29 Mar 2010

Federal Court gives the kiss-off to Luscious Lips trade mark owners

by Mary Still

Justice Sundberg of the Australian Federal Court last week delivered a decision on whether the trade mark "Luscious Lips", when used in relation to chocolates shaped to look like lips, was used as a trade mark or simply in a way to describe the product (Nature's Blend Pty Limited v Nestlé Australia Limited [2010] FCA 198).

The applicants were the owners and directors of a small company that sold veterinary, animal, medical and human products. They had registered the trade mark "Luscious Lips" for a range of goods including confectionary, and used the mark on lip-shaped chocolates distributed by them for promotional purposes.

Nestlé is the owner of the well-known Allen's confectionary business, which manufactures a wide range of sweets including a mixed package called the Retro Party Mix. On the back of the packaging for this product appears the list of contents including the words "Luscious Lips" which describes one of the products in the mixture.

The applicants sued Nestlé, alleging trade mark infringement, passing off and a breach of the consumer protection provisions of the Trade Practices Act.

To determine whether or not there had been a breach of the applicant's trade mark, the court first looked at whether the words "Luscious Lips" were descriptive or laudatory of confectionary and, secondly, whether the words had been used as a trade mark.

Somewhat surprisingly, the court found that the plain meaning of the words "Luscious Lips" would be taken by consumers as descriptive or laudatory of confectionary contained in the Retro Party Mix product. In reaching this decision, Justice Sundberg appears to have accepted Nestlé's submissions that each word should be looked at separately. He used the Macquarie Dictionary to define the word "luscious" (highly pleasing to the taste or smell) and then applied that meaning to the word "lips" which clearly described the shape of the chocolates in question.

Justice Sundberg then looked at the whether the words "Luscious Lips" had been used as a trade mark.

He acknowledged that the key question was whether the words "Luscious Lips" would possess the character of a brand, that is to say, were the words used to indicate a connection in the course of trade between Nestlé and its confectionary.

Justice Sundberg acknowledged that although the words "Luscious Lips" as used by Nestlé were substantially identical with or deceptively similar to the applicant's registered trade mark, that was not sufficient to amount to an infringement of that trade mark because the context was all important. In approaching this analysis, he followed the reasoning of Justice Allsop in Anheuser-Busch, Inc [2002] FCA 390:

"The task is to examine the way the words are used in their context, including the totality of the packaging, to assess their nature and purpose in order to see whether they are used to distinguish the goods from goods of others ... The assessment is made from the perspective of what a person looking at the label would see and take from it as to the purpose and nature of its use."

Justice Sundberg thought the following issues were relevant:

  • the well-known trade mark Allen's appeared prominently in the packaging accompanied with the symbol ®;
  • the product title "Retro Party Mix" also appeared prominently;
  • the respondent's trade mark Nestlé and the accompanying ® symbol also appear on the packaging;
  • the words "Luscious Lips" have a meaning that could spring unaided to the mind being that of a confectionary product which has a sweet taste and is in the shape of lips. He found that the term "Luscious Lips" was not meaningless and had the inherent capacity to describe the confectionary.

Ultimately, Justice Sundberg was not satisfied that there had been use as a trade mark because:

  • the word "luscious" is descriptive and is intended to convey to consumers a laudatory or even humorous description of the confectionary product which is shaped as lips;
  • the effect of the words "Luscious Lips" on consumers was diluted by the prominence of the well-known trade marks "Allen's" and "Nestlé" plus the product name "Retro Party Mix" appearing in a large font on the front and back of the product.

The applicants also alleged that Nestlé had not used the words Luscious Lips in good faith. However, evidence tended to show independent development of the name and product Nestlé and this was sufficient to defeat this allegation.

The allegations of passing off and a breach of the consumer protection provisions of the Trade Practices Act were dismissed largely because the applicant's reputation in "Luscious Lips" was not substantial and it could not be said that anyone would be misled by Nestlé's use of the trade mark.


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