Coca Cola Co v PepsiCo Inc (No 2)  FCA 1287
Shape trade marks and use of a shape as a trade mark.
Coca Cola has sold its beverage in a distinctive contoured bottle (Contour Bottle) for over 75 years in Australia and holds 4 registered Australian trade marks relating to the outline or shape of the bottle:
Pepsi began using its “Carolina” shaped bottle in Australia in 2007 in a limited way:
Coke commenced proceedings against Pepsi alleging that Pepsi’s Carolina bottle infringed Coke’s trade marks and that Pepsi’s use of a similar bottle was misleading and deceptive conduct in breach of section 18 of the Australian Consumer Law.
COURT DECISION AND REASONING
Coke’s trade marks were not infringed and Pepsi did not infringe the Australian Consumer Law.
The multiplicity of bottle shapes does not mean that consumers treat each shape as a badge of origin – there were at least 4 other soft drinks on the market sold in waisted bottles of varying kinds.
The bottle itself is not the product, it is the container for the product, meaning cases relating to shape trade marks for the actual product did not apply.
A key issue is whether Pepsi was using the shape as a trade mark.
The relevant test is as set out by Sundberg J in Global Brand Marketing Inc v YD Pty Ltd  76 IPR 161 (concerning a shape trade mark for shoes):
Whether a shape is used as a trade mark is a matter for the Court and is not determined by the absence of evidence;
The context of the use is critical and will generally determine whether the use is trade mark use;
Use covers a spectrum from shapes which are features that are purely functional at one end and shapes or features that are non-descriptive and non-functional (“arresting of appearance” or more attractive) at the other.
The Carolina Bottle is distinctive and functions as a trade mark as consumers would associate it with Pepsi.
Coke provided no evidence that consumers had been misled by Pepsi’s use of the Carolina Bottle.
The judge rejected Coke’s argument that the overall impression a consumer would have of Pepsi’s Carolina Bottle is a low-waisted contoured bottle (like Coke’s). Rather, consumers would focus on the waist, horizontal wave and neck of Carolina; in contrast the vertical flutes and clear belt band of Coke’s Contour Bottle and trade mark (not present in the Carolina) were the distinctive elements.
Considered as a whole, the Carolina Bottle is not deceptively similar to the Coke 2D/3D marks as it does not have the fluting or the band, has a horizontal wave feature (which the Coke marks do not have), has a waist which is higher and more gradual, has flat sides, not curved sides, has a different neck shape and has a twist top seal (not a cap lid seal).
The Carolina Bottle is not deceptively similar to Coke’s silhouette trade marks for the same reasons.
The silhouette of the Carolina Bottle does not function as a trade mark (meaning that Coke’s silhouette/outline trade marks were not infringed) and even if it did, the silhouette was not deceptively similar to Coke’s silhouette trade marks for the same reasons set out above.
In relation to the misleading and deceptive conduct argument, while enough consumers may make their initial selection based on bottle shape, the bottles are different (as set out above) and each bottle is clearly and prominently labelled with COCA COLA or PEPSI (both well-known brands), removing any real likelihood of deception.
If deceptive similarity is not established for trade mark purposes, misleading and deceptive conduct under the Australian Consumer Law is unlikely to be established.
Coke does not have a reputation in the outline or silhouette of the bottle alone.
Note: Coca Cola lost a similar case against Pepsi before the High Court of New Zealand recently.
Coca Cola has appealed this Australian decision.
Shapes may be used as trade marks even if they also have a functional purpose.
Shape marks are worth registering but reasonably small differences will avoid infringement.
Where other branding (particularly word branding) is present, it will be more difficult to establish misleading and deceptive conduct due to the countering influence of other branding, particularly for well known marks.