
Late last year some of my readers will recall a story making headlines about people selling the popular US cookies called Crumbl via a Bondi Pop Up store in Sydney Australia.
Since its inception in 2017, the Crumbl Cookie enjoys cult status in the US with over 1000 franchised retail outlets and a major online presence.
The people behind the Bondi pop us store (calling themselves “Crumbl Sydney”) had previously flown to Hawaii in the US and bulk purchased cookies from a Crumbl store and brought them back to Australia on a commercial jet airline in their suitcases. The Crumbl cookie is not available for sale in Australia.
Crumbl Sydney went to great lengths to promote the one day only pop up store sale using social media extensively in the week leading up and the hype quickly grew. On the day in question people waited in line for hours to buy the cookies– which sold for AU$17.50 each!
Shortly afterwards the socials reported widespread disappointment. Many purchasers claimed the cookies were stale and expensive. Such was the backlash that Sydney Crumbl’s social media accounts were soon wiped clean of content. Crumbl quickly made it known via social media there was no association between the pop up store and themselves.
This practice of importing goods from overseas outside official distribution channels is typically known as “Parallel Importing” or “grey” or “direct” imports. It involves importing genuine branded products without the authorisation of the brand or its local distributor.
The Australian Government proactively supports parallel importing. This is to encourage competition in Australia where products can often be more expensive than other countries who have larger populations and greater economies of scale. The support manifests itself in the Section 122A of the Trade Mark Act 1995 which came in to being in 2018. It sets out when use of a trade mark will not be considered an infringement. It includes an expanded list of circumstances where consent will be considered to have been given.
The facts aren’t clear whether the Bondi Pop Up Store people ( “ the Popsters”) used any of the Crumbl’s registered or applied trademarks in Australia other than for what was on the packaging. The evidence appears to be that they did not. That being the case it would be hard for Crumbl to argue that its trademarks in Australia had been infringed as the appearance of the Crumbl trademark on the packaging only would not require their express consent.
Section 122A makes it difficult to challenge parallel importing in circumstances where trademarks are lawfully applied offshore to product packaging.
Crumbl might have considered bringing legal action against the “Popsters” for what is known as the tort of “passing off”. Passing off occurs when one party misrepresents its goods, services, or business as being associated with another, causing harm to the latter’s reputation or goodwill. Certainly, it could be argued that the Popsters caused confusion in the market place and led some people to believe it was Crumbl itself selling the cookies. Yet the Popsters went to great lengths in response to the backlash to advise they
“never claimed to be an official Crumbl store. This was clearly stated in bio and our comments. Our goal was to bring the authentic Crumbl Cookies to Australia by importing the cookies directly from the USA. We travelled to the US to purchase the cookies and imported them with their original packaging. We did not bake them ourselves”[1]
If that were true and given that there is no presence in the Australian market place for the cookies just yet it’s hard to see what damage Crumble incurred from the Popsters adventurous conduct.
This cookiegate saga does highlight however the need for overseas companies to protect their brands before launching their products in Australia by registering their trade marks in advance. This will prevent parallel importers using international companies advertising or promotional materials in sales activities that infringe their trade marks.
[1] https://mumbrella.com.au/we-never-claimed-to-be-official-internet-taken-by-storm-over-sydney-cookiegate-saga-850724