“Monster” – New direction on advertising evidence from the Federal Court?

Over recent years, some members of the Federal Court have been sceptical about advertising evidence.  In Cadbury v Darrell Lea,  Heerey J made it clear that expert marketing evidence could prove an expensive waste of time.  In his view, judges were well placed to determine themselves the brand impact of different types of packaging and marketing.  Heerey J was not alone in this view, although the Full Court did overturn his decision to exclude expert evidence from the case.  Now, the “Monster” case shows that the debate continues, but is perhaps trending towards an acceptance that marketing should be recognised as extremely powerful even if its impact is hard to measure.

In Hansen Beverage Co v Bickfords (Australia) Pty Ltd (VID 241 of 2008; 14 November 2008), the American makers of MONSTER ENERGY, an energy drink targeted at young males, sued an Australian company which had introduced a similar drink to the Australian market with the same name.  The case alleges passing off or breach of section 52 Trade Practices Act 1974 (Cth).  There was no question that the products shared the same name and ingredients, and were also presented in a similar fashion.  The issue though, was whether MONSTER ENERGY (US) was sufficiently known in Australia to cause consumers to believe – in error – that the respondents’ drink was sourced from or associated with the US version.  This is because the US company had not yet launched in Australia, although it had engaged in preliminary ‘indirect’ marketing, particularly with extreme sports followers, to develop a brand presence.

The Full Court overturned the primary judge’s finding in favour of the respondents, finding that the primary judge had mistakenly imposed on the US company the requirement to establish that a substantial number of persons in the target market (namely, young men generally) had been misled.  The right approach was to ask whether a ‘not insignificant’ number of people generally in Australia (say, extreme sports followers) would be familiar with the original MONSTER ENERGY brand.  Finkelstein J indicated that such a number could be as low as 70.

What is particularly interesting though, is the Full Court’s acceptance of indirect advertising (such as sponsorship of sporting events) as a powerful marketing tool.  Commenting that the trial judge’s approach to indirect advertising was overly cautious, Finkelstein J noted: “Billions of dollars are spent on advertising.  The object is to obtain brand recognition.  The purpose is to influence consumer decision-making.”  He also acknowledged the changing face of marketing: “But the advertising industry has now moved away from primarily relying on direct advertising.  The belief is, and the belief is likely to be correct, that indirect communication sometimes expresses a point with more impact.”  With a nod towards product placement, Finkelstein J concluded: “After all, everyone knows that James Bond drives an Aston Martin, Janis Joplin wanted to own a Mercedes Benz and Audrey Hepburn had breakfast at Tiffany’s“.

It is understandable that judges have over the years expressed scepticism about advertising.  After all, the very function of a judge is to engage in an objective, reasoned and logical assessment of the evidence and law.  Advertising and marketing contrasts sharply with this – it acts on the sub-conscious by making people want and need things even if this is irrational behaviour.  Working out how to explain to a judge that successful marketing can affect them too, even if they don’t know it, can be quite challenging!  Therefore, seeing a growing recognition from the bench of this phenomenon is quite encouraging to practitioners in this area.A final comment: This case is a salutory lesson that global convergence in marketing has now reached our shores.  As this case shows, (almost) gone are the days when a marketer could visit the United States, see a great brand and bring it back to launch in Australia!

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