In a case heard by Justice Wheelahan of the Australian Federal Court recently, Dutch coffee giant Koninklijke Douwe Egberts BV (KDE), the owner of the MOCCONA brand, brought allegations of trade mark infringement, breaches of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)), and passing off against Australian company Cantarella Bros Pty Ltd (Cantarella), which sells coffee under the VITTORIA brand. Cantarella cross-claimed for the removal of the KDE shape mark from the register on several grounds including distinctiveness and that KDE had no intention to use the mark.

In its 7 November 2024 judgment, the Court dismissed all of the parties’ claims, maintaining the status quo in the Australian instant coffee jar market. At 156 pages, the decision is hefty and covers several aspects of Australian trade mark law – we’ve picked out a few of the tasty bits as they relate to New Zealand law.

Background

KDE owns a trade mark registration in Australia for the 3D shape of its coffee jar (Shape Mark). The Shape Mark was registered with effect from 7 January 2013 and has been used by KDE to sell its MOCCONA branded instant coffee in Australia since October 1977 (if not before).

Cantarella was incorporated in Australia in 1951. Its VITTORIA brand for coffee products was launched in 1958 and, by 2023, was the highest selling brand by value in Australia in the bean and ground coffee market. In 2021, Cantarella launched a 100-gram freeze-dried instant coffee product sold in a cylindrical glass jar with a gold-coloured plastic lid. In 2022, Cantarella then expanded this range to a 400-gram freeze-dried instant coffee product, sold in a cylindrical glass jar with a glass stopper lid. KDE took issue with the new VITTORIA jars and so the dispute arose.  

The Shape Mark registration, and examples of the MOCCONA jar and VITTORIA jars, are below:

Registering shape marks

Shape marks are relatively uncommon in New Zealand – there are only approximately 550 live registrations as at the time of writing. This is because, typically, trade mark applications for shape marks face objections, oppositions or invalidity actions based on a lack of distinctiveness, especially where they consist of a shape alone and/or are purely functional. In many instances, registration can be achieved (and maintained) by submitting evidence of acquired distinctiveness through use.  

One of the grounds on which Cantarella attacked the Shape Mark registration was exactly that – Cantarella argued that the Shape Mark was, at the relevant date, not inherently adapted to distinguish, and did not in fact distinguish, KDE’s goods from the goods of other traders.

In rejecting this cross-claim, the Australian Federal Court accepted that the Shape Mark was not inherently adapted to distinguish but found that it had been used to such an extent and over a sufficient period of time that it had become distinctive of KDE’s products. A number of factors led to this conclusion –

• There were numerous coffee jars and containers in evidence but within the diversity of shapes and sizes, the MOCCONA jar was distinct;

• The jars, without any labels or visual embellishment, had featured prominently in several television commercials for MOCCONA coffee – this is a pivotal factor for brand owners to be aware of; and

• From the evidence, KDE appeared to have been the only user of the shape in Australia in relation to coffee for a period of almost 20 years before the priority date of the Shape Mark application.

The actual extent of use relied on is difficult to evaluate because KDE’s advertising expenditure and sales revenue figures were detailed in confidential evidence. But based on the references to ads in the Court’s decision, it seems that the advertising by KDE in Australia included several free-to-air and pay TV commercials, which presumably reached national audiences, and online advertisements (e.g. via YouTube), some of which had close to 500,000 views.

A peculiarity of New Zealand law is that it offers 16 years (or 25 years if the drawings are works of artistic craftsmanship) of automatic copyright protection against the unauthorised mass reproduction of a three-dimensional product which reproduces a two-dimensional drawing. This is not the case in Australia. Some businesses in New Zealand choose to rely on this protection to avoid the “acquired distinctiveness” hurdle of trade mark registration, though there are limitations/challenges with copyright enforcement too. Note also that copyright/design protection is time limited, whereas trade mark protection can be a perpetual intellectual property right (if renewed).

What is use of a shape mark "as a trade mark"?

As in New Zealand, Australian trade mark law requires that for there to be infringement the allegedly infringing sign must have been used as a trade mark. This is of course a highly fact specific assessment and contextual factors are important.  

In this case, KDE failed to show that the shape of the VITTORIA jar itself had been used as a trade mark (i.e. badge of origin). The Australian Federal Court concluded that the VITTORIA jar is "relatively plain", there was no evidence that Cantarella had advertised its products in unbranded jars, and use of the jar in advertising and promotional materials did not draw express attention to the shape of the jar itself. Regarding use in advertising, the Court noted that "simply displaying a picture of a product in its packaging does not entail that the shape of the packaging will be used as a trade mark — even though the packaging will almost always be bigger than the label affixed to it.…Without more, featuring a product in its packaging as part of an advertisement does not constitute trade mark use”.

The Court was also of the view that while purchasers of instant coffee do not spend a long time deciding which products to buy, there was no “real, tangible risk that a notional buyer, with a recollection only of the KDE shape mark’s rough proportions and general shape, would be perplexed, mixed up, caused to wonder, or left in doubt, about whether instant coffee sold in the Cantarella jar shape has the same commercial source as coffee sold in the KDE shape mark”.

Expert evidence

An interesting observation from the decision relates to the expert evidence submitted by the parties.

The Court stated that such evidence did “not greatly assist in deciding [the] issues” because it focussed on, and used the language of, the field of marketing, not trade mark law. The Court acknowledged that this was not a criticism because the experts were asked to give evidence based on their expertise, which was in marketing and not law.  

The Court also found the evidence unhelpful because it addressed issues that are, ultimately, for the Court to decide, noting that “[t]his is not a trial by expert” and “the Court’s task is not simply to weigh the opinions of experts on these questions”. There was also doubt raised as to whether the studies relied on in the expert evidence objectively supported the experts’ views or if the evidence simply reflected the experts’ own extrapolation from the studies cited.

Having regard to these limitations, careful thought should be given to the relevance and usefulness of expert evidence in a trade mark dispute, especially given the expense of getting it. If the key questions in the dispute are questions of fact for the Court to determine by reference to legal standards – such as use of a sign as a mark of origin, deceptive similarity, and misleading and deceptive conduct – expert marketing evidence may be of little utility.

If this discussion raises trade mark questions for your business, please get in touch.