Bega Cheese has won the right to use its own brand on its peanut butter and other products after a ruling in favour of the company in Victoria’s Supreme Court yesterday.
The dispute centres around a 2001 licensing agreement Bega granted to Fonterra, the huge NZ dairy company, allowing it to use the Bega trademarks in Australia on its cheese and butter products.
Bega sought to overturn the agreement, however Fonterra countered with legal action that sought to stop Bega from using Bega trademarks in Australia on products outside of the licensed products without its consent.
In a judgment handed down on Thursday, the Victorian court ruled Bega was entitled to use its own trade mark outside of the scope of Fonterra license and without the other company’s consent.
Fonterra had claimed in an earlier hearing that Bega’s attempt to use the name on its peanut butter range it diluted the “distinctiveness” of the Bega brand, which had traditionally been associated solely with cheese. That was dismissed by the court.
“In practical terms, this means that while Fonterra has an ongoing licence to use the Bega trade mark on natural and processed cheddar cheese, string cheese and butter, Bega Cheese is entitled to use the Bega trade mark on products outside of the scope of the Licensed Products including on peanut butter,” the company said.
“Bega Cheese is pleased that its right to use its brand on these products has been confirmed by the Court.”
The legal action has been running since mid 2019.
The court also dismissed counterclaims by Bega.
Bega had claimed Fonterra had breached a contractual obligation to market and promote the Bega brand, however, the court found there was no obligation for Fonterra to do so.
Bega also contended that Fonterra breached an agreement between the two companies by misrepresenting to consumers that all cheese in Bega products was made in the Bega Valley. That claim was also dismissed.
Fonterra said it was pleased with the decision that it would retain the exclusive licence for the Bega Cheese brand for cheese and butter.
However, it was disappointed with the decision on the trademark claim.
It was the second win in two years for Bega in legal challenges from foreign food giants.
In 2019 the Federal Court has ruled that Bega Cheese has exclusive rights to the well-known yellow-labelled peanut butter jar, ending a packaging legal argument initiated by its rival, US food giant Kraft.
Kraft took Bega to the Federal Court in a bid to stop it using the packaging, claiming it owned the exclusive rights to the “jar with a yellow lid and a yellow label with a blue or red peanut device”.
It claimed Bega Cheese’s use of the packaging amounted to misleading and deceptive conduct.
That was rejected by Justice David O’Callaghan in the Federal Court, who found Bega acquired all rights to use the yellow-labelled and lidded peanut butter jar when it bought the assets from Mondelez Australia (the renamed Kraft Australia).
Justice Callaghan said the Australian company was therefore “entitled exclusively” to use the packaging.
Bega shares rose just over 1% to $6.22.
