COMMENT: The attention of New Zealand media has been caught by the recently publicised response by My Food Bag to allegations about its marketing by multinational company HelloFresh.
Although My Food Bag has not yet published the actual claims by HelloFresh, the issue appears to be My Food Bag's promotion of its "Fresh Start" product with the phrase "Hello, Fresh Start".
HelloFresh has a New Zealand trade mark registration for its logo that includes the words "HelloFresh".
My Food Bag is also using a "Fresh Start" logo that has some resemblance to the HelloFresh registered trade mark.
My Food Bag has, in turn, registered a trade mark, although it is a little different to the logo being used.
My Food Bag's widely published response suggests HelloFresh's complaint relates only to the use of the word "Hello".
It is currently impossible to tell whether this is an accurate summary of HelloFresh's position but wider legal issues relating to trade marks, copyright and the Fair Trading Act may well exist.
The response also implies that My Food Bag is surprised to have been noticed by HelloFresh.
In fact, the two companies competed directly in Australia from 2014 to 2016.
It seems to be more common for businesses accused of infringing intellectual property laws to seek and rely on the court of public opinion rather than (or perhaps as well as) making a traditional legal response.
This is particularly the case where the business in question can portray themselves as a local hero "David" against a foreign "Goliath".
The aim, of course, is to create a PR downside that might outweigh the legal upside to the claimant enforcing its legal rights.
HelloFresh has a business presence in every mainland Australian state.
Expansion into New Zealand is an obvious option. My Food Bag itself moved into Australia in 2014, competing directly with HelloFresh, but withdrew from that market in 2016.
As the incumbent New Zealand market leader, My Food Bag has a considerable incentive to hinder HelloFresh from muscling in on its home territory.
It claims to be New Zealand's third largest food retailer behind only the two big supermarket chains. Its annual revenue exceeds $135 million and it has over 50,000 customers.
Although significantly smaller than HelloFresh, this is quite a big "David".
In light of these stakes, it may have been a canny move by My Food Bag to paint HelloFresh as an unreasonable aggressor.
HelloFresh does have legitimate intellectual property to protect in New Zealand but may not be as keen to get into business here at a time when its reputation is on the back foot.
On the other hand, those that dig beneath the surface of a witty press release may realise that the issues are not as simple as they first appear.
Any business on the receiving end of allegations of infringement of trade marks or other intellectual property should seek expert legal advice.
Seeking to claim the moral high ground or to gain a public relations advantage can be part of an effective response strategy but this ought to be done with careful consideration of the legal and commercial strengths and weaknesses of your position.
- Paul Johns is head of dispute resolution at Baldwin's.