Kraft Loses Sticky Copyright Battle over Peanut Butter Trade Dress

In a win against American food giant Kraft, Australian brand Bega was awarded the exclusive right to use “a jar with a yellow lid and a yellow label with a blue or red peanut device” for its peanut butter product sold in Australia – even though it was Kraft who invented the famous yellow-lidded jars.

The Federal Court of Australia (“FCA”) held that the “trade dress” – i.e., the shape of the jar, distinctive yellow lid and label design – which used to be held by Kraft - had been fully transferred to Bega when Bega purchased Kraft’s Australian peanut butter business and assets in 2017.

Kraft controlled two thirds of Australia’s multi-million dollar peanut butter industry before the sale to Bega. In 2018, Kraft decided that it wanted back into the Australian market and came up with a new peanut butter formulation that it began selling using the famous yellow lid and peanut label it had designed. There was one problem: Bega had already been using the trade dress in association with its own peanut butter product since 2017.

In an effort to reclaim its position in the market, Kraft alleged that Bega had engaged in misleading or deceptive conduct over the marketing of its peanut butter. Justice O’Callaghan of the FCA didn’t find favour with Kraft’s argument. He ruled that, “having bought the business, the recipe, the goodwill, including the [trade dress], Bega does not mislead a consumer within the meaning of the [Australian Consumer Law] by doing that to which it has a contractual right”.

Authors: Larissa Fulop and Samanthea Samuels, 2018/2019 Articling Student-at-law