Care A2 v a2 Milk: Federal Court rules 'a2' is a brand, not a scientific descriptor

a2 Milk

a2 Milk was founded by Dr Corran McLachlan and Howard Paterson, who had discovered that cows could be genetically tested to identify those producing milk free of the A¹ β-casein protein, milk that purportedly offered benefits such as digestive wellbeing, improved taste and superior frothing ability.

a2 Milk's registered trade marks

a2 Milk is the registered owner of the following five trade marks covering milk and infant milk powder in Australia (collectively, a2 Milk Marks), among many others:

Trade mark	Number	Class	Priority date
a2 Milk	1708342	5 and 29	20 July 2015
	1676054	5 and 29	20 February 2015
	1668754	5 and 29	13 January 2015
	1454858	5 and 29	20 October 2011
	1422098	5 and 29	23 March 2011

a2 Milk's evidence of use

a2 Milk had strong evidence of the continuous and extensive use of the a2 Milk Marks in Australia since at least 2003. Key evidence showed that a2 Milk:

• always used the a2 Milk Marks with 'a2' where 'a' is in lowercase;
• always used the a2 Milk Marks on product packaging with the ™ or ® symbol, as appropriate;
• used 'a2' in all consumer marketing activities in Australia;
• sold its products under the a2 Milk Marks at a significant price premium over regular dairy products;
• sold its products under the a2 Milk Marks in Australia at more than 2,500 supermarkets and 450 pharmacies in March 2024;
• was the only milk brand distributed through all six key grocery retailers in Australia (Woolworths, Coles, Aldi, Costco, Metcash (IGA) and SPAR) in October/November 2020;
• displayed its products under the a2 Milk Marks at supermarkets in a 'brand block', as shown below;

• generated sales under the a2 Milk Marks in Australia and New Zealand of many hundreds of millions of dollars in 2019 and 2020;
• incurred advertising expenditure for the a2 Milk Marks in Australia of many millions of dollars, which included ads on social media, billboards, television and radio, on video-on-demand and YouTube, and sponsorship of top-rating television programs such as MasterChef Australia, My Kitchen Rules, The Block and LEGO Masters;

• had market share for fresh milk of 10.5% in 2018-2019 and 8.7% in 2019-2020 and for infant formula of 36.8% in 2018-2019 and 20.4% in 2019-2020; and
• had conducted annual surveys, Brand Health Reports, since 2010, which consisted of thousands of 15-minute online interviews with grocery buyers aged 18 and over, and the report, a2 MILK™ Brand Health: Wave 11, December 2020, concluded that the 'a2 Milk' brand is a highly recognised and trustworthy brand, with over 8 in 10 people recognising the brand.

Key findings

The central issue was whether 'a2/A2' functions as a brand or a scientific descriptor. a2 Milk had no objection to third parties using 'A2' to describe the A² β-casein protein present in milk, but argued Care A2's use of 'A2' went beyond descriptive use. a2 Milk brought proceedings against Care A2 for trade mark infringement under section 120(1) of the TMA and for misleading or deceptive conduct and misrepresentation under sections 18 and 29 of the ACL. Care A2 brought an invalidity proceeding to cancel, rectify or limit the a2 Milk Marks under section 88 of the TMA. Care A2 was unsuccessful, and a2 Milk was successful, for the reasons summarised below.

Care A2's invalidity proceeding

Care A2 sought to cancel or limit the a2 Milk Marks or to otherwise have them rectified by entering an endorsement that 'registration does not confer any exclusive right to the use of the terms "A2", "A2 Milk", "a2", or "a2 Milk"'.

Care A2 pressed six grounds of invalidity under sections 41, 42(b), 43, 59, 24 and 25 of the TMA. The most significant was the challenge to distinctiveness under section 41. Justice Rofe rejected each of the remaining grounds, principally because Care A2 led no evidence in support and because the reasoning on descriptiveness disposed of them. The section 41 challenge is summarised below.

(a) Distinctiveness (section 41 of the TMA)

Care A2 pleaded that the a2 Milk Marks were not capable of distinguishing milk and milk products because 'a2/A2' and 'a2 milk/A2 milk' describe that the products contain only, or predominantly, the A² β-casein protein. (Care A2 tried to add to its pleading that this also meant the absence of the A¹ β-casein protein but Justice Rofe rejected its attempt.)

In addition to evidence of its use, a2 Milk filed evidence of:

• its chief scientific advisor, which provided that it was the absence of certain β-casein protein variants which provide purported health benefits in milk;
• Professor Quester, a consumer behaviour and marketing expert, which provided that prior to a2 Milk's launch in 2003, consumers had no familiarity with the meaning of 'a2' or milk protein nomenclature; and
• Professor Zuckermann, a linguistic and lexicographic expert, which provided that common Australian English lexical mechanisms (eg, '-free', 'non', 'no') meant a trader would likely use terms such as 'A1-free', 'A1 beta-casein protein-free' or 'zero A1' to describe milk free from A¹ β-casein protein, rather than 'a2/A2'.

Care A2's sole evidence in the proceedings was the affidavit of its solicitor annexing about 300 pages of documents obtained primarily through Google searches by six employees. Justice Rofe did not consider that evidence to be persuasive because it included documents that referred to a2 Milk's own products, showed explanations rather than an understanding of 'a2/A2', or were from New Zealand websites, scientific journals, patent specifications or the Macquarie Dictionary (the definition of 'a2' contained in which was challenged by Professor Zuckermann). Justice Rofe also did not consider any of a2 Milk's own uses of its trade marks to be descriptive.

Agreeing with Justice Bromwich who held that 'a2/A2' and 'TRUE A2' were sufficiently inherently adapted to distinguish in The a2 Milk Company Ltd v LD&D Australia Pty Ltd (2021) 164 IPR 293 (LD&D), Justice Rofe held:

• 'a2/A2' did not ordinarily signify milk or milk products free from A¹ β-casein protein. 'a2 milk'/'A2 milk' is not a scientific or descriptive term for A¹ β-casein protein-free milk and is allusive at most. The relevant consumer being the general public would not have any knowledge of milk protein chemistry;
• other traders were more likely to use the alternative terms set out in Professor Zuckermann's evidence (eg, 'A1-free', 'A1 beta-casein protein-free' or 'zero A1'); and
• the a2 Milk Marks had otherwise acquired distinctiveness through use.

a2 Milk's infringement proceeding

Justice Rofe held that Care A2's conduct infringed the a2 Milk Marks under section 120(1) of the TMA. However, the infringement finding was notably limited in scope, reflecting the constraints inherent in a2 Milk’s portfolio of marks built around a descriptive term.

As a threshold matter, it is important to note that a2 Milk’s strongest mark that it could rely on in this case was the word mark ‘a2 Milk’ (TM 1708342), and not a mark for 'A2' or 'a2' only, which only proceeded to registration after Justice Bromwich’s decision in LD&D. The remaining four marks are device marks incorporating stylised elements and specific get-up.

Composite mark or two separate trade marks? The critical preliminary issue was how Care A2’s sign should be characterised. Care A2 argued that consumers would perceive the composite phrase ‘Care A2+’ as a single badge of origin, with the distinctive word ‘Care’ differentiating it from a2 Milk’s marks. a2 Milk argued that ‘Care’ and ‘A2+’ functioned as two separate marks.

Justice Rofe found that Care A2 was using two separate marks: ‘Care’ and ‘A2+’. Her Honour was influenced by the significant differences in font, style, size and placement of the two components: ‘A2+’ was always prominently and centrally displayed in large, bold, dark blue capital letters with silver bevelling, whereas ‘Care’ appeared in a much smaller separate blue lozenge that was often partially obscured by price tickets on retail shelves. The positioning of ‘Care’ relative to ‘A2+’ was not fixed. It appeared above, beside and in varying sizes across different materials, further supporting the impression that the two elements operated independently.

Deceptive similarity limited to only two marks. On the basis that ‘A2+’ was a standalone sign, Her Honour held that it was deceptively similar to (though not substantially identical with) only two of the five a2 Milk Marks: the word mark ‘a2 Milk’ (TM 1708342) and the simpler ‘a2’ device mark (TM 1676054). Critically, ‘A2+’ was not found to be deceptively similar to the remaining three device marks (TMs 1668754, 1454858 and 1422098), which incorporated more elaborate stylised elements and get-up. This means that the older, more heavily stylised registrations – the very marks a2 Milk was able to obtain without the same descriptiveness battles – provided no enforcement utility in this case.

No infringement if ‘Care A2+’ is one composite mark. In the alternative, Her Honour considered the position if ‘Care A2+’ were viewed as a single composite mark. On that characterisation, she held that ‘Care A2+’ was not deceptively similar to any of the a2 Milk Marks. This is a significant finding. It means that if Care A2 had more effectively locked ‘A2’ together with its house mark ‘Care’ – for example, by using consistent sizing, integrated presentation and fixed positioning – the infringement case would likely have failed entirely. The practical implication is that a third party can potentially design around a2 Milk’s registrations by combining ‘A2’ with a sufficiently distinctive house brand in a manner that consumers perceive as a single composite sign.

Justice Rofe awarded additional damages on the basis that the infringement was flagrant. Care A2 had continued its conduct after receiving a letter of demand and had originally challenged around 50 of a2 Milk’s trade marks before failing to pay security for costs, resulting in the narrowing of its case to the five marks in suit.

a2 Milk's ACL proceeding

Justice Rofe held that Care A2's conduct also constituted misleading or deceptive conduct and misrepresentation under sections 18 and 29 of the ACL. Her Honour found that, taking into account all immediate and broader context, the relevant consumer would likely perceive the prominent 'A2/A2+' on the tins or sponsorship materials as indicating a connection with a2 Milk. Consumers would be confused, misled or deceived into thinking that the product and event were provided by, or had the licence, approval or authorisation of, a2 Milk. It was also relevant that Care A2 had no evidence explaining why it adopted the 'Care A2+' sign, or whether any due diligence was conducted, and that a2 Milk filed evidence of actual confusion where a National Business Review (NBR) article about a2 Milk wrongly included Care A2+ product images, although little weight was given to that evidence alone.