Slippery slope for similar products20 September 2017
German supermarket giant Aldi wound up in a two-year legal battle when it opposed the registration of Moroccanoil Israel Ltd's (MIL) "MOROCCANOIL" word mark for hair care products in 2015. MIL is the registered proprietor of two Australian trade marks, both of which are variations of the words "MOROCCANOIL". The word mark is pictured in white with a capital "M" in orange over the top of a turquoise background.
The grounds of opposition were under s 41 of the Trade Marks Act 1995 (Cth) (the Act), with Aldi alleging "Moroccan oil" is merely a generic term used to describe argan oil that is naturally found in Morocco. It followed that the application was refused registration because the trade mark was not inherently adapted to distinguish MIL's products from others in the market.
MIL appealed the Trade Marks Office's decision shortly after. The appeal was heard together with MIL's application against Aldi for trade mark infringement and breaches under the Australian Consumer Law. After two years of proceedings, the Federal Court judgment was handed down on 31 August 2017.
Spot the (10 points of) difference
During the course of the proceedings, MIL did not argue that Aldi's products were substantially identical to their registered marks, but that the products were deceptively similar. Under s 10 of the Act, a product is taken to be deceptively similar to another if it so nearly resembles the other that it is likely to deceive or confuse consumers.
The proceedings went into great detail about Aldi's business model of identifying "on trend" products then introducing its own version bearing similar colouring, packaging and words associated with the "on trend" product. In cross-examination, a buying assistant in the Corporate Buying Department at Aldi said the rule of thumb was to have "at least 10 points of difference" between "on trend" products and their products.
It was ultimately held that, despite similarities in the presentation of the respective products, there was no real tangible risk that a reasonable consumer would confuse the Aldi products with MIL's.
Not so natural....
MIL further alleged that by using the word "naturals" in its packaging and advertising, Aldi had represented that each of the products in the range only or substantially included natural ingredients and that, in making this representation, Aldi had engaged in misleading or deceptive conduct under s 18(1) of the Australian Consumer Law.
After consideration of significant expert evidence, Justice Katzmann held that a number of Aldi's products were predominantly made up of synthetic ingredients and, therefore, the representation that the products were "natural" was misleading or likely to deceive consumers. It was also held that the trace amounts of argan oil contained in Aldi's argan oil-infused brushes, hair dryers and straighteners would not make a material contribution to their performance, so were also misleading to consumers.
The lengthy judgment closed with the setting aside of the Trade Marks Office's decision. It was held that the "MOROCCANOIL" word mark was, to some extent, inherently adapted to distinguish Aldi's hair care products from MIL's. This was justified on the grounds that there is no evidence to suggest the single word "moroccanoil" has any ordinary meaning to Australian consumers, purchasers or traders.
You can read the full Federal Court judgment of Moroccanoil Israel Ltd v Aldi Foods Pty Ltd  FCA 823 here.