Full Court tosses appeal in copycat case over sheep placenta oil
Competition & Consumer Protection July 6, 2018 9:38 pm By Christine Caulfield | Melbourne

Australian drug company Homart Pharmaceuticals has lost an appeal of a ruling that found the packaging of its bio-placenta skin care oil was intentionally and deceptively similar to a rival’s get-up, in breach of the consumer law.

The Full Federal Court ruled Thursday that Justice Stephen Burley had not been in error when he ruled that the get-up of rival Careline’s Chantelle Sydney was distinctive on its own and that Homart had intentionally adopted the packaging to mislead consumers.

Judge Burley in April 2017 dismissed Homart’s claims and found in favour of Careline’s cross-claim that Homart had engaged in misleading or deceptive conduct in violation of the ACL by intentionally adopting the get-up of its competitor.

The court heard Careline has sold its skincare oil – made of sheep placenta extract — under the brand name ‘Chantelle Sydney’ in boxes of three of six glass capsules of serum since September 2014.

Homart’s bio placenta product was launched in early 2016 under the brand name “Cheri Australia”, and also sold in boxes of either three or six glass capsules of serum.

In banning Homart from selling or marketing its product in the misappropriated packaging, Judge Burley found that the get-up of Careline’s Chantelle was “distinctive” and “striking” and that the competing products were “strikingly similar”.

The judge listed 11 features of Chantelle’s packaging, including the “notably solid” form and “golden bronze” colour of the rectangular box and the rectangular carry bag with the gold rope handle.

Careline had developed a reputation not only in the Chantelle Sydney name of its bio placenta oil, but the “eye-catching” packaging, the judge had ruled.

“This is such that consumers familiar with the CHANTELLE bio-placenta product who observe the packaging but not the name, would nonetheless recognise it to be a product originating from the manufacture[r] of the CHANTELLE bio-placenta product,” he said.

On appeal, Homart argued that the judge overemphasised the effect of the uniqueness of thefeatures of the “CHANTELLE” packaging.

Between September 2014, when Careline’s new packaging was launched, to February or March 2016, when Homart’s Cheri product came on the market, was a relatively short period of time for a “deep and wide reputation in a simple thing like an unadorned box”.

The judge was wrong in finding that the presence of a “different prominent brand name” on the Homart packaging — which was also a gold, rectangle box — was insufficient to distinguish its goods, the company told the Full Court.

In finding that Homart intentionally set out to mislead or deceive consumers, the judge also erred, the company argued, failing among other things to consider that there was not one instance of actual confusion by a consumer and that the colour gold was commonplace.

The judge also failed to take into account that some factors leading to potential confusion — that the boxes could be stacked such that no names were visible to consumers– were not of Homart’s making.

In dismissing the appeal, the Full Court ruled Judge Burley was not required to make anything of the absence of evidence of confusion.

“It was a matter of speculation whether a complaint would have emerged during the period that the competing products were both in the market if there had been confusion. Further, the fact that the get-ups of the competing products were effectively identical apart from their brand names provides an obvious and plausible explanation for the absence of complaints,” the Full Court ruled.

The Full Court further found that the judge was entitled to rule that the Chantelle packaging was distinctive, separate from the brand name.

“Indeed, we would have reached the same conclusion on the evidence,” the appeals judges said.

The judge was also not in error when he found that the stacking of the boxes of the competing products that resulted in the concealing of labels, was a “natural and obvious consequence of the distribution by Homart of its products”, the court found.

The judges on the Full Court were Justice Bernard Murphy, Justice Jacqueline Gleeson and Justice Brigitte Markovic.

Homart was represented by Coleman Greig Lawyers. Careline was represented by Pure Legal.

The case is Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd.

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Christine Caulfield

Christine Caulfield has been a journalist for 18 years. She was most recently the Co-Managing Editor at US legal news publication Law360. Prior to that she worked as the County Court reporter for The Herald Sun. She is Co-Founder and Editor of Lawyerly.