IP Bite: Is there another round to come in the battle for the Peanut Butter trade dress?

What you need to know

• Kraft has filed an application for special leave to appeal the decision in Kraft Foods Group Brands LLC v Bega Cheese Limited [2020] FCAFC 65 to the High Court of Australia.
• The special leave application has not yet been heard.
• If the High Court allows the special leave application and decides that the matter warrants being heard, it will be interesting to see whether the High Court agrees with the Full Court's position on the assignment of unregistered trade marks and whether it goes one step further and sheds light on the position regarding licensing of unregistered trade marks.

On 14 April 2020 the Full Federal Court upheld the decision of the trial judge in Kraft Foods Group Brands LLC v Bega Cheese Limited (No 8) [2019] FCA 593, dismissing the appeal by Kraft Foods Group Brands LLC (Kraft) and H.J Heinz Company Australia Limited.  The Full Court held that Bega will retain the right to use the Peanut Butter Trade Dress, which it acquired through purchasing the peanut butter business of Mondelez Australia in 2017.  See our article on this decision here.

The Full Court confirmed that an unregistered trade mark cannot be assigned without associated business goodwill as part of a sale of the business  because business goodwill cannot attach to individual assets. But the Court clarified that this does not necessarily require a sale of the whole business, just the part that uses the unregistered mark (if that is a separate operation within the whole business).  The Full Court declined to express a view on whether an unregistered trade mark can be licensed, which was cast into doubt by the earlier judgment. 

In mid-May, Kraft filed an application for special leave to appeal the Full Federal Court's decision to the High Court.  The special leave application has not yet been heard.  If the High Court allows the special leave application and hears the matter, trade mark owners and practitioners will be keenly waiting to see what position the High Court takes on the assignment and licensing of unregistered trade marks.  

Authors: Annika Barrett, Senior Expertise Lawyer; and Kellech Smith, Partner