Welcome to the DCC kete (basket) of recent New Zealand trade mark cases, and other developments in kiwi trade mark law and practice. In this issue:
- Are the Trade Marks ACTAZIN and ActiPhen really similar? The New Zealand Courts seem to think so (Coa).
- NZ is not Australia in oppositions - the Vagisil case (HC)
- No, seriously, NZ is NOT Australia! Revistiing ActiPhen (Coa)
- How to lose an undefended invalidity action
- Copyright in NZ - it's not Australia!
- eBay can't buy reputation in New Zealand
Are the trade marks ACTAZIN and ACTIPHEN really similar? The New Zealand courts seem to think so
In a somewhat surprising decision, in late July the Court of Appeal of New Zealand held that the trade mark ActiPhen is likely to be confused with the prior mark ACTAZIN, dismissing an appeal and upholding the assessments provided both by the High Court and the Assistant Commissioner of Trade Marks, in Pharmazen Limited v Anagenix IP Limited 2020] NZCA 306. A full report is provided here.
- Cull J of the High Court considered that "most New Zealanders would be likely to pronounce the words as "ACT-I-FEN" and "ACT-I-ZIN which would make them phonetically extremely similar, with the only difference being "F" as opposed to "Z"", citing London Lubricants (1920) Limited's Application. This is surprising given that the opposed mark is ActiPhen (not ActaPhen) and that the respective suffixes -PHEN and -ZIN are quite different to one another.
- The Court of Appeal concluded that consumers and manufacturers were considered likely to pronounce the respective marks ActiPhen and ACTAZIN with the same rhythm, structure and sound.
- HOT CHIPS - as noted by the Court of Appeal, the applicant could not demonstrate that its use of ActiPhen was not likely to deceive or confuse. This is a complete reversal of the situation in Australia where onus is upon the Registrar to establish that there was a risk of deception/confusion.
NZ is not Australian in oppositions - the Vagisil case
In the High Court's July judgment of Dr. August Wolff GMBH & Co. Kg Arzneimittel v Combe International Limited  NZHC 1679 (14 July 2020), we see once again how NZ courts handle essentially the same facts as considered by their Australian cousins. In so doing, the case demonstrates once again an Australian decision is unlikely to influence the outcome New Zealand and in fact, New Zealand will often reach a different outcome to Australia.
This case essentially considered whether VAGISAN is too similar to prior mark VAGISIL, for female hygiene products (short answer? Yes, agreeing with the IPONZ Assistant Commissioner and dismissing the appeal). This is part of a global dispute in with each party as had some success in stopping the other from registering its VAGI- mark.
- For good old s17(1)(a) reverse onus, confusion is a much lower onus than "deception". To establish confusion "The similarity does not need to evince a shared origin of the brands, it "is enough to tie the brands together and to spark a connection in the minds of consumers".2
- What about Australia? [Background - In Australia, Stewart J concluded that it was not established that consumers might be confused or deceived by VAGISAN so as to wonder whether there is any connection between it and VAGISIL, due to VAGISIL's reputation 3. I accept that, despite different statutory wording, the underlying principles relevant to trade mark registration in New Zealand and Australia are similar. But each case is to be decided applying local law to the evidence. I understand a further appeal has been filed in Australia. In this global dispute, decisions in other jurisdictions have gone both ways. As Hinton J said in Beiersdorf AG v Unilever Plc, in the context of registrability under s 18, evidence of successful registration or opposition elsewhere is of limited assistance here, unless there is a clear evidentiary link to circumstances in New Zealand4. Apart from possible differences in the evidence between this case and the case in Australia (for example, relating to co-existence in the UK), it is important to note the different onus of proof that applies in Australian trade mark opposition cases - the opponent to registration bears the onus to prove that the grounds of opposition are made out5.
- S17(1)(a) fails - I am satisfied (by a small margin) that... [VAGISAN], if used in a normal and fair manner, will not be reasonably likely to cause deception and confusion amongst a substantial number of persons. I differ from the Assistant Commissioner primarily because of [the opponent] Combe's use of the V device, which I have concluded materially reduces the risk of confusion in terms of s 17(1)(a)
- S25 WINS - The marks are similar: I agree with the Assistant Commissioner that, given the nature of the goods to which the VAGISIL marks apply, even notional use would likely involve sanitising, washing or cleansing, which is similar to the association with health and cleanliness in Dr Wolff's -SAN suffix. Overall . I consider that Dr Wolff falls short of establishing that its proposed VAGISAN mark is not likely to deceive or confuse.
- Hot chips - Why consider actual use of the Opponent's mark under s17 (with the V device) but notional use under s25? "Under s 25(1)(b), the comparison is the fair and notional use of both marks (rather than [the Opponent's] actual use).... I therefore leave to one side [the opponent's] use of the V device with the word marks6.
So: Be careful when assessing s17 reverse onus if acting for the opponent, as your client's actual use of its mark may reduce the risk of confusion - particularly if it is stylised or combined with other elements, progress etc. in other words, whilst the barrier for "awareness" is low, keep in mind Pacific use of the marks which that awareness relates!
[NOTE: in case restating is necessary, the CoA in the ACTAZIN/ActiPHen case above also noted as that "In both ss 17(1)(a) and 25(1)(b) the activity under scrutiny is the anticipated normal and fair use of the trade mark for which registration is sought. However in the s 17(1)(a) analysis, the base comparator is the manner in which another trade mark has already been used in fact. By contrast, in the s 25(1)(b) analysis the comparator is an assumed use of an existing registered trade mark (trade mark C), albeit in a normal and fair manner7".]
No, seriously, NZ is not Australia! Revisiting ActiPhen
We jump back to the ACTAZIN/ActiPhen case now. Since the NZ Assistant Commissioner handed down her decision in ACTAZIN/ActiPhen, The Australian Registrar's delegate handed down the Australian decision, Finding that the marks were not similar, partly as due to The differences in spelling between the trade marks is simply too great". Was this influential to the NZ Coa? NO.
Hot chips - NZ is not Australia (again!). The Court of Appeal does "not find the Australian decision persuasive given that it was made in the context of s 44(1) of the Trade Marks Act 1995 (Cth). In such oppositions the opponent has the onus of showing that there is an existing or pending trade mark in relation to which the opposed trade mark is either substantially identical or deceptively similar. Anagenix was not able to discharge that onus. However in the New Zealand context it is for Pharmazen to establish that its use of ActiPhen would not be likely to deceive or confuse8.
How to lose an undefended invalidity action
Firstly, background reminder - As NZ invalidity actions are heard by IPONZ (not the Courts), this is one way to attack a registration if you missed opposing it.
Once lodged the owner of the TM registration must file a counterstatement BUT if not filed, the Commissioner must determine the application on the documents filed by the applicant9. So, the invalidity applicant still needs to establish a prima facie case.
In this case, the TM Registration's owner Ms Diep Thao (Thao) did not file a counterstatement, in response to Cong Ty Co Phan Dau Tu Trung Nguyen's (DTTN) invalidity action. So all DTTN has to do is establish a prima facie case and its invalidity action would succeed. Simple right?
DTTN did not provide sufficient evidence to establish even a prima facie case and thus the declaration invalidity application was refused. Why?
DTTN's declaration + 14 exhibits was not enough to establish a prima facie case (!!!).
Why not? To succeed, DTTN need to establish reputation in its own G7 logo, as at the date of registration of the relevant mark. Despite lodging a significant amount of evidence, it failed to establish even a prima facie case. Amongst the many holes in its evidence, the Assistant Commissioner noted as follows in relation to DTTN's evidence:
- whilst a New Zealand website is referenced, there is no evidence to establish that NZ consumers were aware of the website;
- There are no invoices, receipts, sales numbers, advertising spend, number of visitors to the website or other evidence on which the inference of reputation for the stylised G7 Trade Mark can be made. No one with personal knowledge of DTTN's business or the www.vietnamesecoffee.co.nz website has provided evidence10 ;
- Depictions of DTTN's G7 logo using the wayback machine were unclear.
- There is no direct evidence that anyone in New Zealand who may have visited the website was aware of, knew of, or might recall the stylised G7 Trade Mark at the date the application was made. Nor is there any evidence on which I can base a reasonable inference that there is such a reputation11 .
- DTTN's evidence has another issue. It is not clear if the products on the website are those of DTTN, [Thao] a business related or connected one or other of them, or a third party12.
- The statutory declaration does not include a statement that the declarant has personal knowledge of the matters being declared or even that the declaration is made on the basis of DTTN's business records. The declarant's statements have no probative weight13.
Although the TM Registration's owner Thao chose not to participate in these proceedings, "...trade mark registrations are important property rights. The Act has been interpreted as requiring an applicant for invalidity to make out a prima facie case for invalidity. The Evidence Act 2006 is used as a guide to assessing how reliable and probative any evidence is in a proceeding. Whatever evidential standard the evidence needs to meet, it falls well short in this case14. "
Hot chips - This is yet another NZ case where the party taking action has lost due to very poor drafting evidence and quality of exhibits. A different outcome may have been achieved in front of IPAustralia, noting that the TM owner chose not to defend its registration.
Copyright in NZ - it's not Australia!
In the Assistant Commisioner's decision in Zhu Hong v The New Zealand Way Limited  NZIPOTM 14, we get to see an interesting quirk in NZ copyright law, AND how the owners one of NZ's most important tourism brands almost lost an undefended invalidity action - once again due to very poor evidence (see above!).
The case involves the two marks shown below, of which the simple fern is known as the FernMark and is owned by The New Zealand Way Limited (NZ Way), which his owned 50/50 by the NZ Toursim Board and New Zealand Trade and Enterprise. NZ Way licenses the FernMark broadly to interested parties, to help establish a kiwi connection.
The Fern Globe mark shown above was registered by Zhu Hong for bottled water and related class 32 goods (No 1043537). NZ Way sought a declaration of invalidity which Zhu Hong did not defend. Nonetheless, NZ Way would have lost this case (once again due to very poor evidence), if it were not the golden ticket of copyright protection and a quirk in New Zealand which is not present in Australia.
The FernMark was created on commission in 1999 for NZ Way, and had been in use for approximately 20 years in New Zealand when this case was considered. Ordinarily, this should provide NZ Way with a huge cache of evidence upon which you could rely, to establish the reputation in its FernMark, to establish a prima facie case sufficient to win an invalidity action (remembering that as it was undefended, NZ Way only to establish a prima facie case).
- Although its evidence included the assertion that "[t]he FernMark is well-known in New Zealand and globally recognised", the Assistant Commissioner dismissed all of the reputation, due once again largely its quality and the way in which was drafted. The following significant gaps were identified in NZ Way's evidence:
- The licensees will presumably include New Zealand businesses. The scale and scope of that licencing is not clear from the evidence.
- The leading statutory declaration is dated 11 March 2019 it does not address the position at the relevant date.
- No information was provided as the number of licenses granted for bottled water products before the relevant date.
- "There is no indication in the evidence of the number of licences NZSG granted for any products or services or indication of the extent of use of the FernMark in New Zealand. There are no indications of licences applied for or granted, advertising spend, number of visitors to the website, direct evidence from anyone other than NZW, examples of the mark applied to product or other evidence from before the relevant date on which a reasonable inference of reputation for the FernMark can be made."15
This would have been an embarrassing loss for NZ Way, but it was saved by copyright in the trade mark. And this is where the New Zealand quirk comes in. As NZ Way commissioned the FernMark design, it is deemed to be the first owner of the copyright in the FernMark by way of s 21(3) of the Copyright Act, which reads:
Where-(a)a person commissions, and pays or agrees to pay for, the taking of a photograph or the making of a computer program, painting, drawing, diagram, map, chart, plan, engraving, model, sculpture, film, or sound recording; and
(b) the work is made in pursuance of that commission,-that person is the first owner of any copyright in the work.
This is not present in Australia is a significant difference between copyright law in the respective countries.
The Assistant Commissioner found that a prima facie case of copyright infringement was made out, "Given the similarities of features and stylisation of the respective designs I consider that Zhu Hong fern device incorporates the time, skill, labour and effort put into creating the logo. The logo incorporates a substantial part of the logo 16.
- This case is yet another demonstration of how important the quality and drafting of evidence is in relation to New Zealand actions.
- For those of copyright mind, the discussion as to how assessed clear and succinct17
HOT CHIPS - under New Zealand copyright law, a party who commissions certain types of copyright works (e.g drawings, plans, computer programs or paintings or photos) deemed to be the owner of copyright copyright - s21(3), Copyright Act 1994.
eBay can't buy reputation in New Zealand
This EBAY case18 is yet another example of the strict requirements regarding evidence in opposition proceedings, and how even the famous must follow the same rules as the rest of us. The case also demonstrates how little regard is had for Australian decisions in NZ.
Basically, eBay opposed Mediabay Marketplace's application to register the Mediabay logo shown below, in classes 35 and 42.
eBay had been successful in Australia and Europe, and reference those decisions to support its case in New Zealand. Neither decision was given any weight or oxygen in NZ.
eBay relied upon its reputation in the EBAY mark and related marks, using both good old s17 (reverse onus), passing off (s17(1)(b), reference to its earlier TM registrations and that as EBAY is well-known, use of the opposed mark is likely to prejudice eBay (s25(b) and (c) respectively.
Let's cut to the chase. eBay failed. Whilst it is not clear that a different outcome would have been reached with better targeted evidence, this appears at least likely.
The Assistant Commissioner's key observations are:
- "There are a number of aspects of eBay's evidence where I am left to fill in gaps or make assumptions about the significance of the evidence. There is only so far I can go in drawing inferences from the evidence a party files. I cannot substitute any personal knowledge I may have for factual matters a party needs to establish.
- Evidence directly related to the New Zealand market or from someone with New Zealand knowledge will assist an overseas party seeking to establish a reputation for a New Zealand proceeding.
- Given the asserted use and reputation of the eBay trade marks and the apparent size and resources of eBay, it should have been a straightforward task and a mere formality to put together evidence of a relevant reputation in New Zealand. It is not necessary for an opponent to file a copious volume of evidence. The evidence should be targeted to the issue or fact needing to be addressed."19
HOT CHIPS - Foreign brand owners may need to be counselled that simply filing encyclopedias of untargeted evidence will undermine their position in New Zealand. This case is simply one of many that demonstrates how important it is to target and shape to establish the relevant opposition grounds in NZ.
2. Sexwax Inc v Zoggs International Ltd  NZCA 311,  2 NZLR 1 at .)
3. Dr August Wolff GmbH & Co KG Arznzeimittel v Combe International Ltd  FCA 39, At -.
4. Beiersdorf AG v Unilever Plc  NZHC 44 at 
5. Dr August Wolff GmbH & Co KG Arznzeimittel v Combe International Ltd, op cit at [58-59]
6. Dr August Wolff GmbH & Co KG Arznzeimittel v Combe International Ltd, op cit at , citing Anheuser-Busch Inc v Budweiser Budvar National Corp  1 NZLR 472 (CA) at 
7. Pharmazen Limited v Anagenix IP Limited  NZCA 306 at 
8. Ibid, at 
9. Reg 108(2), Trade Mark Regulations 2003
10. Le Hoang Diep Thao v Cong Ty Co Phan Dau Tu Trung Nguyen  NZIPOTM 15, at 42.
11. Ibid, at 
12. Ibid, at
13. Ibid, at 
14. Ibid, at 
15. Zhu Hong v The New Zealand Way Limited  NZIPOTM 14, at 
16. Ibid, at .
17. Ibid, at 51-62: http://www.nzlii.org/cgi-bin/download.cgi/cgi-bin/download.cgi/download/nz/cases/NZIPOTM/2020/14.pdf
18. Mediabay Marketplace Pte Ltd v eBay Inc  NZIPOTM 8
19. Mediabay Marketplace Pte Ltd v eBay Inc  NZIPOTM 8 at 57-60
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.