Case: Coca-Cola Company v All-Fect Distributors Ltd [1999] FCA 1721 ; (1999) 96 FCR 107
Outcome: applied
In Coca-Cola Company v All-Fect Distributors Ltd [1999] FCA 1721 ; (1999) 96 FCR 107 ( All-Fect ) the appellant's well known 'Coca-Cola shaped bottle' mark was registered in two-dimensional form. Key features of the shape included: &#8226; its curved rather than flat sides &#8226; a top portion with longitudinal fluting &#8226; a central portion without fluting and a lower portion with fluting &#8226; a flat base and a banded neck. 47 The respondent imported and distributed cola-flavoured confectionary. The issues in suit were whether a three-dimensional shape - namely confectionary - could be used as a mark to denote the origin of goods, and whether such use infringed the appellant's registered two-dimensional trade mark. At [20] the Full Court referred to the authorities relevant to the issue of use: ... the question is whether the sign used indicates origin of goods in the user of the sign; whether there is a connection in the course of trade between the goods and the user of the sign. 48 At [31] the Court said: [T]he question at this stage is not whether the respondent has used a sign so as to indicate a connection between it and the appellant. It is whether the use indicates a connection between the confectionary and the respondent. So it does not assist the respondent to demonstrate by reference to the packaging that the suggested connection is with Efruti rather than Coca Cola. 49 These passages reflect High Court authority that a trade mark is a sign used to indicate origin of the goods in the user of that sign. Therefore, in the ordinary case, a court must first examine the use of the impugned mark and whether such use is trade mark use for the purposes of the Act. In cases such as the present this threshold issue should be determined before the court considers whether the two marks are substantially identical or deceptively similar. The threshold issue only examines the impugned mark; not the registered trade mark. As was said in All-Fect at [32], "At this stage the hypothesis is not that the appellant is trying to tell the consumer that the goods emanate from it, but that the respondent is trying to tell the consumer that the goods emanate from the respondent". 50 The Full Court in All-Fect held that the confectionary shape denoted use as a mark, primarily because the confectionary had non-descriptive features in the shape of the mark. The Court said at [25]: The confectionary has three features that are not descriptive of the goods. They are the silhouette, the fluting at the top and bottom, and the label band. It is not necessary for the respondent to adopt any of those features in order to inform consumers that its product is a cola flavoured sweet. It could do so by using the cola colour, the word COLA and the shape of an ordinary straight walled bottle. The silhouette, fluting and band are striking features of the confectionary, and are apt to distinguish it from the goods of other traders. The primary function performed by these features is to distinguish the goods from others. That is to use those features as a mark. It is true, as the respondent said, that the fact that a feature is not descriptive of goods does not necessarily establish that it is used to distinguish or differentiate them. But in the present case we are compelled to the conclusion that the non-descriptive features have been put there to make the goods more arresting of appearance and more attractive, and thus to distinguish them from the goods of other traders. (Emphasis added) 51 The existence of striking features that were not descriptive of the confectionary was enough to indicate that it was used as a trade mark. Features that made the goods more arresting of appearance and more attractive had the capacity to distinguish the respondent's goods from those of others. 52 At [35] the Court said that whether the respondent had used features of the confectionary as a trade mark was a matter for the court, and was not governed by the absence of evidence that shopkeepers or customers concluded that the confectionary had a trade mark origin. 61 The principles relevant to use of shape as a trade mark are now set out. (a) A special shape which is the whole or part of goods may serve as a badge of origin. However the shape must have a feature that is 'extra' and distinct from the inherent form of the particular goods: Mayne at [67], Remington at [16] and Kenman Kandy at [137] (b) Non-descriptive features of a shape point towards a finding that such features are used for a trade mark purpose. Where features are striking, trade mark use will more readily be found. For example, features that make goods more arresting of appearance and more attractive may distinguish the goods from those of others: All-Fect at [25]. (c) Descriptive features, like descriptive words, make it more difficult to establish that those features distinguish the product. For example, the word COLA or an ordinary straight walled bottle are descriptive features that would have limited trade mark significance: All-Fect at [25] and Mayne at [61]-[62]. (d) Where the trade mark comprises a shape which involves a substantial functional element in the goods, references to the shape are almost certainly to the nature of the goods themselves rather than use of the shape as a trade mark: Mayne at [63]. For example, evidence that a shape was previously patented will weigh against a finding that the shape serves as a badge of origin: Remington at [12] and Mayne at [69]. (e) If a shape or a feature of a shape is either concocted compared to the inherent form of the shaped goods or incidental to the subject matter of a patent, it is unlikely to be a shape having any functional element. This may point towards the shape being used as a trade mark: Kenman Kandy at [162] and Mayne at [69]. (f) Whether a person has used a shape or a feature of a shape as a trade mark is a matter for the court, and cannot be governed by the absence of evidence on the point: All-Fect at [35]. (g) Context "is all important" and will typically characterise the mark's use as either trade mark use or not: Remington at [19] and Mayne at [60]-[62]. 63 At the other end of the spectrum are those features of a mark that are non-descriptive and non-functional. They ordinarily make the shape more arresting of appearance and more attractive, thus providing a means of distinguishing the goods from those of others. All-Fect and Remington show that non-functional features add something extra to the inherent form of the shape. A concocted feature will typically be considered non-functional: Kenman Kandy . 71 In my view the Photon and the Cube shoe are used as trade marks where the features listed in [70], especially features (a), (b), (d), (g) and (h), are combined in the shape of a shoe. The most important of these features for present purposes are the stitched YD label on both shoes, the small rounded piece at the back of the Cube shoe, and the Photon's stripe running parallel to the base of the sole. Neither the Cube's rounded piece nor the Photon's parallel strip is found on any of the shoes in evidence other than YD's shoes. Mr Vickery described the rounded piece as "quite distinctive" and not a feature commonly used in the shoe industry. It can I think be considered a striking feature given its lack of commonality in the trade: cf All-Fect at [25]. 72 Features (c), (e), (i) and (j) in the list at [70] are either functional or in common use. Common features are like descriptive words. 73 In my view the non-functional and non-descriptive features referred to in [71] overwhelm the functional features and common features referred to in [72] and give the Cube and Photon shoes a trade mark purpose. 93 Of the essential features, the D is the most dominant feature of the Shape Mark. Significant weight and importance have been attached to that feature: cf Melbourne Chinese Press Pty Ltd v Australian Chinese Newspapers Pty Ltd (2004) 63 IPR 38 at [18] ( Melbourne Chinese Press ) and All-Fect at [42]. 99 Finally, the context is all important. In the present case the risk of confusion is mitigated by the circumstances in which the products are bought and sold: &#8226; Purchasers of the shoes in suit are metro-shoppers. They are fashion conscious and discerning in their choices. They are likely to be well informed about the products before purchasing them. The steps involved in a purchase (see [26]) constitute a relatively lengthy process in the course of which a customer will become well informed about a product before making a purchase. &#8226; Metro-shoppers review product labels. Branding, labels and logos are important features to this class of consumer. Their purchasing habits are refined, and this lessens the chance of confusion. &#8226; YD's shoes are sold only in YD stores. The stores display YD's signage, and customers are well aware that they are in a YD store when purchasing an item. &#8226; The applicants' and YD's shoes are relatively expensive items compared with impulse products such as soft drinks and confectionary: cf. All-Fect at [41]. Purchasers of shoes generally tend to be discerning in their purchasing habits. &#8226; While it is not necessary for the applicants to lead evidence of actual deception (cf Crazy Ron's at [95]), it is relevant that there was no such evidence.