Background

In 2010, The Coca-Cola Company (‘Coca-Cola’) applied for declarations, injunctions, damages and other relief against PepsiCo Inc (’PepsiCo’), PepsiCo Australia Holdings Pty Ltd (‘PepsiCo Australia’) and Schweppes Australia Pty Ltd (‘Schweppes’) (collectively, the 'Respondents').

The dispute centred around Coca-Cola's “Contour Bottle”, which it claimed has a characteristic shape and silhouette that gave rise to "substantial goodwill and a valuable reputation". Coca-Cola alleged that the Respondents had provided cola beverage products in a deceptively similar glass "Carolina Bottle" (a visual comparison of the two bottles is shown below). As a consequence, Coca-Cola alleged the following three causes of action against the Respondents:

  1. Trade mark infringement of one or more of Coca-Cola's four trademarks under s 120(1) of the Trade Marks Act 1995 (Cth). This focused on two key issues:
    1. Whether the Respondents used the shape of their Carolina Bottle, or its silhouette, as a trade mark within the meaning of ss 17 and 120(1) of the Trade Marks Act; and 
    2. If so, whether the shape of the Respondents' Carolina Bottle, or its silhouette, was deceptively similar to one or more of Coca-Cola’s four trade marks.
  2. The tort of passing off. 
  3. Misleading or deceptive conduct in contravention of ss 52 and 53(c) of the Trade Practices Act (as the proceeding began prior to the commencement of the Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010 (Cth)).

Click here to image.

In his decision, Justice Besanko detailed the origins of Pepsi and Coca-Cola, and that of their respective bottles, before discussing the evidence of 14 witnesses with respect to matters of design, consumer behaviour and the contexts in which each bottle is sold.

The decision

Coca-Cola's trade mark claims - use as a trade mark

Coca-Cola argued that the Respondents used both the shape of its Carolina bottle, as well as its outline or silhouette, as trade marks. The Court agreed that the Carolina bottle itself would be recognised by consumers as distinctive and therefore being used as a trade mark but rejected Coca-Cola's argument that the outline or silhouette of the bottle was an additional and separate trade mark.

In pursuance of this second argument, Coca-Cola claimed that the Carolina bottle's "low waisted shape" was the most significant element of its design and sought to place emphasis on the fact that only the outline or silhouette, when in a refrigerator or cooler, would be "readily observable and eye-catching, relative to the other aspects of the shape of the bottle". However, Justice Besanko disagreed and held that it was the overall shape of the Carolina bottle that was being used as a trade mark; the waist and its outline or silhouette merely being part of that overall shape. His Honour noted that the fact that only one aspect of a product may be seen does not lead to the conclusion that consumers would see that aspect as an independent badge of origin.

Deceptive similarity

Justice Besanko also held that the Respondents' Carolina bottle was not deceptively similar to Coca-Cola's trade marks. His Honour rejected Coca-Cola's submission that the low waisted contoured shape of its Contour bottle was the essential or dominant feature of its trade marks. His Honour held that there were a number of features of the Contour bottle, none of which were more prominent than another. As a consequence, his Honour found that an ordinary consumer would not form the view that the waist in particular was the essential feature.

In the absence of any one essential feature, Justice Besanko held that the appropriate comparison for deceptive similarity was between the Carolina and Contour bottles overall. In doing so, Justice Besanko found that while there were broad similarities between the two bottles, the unique features of each bottle rendered the marks distinct. In forming this opinion, his Honour highlighted the fluting and belt band of Coca-Cola's marks and the horizontal waves of the Carolina bottle as decisive factors.

Passing off and claims under the Trade Practices Act

The Court also dismissed Coca-Cola's passing off and misleading or deceptive conduct claims. Justice Besanko held that Coca-Cola had a reputation in its Contour bottle as a whole, including features not present in the Respondents' Carolina bottle, and that ordinary consumers would quite clearly detect the difference between the two bottles, negating any confusion.

Justice Besanko also acknowledged expert evidence that the consumer would treat the branding on the bottle (in this case the brands "Coca-Cola" and "Pepsi") as the "most valid cue" when making their selection of a cola product, however, his Honour did accept (albeit with some hesitation) that a sufficient number of consumers may make their selection of cola products based on overall bottle shape.

Justice Besanko also took into account the fact that Coca-Cola was unable to adduce empirical evidence of actual deception or likelihood thereof.

Commercial implications

The decision highlights the importance of assessing trade marks as a whole when determining deceptive similarity, particularly with respect to shape marks concerning small, everyday consumer items. Where there are multiple allegedly distinctive features of a mark, the ubiquitous nature of the products or packaging that form the shape mark is likely to mitigate the impact of any one distinctive feature on the consumer, unless that feature is particularly unknown or unique.

The decision is a reminder that despite what a manufacturer considers to be distinctive about its products, distinctiveness must be assessed by reference to the audience or consumer. Usually, this will be a significantly higher threshold.

For the time being, it seems that tensions between the two cola giants will continue to bubble under the surface. Watch this space for news of an appeal.