On 17 December 2024, the Federal Court of Australia delivered a judgment in favour of Gestalt Law client, Little Bellies, in its legal dispute with ALDI.

The well-known German discount supermarket chain ALDI operates in Australia as a challenger to Australia’s larger supermarket brands.  It operates under a"limited assortment" or "no-frills" business model, which provides cost savings to its customers.

ALDI offers the majority of its products under its own private label brands rather than carrying a wide variety of national brands.  ALDI claims that this allows it to have more control over production costs and negotiate better deals with suppliers.

ALDI is also well-known for sailing close to the wind in producing private label packaging and branding that is at least reminiscent of big-name equivalents.

In Australia, it unashamedly operated a long-running campaign, "Like Brands. Only Cheaper."  ALDI now trades under the tagline “Good Different”.

ALDI has long successfully resisted liability in Australia for trademark infringement, passing-off and claims under the Australian Consumer Law.

Principal difficulties for past claimants have included the following:

• ALDI uses its own trade marks, which are not substantially identical with or deceptively similar to the claimant’s trade marks.  These trade marks assist in distinguishing its products and reducing consumer confusion.
• ALDI reproduces colour & get up, which can be difficult to protect in the absence of trade mark and design registrations.
• ALDI’s customers are aware that ALDI’s copycat products are not those of the claimant and are rather ALDI’s versions ("Like Brands. Only Cheaper" / “Good Different”) and, as such, are not misled or confused.

However, its bullet-dodging strategy has ended now that Australian snack food brand Little Bellies has successfully established copyright infringement against ALDI in relation to artistic works that comprise its organic snack packaging. The case is novel in that it is the first claim of copyright infringement against ALDI in Australia.

The Applicant in the Federal Court proceedings, Hampden Holdings IP Pty Ltd, owns the intellectual property for the Baby Bellies, Little Bellies, and Mighty Bellies snack ranges and licenses the brands to Every Bite Counts Pty Ltd (collectively Little Bellies).  Little Bellies is the market leader in its category of snack food.

Little Bellies claimed that ALDI had infringed copyright in its artistic works that comprise its organic snack packaging.  The relevant artworks comprise the design,layout, colours, fonts and figures on the packaging.

Moshinsky J found that ALDI had infringed copyright in relation to the following artworks in that ALDI had reproduced a substantial part of those artworks.

ALDI’s design and benchmarking process was scrutinised in the judgment.  Notably, Moshinsky J also awarded additional damages against ALDI.

Additional damages are relatively rare in Australia. Additional damages are awarded under section 115(4) of the Copyright Act 1968 (Cth), and they go beyond the compensatory damages intended to compensate the copyright owner for their actual loss. They are punitive or exemplary in nature and focus on punishing the infringer for particularly egregious behaviour.

Moshinsky J said:

“…I am satisfied that Aldi deliberately developed packaging for the MAMIA baby puffs products that resembled the packaging of the BELLIES puffs products.  Aldi sought to use for its own commercial advantage the designs that had been developed by a trade rival.  Although Aldi may have intended, if possible,to avoid infringement and legal liability, it took the risk that its use of the BELLIES designs would exceed what the law allows. I consider Aldi’s conduct to be flagrant. Further, I consider that an award of additional damages is appropriate to deter similar infringements of copyright.”

The Gestalt Law team was principal Lance Scott, lawyer Patrick Martin and trademark attorney Clare Liang. Counsel for Little Bellies were John Hennessy SC and Sam Hallahan.

The Federal Court judgement is Hampden Holdings I.P. Pty Ltd v Aldi Foods Pty Ltd [2024] FCA 1452

‍