On 17 December 2024, Moshinsky J handed down his decision in Hampden Holdings I.P. Pty Ltd v Aldi Foods Pty Ltd [2024] FCA 1452, finding Aldi liable for copyright infringement in respect of artistic works used on the packaging of ‘Bellies’ brand products — a ‘big name’ brand and trade competitor.
In this post we step through the decision, consider what got the applicants over the line in proving infringement of copyright (in some, but not all, of the applicants’ artistic works), and discuss the implications of the case (perhaps greater reliance on copyright in lookalike packaging cases in future!).
Who is involved?
Hampden Holdings I.P. Pty Ltd (Hampden) and Lacorium Health Australia Pty Ltd (Lacorium) (together the applicants) sued Aldi Foods Pty Ltd (Aldi) for breach of copyright in respect of the applicants’ artistic works used on packaging for children’s snack products.
Hampden is an IP holding company that licenses IP to a related company, Every Bite Counts Pty Ltd (EBC). EBC sells children’s food products under the ‘Bellies’ brand, including BABY BELLIES, LITTLE BELLIES and MIGHTY BELLIES.
Lacorium provided design services to EBC in relation to products sold under the Bellies brand and was joined as an applicant during the course of the proceedings given its ownership of copyright in certain copyright works in dispute.
As is well known, Aldi operates discount supermarkets across Australia and the world. Aldi primarily sells products under its own house brands, many of which resemble the packaging of other competitor brands.
What happened?
In 2017 and 2018, EBC re-designed the packaging of its Bellies brand products. In September 2018, EBC began using the new packaging on its Bellies brand products.
In late 2018 and 2019, Aldi undertook a re-design of its MAMIA brand, its house brand for baby products. Aldi engaged Motor Brand Design to carry out the re-design and expressly instructed it to use EBC’s Bellies brand as the ‘benchmark’ for Aldi’s packaging. In February 2020, Aldi began selling its MAMIA products in the new packaging.
In 2020 and 2021, Aldi developed a new MAMIA product – baby puffs. Motor Brand Design developed the packaging by again using the Bellies brand as the ‘benchmark’. These products were sold in mid-2021.
In December 2021, and in response to letters from the applicants, Aldi made changes to its MAMIA packaging, by changing the featured owl figure to a monkey and altering the font.
In February 2022, the applicants commenced proceedings against Aldi for breach of copyright. Interestingly, the applicants did not claim that Aldi engaged in passing off or misleading or deceptive conduct (as is usually pleaded in such cases, and has been unsuccessful in similar actions against Aldi in the past).
What did the Court find?
The applicants alleged that their copyright in several artistic works had been infringed by Aldi, those works comprising the front-of-pack artwork on the packaging of the applicants’ Bellies products. It was not in dispute that the applicants’ works were artistic works or that copyright subsisted in those works.
Were the applicants the owners of copyright in the applicants’ works?
The Court concluded that Hampden and/or Lacorium were the owners of copyright in the applicants’ works and could therefore sue for breach of copyright.
A contentious issue in the case was whether the right to sue for past copyright infringement (ie infringement that occurred before the date of an assignment of copyright) can be assigned, such that the assignee can sue on the infringement. Moshinsky J held that the right to sue can be assigned prospectively.[1]
Did Aldi infringe copyright by reproducing a substantial part of the applicants’ works?
In determining whether a substantial part of each of the applicants’ works had been reproduced by Aldi, Moshinsky J considered whether Aldi reproduced the applicants’ works by reference to two elements: a causal connection between the applicants’ works and Aldi’s works; and a sufficient degree of objective similarity between the works.
Causal connection
The Court found that Aldi instructed Motor Brand Design to seek to emulate the layout or structure of the Bellies brand packaging on the basis of the following evidence:
- An email from Aldi’s buying director to Motor Brand Design stating: ‘If you could send through your feedback regarding the benchmarks we will get started … The Snacking Range market leader was Little Bellies.’ Attached to the email was a document titled ‘Mamia Baby Snacking Market Review’ which included an image of the packaging for BABY BELLIES.
- An email from Aldi’s buying director to Motor Brand Design stating: ‘In regards to the benchmarks … Snacking Benchmarking – Little Bellies https://bellies.com.au’.
- An email from Motor Brand Design to Aldi attaching document titled ‘Brandstorm – MAMIA Baby Food Redesign’, which included a page headed ‘MAMIA Baby Food Redesign – BENCHMARK’ and comprised images of BELLIES products.
- An email from Motor Brand Design to Aldi attaching an updated document titled ‘Brandstorm – MAMIA Baby Food Redesign’, which presented two proposed designs utilising an owl character, and showed images of BELLIES products.
- An email from Motor Brand Design to Aldi stating: ‘For the Snacking Range we have visualised two layouts as Baby Bellies has two different architectures.’
- An email from Aldi to Motor Brand Design stating: ‘Unfortunately I have received feedback that this particular artwork is too close to our benchmark, I understand we are now on V5 of artwork rounds. Motor this artwork will need to be updated with the below requirements: 1. Baby Puffs to be removed from inside owl & placed under Mamia Organics. 2. Rearrange the layout of packaging, so the owl puff imagery is in a different position.’
- An annotated copy of Aldi’s packaging design with comment from Motor Brand Design stating: ‘ALDI have now had legal come back to them and state this design is too close to the benchmark – no shit! ALDI would like to see the below edits made: – “Baby Puffs” removed from the owl’s belly and placed under Mamia Organic – rearrange the layout of the pack so the owl and the imagery is in a different location. Best to just swap them around so at least there is some consistency across the range. Reference to the benchmark is in the folder.’
- An email from Motor Brand Design to Aldi stating: ‘Emily passed your feedback through in regards to the Baby Puffs. I have had the creative team update this for you. Please see attached. Now that the owl doesn’t have text in his tummy I think this should move it far enough away from the benchmark.’
The Court made a finding of causal connection on the basis of the above documentary evidence, which showed that Motor Brand Design had access to the packaging of the applicants’ products and its process was to design packaging for Aldi that resembled the packaging of the benchmark product.
Objective similarity
Is Aldi liable for additional damages?
As the issues of liability and quantum are to be heard and determined separately, no orders relating to quantum have been made yet. However, the Court did determine Aldi’s liability for additional damages as part of its findings on liability in the December 2024 judgment. The Court concluded that Aldi is liable for additional damages because:
- Aldi’s infringement was flagrant – Aldi deliberately developed packaging that resembled the applicants’ products and sought to use designs developed by a trade rival for its own commercial advantage
- Aldi continued to sell its infringing products in packaging bearing the applicants’ works for months after the applicants sent a letter of demand and
- there is a need to deter similar infringements of copyright.
What happens now?
The matter has been listed for a further case management hearing, with the parties to make submissions as to the orders to be made consequent upon the judgment.
We expect this is not the last we’ll hear of this decision. It is significant for a few reasons:
- Aldi’s packaging for its house brand products is well known for taking inspiration from popular ‘big name’ brands (Aldi’s previous advertising campaign even featured the slogan ‘Like Brands. Only Cheaper.’). In Australia, Aldi has successfully defended claims for trade mark infringement, misleading or deceptive conduct, and passing off.[2] This decision represents the first time Aldi has failed to defend a ‘lookalike packaging’ claim in Australia.
- Given the Court’s finding of infringement in relation to just 3 of the 9 pleaded artistic works, it seems likely that any appeal by Aldi will be accompanied by a notice of cross-appeal by the applicants in relation to findings of non-infringement for the remaining artistic works. This increases the stakes in any appeal that Aldi may seek to bring – Aldi stands the chance of potentially going backwards not just in terms of the findings on liability but, more significantly, in terms of its exposure to pecuniary relief (including additional damages).
- The applicants’ successful claim of copyright infringement in the context of product packaging may prompt other brands to rely on copyright as a cause of action in lookalike packaging cases in future, in addition to, or instead of, claims under the Australian Consumer Law. This may curb Aldi’s process of using the packaging of big brand competitors as a benchmark to design Aldi’s house brand products.
- Additional damages are relatively rare in Australia. Assuming that the quantum of pecuniary relief is not resolved interpartes, we look forward to reading about the quantum of damages awarded (when those orders are made)!
Featured image: Comfreak, ‘Wet blueberries close up’, Pixabay via Wikimedia Commons, 7 June 2018, CC0 1.0 Universal (cropped).
[1] See Global Brand Marketing Inc v Cube Footwear Pty Ltd [2005] FCA 479; 65 IPR 44.
[2] See, for example, Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93.