Legal issues create confusing private label environment

Supermarket private labels may be purposefully creating similar products and packaging to more established brands, but under current Australian laws, it is possible that little can be done to oversee the issue.

Last week the Australian Food and Grocery Council (AFGC) accused supermarkets of deliberately copying the design of well known products in a bid to confuse consumers into buying their private label.

The AFGC wants the practice stopped, saying it hinders competition in the sector, but trade marks in packaging and Intellectual Property lawyer Sharon Givoni told Food Magazine it may not necessarily be realistic.

“Judges often talk about sailing too close to wind and sometimes there is a fine line between what amounts to copying and passing off and what you can get away with,” she said.

“The four main areas that come into play are trade mark protection like if the product name is too close or look of the packaging shape, copyright protection depending on factors such as the images used on the packaging and misleading and deceptive conduct and passing off, which to some degree relies on there to be consumer confusion.

Givoni explained that in terms of misleading and deceptive conduct being proven, the current laws are somewhat difficult.

“One of the issues with Australia laws is that you need to show that consumers have been or are likely to be misled,” she said.

“Same with passing off – you need to show that one company is passing off the other’s goodwill or reputation.

“In some cases this can be done.

“It comes down to a question of fact, including how bold the brand name is on the packaging and what consumers really think when they are buying the products.

“Do they think that a Coles Brand is really from another source?

“The other thing to bear in mind is sometimes if someone doesn’t protect intellectual property early enough and enforce it for third parties it can become generic in the term that its free to use.”

And it would not be an easy task, she said, to prove consumers were being confused by packaging.

“Whether they are confused is a concept of fact,” she told Food Magazine.

“Because if they’re not confused, it is skirting very close to the edge, but unless can pin them down for a legal issue like passing off, it would be hard to make a case.

The other important thing to bear in mind is that copyright might also apply if what is copied is the graphic elements of the packaging, Givoni explained.

Last week National President of the Australian Institute of Packaging, Pierre Pienaar told Food Magazine weighed in on the debate, telling Food Magazine that from a packaging perspective, the decision to have similar bottles or designs is actually not a bad move.

“I view it very differently from most others in terms of whether it’s been a deliberate ploy,” he said.

Pienaar explained that when manufacturing packaging products, there are ways for companies to make it cheaper and easier, by adapting to the sizes and materials already used.

“From a supply chain perspective, what they’ve done is absolutely the right thing, because if something is similar it doesn’t impact your secondary and tertiary packaging, it is all harmonised.”

He said the suggestions of a Supermarket Ombudsman to oversee the issue, as suggested by the AFGC, would be unnecessary, a position Givoni shares.

“I don’t real see how it’s relevant at all, given we’re talking about private businesses,” she told Food Magazine.

“A Supermarket Ombudsman could oversee the issue, but this would not change what the state of the law is”.

"However, it could encourage better practices and if so that would be a positive thing," she said.

“With more items entering shelves every day, it is a cut throat and ever competitive market."

Send this to a friend