETWEEN:
BEGA CHEESE LIMITED

Cross-Appellant

AND:
KRAFT FOODS GROUP BRANDS LLC

First Cross-Respondent

AND:
H.J. HEINZ COMPANY AUSTRALIA LIMITED

Second Cross-Respondent

JUDGES:

FOSTER, MOSHINSKY AND O'BRYAN JJ

DATE OF ORDER:

14 ApRil 2020

THE COURT ORDERS THAT:
1.The appeal be dismissed with costs.
2.The cross-appeal be dismissed with costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
THE COURT:
INTRODUCTION

This appeal relates to the get-up or appearance of packaging used in relation to certain peanut butter products in Australia. The get-up in issue, which will be referred to as the Peanut Butter Trade Dress, consists of a jar with a yellow lid and a yellow label with a blue or red peanut device, with the jar having a brown appearance when filled. The Peanut Butter Trade Dress can be seen in the following examples of products manufactured and sold in Australia by Kraft Foods Limited (KFL), an Australian company, in the period between late 2011 and October 2012:
It is common ground that the Peanut Butter Trade Dress is an unregistered trade mark.
In October 2012, the corporation then known as Kraft Foods Inc, which was incorporated in the State of Virginia and the ultimate parent company of KFL, effected a corporate restructure (the Restructure). In broad terms, two independent public companies were created: Kraft Foods Inc, which retained (what was described as) the global snacks business, and Kraft Foods Group Inc (which, prior to the Restructure, was a subsidiary of Kraft Foods Inc), which held the North American grocery business. The Restructure was achieved by a ‘spin-off’ of the shares in Kraft Foods Group Inc to the existing shareholders of Kraft Foods Inc. The Kraft brand was allocated to the North American grocery business. Kraft Foods Inc, as the parent company of the global snacks business, was renamed Mondelez International Inc. As part of the Restructure, the North American grocery business gave the global snacks business a licence to use the Kraft brand on certain products for a period of 10 years. That period was later reduced to end on 31 December 2017.
Following the Restructure, KFL, which remained a subsidiary of Mondelez International Inc, was renamed Mondelez Australia (Foods) Ltd (MAFL). It continued to manufacture and sell peanut butter products under the Kraft brand and with the Peanut Butter Trade Dress.
In July 2015, Kraft Foods Group Inc (the parent company for the North American grocery business) merged with H. J. Heinz Company in the United States to form Kraft Heinz Company.
In January 2017, Mondelez Global LLC, MAFL, Mondelez Australia Pty Ltd and the respondent, Bega Cheese Limited (Bega) entered into a sale and purchase agreement in relation to what was called the “Joey business” of the Mondelez group (essentially, the business and assets of MAFL). The agreement was subsequently amended. The amended agreement that governed the transaction was dated 4 July 2017 (the SPA). The transaction closed on 4 July 2017.
In June 2017, MAFL began to sell peanut butter products without the Kraft brand, but using the Peanut Butter Trade Dress in conjunction with the words “The Good Nut”, depicted as follows:
In July 2017, following Bega’s acquisition of the business and assets of MAFL, including a peanut butter factory in Port Melbourne, Victoria, Bega commenced manufacturing and selling peanut butter products under the Bega brand in conjunction with the Peanut Butter Trade Dress and the words “The Good Nut”, depicted as follows:
Since late 2017, Bega has sold Bega branded peanut butter products using the Peanut Butter Trade Dress, depicted as follows:
The first appellant, which was the first applicant at first instance, is Kraft Foods Group Brands LLC. It was incorporated in Delaware on 1 June 2012 and became the intellectual property company for the North American grocery business under the Restructure. As such, it was a subsidiary of Kraft Foods Group Inc and, since July 2015, has been a subsidiary of Kraft Heinz Company. It has its principal place of business in Chicago. The second appellant, which was the second applicant at first instance, is H.J. Heinz Company Australia Limited. It is a recently incorporated Australian company. It is also a subsidiary of the Kraft Heinz Company. It manufactures various products, including peanut butter, in Australia. It will be convenient to refer to the appellants collectively as Kraft.
In the proceeding at first instance (which included a cross-claim), Kraft and Bega each claimed that they were entitled to use the Peanut Butter Trade Dress in relation to peanut butter products to the exclusion of the other. Kraft relied on causes of action based on contract, passing off and the misleading or deceptive conduct provisions of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law). Bega relied on passing off and the misleading or deceptive conduct provisions of the Australian Consumer Law. The resolution of these issues involved a consideration of: rights in relation to the Peanut Butter Trade Dress before the Restructure; the effect of the Restructure; rights in relation to the Peanut Butter Trade Dress following the Restructure; contractual obligations under the Restructure documents to which Bega acceded; and various other issues relating to alleged misleading or deceptive conduct.
The primary judge concluded, in summary, that:
(a)immediately prior to the Restructure, the goodwill generated in respect of Kraft branded peanut butter bearing the Peanut Butter Trade Dress inured to KFL (as contended by Bega);
(b)after the Restructure, the goodwill generated in respect of Kraft branded peanut butter bearing the Peanut Butter Trade Dress inured to MAFL (as contended by Bega);
(c)the rights to the Peanut Butter Trade Dress were sold to Bega in July 2017;
(d)it followed from (c) that Bega was entitled to use the Peanut Butter Trade Dress in the business that it acquired and Bega was entitled to take action to protect its goodwill in its peanut butter business by preventing use of the Peanut Butter Trade Dress by others, including Kraft;
(e)having bought the business, the recipe and the goodwill (including the Peanut Butter Trade Dress), Bega did not mislead consumers within the meaning of the Australian Consumer Law by doing that to which it had a contractual right to do;
(f)insofar as Bega acceded to certain obligations under the Restructure documents, Bega had not breached any such obligations by its use of the Peanut Butter Trade Dress;
(g)in relation to television and radio advertisements published by Bega in late 2017, Kraft’s case based on the first to seventh alleged representations was not made out, but Kraft’s case based on the eighth alleged representation was established;
(h)Kraft contravened the Australian Consumer Law by its release of a press release in October 2017 and by its use of the slogan “Loved since 1935”;
(i)Kraft engaged in misleading and deceptive conduct, and passing off, through its use of the Peanut Butter Trade Dress;
(j)insofar as Bega used a Kraft hexagon logo on ‘shippers’ (which are a form of shelf-ready packaging, with a perforated section that can be removed so that what remains acts as a tray to hold products for display on a supermarket shelf), this constituted an infringement of Kraft’s trade marks under s 120(1) of the Trade Marks Act 1995 (Cth).
Kraft appeals from part of the judgment of the primary judge. Kraft’s amended notice of appeal contains 10 grounds. Kraft’s principal contentions on the appeal relate to the proper construction of the Restructure documents. In summary, Kraft contends that, on the true construction of those documents, the rights relating to the Peanut Butter Trade Dress were allocated to the North American grocery business (referred to as “GroceryCo” in the Restructure documents) rather than to the global snacks business (referred to as “SnackCo”). Further, Kraft contends, Bega was bound by that allocation as a matter of contract, as it agreed to assume certain obligations under the Restructure documents.
For the reasons that follow, we reject the fundamental premise of Kraft’s contentions. That is, we do not accept that on the true construction of the Restructure documents the Peanut Butter Trade Dress was allocated to the North American grocery business. Rather, in our view, on the true construction of the documents, viewed in their commercial context, the Peanut Butter Trade Dress was allocated to the global snacks business. It follows from this, and the other conclusions set out later in these reasons, that the appeal is to be dismissed.
Bega cross-appeals from the part of the primary judge’s judgment dealing with the shippers. For the reasons that follow, we consider that the cross-appeal should be dismissed.
BACKGROUND FACTS
The following outline of the background facts is based on the primary judge’s reasons for judgment: Kraft Foods Group Brands LLC v Bega Cheese Limited (No 8) [2019] FCA 593 (the Reasons).
Kraft branded peanut butter sales in Australia before October 2012
For many years before Bega acquired the assets and business of MAFL in 2017, KFL/MAFL had by far the largest market share of peanut butter products in Australia.
Kraft Walker Cheese Company Proprietary Limited was first incorporated in Australia in 1926. That company was renamed Kraft Foods Limited in 1951.
“Kraft Peanut Butter” has been available for purchase in Australia since 1935.
The word “Kraft” was registered as a trade mark in Australia for use in a class of goods, including peanut butter products, in the name of KFL in October 1959.
In 1962, KFL established a factory at Port Melbourne, in Victoria, to manufacture peanut butter (and other products).
In 1963, KFL registered the following Kraft hexagon logo as a trade mark in Australia for use in a class of goods, including peanut butter products:
Commencing in the 1980s, KFL promoted its peanut butter products by television advertisements featuring the “Never Oily, Never Dry” expression. The scripts of these television advertisements are set out in Annexure B to the Reasons.
In the early 1990s, Kraft peanut butter first became available in Australia in a jar with yellow lid.
From around 1997, the packaging of Kraft branded peanut butter involved the use of a clear jar with a yellow lid with the Kraft hexagon logo presented centrally on its label.
On 1 January 2000, KFL entered into a licence agreement with Kraft Foods Holdings Inc (the 2000 Licence Agreement), a Delaware corporation. The primary judge found that the licence agreement did not relate to peanut butter products (Reasons, [220]) and there is no appeal from that finding.
On 4 July 2001, KFL registered the words “Never Oily, Never Dry” as a trade mark in Australia for use on a class of goods of peanut butter products. The words “Never Oily, Never Dry” appear on each of the peanut butter products depicted in the Introduction to these reasons, immediately below the words “Peanut Butter” in the blue or red peanut device. Two of the facts agreed between the parties at first instance were as follows:
3Australian Trademark Registration No. 778978 is a trade mark registration for the words ‘NEVER OILY NEVER DRY’, registered in Class 29 for ‘peanut butter’ from 20 November 1998.
4Australian Trademark Registration No. 778978 was or has been registered in the name of:
a)Kraft Foods Ltd until about 9 October 2013;
b)Mondelez Australia (Foods) Ltd from about 9 October 2013 until about 21 September 2017; and
c)Bega Cheese Limited from about 21 September 2017.
By 2007, KFL was making, promoting and selling peanut butter products in Australia applying four trade marks:
(k)the registered trade mark of the word “Kraft” (registered in the name of KFL);
(l)the registered trade mark of the Kraft hexagon logo (registered in the name of KFL);
(m)the registered trade mark of the words “Never Oily, Never Dry” (registered in the name of KFL); and
(n)the (unregistered) Peanut Butter Trade Dress.
From 2007, the packaging of Kraft branded peanut butter involved a jar with a yellow lid and a yellow label with a blue or red peanut device, the jar having a brown appearance when filled (i.e. the Peanut Butter Trade Dress). The Peanut Butter Trade Dress was, therefore, used by KFL from 2007. There is no suggestion in the material that the Peanut Butter Trade Dress was developed or used by any other entity in the Kraft Foods Inc group.
In 2009, an agreement entitled “Amendment to and Restatement of License Agreement” was entered into by Kraft Foods Global Brands LLC and KFL, effective 1 January 2009 (the 2009 Licence Agreement). We pause to note that Kraft Foods Global Brands LLC is to be distinguished from Kraft Foods Group Brands LLC, which is the first appellant and has been referred to earlier. Kraft Foods Global Brands LLC was the intellectual property company for the Kraft Foods Inc group of companies prior to the Restructure. In the Restructure, it remained a subsidiary of Kraft Foods Inc and became part of the global snacks business, changing its name to Intercontinental Great Brands LLC in May 2013. In the Restructure documents, it is referred to as “SnackCo IPCo”. As already noted earlier, Kraft Foods Group Brands LLC was incorporated in July 2012 and became the intellectual property company for the North American grocery business following the Restructure. It is referred to in the Restructure documents as “GroceryCo IPCo”.
By the terms of the 2009 Licence Agreement, KFL was granted a licence to use the “Subject Trademarks” in the Territory (defined as Australia) subject to certain conditions. “Subject Trademarks” were defined to mean:
(i)all trademarks owned in the Territory by Licensor from time to time, or which have been licensed to Licensor with the right to grant sublicenses thereunder in the Territory;
(ii)trademarks that are registered in the name of Licensor or the subject of pending applications for registration in the Territory, standing in the name of Licensor;
(iii)trademarks filed and/or registered in the Territory by Licensor after the date of this License Agreement, and all trademarks used in the Territory by Licensee at present or in the future under the control of Licensor as to the character and quality of the goods and/or services connected with such trademarks.

The 2009 Licence Agreement provided for the payment of royalties by KFL (see clause III.A). Clause IV was entitled “Control”, and included:
A.To protect the goodwill symbolized by the Subject Trademarks, and to ensure that the public may continue to rely upon the Subject Trademarks as identifying Products and Services of consistent high quality, Licensee agrees that it will use the Subject Trademarks under the strict control of Licensor as to the character and quality of all Products and Services associated with the Subject Trademarks. More particularly, Licensee agrees that it will manufacture, promote, advertise, distribute, sell, and package the Products distributed, sold, or offered for sale by it in association with the Subject Trademarks in accordance with Licensor’s specifications, recipes, formulae, procedures, quality control and other standards, policies, and guidelines.
In April 2009, Kraft Foods Global Brands LLC filed (and subsequently registered) Australian Trade Mark No. 1294171 for the logo appearing on peanut butter in Australia, depicted as follows:
In August 2009, Kraft Foods Global Brands LLC filed Australian Trade Mark No. 1317816 (which was subsequently registered). The logo in that trade mark is the bear shown on the top right-hand corner of a version of the peanut device, depicted as follows:
In 2011, the 2009 Licence Agreement was amended and restated by an agreement entitled “Second Amendment to and Restatement of License Agreement” between Kraft Foods Global Brands LLC and KFL, effective 1 January 2011 (the 2011 Licence Agreement), but the applicable provisions of that agreement were not relevantly different.
In October 2011, Kraft Foods Global Brands LLC applied for trade marks for the following logos in respect of peanut butter (which were subsequently registered as Australian Trade Marks Nos. 1454045 and 1454228):
On 19 April 2012, KFL entered into a trade mark assignment agreement with Kraft Foods Global Brands LLC (the April 2012 Assignment Agreement). That agreement included an assignment of the “Kraft” word trade mark and the Kraft hexagon logo trade mark from KFL to Kraft Foods Global Brands LLC. The April 2012 Assignment Agreement did not refer to the Peanut Butter Trade Dress.
Kraft contended at first instance that Kraft Foods Global Brands LLC was at all material times prior to the assignment the beneficial owner of the “Kraft” word trade mark and the Kraft hexagon logo trade mark, and that KFL/MAFL only ever held bare legal title to those marks. The primary judge rejected this contention: Reasons, [243]-[244].
It was common ground at first instance that KFL/MAFL was at all material times the legal and beneficial owner of the registered trade mark being the words “Never Oily, Never Dry” and that Bega acquired the mark when it acquired the business and assets of MAFL in 2017: Reasons, [80].
As at September 2012 (i.e. immediately before the Restructure), KFL produced, promoted and sold Kraft branded peanut butter products, applying the following trade marks (as depicted in [1] above):
(a)the registered trade mark of the word “Kraft” (registered in the name of Kraft Foods Global Brands LLC and licensed to KFL);
(b)the registered trade mark of the Kraft hexagon logo (registered in the name of Kraft Foods Global Brands LLC and licensed to KFL);
(c)the registered trade mark of the words “Never Oily, Never Dry” (registered in the name of KFL);
(d)the trade marks depicted in [35] above (applications in the name of Kraft Foods Global Brands LLC and licensed to KFL); and
(e)the (unregistered) Peanut Butter Trade Dress.
The Restructure (October 2012)
On 4 August 2011 the board of directors of Kraft Foods Inc, the parent entity and ultimate controller of companies operating the Kraft Foods business globally, announced that it intended by October 2012 to create two independent public companies: a global snacks business and a North American grocery business. It was called a “proposed spin-off transaction”. In its Form 10-Q for the quarterly period ended 30 June 2012 filed with the United States Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 on 3 August 2012, Kraft Foods Inc described the proposed transaction in these terms, which the parties agreed at first instance was a useful summary of the purpose and effect of the Restructure:
On August 4, 2011, we announced that our Board of Directors intends to create two independent public companies: (i) a global snacks business (the “Global Snacks Business”) and (ii) a North American grocery business (the “North American Grocery Business”). We expect to create these companies through a spin-off of the North American Grocery Business to our shareholders (“Spin-Off’). Following the Spin-Off, we will hold the Global Snacks Business and change our name to Mondelez International, Inc. (“Mondelez”). Mondelez will primarily consist of our current Kraft Foods Europe and Developing Markets segments as well as our North American snack and confectionery businesses and related categories in our Canada & N.A. Foodservice segment. Our subsidiary, Kraft Foods Group, Inc. (“Kraft Foods Group”) will hold the North American Grocery Business, which will primarily consist of our current U.S. Beverages, U.S. Cheese, U.S. Convenient Meals and U.S. Grocery segments, grocery-related categories in our Canada & N.A. Foodservice segment as well as the Planters and Corn Nuts brands and businesses. We have received a private letter ruling from the Internal Revenue Service (“IRS”) confirming that, based on certain representations, assumptions and undertakings, the Spin-Off will be tax-free to our U.S. shareholders for U.S. federal income tax purposes.
In the transaction documents for the Restructure, which took place in October 2012, the head company of the global snacks business (Kraft Foods Inc) was referred to as “SnackCo” and the intellectual property company for that business (Kraft Foods Global Brands LLC) was referred to as “SnackCo IPCo”. The head company for the North American grocery business (Kraft Foods Group Inc) was referred to as “GroceryCo” and the intellectual property company for that business (Kraft Foods Group Brands LLC) was referred to as “GroceryCo IPCo”. Given the similarity in the names of the companies, we will often refer to the companies both by name and by the label given to them in the transaction documents. This should assist in making clear which company is being referred to.
The following agreements, which are relevant for present purposes, were entered into as part of the Restructure:
(a)a Separation and Distribution Agreement between Kraft Foods Inc (SnackCo) and Kraft Foods Group Inc (GroceryCo), entered into on 27 September 2012 (the SDA);
(b)a Master Ownership and License Agreement Regarding Trademarks and Related Intellectual Property between Kraft Foods Global Brands LLC (SnackCo IPCo) and Kraft Foods Group Brands LLC (GroceryCo IPCo) dated 27 September 2012 (the Master Trademark Agreement or MTA);
(c)a Master Ownership and License Agreement Regarding Patents, Trade Secrets and Related Intellectual Property between Kraft Foods Global Brands LLC (SnackCo IPCo), Kraft Foods Group Brands LLC (GroceryCo IPCo), Kraft Foods UK Ltd, and Kraft Foods R&D Inc dated 27 September 2012 (the Master Patent Agreement); and
(d)a Trademark Assignment between Kraft Foods Global Brands LLC (SnackCo IPCo) and Kraft Foods Group Brands LLC (GroceryCo IPCo) dated 21 November 2012, including the assignment of the “Kraft” word and hexagon trade mark registrations in Australia, which states “together with the goodwill of the business symbolized thereby and associated therewith”.
The relevant provisions of these agreements are set out later in these reasons.
On 1 October 2012, Kraft Foods Inc changed its name to Mondelez International Inc.
It was common ground at first instance that the registered trade marks of the word “Kraft” and the Kraft hexagon logo were agreed to be assigned from Kraft Foods Global Brands LLC (SnackCo IPCo) to Kraft Foods Group Brands LLC (GroceryCo IPCo) and that the assignments were effected by a Deed of Assignment dated 21 November 2012, expressed to have been effective on 29 September 2012.
Under the MTA, GroceryCo IPCo granted to SnackCo IPCo a 10 year licence to use the Kraft brand in relation to certain products, subject to the terms and conditions of that agreement (the Mondelez Licence). The period of that licence was subsequently reduced to end on 31 December 2017 (see the Reasons at [504]).
Peanut butter sales in Australia between October 2012 and July 2017
After the Restructure, MAFL continued its business of making, promoting and selling peanut butter products in Australia, which included the application of the Peanut Butter Trade Dress to them.
At first instance, the parties agreed that Exhibit A1 accurately depicted each of the different Kraft branded peanut butter products sold by KFL/MAFL in Australia between 1997 and July 2017. It also showed, as the parties agreed, the Bega branded peanut butter products sold in Australia since late 2017. Exhibit A1 was annexed to the Reasons as Annexure C. The colours, in particular the colours of the yellow lids, are not uniform. The primary judge noted that this was due to the photography. The actual colour yellow, which is accurately enough depicted in the examples in [1] above, has remained unchanged at all relevant times.
The following licence agreements were entered into after the Restructure:
(a)an agreement entitled “Trade Mark License Agreement” between MAFL and another Mondelez entity effective 1 December 2016 (the 2016 Licence Agreement); and
(b)an agreement entitled “Amendment No. 1 to and Restatement of Trademark License Agreement” between MAFL and another Mondelez entity, effective 1 January 2017 (the 2017 Licence Agreement).
By 2017, Kraft branded peanut butter comprised approximately 60% by value and 55% by volume of total Australian peanut butter retail sales.
In June 2017, MAFL began to sell peanut butter products without the Kraft brand, but using the Peanut Butter Trade Dress in conjunction with the words “The Good Nut”, as depicted in [6] above.
The SPA (July 2017)
On 19 January 2017, Mondelez Global LLC, MAFL, Mondelez Australia Pty Ltd and Bega entered into a Sale and Purchase Agreement in relation to what was called the “Joey Business” of the Mondelez Group (essentially, the business and assets of MAFL). The agreement was subsequently amended. The amended agreement, which is dated 4 July 2017, is referred to in these reasons as the “SPA”. The closing of the transaction under the SPA took place on 4 July 2017. In the SPA, Mondelez Global LLC was defined as “MDLZ”; Mondelez Australia (Foods) Ltd (MAFL) was defined as “MDLZ Australia Foods”; Mondelez Australia Pty Ltd was defined as “Mondelez Australia Pty”; and Bega Cheese Limited was defined as “the Buyer”.
The “Joey Business” was defined by the SPA to include the business, among many others, of developing, manufacturing, marketing, selling and distributing spreads including peanut butter, as conducted by the Mondelez group in Australia and New Zealand from time to time.
On 4 July 2017, Bega also entered into a Supplemental Agreement in Relation to the Sale and Purchase of the Australia and New Zealand Meals Business of Mondelez International with Intercontinental Great Brands LLC, Mondelez International AMEA Pte Limited, Mondelez International Holdings LLC, Mondelez UK Limited and Mondelez Ireland Limited (the Supplemental Agreement). Clause 6.4 of that agreement provided as follows:
Each MDLZ Party and the Buyer hereby acknowledges that certain of the Business IP is subject to the KFG Master Trademark Agreement or the KFG Master Patent Agreement. Any transfer of Business IP subject to, and of any related rights under, the KFG Master Trademark Agreement and the KFG Master Patent Agreement, is made on the basis that any Buyer Group Company which is a transferee of any such Business IP and related rights expressly assumes in writing all the obligations of the relevant transferor under the KFG Master Trademark Agreement and KFG Master Patent Agreement with respect to such transferred Business IP and related rights, and acknowledges KFG as the intended beneficiary of those obligations.
KFG was defined in that agreement to mean “Kraft Foods Group, Inc and its Affiliates”. The KFG Master Trade Mark Agreement and KFG Master Patent Agreement referred respectively to the MTA and Master Patent Agreement.
Peanut butter sales in Australia since July 2017
In July 2017, following Bega’s acquisition of the business and assets of MAFL, Bega commenced manufacturing and selling peanut butter products under the Bega brand in conjunction with the Peanut Butter Trade Dress and the words “The Good Nut”, as depicted in [7] above.
Since late 2017, Bega has sold Bega branded peanut butter products using the Peanut Butter Trade Dress, as depicted in [8] above.
Upon Bega entering the market in July 2017, it obtained the whole, or almost the whole, of MAFL’s peanut butter market share, which was worth more than $60 million in annual sales.
In late 2017, Bega ran a series of advertisements on radio and TV that aired for about a month. The advertisements were:
(a)A radio advertisement, broadcast on multiple radio stations nationally as part of regular traffic report segments, in which an announcer says: “Australia’s favourite peanut butter has changed its name. Kraft peanut butter is now Bega peanut butter. Never oily, never dry, with the same taste you’ve always loved, and now is Aussie owned by Bega.”
(b)A television advertisement broadcast on major television networks and digital channels, which shows a jar of Kraft peanut butter, as an announcer says “Australia’s favourite peanut butter has changed its name to Bega peanut butter.” The Kraft label on the jar is then peeled off, revealing the Bega peanut butter label. The announcer continues: “It’s never oily, never dry, with the same taste you’ve always loved, and now Australian owned and made. Bega peanut butter.”
(c)Two variations of a television advertisement broadcast on the major television networks in metropolitan markets depicting a worker named “Charlie” taste-testing peanut butter in which an announcer says: “Charlie’s quality tested Australia’s favourite peanut butter here in Port Melbourne for 18 years. Now that it’s owned by Bega, let’s see what’s changed.” “Charlie” then tastes the peanut butter and says “it’s the same”. The announcer then says: “Same recipe, same great taste. Now Aussie owned by Bega”. The Kraft label on the jar is then peeled off to reveal the Bega peanut butter label.
Since about April 2018, the second appellant has manufactured and sold peanut butter products in Australia, in relatively limited quantities.
At the time of trial, only Bega’s peanut butter was available at major supermarkets in Australia, which accounted for about 80% of the total nationwide annual sales of peanut butter. The major supermarkets had declined to stock the new Kraft peanut butter manufactured by the second appellant, citing the likelihood of consumer confusion. Both products were, however, still available at smaller, independent supermarkets.
JUDGMENT OF THE PRIMARY JUDGE
The primary judge outlined the competing contentions of the parties at [17]-[31] of the Reasons. As noted at [31], the trial of the proceeding was conducted on issues of liability only, with any issues of quantum to be determined later.
The primary judge summarised the pleadings at [39]-[55]. The primary judge then set out an agreed list of the issues to be determined. The first six issues, which were inter-related, were set out in [56] of the Reasons:
(1)What is goodwill and what is the legal nature of the Peanut Butter Trade Dress as an unregistered trade mark?
(2)What did/does the Peanut Butter Trade Dress designate to consumers?
(3)How does goodwill inure to an entity?
(4)How is an unregistered trade mark in Australia assigned or transferred?
(5)To whom did relevant goodwill generated in respect of peanut butter branded Kraft and bearing the Peanut Butter Trade Dress inure immediately prior to the date of the restructure?
(6)To whom did relevant goodwill generated in respect of peanut butter branded Kraft and bearing the Peanut Butter Trade Dress inure after the date of the restructure?
The additional issues, as set out in [57] of the Reasons, were as follows:
(7)Can the [Australian Consumer Law] and passing off issues in the case be determined without ascertaining whether rights in respect of trade dress accrued to the first applicant under the MTA?
(8)Does the Mondelez Licence (as defined in [18] of the TFASOC) preclude Bega from claiming “ownership” of the Peanut Butter Trade Dress?
(9)Has Bega breached any term(s) of the MTA that it is bound by in respect of its use of the Peanut Butter Trade Dress from 1 January 2018?
(10)What is the proper interpretation of the MTA? Did the MTA affect rights in respect of the Peanut Butter Trade Dress?
(11)Has Bega breached the [Australian Consumer Law] by using the Peanut Butter Trade Dress because of any association that it has with the Kraft brand?
(12)Did Bega breach the [Australian Consumer Law] by its television/radio advertisements in November 2017?
(13)Did Bega engage in passing off or misleading and deceptive conduct through use of the Peanut Butter Trade Dress?
(14)What rights were acquired by Bega in July 2017 in respect of peanut butter?
(15)Did Kraft breach the [Australian Consumer Law] by its release of a press release of October 2017, or use of the slogan “Loved since 1935”?
(16)Did Kraft engage in misleading and deceptive conduct or passing off though use of the Peanut Butter Trade Dress?
(17)Did Bega own, and did Kraft infringe, copyright in respect of the 2012 or 2015 labels?
(18)Was Bega’s use of the Kraft shippers unlawful?
The balance of his Honour’s judgment was structured around these issues.
Issues 1 to 6
His Honour considered issues 1 to 6 at [97]-[340] of the Reasons. In the course of considering issue 1, the primary judge quoted from JT International SA v Commonwealth (2012) 250 CLR 1 (JT International) at [40] per French CJ and at [348] per Kiefel J (as her Honour then was). The primary judge also quoted from ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 (ConAgra) at 366 per Gummow J. The primary judge then noted, at [103], that, as senior counsel for Bega put it, in this case both sides were seeking to exercise the rights in the unregistered trade mark of the Peanut Butter Trade Dress “by taking a protective action against the invasion of goodwill in the form of the actions under the Australian Consumer Law and for passing off”. The primary judge then discussed the nature of goodwill, referring to Federal Commissioner of Taxation v Murry (1998) 193 CLR 605 (Murry); JT International; and Commissioner of State Revenue v Placer Dome Inc (2018) 93 ALRJ 65 (Placer Dome). The primary judge stated at [105] that these decisions stand for the proposition that goodwill is inseparable from the business to which it adds value and cannot be dealt with except in conjunction with the sale of that business.
In the course of discussing issue 1, the primary judge discussed, and rejected, a submission by Kraft that the Peanut Butter Trade Dress was a ‘diagnostic cue’ only to the Kraft brand. The concept of a ‘diagnostic cue’ was explained in the evidence of Professor Klein set out at [157] of the Reasons. It was explained in that evidence that “we use cues (attributes or features) to help us correctly identify an object”. It was stated: “These cues differ in cue validity (the ability of the cue to help distinguish objects from one another). A cue with high cue validity is known as a diagnostic cue.” The primary judge, at [159], did not accept that the Peanut Butter Trade Dress was a diagnostic cue only to the Kraft brand. His Honour noted, at [160], that the undisputed fact was that once Bega took over the business and started manufacturing and selling Bega branded peanut butter products using the Peanut Butter Trade Dress, it quickly assumed MAFL’s market share (over 60% by volume of sales). The primary judge stated at [160]: “That is itself overwhelming evidence that the proposition that the sole attractive force for sales was the Kraft brand cannot possibly be correct.”

At [162], the primary judge stated that he did not accept Kraft’s contention that the Peanut Butter Trade Dress did not generate goodwill itself, separately from that which the use of the Kraft trade mark generated.
The primary judge, at [163], did not accept Kraft’s contention that the Peanut Butter Trade Dress was used only in conjunction with the registered trade marks for the word “Kraft” and the hexagon logo. The primary judge found that it was used for many years in conjunction with KFL/MAFL’s trade mark “Never Oily, Never Dry”, which Bega acquired and was for many years the subject of an extensive advertising campaign.
In relation to issue 2, the primary judge stated at [167] that, as Bega submitted, because the Peanut Butter Trade Dress was an unregistered trade mark, it designated to a consumer that the trade origin of the products on which it was applied was separate and distinct from the trade origin of all other peanut butter products that do not have the Peanut Butter Trade Dress applied to them.
In relation to issue 3, the primary judge held at [168] that goodwill inures to an entity by that entity using, in its business, all of the sources that give rise to the attraction of custom in the business, citing Murry, Placer Dome and other cases.
In relation to issue 4, at [169] the primary judge accepted Bega’s proposition that the assignment or licensing of unregistered trade marks is not possible without the assignment of the underlying goodwill of the business (here, the peanut butter business of KFL/MAFL). The primary judge referred to his earlier reasons (in relation to issue 1) and to Henry Clay & Bock & Co Ltd v Eddy (1915) 19 CLR 641 at 655 per Isaacs J, JT International at [142] and [270], and ConAgra at 366-367.
Issue 5 was: to whom did relevant goodwill generated in respect of peanut butter branded Kraft and bearing the Peanut Butter Trade Dress inure immediately prior to the date of the Restructure?
At [180], the primary judge summarised Kraft’s contentions. Kraft contended that KFL did not conduct the business in which the Peanut Butter Trade Dress was used and the goodwill did not inure to KFL’s benefit prior to the Restructure because:
(a)Before the Restructure, KFL used the Peanut Butter Trade Dress and the “Kraft” word trade mark under licence from Kraft Foods Global Brands LLC (SnackCo IPCo) (we interpolate, by operation of the 2009 Licence Agreement, 2011 Licence Agreement and April 2012 Assignment Agreement).
(b)After the Restructure, and pursuant to the MTA, ownership of the goodwill (and thus ownership of the Peanut Butter Trade Dress) was assigned to Kraft Foods Group Brands LLC (GroceryCo IPCo) (we interpolate, by Kraft Foods Global Brands LLC (SnackCo IPCo)).
(c)Kraft Foods Group Brands LLC (GroceryCo IPCo) then granted to Kraft Foods Global Brands LLC (later renamed Intercontinental Great Brands LLC) (SnackCo IPCo) a licence to use the Kraft brand and the Peanut Butter Trade Dress (i.e. the Mondelez Licence).
(d)Kraft Foods Global Brands LLC (SnackCo IPCo) sub-licensed the Peanut Butter Trade Dress to KFL and later to MAFL until 31 December 2017, on which date Bega, having acquired the business and assets of MAFL, including its licence rights, no longer had any right to use the Peanut Butter Trade Dress.
(e)KFL/MAFL’s production, branding, distribution and sale of Kraft branded peanut butter in Australia was at all times subject to the ultimate control of the relevant US parent company (Kraft Foods Inc, renamed Mondelez International Inc after the Restructure).
(f)The Peanut Butter Trade Dress was only ever a “diagnostic cue” for the Kraft brand, so its use could only have inured to the benefit of the owner of that brand, i.e. Kraft Foods Group Brands LLC (GroceryCo IPCo).
(g)The Mondelez Licence was assigned or novated to Bega, and Bega assumed the obligations and restrictions under the MTA in respect of the Mondelez Licence, by operation of New York law, so the fact that Bega was not a party to the MTA is irrelevant.
The primary judge noted at [181] that it was apparent from that summary of Kraft’s central propositions that its case must involve the requisite proof of the licensing arrangements relied on.
The primary judge, at [183]-[184], accepted Bega’s submission that, even if Kraft Foods Inc or any member of its group had purported to license, assign or otherwise ‘shift’ the Peanut Butter Trade Dress from KFL to an upstream company in the Kraft Foods Inc group, it would have been ineffective as a matter of Australian law. This followed from the primary judge’s conclusion in relation to issue 4, that the assignment or licensing of an unregistered trade mark is not possible without the assignment of the underlying goodwill of the business; and in relation to issue 1, that goodwill is inseparable from the business to which it adds value and cannot be dealt with except in conjunction with the sale of that business. Thus, KFL could not have assigned the rights in the Peanut Butter Trade Dress to any other member of the Kraft Foods Inc group without also assigning its peanut butter business, which (on any view) it did not do: see the Reasons at [179].
Nonetheless, in case that conclusion was wrong, the primary judge went on to consider the evidence adduced by Kraft about the relevant licensing arrangements: see [186]-[244]. The licence agreements in question were produced by MAFL pursuant to a subpoena. The licence agreements so produced included:
(a)the 2000 Licence Agreement;
(b)the 2009 Licence Agreement; and
(c)the 2011 Licence Agreement.
The licence agreements were relevantly in the same terms: Reasons, [191]. The primary judge extracted key terms of the 2011 Licence Agreement at [192] of the Reasons.
After summarising the parties’ submissions, the primary judge concluded at [211] that Kraft had not established by production of the licence agreements that KFL used the Peanut Butter Trade Dress or the Kraft trade mark as a licensee. As the primary judge noted at [212], none of the licence agreements mentioned the Peanut Butter Trade Dress or the Kraft trade mark. The primary judge did not accept Kraft’s contention that it was to be inferred that the licence agreements “relate to Kraft peanut butter” because they were produced by MAFL pursuant to the subpoena: Reasons, [220].
The primary judge then considered the April 2012 Assignment Agreement, by which KFL agreed to assign to Kraft Foods Global Brands LLC the Kraft trade mark and the Kraft hexagon logo. Kraft contended below that this agreement proved that prior to April 2012 KFL only ever had “bare legal title” to the Kraft trade mark and the Kraft hexagon logo, and that the goodwill thus inured, not to the registered owner, but to the beneficial owner, Kraft Foods Global Brands LLC. The primary judge rejected this contention, holding at [244] that there was no proof of any basis upon which it could be established that Kraft Foods Global Brands LLC, prior to the Restructure, held a beneficial interest in trade marks registered in the name of KFL (in particular the word Kraft and the Kraft hexagon logo).
Issue 6 was: to whom did relevant goodwill generated in respect of peanut butter branded Kraft and bearing the Peanut Butter Trade Dress inure after the Restructure? The underlying question was: on the proper construction of the MTA, was the goodwill associated with the Peanut Butter Trade Dress assigned to Kraft Foods Group Brands LLC (GroceryCo IPCo) (as Kraft alleged) or did the MTA have no effect on the position that KFL retained its ownership of the goodwill in its Australian peanut butter business (as Bega alleged)?
The primary judge examined the terms of the agreements by which the Restructure was effected, in particular the SDA and the MTA. The primary judge noted at [278] that the suite of documents made no mention, in terms, of the Peanut Butter Trade Dress, despite the fact that it was a very valuable asset. Although the MTA was governed by “the internal Laws of the State of New York, without regard to the Laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of New York”, it was common ground at first instance that Australian law governed the question of whether the MTA was effective to assign the goodwill in the Peanut Butter Trade Dress because the question of whether an intellectual property right is assignable at all and, if so, in what conditions, is governed by the law of the country under which the right was created: Reasons, [281]. Further, as the primary judge noted at [288], the parties agreed in the end that New York law in relation to the interpretation of contracts is not relevantly different from Australian law, at least for the purposes of this case.
After setting out the parties’ contentions, the primary judge concluded at [322] that the construction of the MTA contended for by Kraft was the preferable one. In the primary judge’s view, the MTA purported to assign to Kraft Foods Group Brands LLC (GroceryCo IPCo) the goodwill associated with the Peanut Butter Trade Dress: Reasons, [322]. (That conclusion of the primary judge is the subject of one of Bega’s grounds of contention in relation to the appeal.) The primary judge held, nevertheless, that for the reasons he had earlier given, such a purported assignment was ineffective as a matter of Australian governing law: Reasons, [322].
Thus, the primary judge’s conclusions in relation to issues 5 and 6 were, in summary, as follows (see the Reasons at [340]):
(a)immediately prior to the Restructure, the goodwill generated in respect of Kraft branded peanut butter bearing the Peanut Butter Trade Dress inured to KFL (as contended by Bega); and
(b)after the Restructure, the goodwill generated in respect of Kraft branded peanut butter bearing the Peanut Butter Trade Dress inured to MAFL (as contended by Bega).
Issues 7, 11 and 13
The primary judge noted his later conclusion (in relation to issue 14) that Bega acquired the Peanut Butter Trade Dress as part of its acquisition of the business and assets of MAFL, pursuant to the SPA: Reasons, [342]. Having found that the rights to the Peanut Butter Trade Dress were sold to Bega in July 2017, it followed that Bega was entitled to use the Peanut Butter Trade Dress in the business that it acquired and Bega was entitled to take action to protect its goodwill in its peanut butter business by preventing use of the Peanut Butter Trade Dress by others, including Kraft: Reasons, [359], [362]. Having bought the business, the recipe and the goodwill (including the Peanut Butter Trade Dress), Bega did not mislead a consumer within the meaning of the Australian Consumer Law by doing that to which it had a contractual right to do: Reasons, [360].
Issues 8 and 9
As noted in [371], Kraft pleaded that the benefit of the Mondelez Licence had been assigned to Bega by operation of New York law and that Bega had assumed obligations under the licence. In [372], the primary judge noted that Bega admitted that the licence granted under cl 3.1(a)(v) of the MTA to use the “Kraft GroceryCo Trademark” (as defined in the MTA) in relation to peanut butter in Australia was assigned to Bega pursuant to the Supplemental Agreement. Bega also admitted that “the assignment … carried with it the consequential obligations to Kraft Foods in relation to that licence provided under clauses 3.5, 3.8, 3.10 and 3.11 of the MTA”. The effect of those clauses was summarised in [373] of the Reasons.
At [374], the primary judge noted that in its written opening submission, Kraft recognised that the scope of Bega’s admissions was limited to “the licence which Bega admits was granted to Kraft Foods Global Brands LLC / Intercontinental Great Brands LLC and then assigned to it (not the broader Mondelez Licence alleged by Kraft)”. However, in its written closing submission at first instance, Kraft took the point further, contending that “the allegations of breach of contract turn solely on the terms of the MTA; they do not depend on the ownership of goodwill or there being any valid assignment of goodwill under the MTA”. The point was taken further in oral closing address, during which senior counsel for Kraft submitted: “Indeed, between us they’re obliged to concede, regardless of the true state of affairs – if it be otherwise – that the goodwill arising from the use of the marks belongs to [Kraft]”. (That submission is maintained and, indeed, emphasised by Kraft on the appeal.) The primary judge rejected Kraft’s contention at [379]:
I do not accept that the assumption of the obligations under the MTA which Bega concedes to have occurred by operation of New York law (the details of which it is unnecessary to explain, in light of Bega’s admission) obliges Bega to concede any assertion by the first [appellant] that it owns the [Peanut Butter Trade Dress], even if, on a proper analysis, it does not. Kraft’s submission also amounts to saying that an assignee is bound by an obligation greater than that owed by the assignor. No authority was cited for it, and no expert evidence on New York law was adduced to support it. Accordingly, I do not accept it.
Issue 10
In relation to this issue, the primary judge referred back to his reasons in relation to issue 6.
Issue 14
The primary judge concluded that Bega acquired all rights to the Peanut Butter Trade Dress pursuant to the terms of the SPA: Reasons, [398].
Issue 12
This issue related to television and radio advertisements published by Bega in October and November 2017. Kraft’s case that Bega had contravened the Australian Consumer Law relied on eight alleged representations, which the primary judge set out at [409]-[410] of the Reasons:
409The [third further amended statement of claim] pleads (at [40]) that each of the advertisements conveys to the ordinary reasonable consumer of peanut butter representations to the effect that:
(a)Kraft peanut butter is now Bega peanut butter (the First Representation);
(b)Kraft peanut butter is being replaced by Bega peanut butter (the Second Representation);
(c)peanut butter labelled with the Kraft Brand is no longer available for purchase or will cease to be available for purchase (the Third Representation);
(d)the Kraft Brand has ceased to exist or is ceasing to exist in relation to peanut butter (the Fourth Representation);
(e)the Kraft Brand has changed to, or is changing to, Bega in relation to peanut butter (the Fifth Representation);
(f)the only difference between Kraft peanut butter and Bega peanut butter is the name (the Sixth Representation); and
(g)the Respondent is, or was until very recently, selling peanut butter under the Kraft Brand (the Seventh Representation).
410It is also pleaded that the First Bega Television Advertisement represents that peanut butter sold under the Kraft Brand is not, or was not, Australian made (the Eighth Representation).
The primary judge concluded at [432] that all but one of Kraft’s claims relating to Bega’s advertising failed because, even if the advertisements could be understood by the ordinary consumer to convey the pleaded representations, in light of the earlier finding on the critical anterior question of entitlement to the goodwill in the Peanut Butter Trade Dress, they were correct representations: Reasons, [432].
The primary judge’s reasoning in relation to the eight alleged representations was as follows:
435The first and second representations, “Kraft peanut butter is now Bega peanut butter” and “Kraft peanut butter is being replaced by Bega peanut butter” are, in light of my earlier findings, correct statements. As Mr McGrath [senior counsel for Bega] put it in his oral closing submission:
Bega’s advertisement stated the correct position, which was that Bega peanut butter was the same as the peanut butter that had previously been marketed as Kraft peanut butter. So if one looks at the general dominant message that’s being given, that’s, in fact, true. What was Kraft peanut butter is now Bega peanut butter. That’s with a label peel, the products are identical. The same business is providing them; it just has a different owner. It’s exactly the same product as it was. And so when one looks at the dominant message being given, the supposed first representation said to be a misrepresentation, it’s in fact a correct – it’s a correct position.
436As to the third representation, “peanut butter labelled with the Kraft Brand is no longer available for purchase or will cease to be available for purchase”, that too, even assuming it to be conveyed, was, in light of the earlier findings, a correct statement at the time the advertisements were broadcast (October - November 2017), because at that time Kraft peanut butter was not available for sale. It did not become available, in limited quantities, until at least April 2018.
437As to the fourth representation, “the Kraft Brand has ceased to exist or is ceasing to exist in relation to peanut butter”, in my view that representation is not conveyed. The words of the advertisements certainly do not say that, and in order to arrive at such a view a consumer would, it seems to me, need to form some view that Kraft had forever departed the peanut butter products market in Australia. But the advertisements do not say that, and they do not reasonably convey that. In any event, as at the date of the broadcasts, the statement was true.
438As to the fifth representation, “the Kraft Brand has changed to, or is changing to, Bega in relation to peanut butter”, that, it seems to me, is another way of saying that the peanut butter product formerly branded Kraft is now branded Bega. Again, that is a correct statement.
439As to the sixth representation, that “the only difference between Kraft peanut butter and Bega peanut butter is the name”, again, that is a true statement.
440As to the seventh representation, “[Bega] is, or was until very recently, selling peanut butter under the Kraft Brand”, in my view that representation is not reasonably conveyed.
441The eighth representation is different. The allegation is that “the First Bega Television Advertisement represents that peanut butter sold under the Kraft Brand is not, or was not, Australian made”. These words are relied on: “Now Australian Owned and Made”. That statement, in my view, obviously enough, conveys the representation that Kraft peanut butter was not made in Australia. It was. It had been made in Port Melbourne since 1962. And it was made by an Australian company, albeit a wholly owned subsidiary of a U.S. company.
442Mr McGrath submitted, to the contrary, as follows:
That included, that advertisement, the statement, “Now Australian owned and made.” Well, that statement by Bega is correct. The products sold by Bega were both Australian owned and made, whereas the – previously the products sold by Mondelez Australia was not Australian owned. The statement made in the advertisement does not say that a previous product was not Australian made and not Australian owned. The dominant message of that advertisement speaks to the characteristics of the product that’s being advertised and which is available for sale, and that is that it’s both Australian made and Australian owned. It’s not telling you anything about the characteristics of a product that had previously been on the market.
443I do not accept that submission. On this occasion, it seems to me, Bega seeks to attribute an overly elaborate meaning that is not a dominant message that any consumer, with the unbidden intrusion of a 15 second commercial, is likely to have arrived at.
444It follows that the eighth representation is made out.
There is no cross-appeal in relation to the primary judge’s conclusion on the eighth alleged representation.
Issue 15

Issue 15 was: did Kraft breach the Australian Consumer Law by its release of a press release in October 2017, or the use of the slogan “Loved since 1935”?
The press release, which was issued on about 24 October 2017 (the Press Release), was in the following terms:
KRAFT RETURNS TO AUSTRALIAN STORES
Kraft, a brand steeped in the life, culture and history of Australia since 1926, is set to appear on Australian supermarket shelves again with the planned return of two locally-manufactured traditional favourites, cheese and peanut butter.
The brand has been such an integral part of Australian families that its temporary absence has promptly been addressed by Kraft Heinz which has listened to its loyal consumers.
“We are thrilled to be bringing back Kraft to Australian supermarket shelves. Kraft is not just a brand, it is a way of life in Australia and we have unwavering commitment to strengthening it even further” said Bruno Lino, CEO of Kraft Heinz Australia.
“Kraft Singles is an Australian staple,” Mr Lino said.
In a move that will be further celebrated by millions of Australians, Kraft Peanut Butter will also be back on Australian supermarket shelves in early 2018.
“Kraft has been the top of mind brand in Peanut Butter for Australians for the last eight decades and when we surveyed consumers, Kraft Peanut Butter commanded a mammoth 65% market share. In addition, two out of three Australian households had Kraft product in their pantry at any point in time,” Mr Lino said.
“We are listening to our consumers and we know that Kraft Peanut Butter is the one Australians love.”
The return of these two Kraft favourites will be supported by an extensive marketing campaign.
Bega contended that the Press Release conveyed two representations: the “2017 Same Product Representation” and the “Bega Product Representation”.
In relation to the 2017 Same Product Representation, Bega contended that the Press Release represented to a reasonable consumer that the peanut butter products that the second appellant was launching in early 2018 (and later did launch in about April 2018) would be the same products that had been sold until about June 2017 under a Kraft trade mark. Bega submitted that, in fact, the second appellant was launching a new product, made by a contracted manufacturer (Sanitarium), and in respect of which substantial work over a long period of time was completed in order to seek to make a product with a similar taste and sensory profile to the one that it was targeting. Bega also submitted that by prominently displaying the slogan “Loved since 1935” on the front label of its newly launched peanut butter products, the use of the slogan on a Kraft branded peanut butter product bearing the Peanut Butter Trade Dress would cause a not insignificant number of consumers to understand that the product that the second appellant was supplying was the same product as that which had been supplied prior to June 2017 by reference to the Kraft trade mark and by reference to the Peanut Butter Trade Dress, when that was not the case.
In relation to the Bega Product Representation, the primary judge noted at [458] that, as at the time of the publishing of the press release, sales of Bega’s peanut butter products had a market share of about 66% by volume. Bega contended that a significant number of consumers who saw the Press Release (or any media resulting from the Press Release) would be familiar with the Bega product, and would understand from the Press Release that the Bega product was not the same product that had until about June 2017 been sold by reference to a Kraft trade mark, when in fact it was.
The primary judge concluded, at [468]-[469], that Bega’s case based on the alleged representations was made out:
468It seems to me that in circumstances where it is common ground that Bega purchased the recipe for the peanut butter that was, before the sale, manufactured and sold by KFL, and then MAFL, it must be likely to mislead or deceive a consumer to say that “Kraft Peanut Butter will … be back on Australian supermarket shelves in early 2018”. That peanut butter is surely the very peanut butter product that Bega acquired, along with all the other assets. It was thus not [the second appellant’s] to bring “back”. It seems from the evidence of Mr de Souza and Ms Dal Maso that the newly incorporated [second appellant] may well in fact have developed a product with a similar sensory profile (that is, with a similar quality, flavour, aroma and texture) as the product that is now the Bega peanut butter. … Bega makes no complaint about that in this proceeding. But it seems to me that whatever new product [the second appellant] has been able to develop, it cannot say, because it would be misleading to say, that it is the same product that MAFL sold to Bega. As Mr McGrath put it, the vice of the advertising in the form of the “Loved since 1935” slogan and the press release that says “Kraft peanut butter will … be back … in early 2018” is that [the second appellant], a company that has never before made peanut butter, seeks to attach itself to a product that it has never had anything to do with, let alone produced.
469It follows, as Bega submits, that consumers who saw the press release who were familiar with the Bega product, could well reasonably believe from it that the Bega product was not the same product that had until about June 2017 been sold by reference to a Kraft trade mark, when in fact it was.
Issue 16
The primary judge stated at [475] that, ultimately, “it must be the case that if one party establishes that it owned the relevant rights in the [Peanut Butter Trade Dress], then the other party must accept that its own use of the [Peanut Butter Trade Dress] amounted to misleading or deceptive conduct and passing-off”. The primary judge stated at [476] that, for the reasons set out earlier, the goodwill in the Peanut Butter Trade Dress inured to the benefit of Bega. It followed that the claims made in Bega’s cross-claim (to the effect that Kraft engaged in misleading and deceptive conduct and passing off through its use of the Peanut Butter Trade Dress) were established.
Issue 17
This issue concerned a copyright claim made by Bega. The primary judge considered it unnecessary to decide this issue.
Issue 18
Issue 18 was: was Bega’s use of the shippers unlawful?
It was not disputed that the Kraft shippers were designed such that the Kraft hexagon logo could be seen on the bottom left hand corner of the shipper when displayed on a supermarket shelf, and that shippers are used by trade mark owners as a communication tool to promote their brand when the product is placed on the shelf in the packaging in which it is delivered: Reasons, [488]. A photograph of Bega’s peanut butter products as presented on supermarket shelves was in evidence and was reproduced at [489]:
In the above photo, the Kraft hexagon logo is presented adjacent to the registered symbol ® with peanut butter labelled both “The Good Nut” and “Bega”. The primary judge explained, at [483], that at various times between September 2017 and late March 2018, Bega supplied to supermarkets and to food service distributors peanut butter products branded “The Good Nut”, but not “Bega”, in Kraft shippers. To the extent that Bega branded products ever appeared on supermarket shelves in Kraft shippers (as in the above photo), this was the result of supermarket staff replenishing empty or depleted shippers on those shelves: Reasons, [486].
Kraft contends that Bega’s conduct between September 2017 and late March 2018 in supplying to supermarkets and food service distributors peanut butter products branded “The Good Nut” in Kraft shippers constitutes:
(a)infringement of each of Australian Trade Mark Registration Nos. 156444 and 181518 pursuant to s 120(1) of the Trade Marks Act;
(b)breach of the Mondelez Licence and, in particular, breach of the transition clause and, after 31 December 2017, breach of the discontinuance clause; and
(c)breach of ss 18 and 29(1)(a), (g) and (h) of the Australian Consumer Law, and passing off.
The primary judge noted at [494] that the first appellant was the owner of Australian Trade Mark Registration No. 156444 for the word “Kraft”. It was lodged on 14 October 1959 in class 29 and it expressly encompasses goods including, inter alia, peanut butter. The first appellant was also the owner of Australian Trade Mark Registration No. 181518 for the Kraft hexagon logo, which was lodged on 15 July 1963 in class 29 and which expressly encompasses goods including, inter alia, peanut butter.
The primary judge concluded that Bega’s use of the Kraft hexagon logo on shippers constituted an infringement of Kraft’s trade marks under s 120(1) of the Trade Marks Act. His Honour’s reasoning was as follows:
512I do not accept Bega’s contention that the use of the shippers about which Kraft complains was authorised by the MTA. Those parts of clause 3 of the MTA upon which Bega relies can only sensibly apply to circumstances where Bega is using the licence to put Kraft marks the subject of the licence on the product. But it never did that after 4 July 2017.
513The licence granted under clause 3.1(a) permits Bega to use that mark on the principal display panel of certain products (including peanut butter) and in connection with the production and sale of such products. Clause 3.1(a) does not permit Bega to use the Kraft hexagon logo on the packaging of (or otherwise in relation to) products, like “The Good Nut”, that are not themselves labelled with the Kraft hexagon logo.
514Clause 3.5(a) is also of no help to Bega. It is a run off clause, to be sure, but it only relevantly confers the right “to sell any finished goods bearing the Licensed Trademark held as inventory …” It is thus expressly limited to the sale of finished goods bearing the Licensed Trademark. This, again, does not include peanut butter labelled “The Good Nut” which did not bear the Kraft hexagon logo.
515And clause 3.5(b) is also beside the point. It applies if Bega had intended “to transition the name of a product from a Licensed Trademark to a new trademark or brand name after the expiration or termination of the Trademark License” in which case Bega would have been “entitled to announce such transition of a product name prior to the expiration or termination of the Trademark License in advertising, marketing and sales materials”. It is, in my view, unlikely that the placement of “The Good Nut” product in Kraft shippers could be regarded as “announcing a transition”. In any event, I would not make any such finding absent evidence to support it.
516As for Bega’s submission that it did not use the mark – the supermarkets did – I accept Kraft’s submission that a mark which has been applied to goods by a manufacturer is relevantly “used” by the manufacturer at the time when the products are offered for sale or sold by a retailer. See E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at 162 – 164, [42] and [46].
517I also do not accept Bega’s final point that Kraft did not prove that consumers would recognise what is on a shipper tray as being used as a trade mark. The Kraft shipper expressly says that the Kraft hexagon label is used as a trade mark.
518It follows that Bega used the Kraft hexagon logo on shippers in relation to the “Good Nut” peanut butter product without the permission of the first applicant. Such conduct constitutes trade mark infringement under s 120(1) of the Trade Marks Act.
These conclusions are the subject of Bega’s cross-appeal.
In relation to the alleged breach of the Mondelez Licence, the primary judge concluded at [521] that there was insufficient evidence to enable him to form any view about the allegations of denigration or tarnishing, so those allegations failed. There is no appeal from this conclusion.
In relation to the alleged contravention of ss 18 and 29 of the Australian Consumer Law, and passing off, the primary judge concluded at [526] that he was not satisfied that there was sufficient evidence to establish Kraft’s case with respect to the shippers. There is no appeal from this conclusion.
Declarations and orders
The primary judge made declarations and orders on 21 May 2019, including (relevantly for present purposes) the following:
THE COURT DECLARES THAT:
1.By supplying, selling, offering to sell, advertising and promoting its Kraft-branded peanut butter products in the product packaging that is used for those products, H.J. Heinz Company Australia Limited:
(a)engaged in misleading and deceptive conduct in contravention of ss 18, 29(1)(g) and 29(1)(h) of the Australian Consumer Law; and
(b)committed the tort of passing off.
2.By issuing the press release dated 24 October 2017, H.J. Heinz Company Australia Limited engaged in misleading and deceptive conduct in contravention of s 18 of the Australian Consumer Law by falsely representing that:
(a)its products were the same as the peanut butter products that were sold in Australia prior to June 2017 by reference to the Kraft trademark and, since July 2017, by reference to the Bega trademark; and
(b)the peanut butter products that had been sold in Australia since July 2017, by reference to the Bega trademark, are not the same as the peanut butter products that were sold in Australia prior to June 2017 by reference to the Kraft trademark.
3.By using the slogan “Loved since 1935” on the packaging of its Kraft-branded peanut butter products, H.J. Heinz Company Australia Limited engaged in misleading and deceptive conduct in contravention of s 18 of the Australian Consumer Law by falsely representing that its products were the same as the peanut butter products that were sold in Australia prior to June 2017 by reference to the Kraft trademark and, since July 2017, by reference to the Bega trademark.
4.Kraft Foods Group Brands LLC is a person who was involved in each of the contraventions of ss 18, 29(1)(g) and 29(1)(h) of the Australian Consumer Law referred to in declarations (1), (2) and (3) above.
…
6.By packaging, using, selling and distributing peanut butter products branded “The Good Nut” in outer packaging (shippers) bearing the trademark the subject of Australian trademark registration no. 181518 (the Kraft hexagon logo) in the period between September 2017 and late March 2018, Bega Cheese Limited infringed Australian trademark registration no. 156444 and Australian trademark registration no. 181518 pursuant to s 120(1) of the Trademarks Act 1995 (Cth).
THE COURT ORDERS THAT:
1.H.J. Heinz Company Australia Limited, whether by itself, its directors, servants or agents, is restrained from supplying, selling, offering to sell, advertising or promoting peanut butter products in Australia using or bearing the peanut butter trade dress (defined in paragraph 3 of the reasons for judgment dated 1 May 2019 as follows: a jar with a yellow lid and a yellow label with a blue or red peanut device, with the jar having a brown appearance when filled).
2.H.J. Heinz Company Australia Limited, whether by itself, its directors, servants or agents, is restrained from supplying, selling, offering to sell, advertising or promoting peanut butter products in Australia in packaging that is substantially identical or deceptively similar to the peanut butter trade dress.
3.H.J. Heinz Company Australia Limited, whether by itself, its directors, servants or agents, is restrained from supplying, selling, offering to sell, advertising or promoting peanut butter products in Australia using or bearing the slogan “Loved since 1935.”
4.Kraft Foods Group Brands LLC, whether by itself, its directors, servants or agents, is restrained from being involved in any conduct by H.J. Heinz Company Australia Limited contrary to orders (1), (2) and (3) above.
5.Kraft Foods Group Brands LLC and H.J. Heinz Company Australia Limited pay the costs of Bega Cheese Limited of the proceeding to date (being for the liability phase of the proceeding), including all reserved costs, but excluding costs the subject of previous costs orders.
6.The cost orders to date in this proceeding, including order (5) above, be taxable forthwith.
7.There be a further hearing and determination as to the quantum of monetary relief, if any, in respect of the following issues:
(a)the contraventions by Kraft Foods Group Brands LLC and H.J. Heinz Company Australia Limited of ss 18, 29(1)(g) and 29(1)(h) of the Australian Consumer Law;
(b)the commission by H.J. Heinz Company Australia Limited of the tort of passing off;
…
(d)infringement by Bega Cheese Limited of a registered trademark.
APPEAL AND CROSS-APPEAL
By the amended notice of appeal, Kraft appeals from that part of the judgment of the primary judge whereby his Honour:
(a)declined to grant the relief sought by the appellants in paragraphs 1(a) to 1(d), 2(a), 2(b), 2(c), 3, 4 and 5 of the further amended originating application dated 3 September 2018;
(b)granted the relief sought by the respondent in the amended notice of cross-claim dated 18 May 2018;
(c)made the declarations contained in paragraphs 1 to 4 of the orders made on 21 May 2019;
(d)made the orders contained in paragraphs 1 to 6, 7(a) and 7(b) of the orders made on 21 May 2019; and
(e)made the orders contained in paragraph 3 of the orders made on 14 June 2019 (which related to the costs of an interlocutory application).
Kraft’s amended notice of appeal contains 10 grounds supported by lengthy particulars. The grounds (omitting the particulars) are as follows:
A.       Bega’s Breach of the Master Trademark Agreement
1.The primary judge erred in that he failed to find that the Respondent (Bega) had breached clauses 3.5, 3.10 and 3.11 of the Master Trademark Agreement (MTA).
B.Goodwill generated by use of the Peanut Butter Trade Dress prior to the restructure in October 2012
2.The primary judge erred in finding that the goodwill generated by the use of the Peanut Butter Trade Dress on Kraft peanut butter in the period prior to October 2012 inured to the benefit of KFL.
C.Assignment of goodwill generated by use of the Peanut Butter Trade Dress prior the Restructure
3.Having found at [322], [337] and [338] that the terms of the MTA purported to assign goodwill generated through use of the Peanut Butter Trade Dress from [Kraft Foods Global Brands LLC] to [Kraft Foods Group Brands LLC], the primary judge erred in finding at [183]-[184] that the assignment was ineffective.
D.Goodwill generated by use of the Peanut Butter Trade Dress after the restructure in October 2012
4.The primary judge erred in finding that the goodwill generated by the use of the Peanut Butter Trade Dress in the period after October 2012 on Kraft peanut butter inured to the benefit of KFL/MAFL.
E.Misleading and deceptive conduct by Bega
5.The primary judge erred in failing to find that Bega had engaged in passing off and misleading and deceptive conduct contrary to section 18 and 29 of the Australian Consumer Law.
F.Sale and Purchase Agreement
6.The primary judge erred in finding that goodwill in the Peanut Butter Trade Dress was acquired by Bega.
G.Bega’s television and radio advertising
7.The primary judge erred in failing to find that the conduct of Bega in publishing the:
(a)       Bega Radio Advertisement;
(b)       First Bega Television Advertisement; and
(c)       Second Bega Television Advertisement;
(the Bega Advertisements)
was contrary to section 18 of the Australian Consumer Law.
H.       Cross-claim – press release
8.The primary judge erred in finding at [468] and [469] that the conduct of the second appellant (Kraft Heinz) in issuing the Press Release contravened section 18 of the Australian Consumer Law.
I.Cross-claim – “Loved Since 1935”
9.The primary judge erred in finding at [468] and [469] that the conduct of Kraft Heinz in displaying the slogan “Loved Since 1935” on the front label of its peanut butter products contravened section 18 of the Australian Consumer Law.
J.Cross-claim – Australian Consumer Law and passing off
10.The primary judge erred at [475]-[477] in finding that:
(a)Kraft Heinz had engaged in misleading and deceptive conduct in contravention of ss 18, 29(1)(g) and 29(1)(h) of the Australian Consumer Law.
(b)[Kraft Foods Group Brands LLC] was a person who was involved in each of Kraft Heinz’s contraventions of the Australian Consumer Law; and
(c)Kraft Heinz had committed the tort of passing off.

In our view, these submissions should be rejected. For the reasons given above, the rights in relation to the Peanut Butter Trade Dress were held by KFL/MAFL at all relevant times up until the closing of the SPA. Once it is accepted that MAFL held the rights in relation to the Peanut Butter Trade Dress immediately before the closing of the SPA, it follows that those rights (comprised in the goodwill of the business) were assigned by MAFL to Bega under the SPA in the manner identified by the primary judge.
The subject of the sale and purchase in the SPA was the “Joey Business”, which included the business of developing, manufacturing, marketing, selling and distributing spreads including peanut butter as conducted by the Mondelez Global LLC group in Australia and New Zealand from time to time. This was effected by the sale and purchase of “Transferred Assets”, which included all manner of contracts, intellectual property rights, plant, machinery, property and, importantly, goodwill, in return for consideration which included the allocation of a substantial component for goodwill. While the rights in relation to the Peanut Butter Trade Dress formed part of the “Transferred Assets” under the SPA (because they fell within the definition of “Dedicated IP Rights” as being unregistered rights in get-up or trade dress owned legally or beneficially by MAFL and used prior to Closing exclusively in the “Joey Business” in Australia), under Australian law those rights, as an unregistered trade mark, were actually assigned by way of the transfer of all of the assets (including the goodwill) of the peanut butter business. Accordingly, the primary judge correctly concluded that it was the transfer of all of the assets that comprised the peanut butter business in Australia that constituted the assignment of the rights in relation to the Peanut Butter Trade Dress from MAFL to Bega.
The fact that under the SPA Bega acquired only part of the various businesses conducted by MAFL does not make the part that was transferred any less of a business in itself (or a number of businesses).
For these reasons, we reject ground 6.
Whether Bega breached certain obligations in the MTA
This issue is raised by ground 1 of the amended notice of appeal, by which Kraft contends that the primary judge erred in that he failed to find that Bega had breached sections 3.5, 3.10 and 3.11 of the MTA. Kraft’s submissions that Bega breached those obligations are predicated on the rights in relation to the Peanut Butter Trade Dress having been allocated to GroceryCo IPCo under the MTA and then licensed to SnackCo IPCo under section 3.1(a) of the MTA. Having concluded above that, on the true construction of the MTA, the agreement did not allocate the rights in relation to the Peanut Butter Trade Dress to GroceryCo IPCo under section 2.1(a) and did not grant a licence to use the Peanut Butter Trade Dress to SnackCo IPCo under section 3.1(a), it follows that Bega did not breach sections 3.5, 3.10 and 3.11 of the MTA by continuing to use the Peanut Butter Trade Dress following the expiry of the licence (assuming that it was effectively bound by those obligations). It is therefore unnecessary to examine the issue of whether or not Bega was effectively bound by those obligations in the MTA. It follows that we reject ground 1 of the amended notice of appeal.
Whether Bega or Kraft engaged in passing off and misleading or deceptive conduct in relation to the Peanut Butter Trade Dress
This issue is raised by grounds 5 and 10 of the amended notice of appeal, by which Kraft contends that:
(a)the primary judge erred in failing to find that Bega had engaged in passing off and misleading and deceptive conduct contrary to ss 18 and 29 of the Australian Consumer Law (ground 5); and
(b)the primary judge erred at [475]-[477] in finding that: the second appellant had engaged in misleading and deceptive conduct in contravention of ss 18, 29(1)(g) and 29(1)(h) of the Australian Consumer Law; Kraft Foods Group Brands LLC was a person who was involved in each of the second appellant’s contraventions of the Australian Consumer Law; and the second appellant had committed the tort of passing off (ground 10).
To the extent that Kraft’s submissions in relation to these grounds depend on it having established that the rights in relation to the Peanut Butter Trade Dress were held by the first appellant (GroceryCo IPCo), it follows from our conclusions above that these submissions are rejected.
In the alternative, Kraft submits that it can succeed in an action for misleading or deceptive conduct under the Australian Consumer Law without establishing ownership of goodwill generated by the Peanut Butter Trade Dress. Kraft submits that it advanced an alternative case at trial that through Bega’s use of the Peanut Butter Trade Dress, Bega breached s 18 of the Australian Consumer Law (regardless of the operation of the MTA and property law), as the Peanut Butter Trade Dress conveyed an association with the Kraft brand.
Kraft submits that: the findings made by the primary judge overwhelmingly indicate that consumers perceived an association between the Peanut Butter Trade Dress and the Kraft brand; the primary judge correctly stated at [358] that “at all material times from the 1990s until mid-2017 consumers formed an association between the Kraft trade mark and the [Peanut Butter Trade Dress]”; Kraft need only show goodwill at June 2017 – goodwill created after the Restructure would be sufficient for these purposes; the primary judge should have found that the conduct of Bega in utilising the Peanut Butter Trade Dress on its peanut butter product misled or deceived consumers into believing there was an association with the owner of the Kraft brand, that is, the appellants; there was and is no such association. Kraft makes the following additional points:
(a)First, demonstration of its entitlement to goodwill under the MTA or otherwise is not an element required to be proved by Kraft in order to make out its case under the Australian Consumer Law. Kraft is also not required to establish any reputation or any exclusive right, merely that consumers are misled into believing an association: see Woodtree Pty Ltd v Zheng (2007) 164 FCR 369 at [34], quoted with approval in Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd (2018) 264 FCR 422 at [8]; Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397 at [97] and [99]; Kosciuszko Thredbo Pty Ltd v ThredboNet Marketing Pty Ltd (2014) 223 FCR 517 at [27]-[29].
(b)Secondly, notwithstanding the challenge made in this appeal in relation to goodwill, even if it be the case that Bega had a right to use the Peanut Butter Trade Dress, this gave it no right to mislead the public. Goodwill is negative in character and gives no positive right to use: see JT International at [36]-[40].
(c)Thirdly, the finding that Bega represented the truth of the position by using the Peanut Butter Trade Dress (Reasons, [360]) does not grapple with the pleaded misrepresentation. There was no truth to the position that the product Bega placed into the market place in the Peanut Butter Trade Dress was associated with the Kraft brand or the owner of that brand, namely the appellants.
(d)Fourthly, the suggestion that consumer confusion arose by reason of erroneous assumption is not sustainable (Reasons, [361]). Bega itself chose the aspects of the packaging that it would utilise and is therefore responsible for any misrepresentation it conveys. The fact that an ordinary reasonable consumer might reasonably believe an association between Kraft and Bega existed was unremarkable and plain on the findings made (Reasons, [156]). The authorities referred to at [361] of the Reasons, namely State Government Insurance Corporation v Government Insurance Office of New South Wales (1991) 28 FCR 511 at 562 and Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 (Puxu) at 203-204, did not have application.
(e)Fifthly, the use by Bega of the Peanut Butter Trade Dress to draw an association with the Kraft brand means that, if an adverse event with Bega peanut butter occurred, it would erroneously reflect on the appellants and the Kraft brand. Section 18 of the Australian Consumer Law can and should provide an independent remedy regardless of the more complex findings on goodwill.
In our view, no error is shown in the primary judge’s conclusion that Kraft had not established that Bega engaged in misleading or deceptive conduct, or conduct that was likely to mislead or deceive, in contravention of the provisions of the Australian Consumer Law, by its use of the Peanut Butter Trade Dress. Our reasons are as follows.
The applicable principles are well known. The central question is whether the impugned conduct, viewed as a whole, has a sufficient tendency to lead a person exposed to the conduct into error (that is, to form an erroneous assumption or conclusion about some fact or matter): Puxu at 198 per Gibbs CJ; Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 (Taco Bell) at 200; Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 (Campomar) at [98]; Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [39] per French CJ, Crennan, Bell and Keane JJ; Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [25] per French CJ. It is not sufficient if the conduct merely causes confusion: Puxu at 198 per Gibbs CJ and 209-210 per Mason J; Taco Bell at 202 per Deane and Fitzgerald JJ; Campomar at [106]. As explained by the High Court in Campomar, where the impugned conduct is directed to the public generally (or some relevant section of the public), the Court must consider the likely characteristics of the persons who comprise the relevant class of persons to whom the conduct is directed and consider the likely effect of the conduct on ordinary or reasonable members of the class, disregarding reactions that might be regarded as extreme or fanciful (at [101]-[105]). In Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435, French CJ, Crennan and Kiefel JJ confirmed that, in assessing the effect of conduct on a class of persons such as consumers who may range from the gullible to the astute, the Court must consider whether the “ordinary” or “reasonable” members of that class would be misled or deceived (at [7]).
The commercial circumstances of this case are not uncommon. It is often the case that a business, which has for a long time produced and sold a product under a particular corporate brand, is sold to another entity and the primary corporate brand used on the product is changed. The contention advanced by Kraft is that reasonable consumers who were aware of the product under its original brand and who then see the product under its new brand would be misled into believing (erroneously) that the new brand is “associated” with the original brand. We reject the contention at a number of levels.
First, the alleged erroneous assumption for which Kraft contends requires examination. Kraft’s contention begs the question: what is the nature of the association between Kraft and Bega that consumers would assume by reason of the change in primary brands? In circumstances where the Kraft brand has been removed from the peanut butter product and replaced by the Bega brand, in our view the most likely assumption that would be formed by consumers is that Bega had taken over the peanut butter business formerly conducted by Kraft. That assumption would be correct. In the period shortly before the sale and acquisition, MAFL stopped using the Kraft brand and instead used the words “The Good Nut”. Following Bega’s acquisition, it commenced using its own brand (Bega) together with “The Good Nut” and the Peanut Butter Trade Dress. Subsequently, the words “The Good Nut” were phased out, and the only brand appearing on the products was “Bega”. Also, in late 2017, Bega ran a series of advertisements on radio and TV that communicated, in effect, that Kraft peanut butter was now Bega peanut butter. The facts of the case do not establish a basis for believing that consumers would be likely to form any assumption about the change in primary brands other than the true position. Even if there were a possibility that some reasonable consumers would be confused about the change in brands, conduct that merely causes confusion is not misleading or deceptive.
Secondly, even if we were wrong about the assumptions likely to be made by consumers, it is necessary to consider why and how such an assumption would be likely to arise and whether Bega’s conduct could be considered to have caused the erroneous assumption: see Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 228 per Stephen J, cited in Campomar at [98]. On the basis of the conclusions set out earlier in these reasons, immediately before the sale to Bega, MAFL held the rights in relation to the Peanut Butter Trade Dress. It was entitled to transfer, and did transfer, these to Bega. Bega was, therefore, prima facie at least, entitled to apply the Peanut Butter Trade Dress to the peanut butter products that it manufactured and sold. It applied its own brand (Bega) to the peanut butter products it manufactured and sold, and did not apply the Kraft brand. And Bega conducted an advertising campaign to inform consumers of the change from Kraft to Bega. Bega’s trading conduct involved the use of trade marks and trade dress that it was lawfully entitled to use. It did not use the Kraft brand. Far from seeking to convey a trade association (such as a joint venture, partnership or licence with Kraft), Bega’s trading conduct, including advertising, disavowed such an association. The only association that Bega, by its conduct, conveyed was the correct one: it had acquired the peanut butter business. Bega’s conduct could not be regarded as the cause of any erroneous assumption, even if a reasonable consumer were likely to form such an assumption. The cause of any such assumption would be attributable to the fact that MAFL had traded for a long time under the Kraft brand and consumers making an assumption based on certain preconceptions, rather than Bega’s conduct.
We therefore reject grounds 5 and 10 of the amended notice of appeal.
Whether Bega engaged in misleading or deceptive conduct in relation to the television and radio advertising
This issue is raised by ground 7 of the amended notice of appeal. Kraft contends that the primary judge erred in failing to find that the conduct of Bega in publishing the Bega Radio Advertisement, the First Bega Television Advertisement and the Second Bega Television Advertisement (defined in the Reasons at [399]) (the Bega Advertisements) was contrary to s 18 of the Australian Consumer Law. Kraft relies only on the first to fourth alleged representations that were pleaded in the third further amended statement of claim. Those alleged representations were as follows:
(a)The first representation was that “Kraft peanut butter is now Bega peanut butter”.
(b)The second representation was that “Kraft peanut butter is being replaced by Bega peanut butter”.
(c)The third representation was that “peanut butter labelled with the Kraft Brand is no longer available for purchase or will cease to be available for purchase”.
(d)The fourth representation was that “the Kraft Brand has ceased to exist or is ceasing to exist in relation to peanut butter”.
Kraft’s submissions can be summarised as follows:
(a)A central question is whether the Bega Advertisements conveyed the first to fourth representations, by representing that Kraft peanut butter has been replaced and a Kraft peanut butter product would no longer exist and that the Kraft brand would no longer exist in relation to peanut butter.
(b)The contention made by Bega, which was accepted by the primary judge at [430]-[445], was that the only representations conveyed related to composition of the underlying product and, in those circumstances, any such representations were either not made or true. This approach took too limited a view and failed to countenance the possibility that an advertisement can convey more than one message: see CPA Australia Ltd v Dunn (2007) 74 IPR 495; [2007] FCA 1966 at [28].
(c)Each representation naturally conveyed a permanent state of affairs in respect to Kraft peanut butter. Contrary to [436] of the Reasons, the relevant proposition is not made true simply because the Bega Advertisements aired before the appellants had reintroduced Kraft peanut butter to the market. Kraft peanut butter was not replaced and did not cease to exist in the peanut butter market, any more so than a brand ceases to exist in a particular market whenever the particular branded product is temporarily out of stock.
In our view, no error is shown in the primary judge’s rejection of Kraft’s case based on the first to fourth alleged representations.
In relation to the first and second representations, as the primary judge found at [435], each of those representations was correct – the product that consumers knew as Kraft peanut butter had become Bega peanut butter. This follows from the fact that Bega had purchased MAFL’s peanut butter business and was producing an identical peanut butter product, subject only to changes to the product label.
In relation to the third representation, as the primary judge found at [436], assuming the representation was made, it was a correct statement at the time (November 2017). Further, contrary to Kraft’s submission, there was nothing in the Bega Advertisements that conveyed a permanent state of affairs. Accordingly, the fact that the Kraft brand could be, and indeed subsequently was, used again for peanut butter did not render the third representation incorrect.
In relation to the fourth representation, as the primary judge found at [437], the representation was not conveyed by the advertisements. In any event, as the primary judge found, at the relevant time (November 2017) any such perceived representation was true. Indeed, the Kraft brand was not used again for peanut butter until late April 2018.
We therefore reject ground 7.
Whether Kraft engaged in misleading or deceptive conduct in relation to the Press Release and the slogan “Loved since 1935”
This issue is raised by grounds 8 and 9 of the amended notice of appeal. By these grounds, Kraft contends that the primary judge erred in finding at [468] and [469] that the conduct of the second appellant in issuing the Press Release and in displaying the slogan “Loved since 1935” on the front label of its peanut butter products contravened s 18 of the Australian Consumer Law. This issue is also raised by ground of contention 8.
The primary judge dealt with these matters under Issue 15. His Honour upheld Bega’s contentions in relation to the Press Release (see [94] above) and the slogan “Loved since 1935”.
Kraft’s submissions in relation to the Press Release can be summarised as follows:
(a)The second appellant issued the Press Release in October 2017 prior to release of its peanut butter. The Press Release conveyed the truth of the state of affairs, namely, that Kraft branded peanut butter would be back on supermarket shelves. This subsequently occurred in April 2018.
(b)The Press Release did not convey to any ordinary reasonable consumer the place of manufacture or any other quality of the product save that it would have the Kraft brand: see Bodum v DKSH Australia Pty Ltd (2011) 280 ALR 639 at [218]. A trade mark owner is entitled to change the composition of a branded product and to have that product produced at a different factory: see Re GE Trade Mark at 454; Re McGregor Trade Mark at 52-53; Dental Manufacturing Co Ltd v C de Trey & Co [1912] 3 KB 76 at 88. A trade mark acts as a badge of origin, not a badge of consistency: see Burrell and Handler, Australian Trade Mark Law (Oxford University Press, 2nd ed, 2016).
(c)The primary judge erred at [468] in finding that the Press Release conveyed a representation that the product that the appellants produce will be the very same product produced formerly under licence (i.e. identical in every single respect). This representation was not made.
(d)The primary judge further erred in finding at [468] that the Press Release conveyed that there was an association with Bega. A reference by the appellants to a registered trade mark owned by the appellants does not convey any such association.
(e)The appellants represented nothing but the factual position. The Kraft Australian peanut butter intellectual property was transferred to them. They had also secured the recipe for Kraft peanut butter and were entitled and able to produce a product with the same sensory profile (i.e. taste) as that previously made under licence by KFL. There would be no discernible difference to the product previously sold insofar as the consumer was concerned. There was no evidence that the peanut butter produced at the Port Melbourne factory had any difference in taste. The place of manufacture was inconsequential.
(f)The primary judge’s finding that the appellants had sought to attach themselves to a product that they had “never had anything to do with” ([468]) is wrong for the reasons set out above in describing the circumstances of the Restructure. Bega itself admitted that the product sold prior to 2017 was sold pursuant to a licence to use the Kraft brand (albeit there was a dispute as to the scope of that licence). This alone is sufficient to contradict the finding that the appellants had no connection to that product. The primary judge should have found that the Press Release was not misleading and deceptive, either because no such representations were conveyed or, alternatively, any such representation conveyed was true.

In our view, no error has been shown in the primary judge’s conclusions in relation to the Press Release. In the context provided by the Press Release, the products that were represented to be “back on … shelves” were the products that consumers had previously bought by reference to the “Kraft” trade mark (prior to July 2017). The Press Release therefore conveyed that the peanut butter products that the second appellant would be launching in early 2018 would be the same products that had been sold until about June 2017 under the Kraft brand. The primary judge correctly found at [468] that this was likely to mislead or deceive because, whatever new product Kraft had been able to develop, it could not say that it was the same as the product that was sold until about June 2017 under the Kraft brand, and that Bega was continuing to manufacture and sell. The primary judge also correctly found at [469] that the Press Release represented that Bega’s products were not the same products that consumers had previously bought by reference to the “Kraft” trade mark (prior to July 2017), when in fact they were.
Kraft’s submissions in relation to the use of the slogan “Loved since 1935” on the label of Kraft peanut butter can be summarised as follows:
(a)The slogan appeared on the peanut butter products depicted in the Reasons at [7]. The slogan conveyed, at most, a reference to the longevity of the Kraft brand, which has been used on peanut butter since 1935. There is no dispute the appellants received the exclusive right to the Kraft brand. The slogan simply indicated that this peanut butter was associated with the owner of the Kraft brand, a brand that had been used on peanut butter since 1935.
(b)The primary judge erred in finding at [468]-[469] that the slogan falsely conveyed a reference to Bega and its product. Consumers would not have considered the slogan to be indicating that Kraft peanut butter, produced in April 2019, was from Bega or identical to Bega peanut butter.
(c)Otherwise, the same contextual considerations as discussed in relation to the Press Release apply. To the extent they did so, the appellants were entitled to take the benefit of any legacy value in respect of the Kraft brand in circumstances where they acquired the Kraft brand in the Restructure. The primary judge should have found that the slogan was not misleading or deceptive.
In our view, no error is shown in the primary judge’s conclusions in relation to the slogan “Loved since 1935”. While it is possible that for some consumers the words “Loved since 1935” conveyed merely that the trade mark “Kraft” had been used since 1935 (as Kraft submits), for many consumers the words, in their context on the peanut butter jars bearing the Peanut Butter Trade Dress, conveyed that the peanut butter products that the second appellant launched in about April 2018 were the same products that had been sold until about June 2017 under the Kraft brand, and that was likely to mislead or deceive for the same reasons as set out above.
We therefore reject grounds 8 and 9. In light of this conclusion, it is unnecessary to deal with ground of contention 8.
Whether Bega engaged in trade mark infringement in relation to the shippers
This issue is raised by grounds 1, 3, 4 and 5 of the amended notice of cross-appeal (see [113] above) and by Kraft’s notice of contention in relation to the cross-appeal (see [114] above). The primary judge considered Kraft’s claims based on the shippers under Issue 18, as summarised in [101]-[108] above.
Ground 1 of the amended notice of cross-appeal relates to section 3.5 of the MTA. In this regard, Bega first submits that the licensed use of the “Kraft” trade mark on the labels for the peanut butter products had ceased by the time of Bega’s acquisition, such that, for the purposes of section 3.5, the licence had “expired” in a practical sense. Bega then submits that section 3.5(a) permitted the run-out use of the shippers as these constituted “packaging materials” within the meaning of section 3.5(a), and that the primary judge erred by concluding (at [514]) that section 3.5(a) did not assist Bega because it was expressly limited to the sale of finished goods bearing the Licensed Trademark.
In our view, the primary judge was correct to conclude that the relevant part of section 3.5(a) was limited to the sale of finished goods bearing the Licensed Trademark. The second sentence of section 3.5(a) (set out at [168] above) stated that during the 12 month period following termination or expiration of the licence, the licensee would have the right: (i) “to sell any finished goods bearing the Licensed Trademark held as inventory …”; and (ii) “to produce products bearing such Licensed Trademark to the extent necessary to exhaust all packaging materials … and in connection therewith to use such packaging materials and sell such products as finished goods”. Both (i) and (ii) operate only where there are finished goods bearing the Licensed Trademark, which was not the case here. As described above, the relevant products bore the words “The Good Nut”; they did not bear the Kraft brand.
Bega also relies on section 3.5(b) of the MTA. Bega submits that having the Kraft hexagon logo trade mark appear only on the shipper packaging was consistent with, and within the terms of, section 3.5(b), and that the primary judge erred in not so concluding. In our view, the primary judge was correct to conclude that section 3.5(b) was “beside the point” (Reasons, [515]). The second sentence of section 3.5(b) provided that the “Licensee may announce such transition of a product name on the product packaging and shall be permitted to reasonably reduce the prominence of the logos of the Licensed Trademarks as they appear on such packaging in furtherance of such transition”. We do not consider that the placement of products bearing the words “The Good Nut” in Kraft shippers could be regarded as “announcing a transition”.
Grounds 3, 4 and 5 of Bega’s amended notice of cross-appeal concern the primary judge’s findings at [516] and [518]. For ease of reference, we set out those paragraphs again:
516As for Bega’s submission that it did not use the mark – the supermarkets did – I accept Kraft’s submission that a mark which has been applied to goods by a manufacturer is relevantly “used” by the manufacturer at the time when the products are offered for sale or sold by a retailer. See E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at 162 – 164, [42] and [46].
…
518It follows that Bega used the Kraft hexagon logo on shippers in relation to the “Good Nut” peanut butter product without the permission of the first applicant. Such conduct constitutes trade mark infringement under s 120(1) of the Trade Marks Act.
Bega submits, in summary, that the primary judge erred in finding that when products contained in Kraft shippers were offered for sale or sold by supermarkets, this involved use of that trade mark by Bega. Bega submits that E&J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 (E & J Gallo), relied on by the primary judge, was a decision addressing removal of a registered trade mark for non-use. Bega submits that the concept of “use” in the context of infringement is different and that, for the purposes of s 120(1) of the Trade Marks Act, the issue is whether an upstream supplier of goods is to be directly (or vicariously) liable for the use by another person of a trade mark in Australia. Bega submits that the relevant policy issues concern the liability of a person who is not (most) directly involved in the relevant infringing act.
Kraft’s response is two-fold:
(a)First, Kraft submits that Bega used the Kraft trade marks (i.e. both the “Kraft” trade mark and the Kraft hexagon logo trade mark) when Bega supplied the relevant products to the supermarkets in the shippers bearing the Kraft hexagon logo. If and to the extent that the primary judge did not (implicitly) make a finding to this effect, Kraft contends (in its notice of contention) that his Honour should have so found.
(b)Secondly, Kraft submits that Bega used the Kraft trade marks when the supermarkets offered the relevant products for sale to consumers in shippers bearing the Kraft hexagon logo. In regard to this second proposition, Kraft relies in particular on E & J Gallo at [45]-[47]. In that passage, French CJ, Gummow, Crennan and Bell JJ approved a passage in the judgment of Windeyer J in Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd (1966) 116 CLR 254 at 266-267.
In response to Kraft’s first point, Bega submits that, when Bega supplied the peanut butter products to supermarkets in shippers bearing the Kraft hexagon logo, Bega did not use the Kraft hexagon logo trade mark (or the “Kraft” trade mark) “as a trade mark” within the meaning of s 120(1) of the Trade Marks Act. Bega submits that the relevant purchase was made by the supermarket chains from Bega without knowledge that the external boxes had the word “Kraft” printed on them. Bega relies on Mr Broad’s evidence at trial to show that supermarket chains placed their orders electronically by reference to product codes, and so were unaware of the Kraft trade marks in placing orders. Bega further submits that, even if the supermarket chains’ receipt of the boxes is construed to still be part of the relevant purchase of the goods, those specialist consumers (i.e. the supermarket chains) would not have understood the word “Kraft” to be acting as a badge of origin in all the circumstances; they would instead have understood that the products had been purchased from Bega and would have observed that the peanut butter jars were not labelled with the Kraft trade marks.
In our view, for the reasons that follow, Kraft’s first response (see (a) above) should be accepted.
Section 120(1) of the Trade Marks Act provides:
A person infringes a registered trade 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 goods or services in respect of which the trade mark is registered.
(Notes omitted.)
Section 7(4) of the Trade Marks Act provides that “use of a trade mark in relation to goods means use of the trade mark upon, or in physical or other relation to, the goods (including second-hand goods)”. It follows that, as the primary judge stated at [496], a trade mark does not need to appear on the goods themselves to be used in relation to those goods.
The issue is whether, when Bega supplied peanut butter products to supermarkets in shippers bearing the Kraft hexagon logo, Bega used the Kraft hexagon logo trade mark (or the “Kraft” trade mark) “as a trade mark”. In E & J Gallo at [43], French CJ, Gummow, Crennan and Bell JJ quoted with approval the following passage from the judgment of the Full Court of this Court (Black CJ, Sundberg and Finkelstein JJ) in Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107 at [19]:
Use “as a trade mark” is use of the mark as a “badge of origin” in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods … That is the concept embodied in the definition of “trade mark” in s 17 – a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else.
In our view, the Kraft hexagon logo was used “as a trade mark” in relation to the relevant goods because it appeared on the shippers (i.e. the boxes, before the perforated section was removed) containing the products and thus operated as a ‘badge of origin’ in the sense described in the above passage. The Kraft hexagon logo was the only designation on the shippers containing the relevant peanut butter products. It was the only marking on the outside of the shippers that indicated the origin of the goods. Further, the Kraft hexagon logo was prominently displayed on the shippers. When shippers bearing the Kraft hexagon logo (and containing the relevant peanut butter products) arrived at supermarkets, the Kraft hexagon logo (objectively viewed) designated to the receiver of those goods their trade origin. Whether the goods were purchased by reference to product codes and not by reference to the Kraft hexagon logo is not to the point. The Kraft hexagon logo nevertheless acted as a ‘badge of origin’ for the reasons set out above. The fact that the supermarkets purchased the goods from Bega and may be described as specialist consumers is also not to the point. The Kraft hexagon logo (objectively viewed) nevertheless designated the trade origin of the goods.
Thus, Bega’s conduct constituted use of the Kraft hexagon logo trade mark (and the “Kraft” trade mark) “as a trade mark”. If and to the extent that the primary judge did not make a finding to this effect, we would make such a finding.
We therefore uphold Kraft’s notice of contention in relation to the cross-appeal. As a result, it is unnecessary to consider grounds 3, 4 and 5 in the amended notice of cross-appeal. It follows that the cross-appeal is to be dismissed. We note for completeness that no change is required to the form of the relevant declaration made by the primary judge (declaration 6).
CONCLUSION
For the reasons set out above, we conclude that both the appeal and the cross-appeal should be dismissed. In each case, there is no apparent reason why costs should not follow the event. We will therefore make orders that the appeal be dismissed with costs and the cross-appeal be dismissed with costs.

I certify that the preceding two hundred and seventy (270) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Foster, Moshinsky and O’Bryan.
Associate:
Dated: 14 April 2020

Appeal from:	Kraft Foods Group Brands LLC v Bega Cheese Limited (No 8) [2019] FCA 593
File number:	VID 597 of 2019
Judges:	FOSTER, MOSHINSKY AND O'BRYAN JJ
Date of judgment:	14 April 2020
Catchwords:	CONTRACTS – construction of agreements relating to the restructure of the Kraft Foods Inc group in October 2012 – where two independent public companies were created: a global snacks business (SnackCo) and a North American grocery business (GroceryCo) – where certain intellectual property rights were allocated to the intellectual property company of the SnackCo group (SnackCo IPCo) and certain such rights were allocated to the intellectual property company of the GroceryCo group (GroceryCo IPCo) – whether rights in relation to certain get-up used by an Australian company for peanut butter products manufactured and sold in Australia (the Peanut Butter Trade Dress) were allocated to SnackCo IPCo or GroceryCo IPCo – construction of various definitions used in the agreements – consideration of commercial purpose or object of the agreements CONSUMER LAW – misleading or deceptive conduct – whether either party engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law (or passing off) by applying the Peanut Butter Trade Dress to peanut butter products – whether the respondent engaged in misleading or deceptive conduct in relation to its television and radio advertisements – whether the appellants engaged in misleading or deceptive conduct in a press release and by use of the slogan “Loved since 1935” TRADE MARKS – infringement – where primary judge found that the respondent had infringed the appellants’ trade marks by supplying certain peanut butter products in ‘shippers’ bearing the Kraft hexagon logo – whether the respondent used the Kraft hexagon logo trade mark (or the “Kraft” trade mark) “as a trade mark” within the meaning of s 120(1) of the Trade Marks Act 1995 (Cth)
Legislation:	Competition and Consumer Act 2010 (Cth), Sch 2, Australian Consumer Law, ss 18, 29 Trade Marks Act 1995 (Cth), ss 7, 120
Cases cited:	Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 Barefoot Contessa Pantry, LLC v Aqua Star (USA) Co (U.S. District Court, S.D. New York, 15-CIV-1092 (JMF) 26 February 2015) Bodum v DKSH Australia Pty Ltd (2011) 280 ALR 639 Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107 Commissioner of State Revenue v Placer Dome Inc (2018) 93 ALRJ 65 Commissioners of Inland Revenue v Muller & Co.’s Margarine Ltd [1901] AC 217 ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 CPA Australia Ltd v Dunn (2007) 74 IPR 495; [2007] FCA 1966 Defiance Button Machine Co v C & C Metal Products Corp, 759 F2d 1053 (2d Cir 1985) Dental Manufacturing Co Ltd v C de Trey & Co [1912] 3 KB 76 E&J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd (1966) 116 CLR 254 Federal Commissioner of Taxation v Murry (1998) 193 CLR 605 Geraghty v Minter (1979) 142 CLR 177 Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435 Henry Clay & Bock & Co Ltd v Eddy (1915) 19 CLR 641 Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd (2018) 264 FCR 422 Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Inland Revenue Commissioners v Muller & Co’s Margarine Ltd [1901] AC 217 JT International SA v Commonwealth (2012) 250 CLR 1 Kosciuszko Thredbo Pty Ltd v ThredboNet Marketing Pty Ltd (2014) 223 FCR 517 Lacteosote Ltd v Alberman [1927] 2 Ch 117 Marshak v Green, 746 F2d 927 (2d Cir 1984) Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 Optical 88 Ltd v Optical 88 Pty Ltd (2011) 197 FCR 67 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 Pioneer Kabushiki Kaisha v Registrar of Trade Marks (1977) 137 CLR 670 Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491 Re GE Trade Mark [1969] RPC 418 Re McGregor Trade Mark [1979] RPC 36 Revlon Inc v Cripps & Lee Ltd [1980] FSR 85 State Government Insurance Corporation v Government Insurance Office of New South Wales (1991) 28 FCR 511 Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 Visa USA Inc v Birmingham Trust National Bank, 696 F2d 1371 (Fed. Cir. 1982) Woodtree Pty Ltd v Zheng (2007) 164 FCR 369
Date of hearing:	6, 7 and 8 November 2019
Date of last submissions:	22 November 2019
Registry:	Victoria
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Category:	Catchwords
Number of paragraphs:	270
Counsel for the Appellants and Cross-Respondents:	Mr JT Gleeson SC with Mr BN Caine QC, Mr IP Horak and Dr B Kremer
Solicitor for the Appellants and Cross-Respondents:	Jones Day
Counsel for the Respondent and Cross-Appellant:	Mr A McGrath SC with Mr CH Smith
Solicitor for the Respondent and Cross-Appellant:	Addisons Lawyers

VID 597 of 2019
BETWEEN:	KRAFT FOODS GROUP BRANDS LLC First Appellant H.J. HEINZ COMPANY AUSTRALIA LIMITED Second Appellant
AND:	BEGA CHEESE LIMITED Respondent
AND BETWEEN:	BEGA CHEESE LIMITED Cross-Appellant
AND:	KRAFT FOODS GROUP BRANDS LLC First Cross-Respondent
AND:	H.J. HEINZ COMPANY AUSTRALIA LIMITED Second Cross-Respondent

JUDGES:	FOSTER, MOSHINSKY AND O'BRYAN JJ
DATE OF ORDER:	14 ApRil 2020