With the rise of discount and online retailers, we are often approached by clients who are designers and/or manufacturers of goods who wish to take issue with their designs and goods being copied by others. What action can be taken though depends on a range of factors.
When a designer or manufacturer has a registered design under the Designs Act 2003 (Cth) they are able to enforce that design to ensure that a competitor cannot have a product with the same shape or appearance.
However, where the product is not the subject of a registered design, the only claims available to a manufacturer in circumstances where they feel a competitor has ‘copied’ their product are those available under general consumer protection law, the common law or in some cases the Copyright Act 1968 (Cth) (Copyright Act).
For the reasons discussed below, success in these types of claims can be difficult. It is therefore important that designers and manufacturers consider their intellectual property (IP) early, so that they can protect their IP later on when disputes, inevitably, arise.
Misleading and deceptive conduct
In Verrocchi v Direct Chemist Outlet Pty Ltd the Full Court observed that “…there is nothing impermissible per se in a rival copying another’s get-up as long as no relevant contravention occurs, ie there is nothing misleading or deceptive or likely to mislead or deceive as a consequence of such copying”.
A designer or manufacturer may have a claim for a contravention of the Australian Consumer Law where the similarity in design and visual appearance of a product compared to a competitor’s product means that customers at large will, or might be, misled into thinking that the manufacturer’s products are those of the competitor, or are associated with the competitor.
Case law in Australia recognises that a distinctive design or visual appearance of a product can establish an independent reputation in a product if it is so well known that its visual appearance is associated in the minds of consumers with a particular brand or product.
By way of example, in Peter Bodum A/S v DKSH Australia Pty Ltd the majority in the Full Court found that the evidence did establish that selling a coffee plunger which closely resembled the well-known “Bodum” design was misleading and deceptive conduct in circumstances where the competing products did not show a brand name or title and merely the name “Euroline” marked on the bottom of the packaging. Greenwood J stated that “…the relevant inquiry is whether it has been made sufficiently clear to the consumer at the point of sale that the product they are about to purchase is not a Bodum plunger…”.
However, a number of authorities also recognise that even if the design or visual appearance of a product may be associated in the minds of consumers with a particular brand or manufacturer, if a competing manufacturer clearly labels or takes other steps to show consumers that a competing product is not the same product, the conduct in selling a product that closely resembles another will not be misleading or deceptive.
In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd Gibbs CJ said “In all of these cases, the normal and reasonable way to distinguish one product from another is by marks, brands or labels. If an article is properly labelled so as to show the name of the manufacturer or the source of the article its close resemblance to another article will not mislead an ordinary reasonable member of the public”.
In Mars Australia Pty Ltd v Sweet Rewards Pty Ltd, which concerned the sale of “Malt Balls” under the brand name “Delfi” where the label and packaging had some visual similarities to the “Maltesers” product, the Full Court found “because the principal component in the Maltesers get-up is the word “Maltesers”, it is highly unlikely that any ordinary consumer of chocolate confectionary could mistake something which is not called a Malteser for a Malteser. In that sense, Mars is a victim of its own success. The fact that the Delfi jars carry the same “Malt Balls” and use slightly different visual features is sufficiently clear to distinguish them from the Maltesers products”.
Therefore, a mere close resemblance between products will not be misleading or deceptive if a competitor labels or otherwise marks products in a way that clearly shows the manufacturer or brand is different.
In Reckitt & Colman Products Limited v Borden Inc & Ors Lord Oliver said “The law of passing off can be summarised in one short general proposition – no man may pass off his goods as those of another”.
In Bodum, Greenwood J stated that “…passing off is not made out merely by demonstrating that the rival manufacturer is found to have copied the features of its rival’s product.” Instead, there are three elements which must be proved including:
- goodwill or reputation attached to the goods or services by association with the identifying “get-up”;
- misrepresentation by another to the public leading, or likely to lead, the public to believe that the goods or services offered are the goods or services of the claimant; and
- damage suffered, or likely to be suffered, by reason of the mistaken belief caused by the misrepresentation.
Similarly, to misleading and deceptive conduct cases, where a manufacturer makes reasonably clear in the way its products are marketed and sold that its products are of a distinct brand, there will be limited prospects of establishing any misrepresentation and as such any claim based on passing off.
Given the difficulties with bringing claims under general consumer protection law and the common law, it is important for designers and manufacturers to be on the front foot in registering their IP, where possible. Where a party does have a registered design, if another party infringes that design, they should take immediate steps to enforce their IP rights.
This article was written by Melissa Hanbidge, Partner and Rachel Lake, Senior Associate.