Australian dairy processor Bega Cheese has chalked up a win in a long-running legal dispute over the use of well-known peanut butter packaging.

Key points: Bega Cheese can continue using the distinctive yellow lid on peanut butter products

Bega Cheese can continue using the distinctive yellow lid on peanut butter products The Federal Court dismissed an appeal by Heinz and Kraft to prevent Bega using the packaging

The Federal Court dismissed an appeal by Heinz and Kraft to prevent Bega using the packaging Bega is fighting a separate legal battle with Fonterra over the use of its own brand

US food companies Kraft and Heinz wanted to stop Bega Cheese from using a distinctive type of packaging on the peanut butter products Bega is currently selling.

The Federal Court ruled against Heinz and Kraft last year, and on Tuesday morning dismissed their appeal against that decision, as well as a cross-appeal from Bega Cheese.

"We'd always argued that we'd actually done appropriate due diligence in purchasing the business and the associated trade dress when it came to peanut butter," Bega CEO Barry Irvine said.

"Now we've had two courts confirm that position, so we're very pleased.

"We'd prefer not to be in court but sometimes you have to be in court to defend your position, and that's what we've been doing."

The issues between Bega Cheese and Kraft emerged when Bega made a series of acquisitions in 2017, buying a range of pantry items from Mondelez International.

Packaged food products like Vegemite, peanut butter and macaroni cheese were included in the deal.

As Bega moved to rebrand the items, it kept what's known as the 'trade dressing' on many items, including "a jar with a yellow lid and yellow label with a blue or red peanut device, with the jar having brown appearance when filled".

Bega also ran ads stating "Kraft peanut butter is now Bega peanut butter" and that the product was "never oily, never dry, with the same taste you've always loved, and is now Aussie-owned by Bega".

With around $60 million a year in sales, there was plenty at stake for both sides.

The original decision

But in May last year the Federal Court ruled in favour of Bega Cheese.

Kraft claimed Mondelez could not sell the rights to use Kraft's peanut butter packaging as the company merely had a licence to use it that expired in December 2017.

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That was rejected by Justice David O'Callaghan, who found Bega Cheese acquired all rights to use the yellow-labelled and lidded peanut butter jar when it bought the assets from Mondelez Australia.

Justice Callaghan said the Australian company was therefore "entitled exclusively" to use the packaging.

Separately, Fonterra and Bega are involved in a matter before the Supreme Court in Victoria, which also stems from the Mondelez deal.

A judgement in that matter is expected later this year.