Introduction

In Mars Australia Pty Ltd v Sweet Rewards Pty Ltd [2009] FCAFC 174 the Full Federal Court (court) dismissed Mars’ appeal against the decision of the primary judge that the labels and packaging used by Mars’ competitor, Sweet Rewards, on its Delfi Malt Balls product did not constitute passing off, misleading or deceptive conduct or trade mark infringement in relation to Mars’ famous Maltesers product.

The decision is unsurprising. Essentially, the court found that:

  • there will be no passing off or misleading or deceptive conduct where distinguishing features that remove any potential for consumer confusion are incorporated in the impugned packaging, and
  • there will be no trade mark infringement where the common elements between the allegedly infringing product and the registered mark are neither distinguishing features of the registered mark, nor used as trade marks in the allegedly infringing product.

The decision again reminds us that composite trade marks, marks comprising word and device elements, are of limited use in enforcing rights in the individual components of the mark in the absence of clear cut cases of copying. This should be an important consideration when deciding which of your key brands to register, and what type of mark to register.

This decision may be of particular concern to owners of famous marks.

Background

In Mars Australia Pty Ltd v Sweet Rewards Pty Ltd [2009] FCA 606 the primary judge rejected Mars’ allegations that the packaging of Sweet Rewards’ product, the Delfi ‘Malt Balls’ constituted passing off, misleading and deceptive conduct or trade mark infringement. There was no dispute that Maltesers are a famous product, that Mars’ two registered trade marks, composite marks that are effectively the Maltesers packaging, are famous marks or that Mars has acquired a reputation in the get-up of the Maltesers packaging.

The packaging of Sweet Rewards’ Delfi Malt Balls incorporates a red background, the word ‘Delfi’ on the top front centre of the label, a logo consisting of a picture of a skier in a circle to the left of the word Delfi and images of floating brown malt balls (some in cross-section showing a yellow filling).  

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The primary judge noted that the principal component in the Maltesers get-up is the word ‘Maltesers’ and concluded that it would be highly unlikely for a consumer of chocolate confectionary to mistake a Malteser for something which is not called a Malteser. For this reason, the primary judge said, Mars was ‘a victim of its own success’.

In relation to the trade mark infringement claim, the primary judge rejected both the allegation that the Malt Balls label was being used as a trade mark and as a whole infringed the Maltesers marks, and the allegation that each element of the Malt Balls get-up infringed the Maltesers marks. In relation to the first allegation, the judge held that the only feature of the label being used a trade mark was the word ‘Delfi’ and that therefore there could be no substantial identity or deceptive similarity. In relation to the second allegation, the judge held that consumers were so familiar with Maltesers that they could not possibly be confused by the ‘Malt Balls’ label and that therefore there was no likelihood of imperfect recollection by consumers of the Mars trade marks leading to confusion.

The appeal

On appeal, Mars submitted that the primary judge used the strength of the Maltesers marks to Mars’ disadvantage in assessing its claims for passing off and for infringement of its trade marks.

In relation to the trade mark claims, Mars submitted that its reputation was irrelevant and that the primary judge impermissibly considered the fame of the Maltesers marks in determining that there was no deceptive similarity. Therefore, Mars claimed, the decision was based on an application of an incorrect legal test.

Mars also contended that the primary judge erred in concluding that the only feature used by Sweet Rewards as a trade mark was the word ‘Delfi’ and the skier symbol, as the judge did not consider the overall impression conveyed by the label.

The decision of the Full Federal court

The court, in a relatively short decision, dismissed Mars’ appeal and upheld the findings of the primary judge. The court agreed that:

  • the distinguishing feature of the Maltesers get-up and trade marks, as a whole, is the word ‘Maltesers’ and that the other features relied on by Mars, namely the red colour and the pictures of the malt balls product in the whole and cut through, are not distinguishing features of the Mars product  
  • the overall impression in the imperfect recollection of the consumer of the Mars trade marks is of the word ‘Maltesers’  
  • the distinguishing feature of the Sweet Rewards Product is the Delfi trade mark, and  
  • neither the words ‘Malt Balls’, the red colour nor the depiction of the malt balls, both whole and in cross-section, are used as a trade mark by Sweet Rewards.  

In support of their findings, the court relied on evidence:

  • that the colour red and the depiction of the product, both whole and cut through in cross-section, are commonplace in confectionary packaging  
  • that the words ‘Malt Balls’ are an accurate description of the Sweet Rewards product, and  
  • that the words ‘Malt Balls’ have been used by Sweet Rewards on products sold other than under the Delfi brand and have been used on the packaging of a product sold by a confectioner in Melbourne.  

For these reasons, the court found that the primary judge was correct in finding that the Malt Balls label, considered as a whole, was not deceptively similar to the trade marks and did not pass off the goods to which it was affixed as Maltesers or otherwise a Mars product. There was therefore no misleading or deceptive representation made by the use of its label by Sweet Rewards.

The court did not discuss the significance of the reputation of Maltesers, focusing instead on consumer impressions.

Take away note

In our commentary on the primary judge’s decision, we emphasised that composite trade marks, despite their limitations, may still have a place in your stable of registered marks. We said that ultimately, what a brand owner chooses to register should be determined based on the key brand identifiers for the relevant product. However this case again reminds that it will be the factual comparison between what is used as a trade mark on the allegedly infringing product and the distinguishing components of the mark that is protected that will determine whether any infringement has occurred.