Trade Marks and Consumer Law Update – Shape mark – use as a trade mark – is this the FINISH?

This decision by Justice Rofe is another example of how difficult it can be to protect a shape mark, particularly when used in combination with other distinctive trade marks and trade indicia.

Background

The Applicants are both part of the Reckitt Benckiser group of companies, being a group of companies ultimately owned by Reckitt Benckiser Group PLC. The Second Applicant, RBF, is the owner of registered trade mark 1008914 (the 914 Mark) and registered trade mark 1211311 (the 311 Mark) (together, the Registered Marks). The First Applicant, RB, is an authorised user of the Registered Marks, though this was in issue as discussed below.

RB imports, markets and sells a range of dishwashing products in Australia under the FINISH brand. The products were first sold in Australia in 1964 and have been sold here continuously since then. At the time of the trial, FINISH products comprised over 60% share of the market in Australia, including both powder and capsule form. As at July 2021, FINISH had 63% of the dishwasher capsule market in Australia (in the judgment, the term dishwashing capsules is used to encompass all dishwashing products sold in either tablet, capsule or gelcap form).

The evidence established that RB spends a large amount on media advertising for its FINISH capsule products; such advertising including television commercials, online platforms, billboards, and supermarket catalogues.

Since approximately 1999, RB has sold a two-tone (white and blue) hard-pressed dishwashing capsule in Australia (FINISH Tablet). The FINISH Tablet has a protruding red “Powerball” (pictured below).

The evidence was that the constituents of the FINISH Tablet are naturally colourless, or in some cases white or yellow-ish. The red and blue colours were chosen for aesthetic reasons; not serving or providing any functional purpose or performance benefit. Aside from the need to fit within the dishwasher tablet dispenser, there is no functional basis for the FINISH Tablet shape or the positioning of the components within the Tablet.

Since approximately 2007, RB has sold a three-coloured gelcap in Australia (FINISH Gelcap) (pictured below). The FINISH Gelcap consists of the colours white and blue, with a red Powerball. This design is used for the FINISH Quantum and FINISH Quantum Ultimate products. Again, there is no functional basis for the placement of the components or their colouring. The colours and shape serve a purely aesthetic purpose.

The FINISH range of dishwashing capsules were not limited to the Tablet and Gelcap pictured above, or to the red, white and blue colours.

Each variety of the FINISH capsule packaging has the FINISH POWERBALL Logo featuring prominently at the top. This logo contains the word FINISH in dark blue text with a white border. The dot over the “i” is a red ball. Underneath the word FINISH is the word POWERBALL in upper case white font on a red background:

(the FINISH POWERBALL Logo).

The centre of each package design features a stylised depiction of the particular dishwashing capsule found in the package.

In addition to the FINISH POWERBALL Logo, the packaging will often have other words prominently displayed (such as QUANTUM or QUANTUM ULTIMATE), which are sub-products.

FINISH packaging is also cluttered with other words, phrases and pictures, which vary based on the sub-product, examples including imagery of lemons for lemon-scented products; and phrases such as “powerful clean & shine”.

The Registered Marks

The 914 Mark is a colour and shape mark registered for goods in classes 1 and 3. The mark comprises a rectangular tablet with a red ball and blue wave, namely:

Importantly, the 914 Mark contains the following endorsement:

The trade mark consists of the shape and colour of the goods as depicted in the representation attached to the application form, namely, a rectangular shaped capsule with rounded corners; the capsule has a RED cylindrical compartment embedded in the capsule; the RED centre is partly encircled by a BLUE portion of the capsule resembling a wave; the BLUE wave portion of the capsule is made of a gel substance; the remaining portion of the capsule consists of multi coloured granules of powder.

The 311 Mark, which is a figurative mark with no endorsement, is registered in relation to goods in class 3, and is an image featuring a red ball in a white “explosion” against a blue backdrop, as depicted below:

Henkel and the SOMAT products

The Respondent, Henkel, part of the global Henkel group of companies, imports, markets and sells a range of consumer and industrial goods in Australia, including laundry and home care goods.

Henkel AG, also part of the Henkel group, has offered SOMAT branded dishwashing detergents for sale in Europe for over 50 years. The brand is a market leader in Germany, with a large market share in other European countries. In about 1999, Henkel AG introduced the SOMAT branded dishwashing products in tablet form in Germany. Henkel AG launched SOMAT Excellence Gelcaps (SE Gelcaps) in Germany and Switzerland in approximately April 2021. Subsequently the SE Gelcaps have been sold in other European countries including Austria, Poland, Italy and Spain.

Interlocutory injunction

Henkel sought to launch the SE Gelcap (depicted below) in Australia in August 2021. RB obtained an interlocutory injunction stopping Henkel from offering for sale, selling and supplying SE Gelcaps in Australia (RB (Hygiene Home) Australia Pty Ltd v Henkel Australia Pty Ltd [2021] FCA 1094).

The proceedings

By way of these proceedings, the Applicants alleged that Henkel’s actual and proposed use of the SE Logo (depicted below) promoting the SE Gelcaps would constitute trade mark infringement under s 120(1) of the Trade Marks Act 1995 (Cth) (the TMA), misleading and deceptive conduct in contravention of ss18 and 29 of the Australian Consumer Law (the ACL) (being Schedule 2 to the Competition and Consumer Act 2010 (Cth)), and passing off:

(the SE Logo).

By way of cross-claim, Henkel applied for removal of the Registered Marks for non-use during the period from 16 July 2018 to 16 July 2021 (the relevant period).

Non-use – the question of “use as a trade mark” and authorised use

Justice Rofe dealt with Henkel’s non-use application first. The key aspect of this part of the decision was whether, in relation to the 914 Mark, RB’s use was use “as a trade mark”. Justice Rofe’s findings show the difficulties that the owner of a shape trade mark may face establishing infringement of the mark, or establishing their own use of the mark if challenged, particularly when the mark is used in combination with other marks. The reasoning is reminiscent of that in Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891, which related to Guylian’s shape trade mark for a seahorse shape, where the seahorse shape on the packaging provided an example of the box’s contents, and where the “Guylian” trade mark on the packaging was seen to dilute the effect of any trade mark significance that might otherwise attach to the seahorse shape as used.

In this case, RB relied on three “marks” that it said demonstrated use of the 914 Mark (relying on section 7(1) of the TMA, i.e. use without additions or alterations substantially affecting the identity of the trade mark). Justice Rofe accepted just one of those examples, namely use in relation to the Quantum Ultimate Product. The question was, having regard to this product, whether the use of the 914 Mark in relation to the Quantum Ultimate Product was use “as a trade mark”. The examples of use considered by the Court related to product packaging for various Finish Quantum products, use in TV commercials, and on the Amazon website, as depicted below:

In relation to the packaging, her Honour concluded at [144] “I do not consider that the use of the image of the Quantum Ultimate Product is use as a trade mark on this packaging. The only purpose of the presence of the Quantum Ultimate Product image on this packaging is to show what the product inside the packaging looks like. This is not an example of use of the 914 Mark as a trade mark”.

Similar conclusions were reached concerning the commercials. At [166], her Honour concluded that the “FINISH Quantum Ultimate capsule is depicted in a functional role to demonstrate the cleaning power of the FINISH Quantum Ultimate capsule”, and it was not used to designate trade origin. That role “is performed by the prominent use of the FINISH brand name and FINISH POWERBALL Logo, both in the text displayed throughout the commercials, on the packaging depicted, and in the voiceovers which form part of the commercials”.

For the examples on the Amazon website, her Honour concluded that the images were not used to distinguish FINISH goods from those of others, and that, by the stage at which the consumer encounters the images on the website, they were “well and truly aware that they are looking at a particular variant of a FINISH product on the Amazon site”.

In relation to the 311 Mark, RB argued that this could be seen as a distinct component of the FINISH brand logo. Justice Rofe acknowledged that use of a mark that is a component of a larger composite mark, or a mark used in conjunction with other marks, can still constitute use of a trade mark. However, her Honour concluded that the FINISH POWERBALL logo did not give the impression of several distinct trade marks, and as a consequence, the red Powerball on the FINISH POWERBALL Logo did not constitute use of the 311 Mark.

On the question of authorised use, having regard to recent authorities on what constitutes authorised use, Rofe J thought that Trident Seafoods Corporation v Trident Foods Pty Ltd (2019) 143 IPR 1 was more relevant in these circumstances than was Lodestar Anstalt v Campari America LLC (2016) 244 FCR 557. There was authorised use flowing from the nature of the corporate structure and the unity of purpose of the business. The authors observe that her Honour’s approach shows it is important not to take various comments in Lodestar out of context.

Her Honour refused to exercise her discretion to allow the Registered Marks to remain on the Register. One aspect of her Honour’s reasoning may present a difficulty for practitioners who are seeking to defend shape marks. Her Honour stated (at [223]) that RB had not explained its failure to use the Marks during the relevant period: “instead it continues to maintain that the product depictions constitute use”. It is difficult to explain a failure to use marks when positively putting a case that there has been actual use of the marks in question.

Infringement

Use as a trade mark

Her Honour noted at the outset of her reasons that, as the High Court has observed, “context is critical” and that the “context in which to consider whether the use of the SE Logo is use as a trade mark, includes its use in relation to other components of the packaging, and the environments in which consumers are likely to encounter the use.”

The experts had agreed that it was common in the trade for dishwashing capsule packaging to include a prominently displayed brand; words such as “Quantum” or “Excellence” near the brand name; a stylised depiction of the dishwashing tablet; a background colour scheme, an array of laudatory epithets; and the number of capsules in the package.

Moreover, the evidence was that dishwasher capsules are low involvement products with consumers looking to make a quick decision on purchase, using as few visual cues as possible (one or two cues). Her Honour found at [259] that “[w]hen confronted with supermarket shelves stocked with the various dishwashing capsule products arranged in branded sections, I consider that consumers seeking to identify and distinguish between products will first focus and rely on the prominent and distinctive feature that remains constant within each brand: the brand name.”

Justice Rofe concluded that the SOMAT brand clearly indicates to consumers the commercial source of the SE Gelcap and that the product image was a poor cue for identifying the brand. In a context where all products have a very prominent and highly visible brand name, her Honour concluded that there was little likelihood that consumers would think that the SE Gelpac products come from the same source as the FINISH products and for this reason, her Honour did not consider that the stylised depiction of the SE Gelcap on the SE Gelcap packaging was use as a trade mark. For similar reasons, there was no use as a trade mark on other marketing materials in evidence, such as wobblers. It may be observed that this reasoning is consistent with her Honour’s conclusions as to whether RB had used the Marks.

Other aspects of infringement

For completeness, her Honour considered the question of deceptive similarity, finding that the SE Logo was not deceptively similar to the Registered Marks. Her Honour concluded that if, contrary to her findings, the SE Logo infringed either of the Registered Marks, the use would fall within section 122(1)(b) of the TMA (good faith use of a product depiction).

Misleading or deceptive conduct and passing off

In relation to the misleading of deceptive conduct case, her Honour concluded that the relevant class of consumers is the ordinary and reasonable consumer who owns an automatic dishwasher and who is looking to replenish their stock of dishwashing capsules, regarding it as inappropriate to narrow the relevant class to subclasses such as long-time purchasers of FINISH products or forgetful shoppers.

For the passing off case, RB’s case was that it has developed a valuable reputation and goodwill in the “distinctive components” of dishwashing products which were advertised and promoted by the use of a prominent depiction of the configuration and appearance of the product. The distinctive components as pleaded included: (1) a red Powerball prominently visible; and (2) the combination of that red Powerball with the colours blue and white.

Justice Rofe did not accept that RB had acquired a reputation in the Claimed Indicia sufficient to found a claim in passing off. There was no evidence RB had ever used the Distinctive Components (of any kind) on packaging of dishwashing products on its own, without the FINISH POWERBALL Logo also being prominently displayed.

Her Honour accepted that RB may have a reputation in the red Powerball, but this was only one part of the Distinctive Components relied upon by RB. The authors expect that, even assuming a reputation in one aspect of the getup, that alone would not have been sufficient to establish passing off, because there was no relevant misrepresentation, particularly having regard to the court’s finding that the brand names were the paramount cues. Indeed, Justice Rofe appears to express the view later that “the red Powerball alone” would have been insufficient to establish the claim.

In relation to the misleading or deceptive conduct case, brand was a good cue, and her Honour did not think a consumer would elevate the importance of the product image over that of the brand. Her Honour noted at [366] that “the packaging of each of the two major brands, and the SOMAT packaging, is very cluttered with up to 18 different visual cues, many of which, including the stylised depiction of the product, are common to the trade. One of the few things to stand out from the packaging to a consumer looking at a dizzying array of packages is the brand. The cluttered nature of the packaging forces the consumer to look at the brand. The brand is consistent for each brand variety, whereas the stylised image under the brand varies with variety.” Ultimately, her Honour was of the view that consumers are unlikely to mistake the SOMAT brand for a sub-brand of FINISH.

As a final note, her Honour considered the final arguments by RB concerning the so-called “Biodegradability Representation” said to have been made by Henkel prior to 3 September 2021, suggesting that the SE Gelcaps are wholly biodegradable when it is in fact only the film. Her Honour noted that the argument was accorded a mere two paragraphs in written closing. The claim was dismissed.