Coca-Cola's third attempt to protect Contour bottle marks against Pepsi fails

Australia

The Coca-Cola Company has made a third attempt to protect its Contour bottle trademarks against its rival PepsiCo Inc in The Coca-Cola Company v PepsiCo Inc (No 2) ([2014] FCA 1287). Coca-Cola brought unsuccessful actions for trademark infringement, misleading or deceptive conduct and passing off against Pepsi in the Federal Court of Australia, having being unsuccessful in similar actions in both New Zealand and Germany.

Four of Coca-Cola’s registered shape trademarks were the subject of the proceeding, each a depiction of Coca-Cola’s Contour bottle, which comprises “a pinch in the bottom portion of the bottle, a relatively wide portion of the bottle above the pinch, and tapering of the bottle from the wider portion up to the neck of the bottle”. Coca-Cola’s trademark infringement action concerned:

  • whether Pepsi used its Carolina bottle’s outline or silhouette, separately or in addition to its whole shape, as trademark; and
  • if the answer to that was yes, whether Pepsi’s Carolina bottle was deceptively similar to Coca-Cola’s Contour bottle.

               Coca-Cola and Pepsi bottles

Coca-Cola's Contour bottle      Pepsi’s Carolina bottle

In determining whether Pepsi was using the Carolina bottle as a trademark, Justice Besanko applied the well-known principle from The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited ((1963) 109 CLR 407), namely:

  • whether a sign is being used as a trademark depends on how the viewer sees the particular use of the sign in the setting or context; and
  • whether that use is for the purpose of indicating a connection in the course of trade between the product bearing the sign and the trader.

Justice Besanko also drew principles from the myriad of shape trademark cases, including in particular Global Brand Marketing Inc v YD Pty Ltd ((2008) 76 IPR 161) (which considered use of a sign that comprised the sole of a shoe) where it was found that, among other things, context is all important in determining whether a sign is being used as a trademark.

Looking at the context in which Coca-Cola’s and Pepsi’s beverages in the Contour and Carolina bottles were sold and displayed to consumers, in light of extensive expert evidence on design and consumer behaviour, Justice Besanko found the following:

  • In relation to whether Pepsi used the Carolina bottle’s outline or silhouette as a trademark, Justice Besanko preferred Pepsi’s expert evidence as to consumer behaviour and likely reactions to the Carolina bottle, finding that, when consumers purchased beverages in the Carolina bottle, their focus would be on the word marks, logos and branding used by Pepsi and not the Carolina bottle’s outline or silhouette. Therefore, Pepsi was not using the Carolina bottle’s outline or silhouette as a trademark.
  • In relation to whether Pepsi used the whole of the shape of the Carolina bottle as a trademark, Justice Besanko found that, in light of Pepsi’s intention to design a bottle that was distinctive and the context in which the Carolina bottle was sold and displayed to consumers (namely that it is a relatively inexpensive fast-moving consumer good, purchased in circumstances of low consumer involvement), Pepsi was using the whole of the shape of the Carolina bottle, in particular the horizontal wave feature (which later became directly relevant to Justice Besanko’s assessment of deceptive similarity), as a trademark. This was despite the fact that Coca-Cola did not provide evidence that consumers consider different shapes of bottles, and in particular the Carolina bottle shape, as an indicator of trade origin and that Pepsi had taken no steps in any country to register the whole of the shape of the Carolina bottle as a trademark. 

In determining whether the whole of the shape of the Carolina bottle was deceptively similar to Coca-Cola’s Contour bottle, Justice Besanko applied the ‘imperfect recollection’ principle from Australian Woollen Mills Limited v F S Walton & Company Limited ((1937) 58 CLR 641) - namely, that a comparison should be made by a person of ordinary intelligence and memory between the impression or imperfect recollection of Coca-Cola’s Contour bottle and Pepsi’s Carolina bottle. Again, Justice Besanko reiterated that the context of display and sale to consumers is of key relevance in determining deceptive similarity.

In relation to the first two of Coca-Cola’s registered Contour bottle trademarks, Coca-Cola submitted that the essential feature of those marks, namely the outline or silhouette, in particular the low-waisted contour shape, had been used by Pepsi in its Carolina bottle. Justice Besanko rejected Coca-Cola’s submission, instead finding marked differences between the bottles, notably the Carolina bottle’s horizontal wave feature and the absence of the Contour bottle’s flutes and clear belt band, which Justice Besanko considered would instead resonate in consumers’ minds. In relation to the final two of Coca-Cola’s registered Contour bottle trademarks, Justice Besanko found there were five principal differences, the first four concerning the outline or silhouette of the Carolina bottle and the fifth, again, Pepsi’s horizontal wave feature, which Justice Besanko considered would be sufficient to not cause consumers to wonder whether it might be the case that the two products come from the same source.

The primary issue for Coca-Cola in relation to misleading or deceptive conduct or passing off was that it had to show that it had a sufficient reputation in the Contour bottle at the time Pepsi’s Carolina bottle was introduced into the Australian market.

Pepsi introduced the Carolina bottle into the Australian market in August 2007, but due to manufacturing difficulties withdrew and reintroduced it in February 2009. Relevantly, Coca-Cola only began marketing the Contour bottle in a silhouetted form from 2009 onwards and therefore submitted that the relevant date for assessing reputation should be February 2009, not August 2007.

Justice Besanko reiterated the principle that an applicant who brings an action for misleading or deceptive conduct or passing off cannot increase its reputation in a mark in the face of a respondent’s prior mark or product. Despite this, Justice Besanko found that, as there were minimal sales and no advertising by Pepsi of beverages in the Carolina bottle upon its initial introduction into the Australian market in August 2007, the proper date for assessing Coca-Cola’s reputation in the Contour bottle was February 2009, that is, conveniently capturing Coca-Cola’s marketing of the Contour bottle in a silhouetted form.

Nevertheless, these facts had no impact on Justice Besanko’s decision, as he found that Coca-Cola was not able to show a significant reputation in the Contour bottle either as at August 2007 nor February 2009 because its reputation resided instead in its use of the COCA-COLA word trademark. Justice Besanko went on to find that, if it was the case that Coca-Cola had sufficient reputation in the Contour bottle’s silhouette or outline alone, that the differences between the two bottles, particularly the Contour bottle’s fluting and the Carolina bottle’s horizontal wave feature, would not cause any possibility of deception, despite the similar contexts in which each of the bottles were sold and displayed to consumers.

Justice Besanko’s decision reinforces the principle that the context in which the allegedly infringing product and original product are sold and displayed to consumers is fundamental. Context goes to whether allegedly infringing product is (a) being used as a trademark and (b) deceptively similar to the original product. Finally, despite Justice Besanko “doubt[ing] that the introduction of the Pepsi beverages into the Australian market had any substantial impact in the market before the reintroduction of the Carolina bottle in February 2009”, citing the inadequacy of Pepsi’s evidence to prove any real pre-existing reputation, his decision does serve to reinforce the principle that, in ordinary circumstances, after-acquired reputation is irrelevant in assessing reputation for the purposes of an action in misleading or deceptive conduct or passing off.

Stephen Stern and Lauren Gore, Corrs Chambers Westgarth, Melbourne

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