The Coca-Cola Company Ltd v Frucor Soft Drinks Ltd [2013] NZHC 3282

The Coca-Cola Company Ltd (the plaintiff, TCCC) sold its cola beverage in a contour shaped clear plastic or glass bottle. In 2010, it commenced proceedings against Frucor Soft Drinks Ltd (the first defendant), and PepsiCo Inc (the second defendant) for trade mark infringement, passing off and breach of the Fair Trading Act 1986. Frucor was the New Zealand distributor of PepsiCo’s drinks including PEPSI, PEPSI MAX and 7UP. In 2009, PepsiCo and Frucor had started selling drinks in New Zealand using PepsiCo’s new “Carolina” bottle shape.

TCCC alleged that the Carolina bottle infringed three of its New Zealand registered trade marks:

Specifically, TCCC argued that the defendants’ sign was similar to each of TCCC’s three trade marks, was being used for identical goods, and use of the defendants’ sign was likely to deceive or confuse (infringement under s 89(1)(c) Trade Marks Act 2002). TCCC argued that the sign being used was the Carolina bottle shape and its silhouette. The defendants argued that the signs used were a combination of the Carolina bottle shape and the relevant PepsiCo trade mark of PEPSI, PEPSI MAX or 7UP. The defendants denied that the Carolina bottle, or its the silhouette, had been used as a trade mark. The defendants also denied any likelihood of deception or confusion.

TCCC also alleged that sale of PepsiCo’s products in the Carolina bottle amounted to passing off of PepsiCo’s products as TCCC’s products, or as being associated with TCCC. Further, TCCC alleged that the defendants’ sale of the products in the Carolina bottle breached the Fair Trading Act 1986 because this conduct was misleading or deceiving customers into believing that the PepsiCo products were TCCC products or products associated with TCCC.

Photographs of the COCA-COLA and PEPSI products (shown side by side) are below:

These images are (c) New Zealand Centre for Intellectual Property 2024 and licensed for use under a CC BY 4.0 licence.

TCCC had also sued PepsiCo in relation to use of the Carolina bottle in Australia and in Germany.

The matter went to trial in New Zealand in November 2013.

Wylie J gave judgment in December 2013. The judgment is available at NZLII.

What were the defendants’ sign(s)?

For the purposes of trade mark infringement, it was necessary to compare TCCC’s registered marks with the sign or signs being used by the defendants in the course of trade [97].

Wylie J determined that the defendants were using two signs: a combination sign, comprising the bottle shape and other relevant marks such as PEPSI, PEPSI MAX or 7UP (depending on the product) [125]; and the bottle shape alone [125]. The latter finding was reached in reliance on Saville Perfumery Ltd v June Perfect [1941] 58 RPC 147 (CA); 171 (HL). TCCC had argued that Saville stood for the principle that “once a mark is proved, a user of it cannot escape by showing that by something outside the actual mark itself, [they] have distinguished [their] goods from those of the registered proprietor” [107]. The defendants had argued that the Saville approach should not be followed for a number of reasons, including that the UK courts had moved on from this [117]. Wylie J did not consider that the UK decisions assisted [119].

Were the defendants’ signs being used as trade marks?

Section 89(2) requires that a defendant be using their sign in such a manner as to render the use of the sign as likely to be taken as being as a trade mark [127]. The issue of whether a sign is being used as a trade mark was “likely to assume greater signficance” given that non-traditional marks were capable of registration post amendments made by the Trade Marks Amendment Act 1994 [128].

There was no question that the combination sign was being used as a trade mark [129].

The Carolina bottle shape was also being used as a trade mark [141]. A feature of the Carolina bottle was its “waisted shape in the lower section of the bottle” [132]. This feature was shared by many bottles on the market. However, “the fact that a feature of an article may have a functional purpose does not ... mean that that feature cannot aslo serve as a trade mark... The issue is ... whether those to whom the use is directed are being invited to purchase the goods of the alleged infringer, which are to be distinguished from the goods of other traders, partly because they have the feature in question.” [133]. Here, each side’s experts agreed that bottle shape was a diagnostic cue for purchasing (although they differed on how important it was) [134]. PepsiCo had developed the Carolina bottle with the intention that it be distinctive [135]; the bottle had been presented to the market in a way that emphasised its ability to function as a trade mark [136]; marketing had emphasised the bottle shape [137]; PepsiCo had applied for trade mark registration of a Carolina-type bottle [139]; and there were at least 90 trade mark registrations for bottles in New Zealand, indicating that their proprietors (including the parties) considered that bottles were capable of acting as trade marks [140].

Were the defendants’ signs similar to any of TCCC’s trade marks?

In relation to the approach to take to assessing infringement under s 89(1)(c) of the Act, Wylie J stated that earlier tests articulated by Court of Appeal decisions “tend[ed] to run together, and any attempt to differentiate between them is largely a matter of semantics” [154]. His Honour’s view was that [154]:

“If the defendants’ sign is obviously not similar to the registered trade mark, then it will not generally be necessary to go on to consider whether or not use of the defendants’ sign is likely to deceive or confuse. ... [W]here the mark and the sign are similar, it will generally be appropriate to consider the issues of similarity and deception and confusion together, because the extent of the similarity is likely to inform the decision whether there is a likelihood of decision and confusion. The Court in such cases can make a global assessment, taking into account the similarity of the mark and the sign, when determining whether the use of the sign will be liable to deceive or confuse. When a global assessment is called for, then the Court will apply the various tests relevant to deception and confusion which have been discussed in the authorities ... It will do so from the perspective of the average consumer in the relevant market.”

Adopting this approach, it was necessary to compare the normal and fair use that TCCC had made of its registered marks with the actual use the defendants had made of their signs [156]. In outlining what normal and fair use of TCCC’s marks would be, Wylie J was critical of TCCC’s reliance on the silhoutte of its bottle shape [160]. To rely on the silhouette was an impermissible attempt to extend the scope of TCCC’s registrations [160]. Further, in comparing the marks and the defendants’ signs, each had to be considered as a whole [161] from the perspective of the average consumer [162], taking into account imperfect recollection of TCCC’s marks [163].

Adopting the above approach, the comparison was between normal and fair use of TCCC’s registrations and actual use of the Carolina bottle sign, but “disregarding the defendants’ word or device marks on the bottle” [164].

There was no material similarity between the Carolina bottle and TCCC’s trade mark no. 47221 [174], no material similarity between the Carolina bottle and TCCC’s trade mark no. 244906 [183], and no material similarity between the Carolina bottle and TCCC’s trade mark no. 295168 [187].

When commenting on TCCC’s trade marks 244906 and 295168, Wylie J was critical of the representations of the two trade marks as being insufficiently clear [181] and [185]. It was “troubling that TCCC has registered and now seeks to rely on a registered mark [244906] which is so imprecise” [181] and “surprising that the representation [of 295168] is not particularly accurate” [185]. However, in both cases, the unclear aspects of the representations were considered to relate to features that the average consumer with imperfect recollection would not notice in any event.

As there was no material similarity between the TCCC trade marks and the defendants’ Carolina bottle sign, there could be none when it came to the trade marks and defendants’ combination sign, either [189]. The additional marks of PEPSI, PEPSI MAX or 7UP clearly distinguished the defendants’ products in the market place [189]. It was relevant that the defendants’ marks were well known [190].

There was no likelihood of deception and confusion for either of the defendants’ signs (considered “for the sake of completeness” [192]). There was no material similarity; the defendants’ signs clearly distinguished their products; there was no evidence of confusion; no reason to suspect undetected confusion; TCCC had taken no steps until almost a year after becoming aware of the Carolina bottle; TCCC had not taken steps in most other countries where the Carolina bottle was sold; and no survey evidence had been produced by TCCC as to customer perceptions [198] - [204].

TCCC’s passing off allegations

TCCC’s contour bottle as a whole had a reputation in New Zealand sufficient to ground a passing off claim [213]. In assessing whether consumers had been misled, the test to be applied asked whether there was a reasonable likelihood of confusion or deception amongst a substantial number of persons [214]. The comparison was between the actual products, in the circumstances of actual use [215]. The get-up of each product had to be compared as a whole [216]. Adopting this approach, there was no reasonable likelihood of confusion or deception [217]. TCCC had not suffered, and was not likely to suffer, any damage [220].

TCCC’s Fair Trading Act allegations

The defendants’ conduct had not been misleading and nor was it capable of being misleading [225]. The defendants had not made a fale or misleading representation either [225]. Therefore there had been no breach of the Fair Trading Act [227].

Although TCCC filed an appeal in the Court of Appeal against the judgment, the appeal was abandoned. The defendants had also filed a cross-appeal against the High Court’s finding that they were using the Carolina bottle as a sign by itself. That cross-appeal was also abandoned.