Aldi liable for copyright infringement in lookalike packaging case

Turned belly up: Aldi liable for copyright infringement in lookalike packaging case

On 17 December 2024, Moshinsky J handed down his decision in Hampden Holdings I.P. Pty Ltd v Aldi Foods Pty Ltd [2024] FCA 1452, finding Aldi liable for copyright infringement in artistic works featured on the packaging of ‘Bellies’ brand products—a major competitor.

This post outlines the decision, key factors in proving infringement and its broader implications, including the potential for increased reliance on copyright in future lookalike packaging disputes.

The parties

Hampden Holdings I.P. Pty Ltd (Hampden) and Lacorium Health Australia Pty Ltd (Lacorium) sued Aldi Foods Pty Ltd (Aldi) for copyright infringement concerning packaging designs for children’s snack products.

Hampden, an IP holding company, licenses its intellectual property to Every Bite Counts Pty Ltd (EBC), which sells children’s food under the Bellies brand (Baby Bellies, Little Bellies, Mighty Bellies). Lacorium provided design services for these products and was joined as an applicant due to its ownership of copyright in certain works in dispute.

Aldi, known for its discount supermarkets, primarily sells house-brand products, many of which resemble competitor packaging.

Background

• 2017–2018: EBC redesigned its Bellies brand packaging.
• 2018–2019: Aldi commissioned Motor Brand Design to redesign its Mamia brand packaging, instructing it to use Bellies as a benchmark.
• 2020–2021: Aldi expanded its Mamia product range, again using Bellies as a reference.
• December 2021: In response to complaints from Hampden and Lacorium, Aldi modified its Mamia packaging by changing its owl mascot to a monkey and altering the font.
• February 2022: Hampden and Lacorium sued Aldi for copyright infringement. Notably, they did not pursue passing off or misleading conduct claims, which have previously failed against Aldi.

The Court's Findings

Copyright ownership

The Court confirmed that Hampden and Lacorium owned copyright in the relevant packaging artwork and could sue for infringement.

A key issue was whether the right to sue for past copyright infringement can be assigned. Moshinsky J ruled that it can be assigned prospectively.

Substantial Reproduction

To determine infringement, the Court assessed:

• Causal connection: Whether Aldi had access to and designed packaging that resembled the Bellies
• Objective similarity: Whether Aldi’s packaging substantially reproduced protected elements of the Bellies
  
  

Causal Connection

The Court found compelling documentary evidence that Aldi instructed Motor Brand Design to emulate the Bellies layout, including:

• Emails explicitly naming Little Bellies as the “benchmark”.
• Design documents comparing Mamia and Bellies
• Emails between employees of Motor Brand Design and Aldi acknowledging elements of resemblance and recommending modifications to avoid legal risk.
  
  

Objective Similarity

The Court concluded that Aldi’s Mamia packaging substantially copied key elements of the Bellies works, constituting infringement in relation to 3 of the 9 pleaded copyright works. The key reproduced elements included a cartoon character with a large belly, solid white background, two-column layout, childlike font, and photos of the product and ingredients.

Additional Damages

The Court considered it appropriate that there be an award for additional damages due to:

• Flagrant infringement: Deliberate copying of a competitor’s design for commercial gain.
• Continued sales post-complaint: Aldi persisted in selling infringing products despite legal warnings.
• Deterrence: A need to discourage similar infringements in future.
  
  

Next Steps

A hearing will determine the financial remedies Aldi must pay. This decision is significant because:

1. First copyright win against Aldi in Australia: Aldi has previously defeated trade mark, misleading conduct, and passing off claims.
2. Potential appeal risks: Aldi may appeal, but the applicants could cross-appeal on non-infringement findings, increasing Aldi’s exposure to damages.
3. A shift in lookalike packaging cases? The ruling may encourage more brands to pursue copyright claims against copycat packaging rather than relying solely on consumer law or trade mark infringement.
4. Award of additional damages: Future rulings on pecuniary relief will be closely watched.
   
   

This case marks a pivotal moment in brand protection strategies against private label competitors like Aldi. We expect further developments as the parties argue over damages and potential appeals unfold.

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