Full Court decision: Kraft Foods Group Brands LLC v Bega Cheese Limited  FCAFC 65 (14 April 2020)
After a corporate restructure, spin-off and sale of the business, by 2017 Kraft’s Australian peanut butter business came to be owned and operated by Bega. At stake was rights to the trade dress or “get-up” of the labelling and packaging, with both companies claiming exclusive rights to use the familiar jar with the yellow lid and label design. There were no registered trade marks in respect of the trade dress (which does not include corporate logos). Bega adopted the trade dress and advertised to consumers that it had taken over Kraft peanut butter: eg “Australia’s favourite peanut butter has changed its name” and it had the “same recipe”.
At risk of over-simplifying a lengthy and factually complex case, on appeal the Full Federal Court upheld the trial judge’s decision that after the sale, by provisions of the relevant agreements, the goodwill now inured to Bega, which was therefore entitled to use the trade dress, and that it was actually Kraft that was engaging in misleading or deceptive conduct by seeking to re-introduce the trade dress and claiming that its re-introduced peanut butter product was the same one that had been “loved since 1935”.
A key takeaway from this case is that under Australian law, unregistered trade marks (in this case, the trade dress or “get-up” of the peanut butter labelling and packaging) cannot be assigned to a new owner as if a piece of property in the absence of also transferring the goodwill of the relevant business. An unregistered trade mark (or “rights to the trade dress”) is more accurately described as a business having the requisite reputation with respect to the relevant product to be able to take action for passing off (or misleading or deceptive conduct under the Australian Consumer Law).
A lesson is that trade marks should be registered where possible. Otherwise beware of attempting to assign branding and trade dress without the goodwill of the business, as this will be ineffective.