Natureâs Blend, owner of the trade mark LUSCIOUS LIPS, has failed in its appeal to the Full Federal Court against a finding of non-infringement by Nestlé in Natureâs Blend Pty Ltd v Nestlé Australia Ltd [2010] FCAFC 117.
Nestlé, under its Allenâs brand, had sold a confectionary product known as the Retro Party Mix. The back of the packaging of the product contained a blurb describing the various lollies within the mix and included the expression âluscious Lipsâ along with others such as âcool Cola Bottlesâ and âradical Racing Carsâ. At first instance the trial judge held that Nestléâs use of the expression âluscious Lipsâ in this context was not use as a trade mark.
On appeal, Natures Blend criticised the approach of the trial Judge for focussing only on the conduct of Nestlé and its use of the expression âluscious Lipsâ and giving insufficient attention to the proper meaning of its trade mark.
The Full Court noted that there was no dispute that the words used by Nestlé were substantially identical to the trade mark and stated that in that context there is no requirement that the meaning of the registered mark must first be ascertained. Accordingly, there was no error made by the trial judge in failing to ascribe a meaning to the mark LUSCIOUS LIPS independently and apart from the alleged infringing conduct. The appropriate question, as posed by the trail judge was âwhether the words âluscious Lipsâ would have appeared to consumers as possessing the character of a brandâ.
In answering this question the Full Court approved of the trial Judgeâs reliance on authorities for the proposition that âthe branding function can be carried out in different places on packaging with different degrees of strength and subtletyâ and that âthe existence on a label of a clear dominant âbrandâ is of relevance to the assessment of what would be taken to be the effect of the balance of the labelâ.
The Full Court considered that:
Even if most consumers may look at the back of Nestléâs packet before purchase or even read the blurb, such an inspection would simply reveal that one of the mixed lollies in Nestléâs product is described in a light and amusing context as being âluscious Lipsâ. However, by the time the consumer has read the blurb, if indeed the consumer does so, he or she has already seen that it is in an Allenâs brand of product with the name of the product variant being RETRO PARTY MIX. If the consumer does go on to read the blurb, the consumer is well aware by that stage that the brand and commercial source is Allenâs.
Accordingly, the trial judge âwas correct in taking into account the prominence of the registered ALLENâS and NESTLÃ marks on the packaging in contrast to the location and style of the expression âluscious Lipsââ.
The Full Court also upheld the trial Judgeâs finding that Nestlé had made out a good faith defence on the basis that it was not, and indeed could not, have been aware of the Natureâs Blend trade mark at the time it first adopted the expression âluscious Lipsâ.