In Nature's Blend Pty Ltd (ACN 126 406 488) v Nestle Australia Ltd (ACN 000 011 316)  FCA 198 Sundberg J of the Federal Court considered the Trade Marks Act 1995 (Cth) and Trade Practices Act 1974 (Cth) in connexion with the claim by Nature's Blend - a small confectionary manufacturer - that Nestlé had infringed its registered trade mark for 'Luscious Lips'.
Nature's Blend, initially selling "veterinary, animal and medical products", had expanded into confectionary. It was using the registered mark - satisfying s 17 of the Trade Marks Act - for chocolates as goods under class 30 of the Act. Nestlé, having acquired the Allens confectionary business, sold a product - mixed confectionary, including lip-shaped jellies - by the name of Retro Party Mix from 2007 to 2009. The packaging for that product referred to "luscious Lips" -
That's right! All your favourites are back, so put on those flares and get ready to party! Up to 7 lolly varieties including ... cool Cola Bottles, those radical Racing Cars, yummy Honey flavoured Bears, totally freeeekie Teeth, luscious Lips, partying Pineapples and outrageous Raspberries.The product was elsewhere promoted as "All Delicious! All FUN! 99% Fat Free!". How can you go past something that's both FUN and fat free (and presumably didn't involve the evisceration of kittens, death to innocent tuna or the demise of a rainforest or two)?
Nature's Blend argued that Nestlé was liable in relation to trade mark infringement under the Act, the tort of passing off, and misleading and deceptive conduct under the Trade Practices Act. It submitted that
submit that the phrase 'luscious Lips' is not a phrase which ordinarily and naturally describes confectionary and is 'in no sense laudatory of confectionary, whether in relation to the shape, appearance, or taste', nor does it refer to the character or quality of confectionary. ... the phrase is inherently distinctive and newly-coined ... in relation to confectionary.Sundberg J noted that
The words 'luscious Lips' are substantially identical with or deceptively similar to the 'LUSCIOUS LIPS' mark. However this in itself is not sufficient to infringe; the context is all-important.After discussing the 'Kettle Chips' and other cases he stated that
When considering the evidence on use as a whole, I am not satisfied that the there has been 'use as a trade mark' for the following reasons.Guylian was noted here last year year.
First, the word 'luscious' is descriptive and is intended to convey to consumers a laudatory, perhaps even humorous, description of such of the respondent's confectionary contained in the Retro Party Mix Product which are shaped as lips, in the same way that the expression 'cool Cola Bottles' or 'yummy Honey flavoured Bears' provides a laudatory description of confectionary in the product that are shaped like cola bottles and bears respectively. It may be the case that some consumers would not read the marketing narration on the back of the pack at all. However, for those consumers who took the time to do so, my impression is that they would have taken 'luscious Lips' as essentially a humorous way to describe the products contents, not as a badge of origin. See Johnson & Johnson Australia Pty Limited  FCA 310; 30 FCR 326.
Second, the effect of the words 'luscious Lips' on consumers is diluted by the prominence of the well known mark 'ALLEN'S' on both the front and back of the packaging, along with the mark 'NESTLE' appearing on the back of the packaging. These two registered marks perform the role of distinguishing the respondent's confectionary from that of others. In addition, the product name 'RETRO PARTY MIX' appears in large font on the front and the back of the product. I accept that, in some circumstances, there may be trade mark use despite other marks appearing on the product: see Anheuser-Busch, Inc  FCA 390; 56 IPR 182. However, in my view, this case is distinguishable from that type of case. In Anheuser-Busch, Inc  FCA 390; 56 IPR 182 the infringing mark 'Budweiser' was the most prominent word on the label. That is not the case here. In this case, the registered marks 'ALLEN'S', and to a lesser extent 'NESTLE', are prominent especially when contrasted with the positioning and use of the words 'luscious Lips'. See Chocolaterie Guylian NV 258 ALR 545.
In essence, Nestlé's use of the words in the particular setting setting was not as a trade mark and did not infringe the Nature's Blend mark: its use of 'luscious' was descriptive (with consumers likely to regard the expression as laudatory - as in tasty, delicious, yummo - and humorous) and the effect of the phrase was diluted by the prominence of the Nestlé, Allens and RETRO PARTY MIX marks. Interestingly, Sundberg J was prepatred to find that Nestlé was using the phrase as a good faith description, given the claim by Nestlé about development of the packaging and its unawareness of the Nature's Blend mark.