Australia: Tasman Insulation New Zealand Limited v Knauf Insulation Limited [2015] 3 NZLR 145; (2015) 116 IPR 352; [2015] NZCA 602

Last Updated: 11 February 2017
Article by Michael Deacon and Chris Bevitt

The Parties

Tasman Insulation New Zealand Limited (Tasman Insulation) is the registered trade mark owner. Knauf Insulation Limited (Knauf) is the alleged infringer of the trade mark. In response to the infringement claim, Knauf sought to revoke registration of the trade mark on the basis that it had become generic and was not being used by Tasman Insulation as a trade mark. This New Zealand Court of Appeal judgment (Randerson, French and Cooper JJ) relates to appeals by both parties from various aspects of the earlier High Court judgment of Brown J in this case.

Note that unlike in Australia, New Zealand's High Court is not the court of final recourse. The New Zealand Supreme Court performs that function.

The Trade Mark

The New Zealand trade mark in issue was BATTS (No. 105507), registered in class 17 for "insulating materials".

Background and Issues

Tasman Insulation has been the owner of the New Zealand trade mark registration for BATTS in respect of insulating materials since 1973. Knauf was importing into New Zealand insulation products under the primary brand "Earthwool", but was also using "batts" on its product packaging, labels, instructions and in the HTML code for an image on its website relating to the products.

Tasman Insulation claimed that Knauf's use of "batts" for its insulation products and in the HTML code infringed Tasman Insulation's BATTS trade mark. In response, Knauf applied to revoke Tasman Insulation's BATTS trade mark registration on the basis that "batts" had become generic in New Zealand and Tasman Insulation was not using "batts" as a trade mark. Knauf also sought to defend the trade mark infringement claim by asserting that it had not used "batts" as a trade mark but had used the name honestly and merely to describe the nature or quality of its products.

Both parties also made claims under the Fair Trading Act 1986 (NZ), including in relation to misleading and deceptive conduct, but those claims are not discussed here.

Previous Decision

Revocation – generecism and non-use

Section 66(1)(c) of the Trade Marks Act 2002 (NZ) provides that a trade mark may be revoked for becoming generic only if it has become a common name in general public use for the relevant goods or services as a result of the trade mark owner's acts or inactivity. Justice Brown confirmed that the applicant carries a heavy burden of proof in order to establish not only that the mark has become a common name but has done so as a result of its owner's acts or inactivity.

For the purposes of section 66(1)(c), "acts" include positive acts to protect the trade mark or encourage its use by others as a trade mark while "inactivity" includes a failure to take measures to protect the mark. Importantly, Brown J noted that inactivity must be considered by reference to unauthorised trade mark use by others. For example, a failure to act in response to descriptive use of a mark by a third party that would not infringe the trade mark would not amount to inactivity because the trade mark owner would not be legally entitled to take action against such use.

The evidence showed that third parties had been using "batts" descriptively. However, the evidence also showed that Tasman Insulation had taken a number of positive steps in connection with protecting BATTS, managing its use as a trade mark by others and/or indicating that it was being used as a trade mark, including: (i) using ® with BATTS; (ii) using BATTS® as an adjective in advertising materials to indicate the origin of its insulating materials (being use as a trade mark); (iii) issuing branding style guides to control use of the mark, including by requiring the mark to be used as an adjective only and encouraging its use with an already generic name such as "product" or "insulation"; (iv) notifying customers in writing of its trade mark rights in connection with BATTS; and (v) taking action for infringement in some cases.

Considering that Tasman Insulation was not obliged to take action against descriptive use of "batts" by others and that Tasman Insulation had been taking positive steps to protect its BATTS trade mark registration, Brown J held that Knauf had failed to prove that "batts" had become a common name as a result of Tasman Insulation's acts or inactivity. In any case, Brown J was not convinced that "batts" had become generic based on the evidence before him.

Justice Brown also held that the evidence showed Tasman Insulation had used "batts" as a trade mark.

As a result, Knauf failed in its bid to revoke Tasman Insulation's BATTS trade mark registration.

Infringement

Justice Brown held that the use of "batts" by Knauf on its product packaging, labels and instructions was not use as a trade mark and therefore did not infringe Tasman Insulation's BATTS trade mark. Noting that Knauf had been using "batts" in lower case without any other distinctive features and taking into account all the circumstances surrounding its use, including the additional "Earthwool" branding, the nature of the market and customers of insulation products, Brown J considered that the relevant public would view Knauf's use of "batts" as describing its products rather than as a trade mark indicating the source or origin of the products.

However, Brown J held that Knauf's use of "batts" in the HTML code was use as a trade mark which infringed Tasman Insulation's BATTS trade mark. In that instance, "batts" would be visible to relevant internet users in a manner which did not simply describe the products but rather acted to identify the source of the products on the website. Knauf's defence that it was merely using "batts" honestly to describe its products failed, with Brown J deciding that "batts" had been used with the intention of diverting consumers to Knauf's website.

The Decision

The Court of Appeal upheld all aspects of the High Court's decision except for the finding that Knauf's use of "batts" in the HTML code infringed Tasman Insulation's BATTS trade mark. Instead, the Court of Appeal took the view that use of "batts" in the HTML code did not amount to use as a trade mark and therefore could not be infringing use, primarily on the basis that HTML code would appear random to consumers and would not convey the meaning necessary for "batts" to operate as a trade mark or be recognised in that manner by consumers.

As a result, both the revocation actions by Knauf and the infringement actions by Tasman Insulation were ultimately dismissed.

The Significance

This case reinforces well-understood principles that a trade mark owner with a trade mark which is at risk of becoming generic must actively manage its own use of the trade mark and use by distributors and customers, and also actively defend the trade mark against infringement. Somewhat ironically, such infringement action by Tasman Insulation in this case was to no avail due to the Court's finding that Knauf's use was not use as a trade mark.

Read full Tasman Insulation v Knauf judgment

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 ranked one of Australia's leading Intellectual Property firms in 2015.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Corrs Chambers Westgarth
Pointon Partners
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Corrs Chambers Westgarth
Pointon Partners
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions