Hansen Beverage Company v Bickfords (Australia) Pty Ltd

• Jurisdiction: Australia Federal only
• Judgment Date: 14 November 2008
• Neutral Citation: [2008] FCAFC 181
• Court: Full Federal Court (Australia)

FEDERAL COURT OF AUSTRALIA

Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181

TRADE PRACTICES – TORT – misleading and deceptive conduct – passing off – appellant sells and promotes energy drink overseas using a mark – respondents commence using that mark in Australia without licence – whether primary Judge’s approach to determining whether appellant’s energy drink has reputation in Australia was correct.

Held: it was not – matter be remitted to the primary Judge

Trade Practices Act 1974 (Cth) s 52

Hansen Beverage Company v Bickfords (Australia) Pty Ltd (2008) 75 IPR 505 reversed

.au Domain Administration Ltd v Domain Names Australia Pty Limited (2004) 207 ALR 521 cited

10^th Cantanae Pty Ltd v Shoshana Pty Limited (1987) 79 ALR 299 cited

Cadbury-Schweppes Pty Limited v Pub Squash Co Pty Limited (1980) 32 ALR 387 cited

Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Limited (2007) 159 FCR 359 considered

ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 cited

Hornsby Building Information Centre Pty Limited v Sydney Building Information Centre Limited (1978) 140 CLR 216 considered

Lumley Life Ltd v IOOF of Victoria Friendly Society (1989) 16 IPR 316 considered

National Exchange Pty Ltd v Australian Securities & Investments Commission (2004) 61 IPR 420 cited

Knight v Beyond Properties Pty Ltd (2007) 242 ALR 586 cited

HANSEN BEVERAGE COMPANY v BICKFORDS (AUSTRALIA) PTY LTD (ACN 053 240 261) and MEAK PTY LTD (ACN 088 219 363)

VID 241 of 2008

TAMBERLIN, FINKELSTEIN AND SIOPIS JJ

14 november 2008

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 241 of 2008

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	HANSEN BEVERAGE COMPANY Appellant
AND:	BICKFORDS (AUSTRALIA) PTY LTD (ACN 053 240 261) First Respondent MEAK PTY LTD (ACN 088 219 363) Second Respondent

JUDGES:	TAMBERLIN, FINKELSTEIN AND SIOPIS JJ
DATE OF ORDER:	14 November 2008
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The appeal is allowed.

2. The orders of the primary Judge made on 31 March 2008 are set aside.

3. The matter be remitted to the primary Judge for orders to be made in accordance with these reasons.

4. The respondents pay the appellant’s costs of the appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 241 of 2008

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	HANSEN BEVERAGE COMPANY Appellant
AND:	BICKFORDS (AUSTRALIA) PTY LTD (ACN 053 240 261) First Respondent MEAK PTY LTD (ACN 088 219 363) Second Respondent

JUDGES:	TAMBERLIN, FINKELSTEIN AND SIOPIS JJ
DATE:	14 november 2008
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

TAMBERLIN J

1 This is an appeal from a Judge of the Court dismissing an application by the appellant (“Hansen”) for declarations and consequential relief against the respondents (“Bickfords”) on the ground that it had engaged in passing off or contravention of the Trade Practices Act 1974 (Cth) (“TPA”): see Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCA 406; (2008) 75 IPR 505.

2 The main issue in the proceeding is whether Hansen has shown a sufficient reputation in Australia in the mark MONSTER ENERGY, at the relevant date of April/May 2006, in relation to energy drinks, such that the use by Bickfords of the mark (or its contraction, MONSTER) conveyed a misrepresentation that Bickfords’ product was actually that Hansen’s or was in some way associated with Hansen. If Hansen can show that is has the requisite representation in Australia, then the conduct of Bickfords is agreed to be misleading or deceptive, or passing off. In other words, there is no dispute that the similarities between Bickfords’ and Hansen’s products could relevantly deceive or mislead for the purpose of the TPA and the tort of passing off.

BACKGROUND

3 The underlying facts alleged in relation to the background are not in dispute, and consequently we substantially set out the background as recounted in the judgment of the primary Judge.

Hansen and MONSTER ENERGY

4 Hansen has, since 1992, developed, marketed, sold and distributed non-alcoholic beverages, including carbonated drinks, energy drinks, fruit juice smoothies, lemonades and juice cocktails in the United States of America. As at November 2006, Hansen had over 700 employees, with the annual revenue for the 2005 financial year being US$415,417,282.

5 In 1996, in response to the success of energy drinks in the United Kingdom, Hansen began consumer testing of its own energy drink, Hansen’s Energy Smoothie. The primary demographic for Hansen’s energy drinks was, and remains, 18 to 30 year old males. This is to be contrasted with the primary demographic for its natural soft drinks and juice products, being 25 to 40 year old affluent college educated females. In 2002, Hansen’s management decided to launch a new energy drink which would be targeted to the 18 to 30 year old male demographic, to compete with Red Bull, the leading energy drink in the world at the time. Hansen created, in conjunction with an independent design firm, the MONSTER ENERGY brand name, and decided to sell the drink in 16 oz (473 mL) cans. Hansen’s intention was to create, by using MONSTER ENERGY, a completely separate “identity” and “personality” from the Hansen brand, thus enabling it to focus on the young male target market. To this end, Hansen developed a website (www.monsterenergy.com), which was separate from, and contained no reference to, Hansen.

6 The official launch of MONSTER ENERGY drinks in the United States of America was in April 2002. In 2003, Hansen introduced a low carbohydrate version of the energy drink, and in 2004 it began selling MONSTER ENERGY in 4-packs. During 2005, other variations of the MONSTER ENERGY drink and packing were introduced, which includeddrinks called “Khaos” (with 70% juice) and “Assault”.

7 Hansen attempts to distinguish its MONSTER ENERGY drinks by, among other things, using ingredients such as taurine, L-carnitine, panax ginseng root extract, guarana seed extract, B vitamins, inositol, glucuronolactone, sodium, glucose and caffeine. All varieties of the MONSTER ENERGY drinks contain these ingredients and are carbonated. Further, all varieties of the drinks are sold in 16 oz (473 mL) cans which:

· are predominantly black, with an ‘M’ claw design;

· refer to the www.monsterenergy.com website;

· include the MONSTER ENERGY slogan “Unleash the Beast!”, which is a registered trademark of Hansen;

· list certain of the ingredients around the top of the can; and

· emphasise with a stylised design the “O” in MONSTER and MONSTER ENERGY.

8 In addition, there are variations between the cans for the different varieties of MONSTER ENERGY drink as follows:

· the low carbohydrate version is sold in a predominantly black can with a blue “M” claw design;

· the Khaos version is sold in a predominantly black and grey can with an orange “M” claw design; and

· the Assault version is sold in a predominantly black and grey can with a camouflage design and a red “M” claw design.

9 The MONSTER ENERGY mark, along with the “M” claw design, is shown below:

10 Hansen sells its MONSTER ENERGY drinks throughout the United States of America, Canada, Mexico, Uruguay, Suriname, Peru, Paraguay, Ecuador, Chile, Brazil, Bolivia, Argentina, Panama, Honduras, Guatemala, El Salvador, Costa Rica, Belize, Virgin Islands, St Maarten, Puerto Rico, Haiti, the Dominican Republic, Curacao, Barbados, The Bahamas, Antigua and Hong Kong. MONSTER ENERGY is sold in all 50 states of the United States of America in more than 100,000 retail stores, and is sold in thousands of stores internationally, including in convenience stores, gas stations and grocery stores. MONSTER ENERGY is sold in these stores because they are the “natural habitat” of Hansen’s target demographic, namely 18 to 30 year old males. MONSTER ENERGY is the second biggest selling energy drink in the world, behind Red Bull.

11 In keeping with its aim of promoting MONSTER ENERGY to the 18 to 30 year old male market, Hansen has adopted the strategy of marketing the brand, inter alia, through the sponsorship of athletes and athletic competitions (which receive media and internet coverage), clothing and merchandise bearing the MONSTER ENERGY marks, in magazines, on the internet, and through sponsoring music festivals and musicians. The athletes and athletic competitions which MONSTER ENERGY sponsors are generally in the extreme sports fields and are, according to Hansen’s Chief Executive Officer, “edgy and aggressive”. By being associated with these athletes and events, Hansen attempts to make MONSTER ENERGY attractive, and “cool” to its target market.

12 Between 2002 and 2006, Hansen spent over US$150 million in advertising, marketing and promoting its MONSTER ENERGY brand.

13 The MONSTER ENERGY brand product has not been sold in Australia (although it has been obtained on eBay in Australia), and Hansen does not rely upon sales or direct promotions in Australia of its product. Rather, Hansen relies upon a strategy which is designed to make the target demographic in a country (like Australia) familiar with MONSTER ENERGY before it is “launched in the country”, and which “helps lay a foundation” before the product is launched.

Bickfords

14 Bickfords is a manufacturer and distributor of beverages based in Adelaide, with a history dating back to the mid-nineteenth century when William...