Monster Headache For Drinks Company In Establishing Sufficient Reputation - Hansen Beverage Company Fails In Federal Court To Establish Claims Of Misleading Conduct And Passing Off Against Bickfords

First published in LexisNexis IP Bulletin, June

2008

Hansen Beverage Company has failed at first instance in the

Federal Court to establish its claims of misleading and

deceptive conduct and passing off against Bickfords with regard

to its branding of a range of energy drinks for sale in

Australia as MONSTER and/or MONSTER ENERGY.1

Bickfords failed in their cross-claim that they had, by their

activities in the Australian market to date in their products,

established the requisite reputation. As a result, it is likely

that we will have a surfeit of differently packaged Monster

drinks on the market, from two different sources.

Middleton J admitted this may involve:

... a risk of confusion or possibility of blunders by some

members of the public in their choice of the energy drinks

that are or may be made available by either Hansen or

Bickfords' but that 'such risk or possibility the law

accepts.

Hansen's product, launched in 2002 in 16 oz (473 ml)

cans, sells well in the US and about 27 other countries,

particularly to 18 to 30 year old males, but it has only been

obtained in Australia via eBay.

Bickfords certainly became aware of this by 2005, and when

they searched the Australian trade mark register and found that

the names MONSTER and MONSTER ENERGY were not the subject of

any actual or pending registrations, they lodged an application

themselves for MONSTER in class 32 on 5thSeptember

2005, and even contacted Hansen in the US to discuss a possible

licence agreement. No agreement eventuated. They were also

successful in obtaining the domain name monsterenergy.com.au

(Hansen owns monsterenergy.com and advertises it on all its

cans).

Bickfords developed and started distributing their new

Monster Energy drinks in April 2006. There was no dispute that

the packaging of the two product lines were so similar that

they could relevantly mislead or deceive for the purposes of

the Trade Practices Act 1974 and passing off. Not only

was the look and feel of the packaging similar, but the brand

name was also identical.

In 2001, Red Bull successfully sued its former

sub-distributor Sydneywide2 for copying the getup of

its well-known energy drink

when there was no similarity between the product names, Red

Bull and LiveWire. The important distinction between that case

and this one is that Red Bull had already been promoted,

distributed and sold in Australia for some years, and Red Bull

therefore definitely had the requisite reputation in Australia

to make its case.

Requisite reputation not made out

At issue in the Monster case was whether the plaintiff had

established the requisite reputation in the products in

Australia to produce a likelihood of deception among consumers,

or damage to its reputation. This was the same issue that had

been dealt with by the Full Court in ConAgra Inc v McCain

Foods (Aust) Pty Ltd (1992) 33 FCR 3023, which

concerned the use of the brand 'Healthy Choice'. It is

necessary to first establish this, the Court said, even when

there may be evidence of fraud available to the plaintiff.

Incidentally, this case follows long-established precedent that

to merely imitate the...