The Full Federal Court has recently issued a decision in Kraft
Foods Group Brands LLC v Bega Cheese Limited 1 , an appeal
regarding ownership of an unregistered trade mark. The mark
in question is the appearance of a peanut butter jar, or, as it is
referred to in the decision, the ‘Peanut Butter Trade Dress’.

Inspire June 2020
Many Australians will be familiar
with Kraft peanut butter, a product
that was first sold here in 1935.

Over the years, a number of different
marks have been developed and
used on the packaging of Kraft
peanut butter. As well as the
KRAFT name, a logo (shown below)
10 featuring a hexagon surrounding
the word KRAFT was registered
for peanut butter products in 1963,
and in the 1980’s the slogan “Never
Oily, Never Dry” (the Slogan) was
developed and used extensively in
television commercials, becoming
registered as a trade mark in 2001.

In the early 1990’s Kraft peanut
butter was sold in a jar with
a yellow lid, and by 2007 the
Peanut Butter Trade Dress (the
Trade Dress) had been developed
and was used by the Australian
company, Kraft Foods Limited.

This involved “a jar with a yellow lid
and a yellow label with
a blue or red peanut device, the jar
having a brown appearance when
filled”. The peanut-shaped device
was overlayed with the words
“Peanut Butter” and the Slogan.

The words “Crunchy” or “Smooth”
also appeared on the label, in
the same colour as the peanut-
shaped element (blue for smooth
and red for crunchy), and the Kraft
hexagon logo appeared above the
peanut-shaped element (Figure 1).

In 2012, the US parent company
of Kraft Foods Limited underwent
a restructure, ultimately splitting
into two companies: Mondelez
International, Inc, which controlled
the global snacks business, and
Kraft Foods Group, Inc, which
controlled the North American
grocery business. Shortly prior
to the restructure, Kraft Foods
Limited assigned the KRAFT word
mark and the Kraft hexagon logo
to the IP holding company of the
US parent, but then continued to
Kraft Foods Group Brands LLC v Bega Cheese Limited [2020] FCAFC 65
1
use those marks under licence.

Significantly, the assignment did
not include the Slogan, and did
not mention the Trade Dress.

Around the time of the restructure,
the Australian company Kraft Foods
Limited was renamed Mondelez
Australia (Foods) Ltd (MAFL). After
the restructure, MAFL continued
selling peanut butter in Australia,
using the Trade Dress, the Slogan
and the Kraft hexagon logo (now
under licence from the IP holding
company of Kraft Foods Group, Inc).

This situation continued until June
2017, when MAFL began to sell
peanut butter under the brand
“The Good Nut”, rather than “Kraft”.

This was in preparation for the sale
of the business to Bega Cheese
Limited, which occurred in July
2017. Bega initially added their BEGA
mark to “The Good Nut” label, but in
late 2017 they dropped “The Good
Nut” and just used BEGA, along
with the Trade Dress (Figure 2).

In doing so, Bega acquired
substantially all of the 60%
market share for peanut butter
Crunch time
for Kraft –
Smooth sailing
for Bega