Coca Cola Company v PepsiCo Inc (No 2) [2014] FCA 1287

A recent decision of the Federal Court emphasises that although shape trade marks have their place, the context in which they are used will affect the scope of protection they offer.

The Coca-Cola Company (“TCCC”) has sold beverages in its distinctive Classic Contour Bottle shape since 1938. It is widely accepted that this is perhaps one of the most well-known shape trade marks throughout the world. TCCC has consistently identified and promoted this shape as part of its advertising campaigns and has registered it, in Australia, as both a 3-dimensional “Shape” trade mark and a 2-dimensional “Device” mark.

Pepsico Inc (“Pepsico”) commenced selling products in a somewhat similar bottle shape (the “Carolina Bottle”) in 2007 but shortly thereafter withdrew this product from the market. In early 2009 Pepsico resumed the sale of products in its new shaped bottle and not surprisingly TCCC commenced infringement proceedings.

Importantly, the validity of TCCC’s shape trade marks was not at issue. In addition, there was no dispute between the parties that the use of a 3-dimensional shape may infringe a 2-dimensional device trade mark.

Regardless, the Federal Court found that the use of the Carolina Bottle shape did not infringe the rights of TCCC under the provisions of the Australian Trade Marks Act, nor did it constitute misleading or deceptive conduct within the meaning of the Trade Practices Act 1974 (now the Australian Consumer Law) or passing off.

Key Learnings

  • The fact that a bottle performs a function does not, of itself, mean that the shape of the bottle cannot operate as a trade mark.
  • The context in which the two bottles are sold is important to both trade mark issues and the issues involved in passing off and claims under the misleading or deceptive conduct provisions of the Australian Consumer Law.
  • While TCCC provided extensive evidence of the use of the Contour Bottle it failed to provide evidence of the reaction of consumers to the Carolina Bottle or of the reaction of consumers to bottle shapes more generally. There was therefore no evidence to show that the use of the Carolina Bottle had or was likely to result in deception or confusion.
  • The date of assessment for the purpose of demonstrating a plaintiff’s reputation is normally the date at which the defendant’s product or service first enters the market, however, where sales are low and the defendant has temporarily withdrawn the goods or services before reintroducing them to the market, it may be more appropriate to assess the plaintiff’s reputation at the later date.
  • Where passing off or misleading or deceptive conduct are alleged, the presence of distinct and well known trade marks on the two allegedly similar products indicate that consumers are unlikely to be misled or deceived.

Summary of the decision

In reaching his conclusion Besanko J placed importance on the context in which the two bottles are sold. The context included a consideration of both the setting within which the products are sold and all of the features of the bottles.

TCCC argued that both bottles have similar outlines or silhouettes. However, it was apparent from the evidence that other products have been sold in bottles having similar silhouettes.

In making the determination regarding infringement under the Trade Marks Act, the Court held that it was incorrect merely to focus on the outline or silhouette of the Carolina Bottle. This is because it was not just the outline or silhouette of the Carolina Bottle that was functioning to identify the product being offered for sale. Rather it was all of the features of the Carolina Bottle including (amongst others) the distinctive horizontal wave lines across the lower half of the bottle that were being used as a trade mark. On this basis, Besanko J held that the Carolina Bottle was not deceptively similar to any of the marks the subject of the registrations owned by TCCC.

The considerations under the Trade Practices Act and common law tort of passing off initially required a determination as to the relevant date on which to assess the reputation that TCCC had acquired, in connection with its Classic Contour Bottle shape. This would normally be assessed as at the first date that Pepsico sold the relevant goods, in Australia, in the Carolina Bottle. However, in this case Pepsico had ceased use of the Carolina Bottle after its initial market entry and had only low levels of sales during this period. The court accepted that this meant that the initial sales by Pepsico had no substantial impact and the proper date to assess the reputation of TCCC was the date that Pepsico resumed sales of beverages in its Carolina Bottle.

Nevertheless, the court noted that the differences between the two dates did not have any practical relevance because it found that the reputation acquired by TCCC at both of these dates was not merely for the silhouette or outline of the bottle. It was the shape of the bottle as a whole in which TCCC had acquired its reputation.

Regardless, on this issue the Court held that the branding on the bottles was the most valid identifying cue. Therefore, in the absence of any empirical evidence showing that consumers have been misled by the use of the Carolina Bottle, the Court found the use of the Carolina Bottle did not constitute passing off or misleading or deceptive conduct.

Images of the Bottles

Contour bottle – TCCC

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Carolina bottle - Pepsi

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