BORDER WARS: A FIGHT FOR DOWN UNDER DIBS

Byline: JOANNA RAMEY

WASHINGTON--Redmond Products is defending its U.S. turf by laying claim to Australia.
The manufacturer of the Aussie and Australian hair care brands is arguing that it has exclusive trademark rights in the U.S. to use the designation Australia in relation to hair care products.
As a result, Redmond, based in Chanhassen, Minn., has asked the International Trade Commission to bar a Canadian competitor from selling its own Australian-inspired shampoo and moisturizer in the U.S.
At issue is how far a company can go in claiming a geographic location as its own when staking out marketing territory.
As with Redmond, the Mississauga, Ontario-based Belvedere International is a family-run company. The firm was started in 1981 by two brothers, Michael and Don Belvedere, both veterans of the beauty industry.
The siblings built their company on a European image with its European Formula brand, distributed in the mass market. Looking to expand, the Belvederes undertook market studies to find a lucrative image for a new product line, and customers were clamoring for things Australian--fresh and outdoorsy. The result: the Australian Natural's hair care line, launched in 1990.
"We knew the Australian mystique was there. It had a connotation of health, prosperity and well-being," said Michael Belvedere, formerly executive vice president at Fabergé of Canada Inc. Don Belvedere previously was president of Revlon of Canada Inc.
Three and a half years ago they marched across the border into the U.S., where they eventually bumped up against the Redmond family, which since 1979 has developed a range of 29 hair care items and has reached the $115 million mark with its two brands.
Redmond said that during last February's Hair and Barber Association convention in Chicago, several distributors stopping by Redmond's booth thought the company was associated with Belvedere.
This case of mistaken identity brought the upstart Canadians to Redmond's attention, and in December, the company filed its unfair trade practices claim with the ITC.
Redmond contends Belvedere has infringed on its registered and common law trademarks. One particular example in which Redmond said Belvedere products are "confusingly similar" involves a comparison of Redmond's Australian 3-Minute Miracle and Belvedere's Australian Natural's 2-Minute Hair Repair.
"The similarity between Belvedere's Australian Natural's products and Redmond's Aussie and Australian products is not an accident, but a calculated effort by Belvedere to ride on the coattails of Redmond's successful line of Aussie and Australian products," Redmond states in its ITC document.
Redmond's Aussie and Australian products have either peach-colored, white and peach, or purple and pink packaging, depending on the line. Each product's packaging includes the image of at least one kangaroo.
Belvedere's Australian Natural's Line has either lemon yellow or evergreen packaging, with a prominent photograph of two koalas printed on the products.
Redmond's advertisements in most of the leading consumer magazines trade heavily on the fact that it is a family-run company, often showing successive generations dressed in white bathrobes. "We've Changed, But Our Formulas Haven't," "Not Just A Family Product, But a Real Family Behind Quality Products," and "Meet the Family That Works for Your Hair" are among the slogans the company has used in its ads, part of a campaign the company says has cost $75 million since 1986.
In comparison, Michael Belvedere said since it is only selling one shampoo and two conditioners in the U.S. under its Natural's line, its advertising budget is miniscule and is typically tied to a store's cooperative-advertising program. Belvedere's adstout Natural's as having "Down Under Savings."
Although Belvedere claims that its total U.S. sales of its Natural's, European Formula and children's Bubbly bath lines together amount to about 1 percent of its total $21.4 million business (30 million Canadian dollars), and that Natural's amounts to less than 10 percent of its U.S. business, Redmond claims the Canadians are already cutting into their business.
In its ITC complaint, the firm offers anecdotal evidence that Belvedere's presence threatens Redmond's business, thus endangering the livelihood of its 202 workers.
"Belvedere's knockoffs have already caused actual confusion with Redmond's Aussie and Australian products," Redmond argues, going on to describe how both companies are going after the "impulse market" where product image is key.
"The typical purchaser of health and beauty aids is not a sophisticated customer," Redmond argues. "Given the narrow price range of health and beauty aids, a typical purchaser is not likely to carefully consider his or her purchase to determine its source."
Belvedere attorney Larry Klayman said that Redmond is off the mark in saying its Aussie and Australian trademark prevents other companies from using the country designation.
"If Redmond's theory was correct, then all of our winemakers would be accused of ripping off all the European winemakers," he said, ticking off Beaujolais and Rieslings as examples. "It is very hard to defend a trademark based on a geographic location.
"Even if they are able to show they have a valid trademark, they have to prove our client has infringed on that trademark," Klayman added, citing that customer confusion is the standard of proof. "If you can't show there is any confusion between your product and another, you aren't entitled to relief from the ITC."
As Michael Belvedere sees it, what is ironic is that the dispute over Australia involves two families that aren't from Down Under. He says plenty of room exists in the marketplace for both companies to capitalize on the Australian mystique in both the U.S. and Canada, where Redmond is also pursuing a case against Belvedere.
According to Thomas J. Steuber, Redmond's attorney, the Aussie and Australian labels are synonymous with Redmond products. "The mark Australian has been associated by people with Redmond," he said.-- Fairchild News Service

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