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Battle of the Bottle – the importance of filing the right mark for the job 07 Oct 2014

The cold war between the world’s leading soft drinks manufacturers, Coca-Cola and Pepsi, fizzed over as the two soft-drink giants went to court over alleged trade mark infringement by Pepsi. And as the dust settled, Pepsi walked away with a solid victory, with the High Court holding that Pepsi’s “Carolina” bottle did not infringe on Coco-Cola’s registered trade marks. The decision largely hinged on Coca-Cola not having trade mark registration for their silhouette mark, instead having to rely on their 3D shape marks which the Judge held were not sufficiently similar to Pepsi’s marks.

Coca-Cola alleged that Pepsi’s “Carolina” bottle infringed three registered shape marks held by Coca-Cola. Coca-Cola claimed their shape mark protected registrations their “contour” bottle. In alleging infringement Coco-Cola relied heavily on their unregistered bottle silhouette and on the similarity between the tapered waists of the bottles.

Justice Wylie held that the comparison between Pepsi’s Carolina bottle and Coca-Cola’s silhouette was not appropriate as Coca-Cola relied on their registered shape marks and did not have a registered trade mark for the silhouette. The Judge stated “I do not consider that TCCC’s [Coca-Cola’s] use of the silhouette of its bottle is a normal and fair use of its registered marks” as the silhouette is necessarily less subtle than the registered shape marks. The silhouette is not a “full expression of, or a surrogate for” the shape marks and to use the silhouette would be ignore a number of features in Coca-Cola’s registered marks, such as the vertical fluting. Accordingly, Coca-Cola had to rely solely on their registered shape marks.

The Judge found that Pepsi’s “Carolina” bottle was not similar to Coca-Cola’s registered shape marks. The Judge noted that “the primary feature the bottles have in common – namely, a waist – is not sufficient to justify a finding that there is any overall similarity between the registered mark and the Carolina bottle” and that “the waists are not the same or even substantially similar”. The Judge further noted that soft-drinks manufacturers frequently employed waists in the bottle design and a tapered waist was, therefore, hardly unique amongst soft-drink bottles. The Judge held that in all other respects, the bottles were different.

Given that there was no similarity between the marks, the Judge was not required to assess whether there was confusion. However, the Judge nonetheless offered a number of comments in this regard.

The evidence provided threw into sharp relief Coca-Cola’s dominance in the soft-drink market generally and the cola market in particular. In 2009, 91% of all cola purchased in New Zealand was branded Coca-Cola. The Judge considered this market dominance left Coca-Cola in unique position to be able to ascertain from retailers whether there had been actual confusion in the marketplace. However, Coca-Cola proffered no evidence of actual confusion. The Judge also questioned the delay of almost a year by Coca-Cola in responding to Pepsi’s release of the “Carolina”. He speculated that Coca-Cola’s tardiness reflected their own reservations as to whether there was a real likelihood of confusion.

The case represents a further victory for Pepsi on the issue of the “Carolina” bottle. Proceedings in Germany in May last year were decided in Pepsi’s favour. Nonetheless, Coca-Cola is likely to appeal, with an appeal of the German decision already underway. Similar litigation is currently underway in Australia and a decision is due shortly. There is certainly no love lost between the parties, reflected best by Coca-Cola’s denial, “rather churlishly” as described by the Judge, that Pepsi’s PEPSI, PEPSI MAX and 7UP marks enjoyed an international reputation.

Broadly speaking, the case does reflect the difficulties in enforcing shape marks against other traders, particularly when dealing with bottles or containers with an obvious functional aspect. The case also highlights the need to clearly define your shape mark on the Trade Marks register and the need to register the marks you wish to protect. This seems like a trite point, but it is important to isolate what is essential in your mark and what really needs to be protected.

Zone Law can assist you in making sure you have the right trade mark registrations to protect your brand and business.

Daniel Nicholson, Lawyer