Ever been to the supermarket and noticed that a product is packaged in a way that looks suspiciously similar to a product you’ve bought before? Well, thanks to a recent Federal court ruling, there will likely be less and less products on the shelves with copycat packaging.
In Hampden Holdings I.P. Pty Ltd v Aldi Foods Pty Ltd [2024] FCA 1452, a novel challenge to copycat packaging paid off. The ruling could have a seismic impact on copyright law in Australia.
The Issue
The case centred around Aldi, the supermarket chain, and its MAMIA children’s snacks. The snacks’ packaging strongly resembled the packaging on the ‘Bellies’ children’s snacks (which include Little Bellies, Baby Bellies and Mighty Bellies) sold by Every Bite Counts (‘EBC’). Hampden Holdings I.P. Pty Ltd (‘Hampden’) who licenses IP to EBC, sued Aldi for copyright infringement.
This was a novel legal approach, since lawsuits for copycat packaging are usually filed on one of two grounds. The first is misleading or deceptive conduct (so here, Hampden would have argued that Aldi was misleading or deceiving customers into thinking MAMIA products were the same as the Bellies products). The second is passing off (Hampden would have argued that Aldi was passing off the Bellies products as their own). The issue is that, in cases like this, plaintiffs historically haven’t had a huge amount of success arguing on either ground. So at the outset, the success or failure of this new approach had fairly high stakes, with the potential to open a new legal avenue to defend packaging designs.
The Ruling
To determine whether Aldi was liable for copyright infringement, the court had to determine if they reproduced a substantial part of the Bellies design.
This test tries to strike a balance between copyright protection and freedom of expression. If the test, on the one hand, required the infringing party to reproduce, or copy, the entire work, it would be far too easy for them to circumvent the law. For example, if you made a painting of a Golden Retriever and I then copied your painting brushstroke for brushstroke but made one minor alteration by, say, placing a toy in his mouth instead of a bone, you would not be able to sue me for copyright infringement.
If, on the other hand, the test only required the infringing party to copy some of the work, even if not a significant part of it, it would be impossible to create anything without infringing on someone else’s work. For example, if my Golden Retriever painting looked completely different from yours but we both used a white background, it would be absurd for that to be considered a copyright violation.
This is why the test requires that a substantial part of the work be copied, to balance those two extremes. The meaning of ‘substantial’ is decided on a case-by-case basis.
In determining whether Aldi reproduced a substantial part of the Bellies design, the court needed to answer two questions:
1) Was there a causal connection between the Bellies design and Aldi’s MAMIA design?
Hampden had to establish that a causal connection existed between the Bellies design and Aldi’s MAMIA design, as opposed to Aldi independently designing its own packaging that coincidentally looked similar to the Bellies design.
Fortunately for Hampden, Aldi left a lengthy electronic trail of e-mails to the company it hired to design the MAMIA products. These e-mails contained tons of references to the Bellies designs. Aldi even included images of the Bellies packaging in its instructional documents. As the packaging design progressed, Aldi further instructed the company to make edits, fearing that the design and layout looked too similar to the Bellies products.
So there was a clear connection between the companies’ packaging designs, with Aldi referencing the Bellies products throughout the entire design process.
2) Were Aldi’s MAMIA product designs objectively similar to the Bellies designs?
Since this test is objective, the court essentially had to determine whether a reasonable person, seeing the two products side by side, would believe the designs were similar.
So the court literally placed the products side by side and compared the design and layout. It found that three of Aldi’s MAMIA products, when placed side by side with Bellies products, were objectively similar. Here’s one example:
Here, the court held that the cartoon characters, with their oval shape and circular white bellies, the white backdrop, the playful children’s font, the particular layout, with two vertical columns, the corn puffs and blueberries ascending vertically and the recommended age in the top right corner, when combined in that particular way, were a distinct design and form of expression. By using all of these elements, Aldi had thus reproduced a substantial part of the Bellies design.
Notably, the court held that six other products were not objectively similar. Here is one example:
Here, the court held that the cartoon character that Aldi used was larger than the Baby Bellies character and looked sufficiently different from it. It noted that the spacing is different as well, with the two columns less clearly separated. Despite the similarity of the other elements (children’s font, recommended age in the top right-hand corner, white backdrop) these relatively minor differences were enough to put Aldi over the line. In the court’s eyes, they did not reproduce a substantial part of the Bellies designs.
What this means moving forward
Aldi may appeal the three copyright infringements it was found liable for and, if so, this case could eventually make its way up to the High Court. If so, this will definitely be a case to watch.
On the one hand, this case definitely puts companies on notice that copycat packaging will not be taken lightly by the courts. On the other hand, given that the difference between the infringing and non-infringing products is not especially dramatic, it may also simply encourage companies to tweak their product designs just enough so that they can avoid liability.
We’ll be following any developments with this case and will be sure to keep you updated. If you require any legal advice related to copyright, you can always reach out to our firm so we can lend our expertise.
