Kraft Foods Group Brands LLC v Bega Cheese Limited (No 9)

[2019] FCA 757

FEDERAL COURT OF AUSTRALIA

Kraft Foods Group Brands LLC v Bega Cheese Limited (No 9) [2019] FCA 757

File number:	VID 1220 of 2017
Judge:	O'CALLAGHAN J
Date of judgment:	21 May 2019
Date of publication of reasons:	24 May 2019
Date of hearing:	21 May 2019
Registry:	Victoria
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Category:	No catchwords
Number of paragraphs:	3
Counsel for the Applicants/ Cross-Respondents:	Mr B N Caine QC and Mr I P Horak
Solicitor for the Applicants/ Cross-Respondents:	Spruson & Ferguson
Counsel for the Respondent/ Cross-Claimant:	Mr A McGrath SC and Mr C H Smith
Solicitor for the Respondent/ Cross-Claimant:	Addisons Lawyers

ORDERS

VID 1220 of 2017

BETWEEN:

KRAFT FOODS GROUP BRANDS LLC

First Applicant

H.J. HEINZ COMPANY AUSTRALIA LIMITED

Second Applicant

AND:

BEGA CHEESE LIMITED

Respondent

AND BETWEEN:

BEGA CHEESE LIMITED (and another named in the Schedule)

First Cross-Claimant

AND:

KRAFT FOODS GROUP BRANDS LLC

Cross-Respondent

JUDGE:	O'CALLAGHAN J
DATE OF ORDER:	21 MAY 2019

UPON THE APPLICANTS UNDERTAKING TO PROSECUTE THE APPEAL REFERRED TO BELOW EXPEDITIOUSLY, THE COURT DIRECTS THAT:

1.On or before 4pm on 4 June 2019, the applicants file and serve any application for leave to appeal and accompanying proposed notice of appeal.

2.On or before 4pm on 10 June 2019, the applicants file and serve any interlocutory application seeking to stay any of the orders made herein and any additional supporting affidavits and submissions.

3.On or before noon on 17 June 2019, the respondent file and serve any additional affidavits and submissions in answer to the interlocutory application.

4.The interlocutory application is fixed for hearing at 10.15am on 20 June 2019 with an estimate of one day.

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.

5.By publishing or causing to be published the first Bega television advertisement (as defined in paragraph 39 of the third further amended statement of claim) Bega Cheese Limited engaged in misleading and deceptive conduct in contravention of s 18 of the Australian Consumer Law by misrepresenting that peanut butter sold in Australia prior to July 2017 by reference to the Kraft trademark was not Australian-made.

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;

(c)the contraventions by Bega Cheese Limited of s 18 of the Australian Consumer Law; and

(d)infringement by Bega Cheese Limited of a registered trademark.

8.For the purpose of enabling Bega Cheese Limited to make an election between its claim for damages and its claim for an account of profits, H.J. Heinz Company Australia Limited file and serve within 60 days an affidavit by its proper officer deposing to:

(a)the total number of peanut butter products sold by it in Australia up to the date of the affidavit, for each stock keeping unit (SKU);

(b)the prices at which those products were sold;

(c)full details of any rebates offered in respect of any supply of those products;

(d)the cost to it of the manufacture, sale or supply of the products, for each SKU;

(e)the approximate amount of profit it contends it made by the sale of those products, for each SKU;

(f)the method of allocating overheads, if any, which it regards as reasonably acceptable;

(g)the steps or reasoning by which the approximate amount of profit has been calculated; and

(h)the records kept by it in respect of such manufacture, sale or supply, price, cost, profit and overheads.

9.For the purpose of enabling Kraft Foods Group Brands LLC and H.J. Heinz Company Australia Limited to make an election between their claim for damages and their claim for an account of profits, Bega Cheese Limited file and serve, within 60 days, an affidavit by its proper officer deposing to:

(a)the total number of peanut butter products branded “The Good Nut” using the peanut butter trade dress in shippers bearing a Kraft trademark sold by it in Australia during the period from September 2017 until late March 2018 for each SKU;

(b)the prices at which those products were sold;

(c)full details of any rebates offered in respect of any supply of those products;

(d)the cost to it of the manufacture, sale or supply of the products, for each SKU;

(e)the approximate amount of profit it contends it made by the sale of those products, for each SKU;

(f)the method of allocating overheads, if any, which it regards as reasonably acceptable;

(g)the steps or reasoning by which the approximate amount of profit has been calculated; and

(h)the records kept by it in respect of such manufacture, sale or supply, price, cost, profit and overheads.

10.The proceeding be listed for further orders in relation to pecuniary relief on a date to be fixed.

11.Orders (1), (2), (3) and (4) above be stayed until the hearing and determination of the interlocutory application fixed for hearing on 20 June 2019 or until further order.

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

REASONS FOR JUDGMENT

O’CALLAGHAN J:

1. On 21 May 2019 I heard detailed submissions from the parties concerning appropriate directions, declarations and orders to be made by the court following the decision in Kraft Foods Group Brands LLC v Bega Cheese Limited (No 8) [2019] FCA 593.

2. The parties agreed that they did not require reasons.

3. The directions, declarations and orders that I made, having considered the submissions of the parties, are set out above.

I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Callaghan.

Associate:

Dated:       24 May 2019

SCHEDULE OF PARTIES

VID 1220 of 2017
Cross-Claimants
Second Cross-Claimant:	H.J. HEINZ COMPANY AUSTRALIA LIMITED