A2 Milk takes legal action against rival Care over trademark and seeks to stop its sales

The A2 Milk Company has taken rival Care A2 Plus to court, alleging a trademark infringement.

A2 Milk Company chief executive David Bortolussi.

The A2 Milk Company alleges Care A2 Plus has engaged in misleading and deceptive conduct by infringing its trademarks and has filed a claim in the Federal Court against its infant formula rival.

In filings late on Tuesday, A2 Milk said it was seeking a “permanent injunction restraining the respondents … from infringing the A2 Milk registered marks” including through the sale of products.

The lodgement comes one week after lawyers from A2 Milk sent a cease and desist letter to Care A2, and shortly after the smaller company launched its own Federal Court action to strike out the trademarks in question.

The filings point to a showdown between the $4bn ASX-listed dairy giant and Care A2, which has intentions to float on the market and is one of a small number of Australian companies to obtain a lucrative permit to export dairy products to the US.

“The A2 Milk Company vigorously protects its intellectual property rights, including trade marks. We will not be commenting further at this stage given the matter is before the court,” an A2 Milk spokesman said on Tuesday.

On Tuesday, The Australian reported that Care Corporation, the owner of the Care A2 Plus brand, had warned that a document purporting to be a prospectus for its ASX listing, seeking to raise up to $49.5m from investors, was “not genuine”. The 60-page document – which suggests the company is valued at up to $544.5m – has been promoted on social media and was available on the website of investment firm Point Capital.

However, Care told The Australian it had no association with Point Capital and did not know how it obtained the document.

The document included a message purporting to be from Care chairman Walter Bugno – who ran Lion in the early 2000s before running Campbell Arnott’s Asia-Pacific operations and overseeing Tabcorp’s casinos division, which later became Star Entertainment.

Some of those documents also make several claims about A2’s infant formula products, unfavourably contrasting them with Care A2-branded formulas. A2 Milk’s Platinum product, the documents claim, is not produced from grass-fed A2 cows and does not use fresh milk.

It is not the first trademark dispute A2 Milk has been involved in.

In 2021, A2 Milk settled a dispute with Oklahoma family-owned “old fashioned ice cream parlour” chain Braum’s.

At the time, The Australian reported that while the terms of the settlement were confidential, US dairy industry sources said Braum’s had been given a grace period to alter its website and product labels to say “A1 free” rather than “A2 Milk”.

For some 12 years Braum’s had been building its own herd of dairy cows carrying the A2 beta casein protein. In 2020, it began selling its own range of A2 dairy products alongside its burgers, crinkle-cut fries and club sandwiches, spruiking the same claim as A2 Milk: that it was “easier on digestion”.

Despite being a relatively small operation, Braum’s efforts didn’t escape the attention of A2 Milk, which sent a cease and desist letter to the Oklahoma company in May 2020. Braum’s retaliated by lodging a complaint in the US District Court, arguing it should be able to use A2 on its products because it was a term referring to a protein.

The company has also sued then Japanese-owned food and beverage giant Lion in 2014 after Lion rebranded its Pura milk products to say “naturally contains A2”.

Tests revealed Pura contained 50-70 per cent beta protein, with the A1 protein comprising the remainder.

A2 Milk and Lion eventually settled out of court in 2017.

In 2015, A2 Milk took on the ABC, accusing the public broadcaster’s program, The Checkout, of breaching a code of conduct by failing to provide balance, as well as reporting factual errors and inaccuracies.

An episode of The Checkout gave A2 Milk “a B minus for science” and suggested claims made by the company were “bullshit”, prompting A2 Milk to issue a writ prepared by prominent lawyer Allan Myers, KC. A2 and the ABC eventually settled.