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A recent Federal Court decision provides further guidance on the use of the word 'natural' in product branding or advertising.
In September 2017, the Federal Court found that supermarket chain, Aldi, had engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law (ACL) by using the word “natural” in relation to its haircare product line.
The case is important because it:
Moroccanoil Israel Ltd (MIL), a founder and global producer of a range of hair and skincare products centred on argan oil, brought several claims under the ACL in relation to Aldi’s similar product line labelled “PROTANE NATURALS”.
In addition to some IP allegations, MIL alleged:
In relation to MIL’s first claim, the Court found that while Aldi did intentionally adopt a similar design for its product range, key differences between MIL and the Aldi range including the absence of MIL’s branding symbol ‘M’ meant that Aldi’s conduct did not amount to misleading and deceptive conduct. The Court held that similarities as well as differences between products must be considered when determining if a reasonable consumer is likely to be misled.
In relation to MIL’s second claim, the Court found that by promoting, selling and advertising each of the haircare products in conjunction with the word ‘naturals’, Aldi represented to consumers that each of the products contained wholly or substantially, natural ingredients when this was not true.
In relation to MIL’s third claim, the Court found that the use of the ‘argan oil’ on and in association with the products amounted to a false representation about the performance benefits of that ingredient.
Although expert scientific evidence was presented to the Court in relation to the meaning of ‘natural’ and ‘natural ingredients’, the Court considered that ‘naturals’ should be assessed in the ordinary context of what consumers would read into that word rather than technical scientific definitions.
The Court accordingly referred to the ordinary dictionary meaning of the word ‘natural’ stating that it meant ‘existing or formed by nature; not artificial’. As Aldi’s use of the word ‘naturals’ referred to the final ingredients used in the product, the Court held that consumers would consider that product wholly or substantially contained natural rather than processed or manufactured ingredients. The Court stated that ‘there is no logical reason why a trader would choose to call a product line ‘naturals’ unless it intended to convey to consumers that the product was ‘natural’ or was comprised of substantially natural ingredients’.
The Court further stated that products that are chemically altered or naturally derived due to a synthetic modification are not natural products and products would not be considered natural if water was the only or predominant natural ingredient.
This Update covers a range of important developments in Australia and overseas in the area of foreign bribery policy, commercial crime, investigations and regulation to 19 December 2018.
Class actions are set to become a prominent feature of the Australian employment law landscape.
On 19 June 2018, the Federal Court of Australia ordered Apple Inc (Apple US) to pay penalties of $9 million for making false and misleading representations to customers about their rights under the...