GRANOLA case raises brand management issues

Australia

In Australian Health & Nutrition Association Limited trading as Sanitarium Health Food Company v Irrewarra Estate Pty Limited ([2012] FCA 592, June 8 2012), the Federal Court of Australia has dismissed Sanitarium Health Food Company’s allegation of infringement of its GRANOLA mark on the basis that, on the facts, Irrewarra Estate Pty Limited was using the word 'granola' only as a descriptive term, and therefore not as a trademark.

Since December 1921 Australasian Conference Association Limited has been the registered owner in Australia of the trademark GRANOLA (which is registered in respect of goods in Class 30 of the Nice Classification, including “preparations made from cereals”). Sanitarium, the applicant in this case, is an authorised user of the GRANOLA mark. From the perspective of Sanitarium, this was a case about GRANOLA, a registered trademark, and its infringing use by Irrewarra. From the perspective of Irrewarra, this was a case about 'granola', a descriptive term for a breakfast food made from oats, wheat, nuts and dried fruits.

It was not in dispute that Irrewarra had been using the word 'granola' on its product labelling as part of the phrase “all natural handmade granola”. Irrewarra’s defence was that its use of 'granola' in this context was not “as a trademark” - that is, it was not a word that distinguished its products from the products of other producers or distributors of cereals. According to Irrewarra, its use of the word was purely descriptive and did nothing more than describe the contents of the package.

In resolving this issue, the court observed that the word 'granola', as used on the packaging, was “inherently suggestive of meaning” because, even though originally it may have been an invented word, it was “not nonsensical”. The 'gran' syllable, taken together with 'ola' and the aural similarity to 'granular', was considered to be plainly suggestive of a grain product. In the context of the clear packaging and the size of the package (500g), the court thought that it would be “obvious” to consumers that the phrase “all natural handmade granola” referred to the contents of the package. 

Furthermore, the court noted a number of dictionary definitions of the word 'granola', including The Oxford English Dictionary (Second Edition, 1989), which stated (in part):

Formerly, a proprietary name for a breakfast cereal devised by WK Kellogg, consisting of wheat, oats and cornmeal baked and ground into granules.

A mixture of rolled oats, wholewheat flour or wheatgerm, nuts, dried fruits, oils and other ‘natural’ ingredients toasted and sold as a breakfast cereal, biscuit-like snack etc (not proprietary in this sense).

Irrewarra neither based its defence on, nor applied to cancel the registration of GRANOLA under, Sections 24 and 87 of the Trademarks Act 1995 (ie, on the grounds that GRANOLA had become a generic term). Although Sanatorium argued that Irrewarra was running a Section 24 case “in disguise”, the court thought that it was “not permissible to speculate on the reasons for any party’s forensic decisions”.

The court also noted the evidence of Jillian Dupleix, the author of 16 cookbooks and a well-known food writer, who offered her own observations of granola recipes and products in Australia and provided a compilation of references to granola. In total, Irrewarra identified 47 retail products, 89 recipes and 80 menu items relating to granola products either produced or imported into Australia. Sanitarium dismissed these references as irrelevant, but the court thought that this evidence at least undermined Sanitarium’s “unrealistic submission” that the word has no meaning whatsoever to Australians.

The court accordingly reached the conclusion that:

[c]onsidered objectively, in the whole context in which the word would be seen, the use would not denote the source of the product in any way. The word is not a badge of origin but a description of the contents of the package.”

The word 'generic' was not used by the court in its judgment (if only because Sections 24 and 87 were not raised in defence, or indeed did not need to be raised in defence, such were the facts), but its ghost may be heard.  Practitioners and students of brand management will (or should) take note.

Julian Gyngell, Kepdowrie Chambers, Wahroonga

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