Australian brand Bega has emerged on top in a long-running battle with American food giant Kraft, winning the right to use the trademark yellow lids on its peanut butter jars.

The Federal Court ruled on Wednesday that Bega owns and has exclusive rights to use the yellow lid, and red and blue labels that most Australians associate with the peanut spread.

Bega Cheese shares hit a 2019 high after the the ruling was announced, jumping as much as 9.2 per cent. They reached $5.53 in early trade – the highest they have been since December 19.

The fight over product appearance and copyright ownership was sparked by a tricky series of takeovers which involved the sale of Kraft to international giant Heinz. That meant Australian products – including peanut butter – were moved under the Mondelez umbrella, which was bought by Bega in January 2017.

That deal, which also included Vegemite, was worth $460 million.

But Kraft went to the Federal Court, alleging it still had the rights to the packaging style and Bega had engaged in misleading or deceptive conduct in marketing its peanut butter.

After the sale of Mondelez to dairy giant Bega, the Australian brand ran ads claiming “Kraft peanut butter is now Bega peanut butter” and that it was “Never oily, never dry, with the same taste you’ve always loved, and is now Aussie owned by Bega”.

As part of the sale, Bega took over the former Victorian Kraft factory in Port Melbourne.

On Wednesday, Federal Court Justice David O’Callaghan delivered his judgment in the long-running case, declaring that while the goodwill generated by the trademark branding had rightly benefited Kraft, and later Kraft and Mondelez, those rights had been transferred to Bega as part of the sales agreement between it and Mondelez.

As a result, Bega is “exclusively entitled” to use the yellow lid and red and blue peanut label.

However, Justice O’Callaghan found Bega had breached consumer law with respect to its first advertisement. He said Kraft also breached the law in an October 2017 press release when it described its product as “loved since 1935”.

Last year, Kraft tried to get US courts to stop Bega using the branding, seeking “emergency relief” against the Australian brand from the International Centre for Dispute Resolution. it also launched its own action in the US federal court.

Justice O’Callaghan told Kraft that proceedings there could not continue until the Australian case was handled.

The matter’s not over yet, with a further hearing to be held to determine relief, which could include damages.

-with AAP