Case: Nature's Blend Pty Ltd v Nestle Australia Ltd  FCA 198
Result: Nature's Blend failed to show infringement.
The Robinsons own the registered trade mark for LUSCIOUS LIPS, which is registered from 12 March 2007 in respect of, inter alia, confectionery. Nature's Blend uses the mark in connection with lip shaped chocolates.
Nestle acquired Allen's confectionery business in 1989 and manufactures about 75 product lines under the ALLEN'S trade mark. ALLEN'S is well known in Australia. It has been used in connection with confectionery since 1891.
From about May 2007 to March 2009 Nestle manufactured, distributed and sold confectionary under ALLEN'S and RETRO PARTY MIX in packaging which included the expression "luscious lips" on the rear of the packaging. The expression appeared together with a description of the products: "That’s right! All your favourites are back, so put on those flares and get ready to party! Up to 7 lolly varieties including...cool Cola Bottles, those radical Racing Cars, yummy Honey flavoured Bears, totally freeeekie Teeth, luscious Lips, partying Pineapples and outrageous Raspberries." [emphasis added]
Sundberg J. discussed the relevant legislation. Section 120 sets out that infringement requires use as a trade mark. Also, the trade marks must be substantially identical or deceptively similar. Section 7(4) states that use in relation to goods means use of the trade mark upon or in physical or other relation to the goods. Section 17 defines a trade mark as, inter alia, a sign used to distinguish goods dealt with or provided in the course of trade by a person from goods so dealt with or provided by any other person. This would mean that descriptive or laudatory words would not usually qualify as trade marks.
In respect of trade mark infringement, the comparison is between the LUSCIOUS LIPS trade mark and Nestle's conduct. So, effectively, Nature's Blend said that Nestle was infringing its trade mark rights by selling the party mix described above.
Nature's blend said that "luscious lips" is not a phrase that ordinarily and naturally describes confectionery. They said that it is inherently distinctive and "newly-coined". Nestle cited various dictionaries which appear to indicate that "luscious" can mean "highly pleasing and pleasant to the taste or smell". According to them, the words were descriptive and laudatory.
It is possible for words to be descriptive and still serve as a badge of origin. In Johnson & Johnson Australia Pty Limited v Sterling Pharmaceuticals Pty Limited  FCA 310, Gummow J said that the fundamental question is "whether those to whom the user is directed are being invited to purchase the goods (or services) of the defendants which are to be distinguished from the goods of other traders “partly because” (emphasis supplied) they are described by the words in question."
His Honour held that the plain meaning of the words would be taken by consumers as being descriptive or laudatory of confectionery in the Retro Party Mix.
Whether or not Nestle used the words as a trade mark was also an important question.
The question is whether the words would have appeared to consumers as being used to indicate a connection in the course of trade between Nestle and the confectionery. As set out in Shell Co of Australia Ltd v Esso Oil (Aust) Ltd (1963) 109 CLR 407, the context of the use is all-important. Allsop J summarized it in Anheuser-Busch, Inc v Budějovický Budvar, Národní Podnik  FCA 390 - "The task is to examine the way the words are used in their context, including the totality of the packaging, to assess their nature and purpose in order to see whether they are used to distinguish the goods from goods of others...The assessment is made from the perspective of what a person looking at the label would see and take from it, as to the purpose and nature of its use."
The words "luscious lips" appeared on the back of the packet as part of a description of the contents. The word ALLEN'S appeared prominently on the front of the packet. So did RETRO PARTY MIX.
In Pepsico Australia Pty Ltd (t/as Frito-Lay Australia) v Kettle Chip Co Pty Ltd (1996) 135 ALR 192 the Full Court held that the word ‘KETTLE” was not used as a trade mark in respect of kettle cooked potato chips. The packet also prominently displayed the well-known trade mark ‘Thins’ and another well-known phrase ‘Double Crunch’. In Johnson & Johnson Australia Pty Limited v Sterling Pharmaceuticals Pty Limited  FCA 310, the Full Court held that CAPLETS on a paracetamol product called "TYLENOL’ had not been used as a trade mark. In this case Lockhart J said: "A person looking at the packaging would assume that the word CAPLETS describes or indicates the shape of the product contained in it or the dosage form."
Possibly disingenuously, Nature's Blend referred to the High Court’s decision in Mark Foy’s Limited v Davies Coop and Company Limited  HCA 41 where the majority held that the defendant's use of the words "Tub Happy" constituted infringement. Although the words meant "washable" it was a meaning that required suggestion. It was not a meaning that "sprang unaided to the mind". This did not help Nature's Blend because his honour felt that "Luscious Lips" did have a meaning that could "spring unaided to the mind". That is it meant a confectionery product that has a sweet taste and is in the shape of lips.
His honour said that "Luscious Lips" were significantly less prominent than the word CAPLETS and KETTLE.
Considering the evidence, he said that he was not satisfied that there had been "use as a trade mark". The two reasons were that the words were laudatory and descriptive and the effect of the words were diluted by the prominence of ALLEN'S.