The short answer is "no". You should not make your product so close to your competitor's product to deliberately misappropriate the goodwill of the competitor. But how close is too close?
The case of Martin & Pleasance Pty Ltd v A Nelson & Co Ltd [2021] FCAFC 80 provides an instructive example.
In this case, the Full Court of the Federal Court of Australia upheld the primary judge's decision to grant an interlocutory injunction restraining Martin & Pleasance Pty Ltd (and related companies) (collectively, Martin) from marketing, promoting and/or supplying their “RestQ” branded range of medicines.
Martin used to be the distributor of Nelson's RESCUE brand of sleep medicines.
Nelson terminated its agreement with Martin.
Martin made a copycat product which he called RESQ.
Nelson sought an injunction.
The primary judge found in their favour. He determined that Martin had committed the tort of passing off and engaged in misleading and deceptive conduct (in breach of the Australian Consumer Law). The primary judge found that “Rescue” and “RestQ” were too close. He noted that Martin used a similar slogan to Nelson. Martin used “Traditionally used to calm the mind & relieve sleeplessness” and Nelson used “Traditionally used to relieve sleeplessness”. Martin also referred to the developer of the product "Dr Bach" on his packaging, like Nelson.
Martin appealed the decision of the primary judge to the Full Federal Court, but the Full Court dismissed the appeal and ordered that Martin pay Nelson’s legal costs.
The matter will now be referred back to the primary judge to determine the substantive causes of action, and award any final relief.