A court has ruled Australian food brand Bega Cheese has exclusive rights to the well-known yellow-labelled peanut butter jar, ending a packaging stoush initiated by its rival, US food giant Kraft.

Key points: Kraft accused Bega of misleading and deceptive conduct over its use of yellow packaging for its peanut butter

Kraft accused Bega of misleading and deceptive conduct over its use of yellow packaging for its peanut butter But the judge found Bega had acquired the rights to use the labelling from Mondelez Australia in 2017

But the judge found Bega had acquired the rights to use the labelling from Mondelez Australia in 2017 Bega produces the spread at the former Kraft peanut butter factory in Port Melbourne

Kraft took the Australian company to the Federal Court in a bid to stop it using the packaging, claiming it owned the exclusive rights to the "jar with a yellow lid and a yellow label with a blue or red peanut device".

It claimed Bega Cheese's use of the packaging amounted to misleading and deceptive conduct.

The US food giant's Australian subsidiary, Kraft Foods Limited, was renamed Mondelez Australia as part of a restructure in 2013 and was granted a licence to use the Kraft brand and packaging on peanut butter.

Mondelez Australia sold its peanut butter business and assets to Bega Cheese in 2017, which began producing the spread at what was the Kraft peanut butter factory in Port Melbourne and selling it in a yellow labelled and lidded jar.

But 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 which expired in December 2017.

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.

Bega 'delighted' by ruling

In a statement to the ASX, Bega Cheese said the court ruling would allow it to continue using the current packaging for its peanut butter.

"The Federal Court judgment … determined that Kraft Heinz's use of the trade dress is misleading or deceptive under Australian law," it said.

"We look forward to continuing to produce and supply our customers with our much-loved peanut butter products."

Bega Foods's executive general manager Adam McNamara said the matter had taken almost 18 months to resolve.

He said the company's legal team was still going through the detail of the judgement, in which they believe Kraft had partially won, but he said the company was pleased it would not need to change its peanut butter packaging.

"It's going to look the same on the shelf and that's what we're delighted about," Mr McNamara said.

He said it was yet to be determined whether Kraft would cover any of Bega Cheese’s legal costs.

In a statement, Kraft said it was disappointed by the judgement and was considering its options.

The court will determine further orders and damages in a hearing at a later date.