Have you ever picked up a new brand of your favourite product in the supermarket and noticed that its packaging looks suspiciously similar to that of your trusted old brand? A recent case between the producers of NutrientWater and Grassroots Enhanced Water reminds us that it is difficult to stop a little shrewd copying of packaging unless it infringes your registered rights or is likely to confuse customers.

Australia has seen a recent boom in a new beverage category, namely, water with added vitamins, minerals and flavours, sometimes called "enhanced waters". NutrientWater Pty Ltd (NW) was the first to bring this category to Australia with its clear plastic bottles containing waters in a rainbow of colours, with names like "Dragonfruit: Endurance" and "Pomegranate Berry: Rehab".

Inevitably, there have been new entrants to the "enhanced waters" market, including Baco Pty Ltd (Baco) with its Grassroots product

NW has taken exception to the similarities between the packaging of Baco's product and its own product and has sued Baco in the Federal Court for passing off and misleading or deceptive conduct and false representations under the Trade Practices Act 1974 (Cth).

In her decision, Justice Kenny notes upfront that the design of Baco's products has taken on various features of NW's packaging. Both products consist of brightly coloured waters in clear plastic bottles. The labels of both products incorporate a band of white and a band of colour approximating the colour of the water in the bottle, and the names of Baco's flavours, including "Dragonfruit & Grapefruit Power On" and "Pomegranate & Blueberry Recovery" are very similar to NW's flavour names.

In fact, Baco was very open about the fact that it used other brands of enhanced water, including NutrientWater, for reference when designing their product and adopted aspects of the packaging of those other brands. However, Baco claimed the reason for this was to ensure that its products were "immediately recognisable as being a competitor in the enhanced water category". Baco referred to these elements as a "category signature" but argued that it was very careful to differentiate its product using additional elements such as a distinctive name, logo and other features of its packaging.

And this is the crux of the matter. Justice Kenny referred to numerous authorities that state that the mere fact that a party copies the design or packaging of a competitor's product does not itself infringe the competitor's rights, as long as it is clear to the consumer that the copier's products are not those of the competitor. Justice Kenny referred to the Pub Squash case (Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851) where a competitor tried to take advantage of the success of the SOLO branded soft drink by producing a similar drink with a product name and packaging derived from the SOLO product's advertising and get-up. The advertisements for SOLO lemon squash highlighted the fact that the drink was just like "those great lemon squashes that pubs used to make" so the competitor called its product "Pub Squash". The competitor's advertising campaign focused on the endeavours of a heroically masculine character as did those for the SOLO soft drink, and the competitor sold its "Pub Squash" in cans of the same size and shade of yellow, with a similar medallion-type label to those of the SOLO soft drink. Despite the competitor's copying, both the trial judge and the Privy Council on appeal found that there was no passing off because the competitor had sufficiently differentiated its product from the SOLO soft drink.

Justice Kenny was satisfied that the distinctive elements of the packaging of Baco's Grassroots products, such as the prominent letter "G" and central grass-coloured band, were sufficient to differentiate Baco's products from NW's and so dismissed NW's claims.

It is interesting to note that Justice Kenny found that in designing its NutrientWater product, NW had itself substantially copied a US product called vitaminwater that was later introduced to the Australian market. It seems that the owner of the vitaminwater brand, Coca-Cola, did not take any court action against NW for this copying, but they may not have had a sufficient reputation in vitaminwater in Australia at the time NutrientWater hit the shelves to support a case. NW has also not taken court action against Coca-Cola over confusion caused by introduction of its vitaminwater to the Australian market after NutrientWater was established, even though much of the evidence led by NW in this case concerned instances of customer confusion between the NutrientWater and vitaminwater products rather than Baco's Grassroots products.

This case highlights the fact that "copying" is not always by its nature unlawful. Many companies "take inspiration" from other products, use them for reference or even copy aspects of other products, without censure from the courts because though the similarities are clear, shoppers still know which product they are putting into their trolley. That said, copying from competitors should never be undertaken without careful considerations of the legal ramifications and any copying of your products by a competitor warrants close scrutiny and consideration of your legal position and options. The overall likelihood of confusion is not always determinative, especially where registered rights are concerned, and in any case, it can be difficult to predict when a judge will see a likelihood of confusion.