To Drink or not to Drink?

The recent Australian Federal court case of Nutrientwater Pty Ltd v Baco Pty Ltd [2010] FCA 2 concerns competitors in the market for water beverages enhanced with nutrients and vitamins. The issue for the Court was whether Baco’s adoption of similar get-up for its enhanced water product range, compared to Nutrientwater’s range, was passing off or misleading and deceptive conduct under the Trade Practices Act.  

The substance of Nutrientwaters’ case was that there was a striking similarity between the appearance of the Nutrientwaters’ product range and Baco’s Grassroots product range.

Nutrientwater had relied on a combination of features, which were said to be distinctive of the Nutrientwater product range, including shape of its bottle, label design and colours of its nutrient water beverages.  The evidence established that most of these features were shared with other competitors in the enhanced water market, particularly with vitaminwater (US product – Coca-Cola Amatil), and, to a lesser extent, Smart Water (Schweppes).

The Court held that there is no liability where allegedly appropriated features were in common use in the enhanced water market when Baco entered the Australian market in May 2009.  The Court held that adoption of features of a competitors’ get-up is permissible where the respondent’s products are sufficiently distinguished through branding and other means, as was the case here by Baco and its products.

Nutrientwater failed to make out its claims, first, because it failed to establish a relevant reputation in the features that Baco allegedly appropriated. Secondly, the Court accepted that a trader is entitled to adopt the features of competitors’ products, providing the result is not likely to deceive or mislead the ordinary reasonable consumer into mistaking the trader’s goods for the goods of competitors.

The design of Baco’s ‘Grassroots’ enhanced water products took on various features of the get-up used by Baco’s market competitors, especially Nutrientwater. At the same time, Baco’s product design was, and was intended to be, distinctive. Apart from Baco’s products’ branding – name and logo – many of the other significant design features used by Baco were, by May 2009 when Baco entered the market, being used by others in the enhanced water market besides Nutrientwater. Furthermore, by its branding – name and logo – and other features of its get-up or packaging, Baco clearly differentiated its products from its competitors’ products in the enhanced water market.

Accordingly it was held, such similarities that existed between Baco’s and Nutrientwater’s enhanced water products could not ground an action in passing off, or under ss 52 or 53 of the Trade Practices Act.

 

Preet Bhatti

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