Nature’s Blend, owner of the trade mark LUSCIOUS LIPS, has failed in its appeal to the Full Federal Court against a finding of non-infringement by Nestlé in Nature’s Blend Pty Ltd v Nestlé Australia Ltd  FCAFC 117.
Nestlé, under its Allen’s brand, had sold a confectionary product known as the Retro Party Mix. The back of the packaging of the product contained a blurb describing the various lollies within the mix and included the expression “luscious Lips” along with others such as “cool Cola Bottles” and “radical Racing Cars”. At first instance the trial judge held that Nestlé’s use of the expression “luscious Lips” in this context was not use as a trade mark.
On appeal, Natures Blend criticised the approach of the trial Judge for focussing only on the conduct of Nestlé and its use of the expression “luscious Lips” and giving insufficient attention to the proper meaning of its trade mark.
The Full Court noted that there was no dispute that the words used by Nestlé were substantially identical to the trade mark and stated that in that context there is no requirement that the meaning of the registered mark must first be ascertained. Accordingly, there was no error made by the trial judge in failing to ascribe a meaning to the mark LUSCIOUS LIPS independently and apart from the alleged infringing conduct. The appropriate question, as posed by the trail judge was “whether the words ‘luscious Lips’ would have appeared to consumers as possessing the character of a brand”.
In answering this question the Full Court approved of the trial Judge’s reliance on authorities for the proposition that “the branding function can be carried out in different places on packaging with different degrees of strength and subtlety” and that “the existence on a label of a clear dominant ‘brand’ is of relevance to the assessment of what would be taken to be the effect of the balance of the label”.
The Full Court considered that:
Even if most consumers may look at the back of Nestlé’s packet before purchase or even read the blurb, such an inspection would simply reveal that one of the mixed lollies in Nestlé’s product is described in a light and amusing context as being ‘luscious Lips’. However, by the time the consumer has read the blurb, if indeed the consumer does so, he or she has already seen that it is in an Allen’s brand of product with the name of the product variant being RETRO PARTY MIX. If the consumer does go on to read the blurb, the consumer is well aware by that stage that the brand and commercial source is Allen’s.
Accordingly, the trial judge “was correct in taking into account the prominence of the registered ALLEN’S and NESTLÉ marks on the packaging in contrast to the location and style of the expression ‘luscious Lips’”.
The Full Court also upheld the trial Judge’s finding that Nestlé had made out a good faith defence on the basis that it was not, and indeed could not, have been aware of the Nature’s Blend trade mark at the time it first adopted the expression “luscious Lips”.