Mars Australia has not succeeded in its efforts to restrain the sale of a range of “Malt Balls” products sold through various discount stores, including Target and Kmart. In June 2009, Perram J dismissed Mars’ claims of registered trade mark infringement, passing off and contravention of ss 52 and 53 of the Trade Practices Act 1974 (Cth) made against Sweet Rewards Pty Ltd. In a judgment handed down shortly before the Christmas/New Year break, a Full Court of the Federal Court (Emmett, Bennett and Edmonds JJ) dismissed Mars’ appeal against the trial judge’s decision.

Malt Balls and Maltesers

Since 2005, Sweet Rewards’ chocolate covered malt balls have been sold in various discount stores, including Target and Kmart. The malt balls are packaged in a plastic jar with a bold red background, with the word “Delfi” on the top front centre of the label, a logo consisting of a skier in a circle on the jar, malt ball images floating across the jar (including some cross-sections of the malt balls), and the words “Malt Balls” written in bold script covering a small portion of the label.

The packaging of the well-known Maltesers product combines the brand name “Maltesers” (written in a stylised script across the packaging), a red background and floating chocolate balls (including some balls shown in cross-section).

Decision of Perram J

Mars made three claims: registered trade mark infringement, passing off and contravention of ss 52 and 53 of the Trade Practices Act. Perram J dismissed each of these claims.

Perram J dismissed the registered trade mark infringement claims on a number of grounds, including on the basis that the “Malt Balls” name was not used by Sweet Rewards “as a trade mark”.

In relation to the claims in passing off and under the Trade Practices Act, Mars alleged the packaging in which the Malt Balls were sold was likely to convey to the ordinary or reasonable consumer that there was some association between that product and Maltesers. Mars also claimed that the Malt Balls jars conveyed a representation of “product equivalence” (i.e. that Malt Balls provided the ”same taste experience” as eating a Malteser).

Perram J held that because the principal component of the Sweet Rewards packaging did not include the word “Maltesers”, which was the most important part of the Maltesers packaging, it was highly unlikely that any ordinary consumer of chocolate confectionary could mistake something which is not called a Malteser for a Malteser. Perram J highlighted the fact that the jars bore the name “Malt Balls” and used slightly different visual features such that a consumer would sufficiently distinguish them from Maltesers. His Honour also considered that the use of the word “Delfi” and the skier image further reduced any likelihood of consumer deception. His Honour also accepted that the term “Malt Balls” was a term of ordinary usage to describe the product and that its use alone would be highly unlikely to mislead consumers into thinking they were eating a Malteser. Mars’ argument regarding “product equivalence” was also rejected, on similar grounds.

The Decision of the Full Court

The Full Court noted that Perram J was correct in his finding that the distinguishing feature of the Maltesers get-up and trade marks, considered as a whole, is the word “Maltesers”. The Full Court did not consider the other features of get-up (packaging) referred to above, including the red colour and the images of floating malt balls, to be features that distinguished the Mars product. Notably, the Full Court considered that the colour red and the images of chocolate malt balls (in whole and in cross-section) are commonplace in the packaging of confectionery.

The Full Court stressed that the questions of similarity of product appearance in the case were matters of impression. In dismissing the appeal on the registered trade mark claims, the Full Court agreed with the trial judge that the overall impression one would have of the Mars trade marks is simply the word “Maltesers”. In addition, the Court considered it relevant that the words “Malt Balls” are descriptive of the nature of the Sweet Rewards product. The fact that the words “Malt Balls” were styled similarly to “Maltesers” did not persuade the Full Court to a contrary view. In the result, the Full Court held that Sweet Rewards did not use the words “Malt Balls”, the red colour on the packaging or the images of malt balls as trade marks. These characteristics were not used by Sweet Rewards to distinguish the malt balls as those of Sweet Rewards, nor to suggest that the goods were Maltesers, nor that they are somehow equivalent to Maltesers or to any other Mars product. The Full Court also held that the Sweet Rewards label, as a whole, was not deceptively similar to the Mars trade marks. Therefore, the appeal against the dismissal of the registered trade mark claims failed on these grounds.

Insofar as the passing off and Trade Practices Act claims were concerned, the Full Court agreed with the primary judge that the “distinguishing feature” of the Sweet Rewards product was the trade mark “Delfi”. The Full Court held that Perram J had not erred and that the label that Sweet Rewards applied to its Malt Balls product, when considered as a whole, did not pass off the Malt Balls product as Maltesers or otherwise as a Mars product. Therefore, this aspect of the appeal also failed.

The judgment is a salient reminder that in the consideration of claims based on similarities of product presentation, decisions will be based largely on impression, and that a court will adopt a commonsense view unaffected by partisan sensibilities in assessing whether the appearance of a product is so similar to another so as to be likely to mislead or deceive the ordinary or reasonable consumer.