Background
Hansen Beverage Company v Bickfords (Australia) Pty Ltd (2008) FCAFC 181 is the latest decision in an ongoing dispute between a US based beverage manufacturer (Hansen) and an Australian beverage company (Bickfords) over the use of the MONSTER ENERGY brand in Australia.
Hansen has produced and sold an energy drink under the name MONSTER ENERGY since 2002. The Hansen MONSTER ENERGY product was sold and extensively marketed in the US, Canada, Mexico and a number of other countries but was not directly sold or promoted in Australia.
Hansen owned registered trade marks in respect of the MONSTER ENERGY brand in a number of countries but did not have any Australian registered trade marks for the MONSTER ENERGY brand.
In 2006 Bickfords commenced producing and selling an energy drink in Australia under the name MONSTER ENERGY. Bickfords' MONSTER ENERGY product used colour schemes, can sizes, branding and slogans very similar to those used by Hansen. There was evidence (which was accepted by the court) that Bickfords was aware of Hansen's MONSTER ENERGY brand and had sought to deliberately copy this brand with only minor adaptations.
The proceedings
As Hansen did not have any Australian registered trade marks, it was forced to rely on 'common law' causes of action. Consequently Hansen commenced proceedings against Bickfords claiming that Bickfords use of the MONSTER ENERGY brand amounted to passing off as well as misleading and deceptive conduct under the Trade Practices Act 1974 (Cth).
Broadly speaking, to succeed in these claims Hansen needed to be able to establish that:
- it had significant reputation in the MONSTER ENERGY brand in Australia; and
- as a result of its reputation, the use of the MONSTER ENERGY brand by Bickfords was likely to deceive or mislead consumers.
The Decision
At first instance the trial judge held that Hansen had not directly sold or promoted its MONSTER ENERGY product in Australia. As a result it was held that Hansen had not acquired a sufficient reputation in the MONSTER ENERGY brand in Australia.
The Full Federal Court allowed an appeal by Hansen and held that brand reputation can be acquired through incidental or indirect marketing. As a result the court held that Hansen's incidental reputation in Australia (acquired mainly due to Hansen's promotion of the MONSTER ENERGY brand at sporting events shown on Australian television and on websites and magazines available in Australia) could be sufficient to establish a claim for passing off or breaches of the Trade Practices Act 1974 (Cth).
The matter has now been remitted back to the trial judge for redetermination.
The lessons
The MONSTER ENERGY litigation demonstrates the difficulties involved in attempting to enforce an unregistered or 'common law' trade mark in Australia.
The case also demonstrates the importance of brand owners registering their trade marks in Australia, even if they don't intend to use those marks in the immediate future. If Hansen had Australian registered trade marks in respect of the MONSTER ENERGY brand it would have had a much stronger case against Bickfords as:
- trade mark registration would have provided Hansen with exclusive rights in Australia in respect of its registered MONSTER ENERGY trade marks; and
- the fact that Hansen had only limited reputation for its MONSTER ENERGY brand in Australia would not have been an issue in establishing an action for trade mark infringement.
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