Read my luscious lips – no infringement!

It was déjà vu for Nature’s Blend this week as the Full Court of the Federal Court handed down its decision in part two of the “luscious Lips” trade mark battle. 
 
Avid readers of this blog will no doubt recall our previous post dealing with the first instance decision.  For everyone else – the first instance decision saw Nature’s Blend sue Nestlé for use of the words “luscious Lips” within a blurb on the back of Nestlé’s Allen’s RETRO PARTY MIX packaging.  The primary claim was trade mark infringement (Nature’s Blend being the registered owner of the word mark “luscious lips”, registered in relation to confectionary).
 
At the trial, Nestlé emerged victorious, Justice Sundberg finding that there was no infringement, and that even if there had been, Nestlé would have been protected by the statutory defence of ‘good faith’.  Nature’s Blend appealed.  In a unanimous judgment, the Full Court (Justices Stone, Gordon and McKerracher) dismissed the appeal and echoed the findings of Justice Sundberg.
 
Nature’s Blend argued that, contrary to Justice Sundberg’s approach, in determining if there has been trade mark infringement, the Court must first look at the registered mark and ascertain its meaning.  The Full Court disagreed, holding that a close examination of the registered mark is only necessary where there is an issue as to whether the marks are substantially identical or deceptively similar.  In this case there was no dispute on that point, and so the correct approach was to consider Nestlé’s use and whether it was use as a trade mark.
 
Nature’s Blend then argued that the expression “luscious lips” was not a natural, obvious or inevitable description of confectionary, and was therefore inherently distinctive such that any commercial use of the words would be use as a trade mark.  The Full Court again disagreed, confirming the view of Justice Sundberg, that context plays a material role in whether a consumer will understand the words as being used as a trade mark (here the relevant context was that there were several other prominent marks on the packaging and that the words “luscious lips”‘ were contained in a blurb, appeared on the back of the packaging only, were descriptive of the contents of the product and were in a relatively small plain font).
 
Nature’s Blend argued that “luscious lips” was used by Nestlé as a sub-brand and not purely as a descriptor of the product contents.  In support of this argument, Nature’s Blend pointed to another Nestlé Allen’s lolly mix product, CHEWMIX, which featured sub-brands on the packaging which were also registered trade marks.  However, the Full Court was not persuaded, instead distinguishing the CHEWMIX product on the basis that the context in which sub-brands were presented was different to the manner in which the words “luscious Lips” appeared on the RETRO PARTY MIX packaging.
 
Nature’s Blend also argued that Justice Sundberg erred in his application of the defence of good faith since his Honour found that Nestlé had not “acted in bad faith”, which Nature’s Blend argued was different from the a finding that Nestlé had acted in “good faith” (as required by the Trade Marks Act).  However, the Full Court considered that Nature’s Blend had mischaracterised the test applied by Justice Sundberg and that when the judgment was viewed in context, it was clear that his Honour had correctly applied the good faith test.
 
A copy of the Full Court’s decision can found here.  At only 14 pages it is a useful summary of the key factors which will influence the determination of whether there is use as a trade mark.