15 September 2010

One month after the appeal was heard, the Full Court has rejected Nature’s Blend’s appeal that Nestlé used Luscious Lips as a trade mark.

Nature’s Blend argued first that the trial judge had wrongly focused on the character of Nestlé’s use instead of the proper meaning of the Nature’s Blend mark. As the mark was registered for all confectionery, not just “lips”, it was said to be inherently distinctive. The Full Court, however, rejected this requirement and re-affirmed that the test was to examine whether or not the way Nestlé used the mark (the “impugned use”) would be understood by ordinary consumers as functioning as a badge of origin.

Nestlé’s Luscious Lips are part of its ‘Retro Party Mix’ pack. The expression ‘luscious Lips’ appeared only on the back of the packaging in the expression:

That’s right! All your old favourites are back, so put on those flares & get ready to party! Up to 7 lolly varieties including … cool COLA Bottles, those radical Racing Cars, yummy Honey flavoured Bears, totally freeeekie Teeth, luscious Lips, partying Pineapples and outrageous Raspberries.

You can see the front of the packaging at the product’s very own facebook page.

Nature’s Blend contended that the trial judge had improperly diluted the significance of the ‘luscious Lips’ expression on the Nestlé packaging by reference to the presence of other, more prominent brands.

This issue can be tricky because the Courts have long held that one does not take into account extraneous matters such as disclaimers or the presence of other trade marks when considering the question of deceptive similarity. On the question of use as a trade mark, it is permissible.

While the Full Court acknowledged that the fact that other trade marks were used more prominently on the packaging did not preclude ‘luscious Lips’ from being used as a trade mark, the characterisation of the impugned use depended on the particular usage in question in its own particular setting. In this case, the presence of ALLEN’s and Retro Party Mix did in fact undercut the likelihood that consumers would read ‘luscious Lips’ as a trade mark.

The Full Court also agreed that Nestlé had used the trade mark in good faith as a description.

Nature’s Blend Pty Ltd v Nestlé Australia Ltd [2010] FCAFC 117 (Stone, Gordon and Mckerracher JJ)

Comment on decision at first instance.