With Australia Day having recently passed, it is timely to review the rules and requirements set in place for use of the well-known ‘Australian made and owned‘ logo (‘Logo’) which features the classic outline of a kangaroo within a triangle, in a very Australian green and yellow colourway (as shown below):
In the recent Federal Court decision of Nature’s Care Manufacture Pty Ltd v Australian Made Campaign Limited [2018] FCA 1936, Justice Perram ruled on whether the Logo, with the descriptor “Australian Made and Grown”, could be used by Nature’s Care Manufacture Pty Ltd (‘Nature’s Care’) on the packaging of its Fish Oil + Vitamin D capsules (pictured below).
In this blog, we will explore the background of the case, the decision and its implications.
Background
Nature’s Care manufactures complementary medicines, including the product in question, which are sold under the brand ‘Healthy Care Australia’. The Logo is a registered certification trade mark owned by Australian Made Campaign Limited (AMC). AMC is responsible for regulating the use of the Logo, and issues 12-month licences to businesses who wish to use the Logo on designated products.
Since 2012, Nature’s Care has held a licence to use the Logo in respect of the ‘Healthy Care Australia Fish Oil + Vitamin D’ capsules. In 2018, AMC proposed to not renew this licence on the basis that it was inaccurate to represent the capsules as being ‘made in Australia’ as the manufacturing process was “quite cosmopolitan in terms of the sources of its constituent elements” and the capsules were not fundamentally different from the imported ingredients.
On this occasion, AMC’s view was guided by the Australian Competition and Consumer Commission (ACCC) public position on when a claim that a product is manufactured in Australia may be made. As a result, the ACCC sought to intervene in the proceedings and made substantive submissions.
Nature’s Care disagreed with AMC’S position and sought declaratory relief which would support its view that the capsules were in fact made in Australia, and could thus be marked with the Logo.
The central issue in this case was whether Nature’s Care could accurately represent to consumers that its capsules were ‘made in Australia’. In order to determine this, the court was required to closely examine the prohibitions contained in the Australian Consumer Law (ACL) on persons engaging in misleading and deceptive conduct, as well as the rules relating to specific conduct that does not contravene these provisions. This includes country of origin representations, which are frequently referred to as the ‘safe harbour provisions’.
Reasoning and Decision
To determine whether the ‘Healthy Care Australia Fish Oil + Vitamin D’ capsules were ‘made in Australia’, it had to be established that the capsules were “last substantially changed” in Australia, and that the goods were “fundamentally different in identity, nature or essential character” from the original imported ingredients.
Nature’s Care argued that the processes conducted in Australia significantly changed the original ingredients, such that the final product could be differentiated from the imported ingredients. The original ingredients included fish oil imported from Chile, vitamin D3 imported from China, glycerol imported from Indonesia and both gelatine powder and water from Australia. However, the court dismissed this argument and instead found the following (amongst other things):
- The mixing of fish oil and vitamin D3, both of which were enclosed in the gelatine sheets made from the glycerol, gelatine powder and water had remained in their same original form;
- The process of mixing and encapsulation did not change the qualities of the fish oil and vitamin D3;
- The glycerol was fundamentally different in nature; however, the glycerol was not a substantial part of the overall product; and
- When viewed overall, the capsules were not fundamentally different in their nature, identity or essential product as compared to the original imported ingredients.
It was held that Nature’s Care could not sufficiently represent that its product was made in Australia, which meant that AMC could refuse to renew Nature’s Care’s licence for use of the Logo.
Impact of Marketing
In addition to these findings, the court also examined how the ‘Healthy Care Australia Fish Oil + Vitamin D’ capsules had been marketed. In marketing the capsules, Nature’s Care had focused on the capsules containing the ingredients, fish oil and vitamin D, both being ingredients that had been imported and not substantially changed during the manufacturing process. Since Nature’s Care had relied on two imported products, it was found that the final marketed product was not substantially different to the imported ingredients.
The power of the Logo and the importance of consumer protection
According to AMC, 99% of Australians recognise the Logo and 89% of Australians prefer Australian products. In addition, 85% of Australians are confident that the products carrying the Logo are genuinely Australian. It is therefore evident that the well-recognised Logo trade mark has a large impact on consumer decision making. This demonstrates the power of trade marks, particularly trade marks that not only represent a brand, but also provide information to the consumer such as the origin of the product.
However, with this power, it is also important that consumers are protected from any misleading or deceptive representations made by the manufacturer. The case of Nature’s Care Manufacture Pty Ltd v Australian Made Campaign Limited [2018] FCA 1936 demonstrated the court’s respect for Australian certification trade marks, as well as its reluctance to allow a brand to falsely depict that a product is ‘made in Australia’. The decision has protected consumers from a possible misrepresentation, whilst also maintaining the integrity of the Logo. Maintaining this integrity should ensure that Australians become increasingly confident that the Logo accurately represents the product and its origins.
If you have a query relating to any of the information in this article, or you would like to speak with a lawyer in Coleman Greig’s Brand Protection team to ensure that your company is not undertaking actions which could be seen as misleading or deceptive, please don’t hesitate to get in touch.
