«July–August, 2012 Vol. 102 No. 4 1014 Vol. 102 TMR “SECONDARY SIGNIFICATION” IN PRODUCT DESIGN GETS A NEW LEASE ON LIFE IN AUSTRALIA By Peter ...»
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July–August, 2012 Vol. 102 No. 4 1014 Vol. 102 TMR
“SECONDARY SIGNIFICATION” IN
PRODUCT DESIGN GETS A
NEW LEASE ON LIFE IN AUSTRALIABy Peter Knight∗
This article will consider briefly the nature of product appearance or design as distinguishing one trader’s goods from another, review how Australian cases have dealt with claims that such imitation products take advantage of the original trader’s reputation under the rubric of “passing off” and have diverged from English authority, discuss whether the decision of the Federal Court in the Peter Bodum case may have corrected that divergence, and provide guidance on how best to present a passingoff claim in Australia based on product design features given that decision.
∗ Partner, Banki Haddock Fiora, Sydney, Australia, Member, International Trademark Association. Mr. Knight is also a member of the UDRP and auDRP Panel for WIPO (World Intellectual Property Organization), a member of the Editorial Panel of The Internet Law Bulletin, the author of the copyright chapter of Laws of Australia (The Hon Michael Kirby AC CMG ed., 2006), and the coauthor, along with James Fitzsimons, of The Legal Environment of Computing (1990).
1. (2011) 280 ALR 639; (2011) 92 IPR 222;  FCAFC 98.
Vol. 102 TMR 1015
II. THE IMPORTANCE OF PRODUCT DESIGN
IN DIFFERENTIATING ONE PRODUCT
FROM ANOTHERWhen certain types of new products are introduced into the market, design features of that product may be a significant factor in differentiating the product from competing products. This is a truism in the design world—and we have all witnessed or read about immensely successful products such as Apple’s iPOD, iPHONE, and iPAD computer devices, which are different in appearance from anything that existed before, and there are many other examples, such as DOC MARTENS shoes, the PHILIPS triple-headed shaver, and the main subject of this article, the BODUM cafetière. There are, no doubt, many other, more prosaic examples.
Furthermore, when such distinctive products meet with great success, there is a commonly observed phenomenon that products immediately identifiable as similar appear in the market. Here, we are not concerned with counterfeits, but with competing products that are invariably sold under another brand and are cheaper.
However, in this article I refer to “copies” or “look-alike” products, even though the product imitations to which I refer may adopt only a few important features in order to trigger an association in the mind of the purchaser who, typically, will not have both the original and the imitation present to compare side-by-side.
Of course, the great success of the original product may result in no small part not from some inherent attractive force of the design, but rather from the marketing efforts of the creator of the new product, including branding and advertising. It is not surprising that a competitor may attempt to benefit from the demand created by that success by offering a similar product. One might expect that this consideration should not detract from the importance of the appearance of the product if, as a consequence, the appearance has become instantly recognizable. In those circumstances, the product design must have some quality that causes it to be remembered by customers in the relevant market.
How far is it legitimate for a competitor to go in this form of imitation? In this field, the protection afforded by registered designs or design patents is rarely available, usually because the initiator cannot know in advance which new product will be so successful and often does not incur the expense of design filings with respect to new product introductions.
This is the domain of the tort of passing off, which has as its central requirement a deliberate misrepresentation of a product so as to deceive, or be likely to deceive, prospective purchasers, as explained in the next section. In Australia, in addition to the common law remedy of “passing off,” there is also “fair trading” legislation, which may operate in a complementary way. The 1016 Vol. 102 TMR Australian Consumer Law, which is Schedule 2 to the Competition and Consumer Act 2010 (Cth), gives a civil remedy in respect of “misleading or deceptive conduct” in very broad terms, in section 18, as well as false or misleading representations in respect of a number of specific matters, including such representations by conduct, in section 29, with the significant point of distinction that intention to mislead or deceive, or knowledge of the falsity of a representation, is not required.
III. ANGLO-AUSTRALIAN COMMON LAW
PASSING-OFF CASESIn Anglo-Australian law, the leading authority on passing off is that of the English House of Lords in Erven Warnink Besloten Vennootschap v J Townend & Sons (Hull) Ltd2 (Advocaat). In that decision, Lord Diplock’s summary of the principles of the tort is universally accepted. His Lordship identified five characteristics that must be present in order to create a valid cause of action for
(a) a misrepresentation, (b) made by the defendant in the course of trade, (c) to prospective customers of the defendant or ultimate consumers of the goods or services supplied by it, (d) which is calculated to injure the business or goodwill of the plaintiff (in the sense that this is a reasonably foreseeable consequence) and (e) which causes actual damage to a business or goodwill of the plaintiff or will probably do so.
This case concerned a claim by Warnink, a producer of a Dutch liqueur made from a blend of hen egg yolks, aromatic spirits, sugar, and brandy, sold under the name “Advocaat,” against Townend, which produced a similar alcoholic drink but using egg and Cyprus wine sold as “Keeling’s Old English Advocaat.” Although the Advocaat decision addressed the use of a name, the synthesis of the then jurisprudence by his Lordship focused on deceptive conduct and its effect, rather than narrowing the remedy by an attempt to define any special types of “property” it may protect. Thus the same principles are, or should be, applicable to a wide range of conduct, from certain types of misleading advertising, to “switch and sell,” to the use of “common law trade marks” as in the Advocaat decision as well as product packaging and design. Under Anglo-Australian law, no distinction should be drawn between this type of conduct and deception by means of products made to look like the original with respect to actual 2.  AC 731.
Vol. 102 TMR 1017 product features, which all come under the heading of “trade dress” or “get-up.” As argued above, one of the reasons a competitor imitates another’s product in any way is to take advantage of the reputation and goodwill built up by the original creator, to “ride on the back” of the original creator’s efforts to create a market for a new product and take sales that would otherwise have gone to the creator. As two of Australia’s most eminent jurists, Justice Dixon (as he then was) and Justice McTiernan, observed in their joint
judgment in Australian Woollen Mills Ltd v FS Walton & Co Ltd:
The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive.3 Most reasonable business people would expect that deliberate copying of a competitive product’s distinctive design elements to make goods appear to be from the same source would be actionable unless there were an exceptional effort on the part of the imitator to make sure that consumers were not deceived. One would expect this idea to be part of the “elementary principles of commercial morality” referred to by Lord Herschell in Reddaway v Banham.4 In Reddaway, the defendant, a former employee of the plaintiff, set up manufacture of the same article and called it the same thing.
The plaintiff was able to show that a very large number of the potential customers of this product identified the name “Camel Hair Belting” with the goods manufactured by the plaintiff, and often thought that defendant’s products bought under this name had, in fact, originated from the plaintiff. The Court of Appeal found for the defendant, saying that the words were merely descriptive of the product and hence free for anyone to use, that the defendant had done no more than tell “the simple truth.” The English House of Lords disagreed, finding that the words had acquired a “secondary signification” of a product unique to the plaintiff.
3. (1937) 58 CLR 641 (at 657).
4.  AC 199; (1896) 1B IPR 401; [1895-96] All ER Rep 133; (1896) 13 RPC 218.
1018 Vol. 102 TMR In another English decision, Reckitt & Colman Products Ltd v Borden Inc5 (Jif Lemon), the plaintiff manufactured and sold in England lemon juice packaged in a yellow container shaped like a lemon and sealed with a yellow cap, and had done so for many years. The container had the word “Jif” embossed in it, and the word “Jif” also appeared on a triangular green label stuck to the package. The defendants commenced the sale of lemon juice that also was packaged in a yellow, lemon-shaped container, but the container was larger and had a red lid and a slightly different shape and was clearly marked with a yellow sticker with the word “ReaLemon” in red letters. Notwithstanding the fact that a lemonshaped container might be considered descriptive of the product, and notwithstanding the clearly different marking, the House of Lords took the view that the plaintiff had a substantial reputation in this “get-up,” and that supermarket shoppers might not be the most careful in the study and comparison of competing products.
The sale of the look-alike product was found to be passing off. This decision illustrates that merely having a distinguishing label may not be enough where the nature of the representation, such as in a 30-second advertisement or a supermarket label or notice, and the nature of the audience to which it is directed are such as to make the audience less likely to be able to discern the subtlety of the truth of a representation.
The concept was thus firmly established that a person may be found to have passed off his goods as those of another in ways other than by using familiar trade names and marks. That is, a seller may deceive a purchaser simply by virtue of the appearance of the goods themselves, or their packaging, regardless of the word mark used. This deception could occur as a result of the color, shape, and design of packaging for products presented to customers in a package, and/or as a result of the shape, color, and design of the products themselves—so long as these are shown to be sufficiently well known to be distinctive of the aggrieved supplier so as to suggest instantly to consumers the original supplier or its product, and no other.
IV. AUSTRALIAN DECISIONS LIMITING
PASSING-OFF PROTECTION FOR
PRODUCT DESIGNNotwithstanding this common law background, in the past two decades Australian courts have shown themselves to be unwilling to find infringement in any case concerning the appearance of lookalike goods that are labeled with a different brand. The Australian cases, other than those concerning surface ornamentation or brand names, have developed in a way that has suggested that the 5. (1990) 17 IPR 1;  1 All ER 873;  1 WLR 491.
Vol. 102 TMR 1019 appearance of a product itself alone cannot be distinctive of its creator, that a product design is distinctive only in combination with a conventional trademark.