Case Study: Nutriwater and Grassroots Water

The Australian Federal Court has recently handed down a decision in the matter of Nutrientwater Pty Limited v Baco Pty Limited [2010] 2 FCA 2. This is a case about products that look similar to each other.

The case revolves around the enhanced water market. The applicant, Nutrientwater produces a number of lightly flavoured water beverages enhanced with nutrients and vitamins. The respondent, Baco competes with Nutrientwater directly in the enhanced water market. The enhanced water market is a fairly new market in Australia, and there are a number of other similar products on the market including Coca Cola’s Vitaminwater range.

Nutrientwater sought various relief against Baco. The substance of its case is that there is a striking similarity between the appearances of Baco’s Grassroots water products and Nurientwater’s water products. Nutrientwater claimed that a number of features of its product distinguished the product, including the label design, the shape of its bottles, and even the colour of the product itself. To a certain extent, this is true – visit your local supermarket and have a look at the products in question.

However, on the basis of the evidence before the Court, it appeared that the features that Nutrientwater claimed were distinct features of their product also appeared in common usage across the market, in particular with Vitaminwater and Smart Water.

One curious aspect of this case, and one that Baco made submissions on, was that many of the features that Nutrientwater claimed were copied or were similar to Vitaminwater’s features. Vitaminwater was a leading brand in the United States but was a late entry into the Australian enhanced water market.

While Baco used a number of features which were common in the market, Baco’s product design was also intended to be distinctive. This was achieved through a clearly different branding direction, for example, having a different name and logo.

In summary, Nutrientwater failed to make out its claims because:

  1. It failed to establish a relevant reputation in the features that Baco allegedly appropriated.
  2. It failed to establish that by adopting features common in the market, Baco misrepresented, misled, or deceived purchasers into thinking that the products were associated with Nutriwater.
  3. By branding and packaging, Baco clearly differentiated its products from its competitors.

What we can take away from this case is that a trader may be permitted to adopt the features of a competitor’s products, in situations where those features are commonly used in the market and not likely to deceive or mislead the ordinary, reasonable consumer into thinking that the products belong to the competition or are associated with the competition.

The other thing we can take away from the case is that you should always try to protect or enforce your intellectual property rights if they are infringed, especially if they are for something new or inventive. In this situation by copying the successful market leader the entire market had diluted whatever interesting or inventive marketing that was initially associated with the product – and now all products in that market are only differentiated by their names, branding, and logos.