Passing Off and section 52: Brand Blocking

Ricegrowers Ltd v Real Foods Pty Ltd [2008] FCA 639 (12 May 2008)

http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/federal_ct/2008/639.html?query=title(Ricegrowers%20Ltd%20%20and%20%20Real%20Foods%20Pty%20Ltd%20)

In a matter involving packaging of rice cakes, the Federal Court has recently applied principles relevant to passing off and section 52. The representations in suit were expressed at [4] and [7]:

PASSING OFF AND MISLEADING CONDUCT CLAIM

4 Ricegrowers alleges that there is a substantial similarity between the two flavoured rice cakes and one flavoured corn cakes products it sells and three flavoured corn cakes products Real Foods sells. Both Ricegrowers and Real Foods make the majority of their sales of these products through the two large supermarket chains, Woolworths and Coles. Ricegrowers alleges that by selling its range of corn cakes, Real Foods has made false representations in trade or commerce, namely that:

(1) Real Foods’ flavoured corn cakes are products of Ricegrowers;
(2) Real Foods’ flavoured corn cakes are sold with the licence, endorsement, consent or approval of Ricegrowers;

(3) Real Foods’ flavoured corn cakes are a range of the products sold by Ricegrowers;

(4) Ricegrowers was selling a range of corn products either alone or in tandem with its rice cake products.

5 Ricegrowers alleges that if Real Foods is found to have made each of those representations, its conduct in making them:

• contravened s 52 of the Trade Practices Act 1974 (Cth) because each representation was misleading or deceptive or likely to mislead or deceive;
• amounted to Real Foods passing off its flavoured corn cakes as products of Ricegrowers or as being, in some way, products associated with Ricegrowers.

FALSE INGREDIENT CLAIM

6 Ricegrowers also alleges that Real Foods’ unflavoured thin corn cake, sold under the name "CORN THINS - original", displayed on its packaging a list of ingredients including "maize (corn) 99%". Ricegrowers asserts that since about April 2007 Real Foods promoted its new range of flavoured corn thins and the packaging of the flavoured corn thins displayed a list of ingredients including "maize (corn) 54%, rice (35%) ..."
7 Ricegrowers alleges that by selling its flavoured "CORN THINS" range, Real Foods made two representations to the effect, first, that the new range had identical ingredients with the "CORN THINS – original" product and secondly, that the new range contained 99% maize. Ricegrowers alleges that each of those representations was false and contravened s 52 of the Trade Practices Act. Alternatively, it says that each was a false representation that the products in the new range had a composition which they did not have, thus contravening s 53(a) of the Act.


Interestingly, his Honour also examined evidence relevant to "brand blocking" and “variant differentiation” at [25] and [26] in dismissing the application:

25 "Brand blocking" is a marketing term to describe a clear and obvious brand feature, such as a logo, image or colour common to different variants of one brand which visually captures a portion of the shelf space to the exclusion of other brands. Thus, the intention of brand blocking is that when many different variants of same brand are placed together on a shelf, it will be abundantly clear to consumers that the different variants are part of the same brand. Real Foods’ senior brand manager, Madeleine Anderson, said that all of the Real Foods corn thins variant used the mark "CORN THINS" in a similar size, colour and font, and that the mark is positioned in a similar, distinct and prominent position on the front of the packaging. Ms Anderson said, and I accept, that brand blocking enables consumers to more easily locate a brand on a shelf, while building familiarity with it. It is a common practice with many products within supermarkets.

26 Variant differentiation is also a marketing concept to describe packaging design that enables consumers easily, almost without thinking, to distinguish between the multiple variants within a brand. Colour is often, but not exclusively, used as one means to communicate variants of a product within the brand, where the colours themselves are not exclusively associated in the consumer’s mind with a particular brand.