Tasman Insulation New Zealand Ltd v Knauf Insulation
Ltd  NZHC 960
When has a trade mark becoming generic?
Was a website metatag used as a trade mark?
T was the owner of BATTS for insulating materials in class 17
since 1973. (T also owns PINK BATTS.)
K imported insulation materials under the EARTHWOOL name which
contained references to "batts" on the packaging and
label. The word was also included as a metatag in a website
operated by another defendant.
T commenced action against K and others claiming infringement of
its mark. K sought revocation of T's mark on the grounds that
it had become generic (s 66(1)(c)) or that T had ceased to use the
mark (s 66(1)(a)). K also asserted by way of defence under s 95(c)
of the Act that it used "batts" in an honest practice to
indicate the kind, purpose or characteristics of goods, and
therefore no infringement occurred.
T and K made various claims against the other for breach of the
Fair Trading Act 1986 (not discussed).
COURT DECISION AND REASONING
Non-use: Even a second or third level sub-brand can function as
a trade mark. T had used BATTS® as an adjective in advertising
and brochures to indicate source or origin (that is, trade mark
use) including as part of the trade mark PINK BATTS. K's
non-use claim failed.
Genericism: An applicant asserting that a mark has become
generic bears heavy burdens of proof firstly that the descriptive
use is widespread and secondly, that such use has arisen from the
owner's acts or inactivity. While the defendants produced
evidence of apparently descriptive use, they had simply assumed it
to be descriptive use without properly demonstrating their claim.
On the quality and quantity of evidence before it, the Court was
not satisfied that the level of descriptive use was sufficient to
justify a finding of genericity. T was not responsible for
descriptive use by others. Inactivity of the owner (T) could only
be assessed by reference to unauthorised trade mark use by
unrelated parties. The evidence did not establish a sufficient
level of positive acts or inactivity by T to establish the
necessary causal element (even if the Court had found that the mark
had become generic, which it did not).
Infringement: Assessing infringement involves considering the
normal meaning of the word, how it was used, the nature of the
market, the types of consumers and general market considerations.
The packaging and label use by K and other defendants involved the
word "batts" in lower case without any distinguishing
features. The public would not see this as trade mark use but
rather descriptive use and therefore no infringement occurred
(however such use breached the Fair Trading Act 1986). The use as a
metatag was trade mark use and therefore infringing. Although the
use was invisible to most website users, it would be visible to an
informed internet user. An injunction was granted to restrain this
K's s 95 defence: None of the use conveyed information about
the kind, purpose or characteristics of the goods and accordingly
the defence was not available. (The defence was not required in
relation to most of the use given the court's finding that
there was no trade mark use.) The metatag use was not honest being
solely to divert customers to the defendant. The defence was
accordingly not available.
Both parties have appealed.
The bar to establish that a mark has become generic is set high
given the NZ owner action/inactivity element.
Use of a competitor's mark in a metatag can be trade mark
use even though the use is invisible to most.
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.
Shelston IP has been awarded the MIP Global Award for
Australian IP Firm of the Year 2013.
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