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Post #5 of our Top 10 of IP in 2020

Kraft Foods Group Brands LLC v Bega Cheese Limited [2020] FCAFC 65 (14 April 2020)

In a significant Full Federal Court decision this year, we were reminded that in Australia, unregistered trade marks (in this case, the well-known trade dress or “get-up” of 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.  Doing so will be ineffective.  

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 of the business 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 is that trade marks should be registered where possible.  

The High Court declined to grant Kraft special leave to appeal, so Kraft’s argument that goodwill ought also to be recognised on a product-by-product basis (rather than an entire business) remains too thinly spread and goes no further for now.  ☁︎

2020 has seen a very healthy amount of activity in intellectual property law in Australia.  In no particular order, my Top 10 of 2020 series of posts contains my top ten things in IP from the year, and what they might mean for 2021. 

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