Carrot Puffs and Copyright: Aldi Found Liable in Australia

It’s all gone puff for Aldi! The Federal Court of Australia has found the supermarket chain liable for copyright infringement due to its use of packaging on certain children’s food products. This outcome is good news for brand owners seeking to prevent copycats and lookalike brands. Our Intellectual Property team considers the impact of the case.

The Federal Court of Australia has found Aldi liable for copyright infringement regarding certain artistic works used on the packaging for children’s food products. In reaching this decision, the Court held that copyright subsists in the design and layout of the packaging as artistic works. In our recent article, we discussed the UK High Court’s ruling on Aldi’s Taurus cloudy lemon cider and Thatcher’s cloudy lemon cider, highlighting a broad challenge for food and beverage companies. They have traditionally found it difficult to prevent copycats from ‘benchmarking’ their products and developing very similar products and packaging. This Australian decision is therefore significant in suggesting that brand owners can now rely on copyright, rather than trade marks or unregistered rights to effectively take enforcement action against copycats and lookalike brands.

Background

Every Bite Counts Pty Ltd (EBC) sells children’s food products under the BABY BELLIES, LITTLE BELLIES and MIGHTY BELLIES brands. EBC began using new packaging on BELLIES branded products sold in Australia in September 2018. Aldi on the other hand operates approximately 590 supermarkets across Australia. One of Aldi’s house brands is called MAMIA. This is its baby portfolio which includes nappies, wipes, wet food and dry food. Aldi instructed a design company to use the LITTLE BELLIES brand as the “benchmark” for the re-design of the packaging for the MAMIA dry food range in April 2019. Aldi began selling MAMIA baby puff products during 2021. A comparison of the competing puffs is set out below.

EBC Products	Aldi Products

Hampden Holdings I.P. Pty Ltd (Hampden), the owner of EBC’s intellectual property, instituted proceedings against Aldi for copyright infringement in February 2022.

Benchmarking

Similar to the position adopted by Aldi in the Thatcher’s case, it accepted that it used the BELLIES brand as the benchmark when re-designing its MAMIA snacking range. According to Aldi’s evidence, the purpose of the benchmark is to enable it to identify cues that customers may associate with the product type generally. The company then adapts these cues to develop its private label product. Aldi argued that the objective was not to produce a copy or variant of the benchmark product. The Federal Court of Australia addressed Aldi’s use of the expression “benchmarking” in this context. It found that Aldi used the term to refer to a process of developing a packaging design that resembled the packaging of the benchmark product. However, the resemblance was not too close, as that would risk infringing the law.

Infringement

The Court was ultimately satisfied that it was likely that Aldi based each of the MAMIA designs above on the BABY BELLIES packaging for the corresponding product. This could be inferred, the Court held, from the similarity between the designs. For example, the following layout and design elements had been reproduced by Aldi:

• A small, oval-shaped cartoon character, with a large, light-coloured belly
• A solid white background
• A two-column layout
• A rounded, childlike font
• On the left side, text elements of varying sizes, “stacked” vertically
• On the right side, photographic images of the product and ingredients, in a vertical composition, and
• A number in the upper-right corner

In the Federal Court’s view, when considered together, these layout and design elements involve a degree of creativity or originality. They also “go beyond an idea or concept and constitute a form of expression,” and are qualitatively significant. For these reasons, the Court concluded that the Aldi puff product packaging does reproduce a substantial part of the BELLIES puff product packaging. In light of these findings, in particular with regards to benchmarking, the Court was satisfied that Aldi:

“ought reasonably to have known that the making of the relevant articles constituted an infringement of the copyright in the Applicant’s Puff Works."

Comment

Although further copyright claims were made regarding other children’s non-puff food products, these claims were unsuccessful. However, the Federal Court’s finding of infringement concerning the puff product packaging will be welcomed by brand owners. The case illustrates that copyright may now provide an alternate route to hold copycat and “dupe” products and brands liable for copying of packaging and creative design elements.

Passing off or infringement of unregistered trade mark rights was explicitly not pleaded in this case. In an action for passing off, benchmarking and/or intention to reproduce or copy is not relevant in the infringement analysis. This was the test endorsed by the Irish Supreme Court in in the leading case on passing off, McCambridge Ltd v Joseph Brennan Bakeries. Although the Federal Court of Australia did not deal with intention to infringe explicitly in this case, the inference from the judgment appears to be that unlike passing off, intention may be relevant on the copyright infringement analysis.

An interesting aspect of the judgment is also that additional damages were awarded against Aldi as the Court was satisfied that Aldi’s infringement was flagrant, ie Aldi had sought to use for its own commercial advantage designs which were developed by a trade rival. This introduces a punitive element. The awarded damages will serve as a further deterrent to copycats against taking risks of using competitors designs which may exceed what the law permits. As this decision holds persuasive authority before Irish and UK Courts, it will be interesting to see if the decision is followed in future infringement cases taken against lookalike companies here.

People also ask

For more information and expert legal advice on the impact of this decision and how best to protect your intellectual property rights, please contact a member of our award-winning Intellectual Property team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.