Pitfalls in product packaging
Copy-cat cans and cartons cause consumer confusion
Consumer-facing brands often use packaging designs to distinguish their product and entice customers in competitive and dynamic markets. Disputes can arise when similarities between different packaging designs for similar or competing products spark concerns that customers will mistake or associate one brand with another.
In two separate proceedings, the Federal Court of Australia recently considered and rejected claims that Better Beer’s lager packaging and Nature's Delight coconut water packaging misled consumers because of the similarities between their respective competitor’s packaging.
These decisions show how competing brands might protect themselves when a competitor is marketing a product with similar packaging. Distinctive, prominently displayed product names or marks can distinguish designs that are otherwise strikingly similar and differentiate products that, without a distinctive mark, might mislead or confuse consumers. Businesses who seek to defend their get-up against copy-cat designs should first ensure they have a strong reputation in a product that is packaged in a manner that is distinctive, unique and recognisable to consumers.
Sidewinder versus Better Beer: do 'thirsty folk want beer, not explanations'?
2021 saw the launch of two new beer ranges in Australia; the Sidewinder
low-alcohol Hazy Pale by Brick Lane Brewing Co Pty Ltd (Brick Lane) and
the Better Beer low-carb lager by Torquay Beverage Co Pty Ltd (Torquay).
Brick Lane launched its Sidewinder range with a media release on 21 July
2021, just five days before Torquay launched its Better Beer with an announcement
to the ASX. The packaging design of both products had distinct similarities -
both appeared in off-white 355mL cans complemented by striped designs in blue,
orange and yellow and the use of dark blue or black lettering.
Brick Lane accepted that the designs of both parties’ products were developed concurrently and independently of one another, so Torquay had not actually copied Brick Lane’s design. Instead, Brick Lane alleged that the packaging and promotion of the Better Beer lager had induced (or was capable of inducing) consumers into mistaking the Better Beer lager for a Sidewinder product or as part of the Sidewinder range or even as a no- or low-alcohol product when it was not. Torquay denied the allegations.
Justice Stewart accepted that the designs of both products' packaging were strikingly similar and accepted Brick Lane's evidence that two consumers had been momentarily confused between the two products. His Honour also acknowledged the well-known statement by Lord McNaughten in his Honour's 1891 decision that "thirsty folk want beer, not explanations", but ultimately found against Brick Lane on the basis that reasonable consumers of beer would take care of their own interests, including by distinguishing between low-alcohol and low-carb beers and noticing the names of products (which in this case were distinctively different). His Honour also found that the Sidewinder range had not established a reputation in its get-up by the time Better Beer launched just five days later, and on that basis, found that consumers would not have mistaken Better Beer for a Sidewinder product or as part of the Sidewinder range.
Raw C versus Nature's Delight: judge finds allegations don't hold (coconut) water
Since 2014 and 2015, respectively, Natural Raw C Pty Ltd (Raw C) and Maicap Pty Ltd (Maicap) have sold coconut water products in the Australian market under their respective marks, 'Raw C' and 'Nature's Delight'. Maicap re-designed its packaging in 2021 and again in 2022. From December 2021, Maicap began selling its product in one-litre, rectangular, white and blue Tetra Paks with white caps, and featuring a blue-coloured tab with the ‘Nature’s Delight’ mark at the top of the product, which Raw C alleged was too similar to its own such that consumers would be misled into thinking that Maicap’s product was made by or associated with Natural Raw C.
Justice Nicholas also found that the features of the Raw C packaging created quite a different visual impact to Maicap's 2021 packaging, having regard to the brand name, the use of a stylised coconut on the Nature's Delight product and the style of lettering on each product. His Honour found that the 2022 packaging was even less similar to Raw C's packaging. In reaching his decision, Justice Nicholas observed that some similarities between the packaging designs were common to products across the coconut water market, including the size and shape of the Tetra Pak and the type and colour of the cap, and those features did not distinguish Natural Raw C’s product in the market.
Distinctive product names may distinguish one product from another, despite similar designs
Prominently displayed, distinctive product names distinguished the Better Beer and Nature's Delight products from the competitor’s products, despite other similarities in packaging design. However, names may not always be capable of distinguishing otherwise similar products. In an earlier case, the marks 'CHÉRI Australia' and 'CHANTELLE Sydney' had such phonetic, visual and geographic similarities that the former mark was incapable of distinguishing a product with almost identical packaging to another product bearing the latter mark.
Evidence that customers have been misled or confused has limited utility
Both Brick Lane and Raw C led evidence from witnesses who had been confused between the two competing products. Brick Lane, for example, led evidence from its employees about conversations they'd had with a Dan Murphy's salesperson and a cleaner at the GABS festival who had mistaken Better Beer for a Sidewinder product. Justice Stewart considered that this evidence "did not go all that far" in establishing Brick Lane's case and reiterated the established principle that such evidence has only peripheral value in determining whether conduct is misleading or deceptive.
Reputation is everything
Establishing a particular reputation in a product design is a necessary springboard for the argument that consumers have been (or are capable of being) misled by a similar product design. One reason why Brick Lane’s case failed was that it couldn’t show that the Sidewinder get-up had any particular reputation in the market by the time the Better Beer lager launched five days later. Similarly, Natural Raw C struggled to establish that it had a particular reputation in a design that included certain packaging features common to the product market, including the size and shape of the Tetra Pak and the type and colour of the cap.
If you’d like to discuss any concerns or queries about your packaging design or competitor’s packaging design.
 Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd (2017) 349 ALR 598
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