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:
- Nothing but strong evidence of confusion will suffice in a New Zealand spillover reputation case
- Are brochures "use" of a trade mark?
- What about "special circumstances" - the Cidirol case?
- IPONZ restricts narrowly again and provides a good overview of its position
- New Zealand's highest court find that "zombies" do exist in New Zealand after all
Nothing but strong evidence of confusion will suffice in a New Zealand spillover reputation case
Kiwi Fresh Orange Company Limited v Monde Nissin (Australia) Pty Ltd  NZIPOTM 26 (30 November 2020)1 demonstrates that reliance upon "spillover" reputation alone can be a risky proposition for foreign brand owners in New Zealand trade mark opposition proceedings. The case demonstrates the benefit of registering secondary trade marks such as slogans in New Zealand and also provides an outstanding overview and summary of New Zealand's unique reverse-onus trade mark opposition ground.
Kiwi Fresh Orange Company Limited (Kiwi Fresh) applied to register its word mark GROVE NOTHING BUT and its stylised GROVE "NOTHING BUT" logo shown below, in classes 31 and 32. Monde Nissin (Australia) Pty Ltd (Monde Nissin) opposed registration of both marks, based upon its reputation in its trade marks NOTHING BUT and NUDIE NOTHING BUT.
New Zealand's "reverse onus" opposition ground and the limits of spillover reputation
The key ground which Monde Nissin relied upon is a favourite in New Zealand opposition proceedings, namely that the "Commissioner must not register as a trade mark or part of a trade mark any matter... the use of which would be likely to deceive or cause confusion" (aka s17(1)(a), Trade Marks Act 2002). As we have reported on numerous occasions, this has a unique reverse onus, which favours the Opponent strongly. The Opponent need only establish an "awareness" in its trade mark in New Zealand before the onus shifts to the Applicant to prove a negative - that is, that use of its trade mark is not likely to deceive or cause confusion.
The bar for an Opponent to establish "awareness" in New Zealand is relatively low, and much less than that required to establish a case of passing off or that the opponent's mark is "well-known" in New Zealand. To quote the Assistant Commissioner, "the Opponent only needs to show awareness, cognisance or knowledge of the [Opponent's] mark"2.
Most of the Opponent's evidence regarding its use of NOTHING BUT in New Zealand was discounted quickly by the Assistant Commissioner. However the Opponent then moves on to assert that its reputation in its NOTHING BUT trade mark in Australia is such that that reputation "spilled over" into New Zealand.
The Assistant Commissioner agreed that such spillover reputation exists and can establish the necessary "awareness" in a trade mark in New Zealand, citing cases such as Valley Girl Co. Ltd v Hanama Collection Pty Ltd3 and Stefanel Next Pty Ltd v Next Retail Limited4. Monde Nissin provided relevant travel statistics for travellers between New Zealand and Australia between 2010. Whilst it did not provide evidence of New Zealanders visiting stores which stock Monde Nissins's NUDIE NOTHING BUT-branded products, this was not considered a bar to establish spillover reputation - consistent with Valley Girl and Stefanel Next5. Assistant Commissioner Alley concluded that "at least some New Zealand travellers to Australia would be exposed to goods bearing the Opponent's NOTHING BUT marks given that they were available in a large number of places that were likely to be visited by tourists, including cafes, casual restaurants, quants lounges and supermarkets6.
A critical issue for Monde Nissin was that most of its use, reputation and evidence related primarily to its primary brand NUDIE. Assistant Commissioner Alley concluded that "on the evidence before me, the NOTHING BUT mark mainly functions as a secondary brand to NUDIE. I consider that the strength of the reputation for the Opponent's NOTHING BUT mark is somewhat diminished by its use in close association with the primary, and far more distinctive, mark NUDIE"7. In other words, whilst Monde Nissin met its onus of establishing awareness in the trade mark NOTHING BUT this was considered to be "by a very narrow margin" leading the Assistant Commissioner conclude that "this low level of awareness will be relevant to the assessment of likely deception or confusion"8.
Establishing "awareness" is not black and white in New Zealand
Assistant Commissioner Alley's comments came back to haunt Monde Nissin, providing a very important and clear warning to trade mark Opponents regarding New Zealand's "reverse onus" opposition ground. Specifically, the level of awareness that an Opponent can establish in its trade mark in New Zealand impacts directly upon the likelihood of confusion which the Applicant must address. If kiwi consumers' awareness of the Opponent's trade mark in New Zealand is relatively low (whilst still meeting the requisite threshold), then this will impact directly upon an assessment as to whether the Applicant's use of its mark will be likely to deceive or cause confusion.
Should Australia and New Zealand be treated as a single market?
Monde Nissin submitted that Australia and New Zealand should be treated as a single market when assessing intellectual property rights. In so doing it relied upon the High Court case of Muzz Buzz Franchising Pty Ltd v JB Holdings (2010) Ltd9. In this case, Toogood J stated that "in 2013 it can hardly be doubted that New Zealand and Australia may, for the purpose of enforcing intellectual property rights, be regarded as "one market"10. In this case Assistant Commissioner Alley was keen to pour cold water on the notion that the two countries do operate in a single market, referring to the Court of Appeal's judgement in Sexwax Incorporated v Zoggs International Limited11, which chose not to refer to the Muzz Buzz case and indicated that the Opponent's mark must have a reputation in New Zealand. AC Alley also went on to refer to the recent High Court decision in Dr August Wolff GmbH & Co. KG v Combe International Limited  NZHC1679, where Gault J dismissed the significance of a successful registration or opposition elsewhere unless there is a clear evidentiary link to circumstances in New Zealand, before dismissing any factual similarity between Muzz Buzz and the present case (Para 59-62).
In light of the aforementioned Sexwax and August Wolff cases, along with Assistant Commissioner Alley's measured but comprehensive tone in this and other decisions, it would be a brave Opponent who tries to rely too much on a bold assertion that Australia and New Zealand should be considered as one, when attempting to assert intellectual property rights.
Is GROVE NOTHING BUT going to be confused with NOTHING BUT?
Assistant Commissioner Alley referred to the standard stable of cases to assess whether or not Kiwi Fresh's GROVE NOTHING BUT (word mark or logo) would be confused with the Opponent's NOTHING BUT trade mark. The Assistant Commissioner studiously and carefully referred to these cases but was careful not to rely upon any of them exclusively, before concluding that the dominant element of the word mark GROVE NOTHING BUT is GROVE, as GROVE is a standalone word at the beginning of the mark and slightly more distinctive than the subsequent words which combine to form the phrase "NOTHING BUT", also being conscious "that the marks must be considered in their entirety so that the overall or net impression of the marks is taken into account. I have been careful to view the respective marks as a whole rather than comparing their constituent parts in isolation"12. This led the Assistant Commissioner to conclude that the visual and aural similarity between the word mark and NOTHING BUT is reasonably limited, and even less so for Kiwi Fresh's GROVE NOTHING BUT logo.
The Assistant Commissioner also considered the overall idea of the respective marks GROVE NOTHING BUT and NOTHING BUT, concluding that "NOTHING BUT" in Kiwi Fresh's GROVE NOTHING BUT mark share some conceptual similarities but are differentiated by the idea of "GROVE".
After a very careful and comprehensive analysis, Assistant Commissioner Alley concluded that there was not the requisite likelihood of confusion necessary for Monde Nissin to succeed in this opposition ground. In reaching this conclusion, the Assistant Commissioner provided as succinct and helpful analysis as I have ever seen on this opposition ground. Rather than getting tied up in knots she has sailed around the leading cases with more precision than an America's Cup catamaran before moving away deftly on her foils (to extend the oblique reference to the America's Cup) to provide ten key comments which attorneys and students would do well to note, when considering this unique "reverse onus" opposition ground:
- "The test of likelihood of deception or confusion does not require that all persons in the market are likely to be deceived or confused.
- The stronger the reputation, the greater the likelihood of deception or confusion.
- The more distinctive the earlier mark, the greater the likelihood of confusion.
- [whilst IPONZ considered Monde Nissins's subsequent trade mark application no.1036573 for NOTHING BUT was sufficiently "inherently distinctive"], the Assistant Commissioner "still consider(s) that the opponent's marks are at the lower end of the distinctiveness spectrum, particularly for the NOTHING BUT mark. It is a simple English phrase, comprising ordinary words, which are somewhat descriptive in the context of the opponent's juice products.
- None of the opponent's marks contain invented words. In my view, the distinctiveness of the opponent's marks is not such that it increases the likelihood of confusion.
- The opponent submits the applicant has not filed any compelling evidence to suggest it is not reasonably probable that the public will be deceived or confused.... The opponent also points to the absence of independent evidence from industry or the general public. However, in New Zealand Breweries v Heineken's Turner J held that when assessing the likelihood of confusion "It is for the Court to decide the question of fact as a matter of impression, having due regard ... to any evidence which has been produced. But the question is not one to be decided upon the opinion of the witnesses. It is a matter for the Judge.
- Likewise, the commentary in Kerly's Law of Trade Marks and Trade Names recognises that the question of likelihood of deception or confusion is one for the court, not the witnesses.
- The applicant observes that the opponent has not provided any evidence of actual confusion. However, assessing the likelihood of confusion is an abstract exercise and does not depend on whether anyone has in practice been confused
- or deceived. Therefore, the absence of evidence of confusion in the present case is in no way determinative.
- The relevant goods are sold to the general public for consumption or domestic use, and therefore I am entitled to take into account my own experience when considering whether purchasers are likely to be deceived or confused."13
What about Monde Nissin's other Opposition Grounds?
Monde Nissin also asserted that Kiwi Fresh's use of its mark would contravene Monde Nissin's common law rights or be contrary to law. However as the onus for these grounds is much higher than that required for the "reverse onus" section 17 ground, this was not made out.
Monde Nissin also tried to assert that Kiwi Fresh had acted in bad faith in seeking registration of this trade mark. Essentially, Monde Nissin asserted that Kiwi Fresh had intentionally adopted the "opposed marks" with knowledge of the Opponent's extensive prior use of NOTHING BUT in Australia. The Assistant Commissioner dismissed this ground, noting that even if Kiwi Fresh knew of Monde Nissin's extensive use of NOTHING BUT, this did not objectively fall short of reasonable standards of commercial behaviour (in seeking to register the Opposed Trade Marks).
NOTHING BUT a good case for attorney's and brand owners
It will provide little comfort to Monde Nissin, but this decision provides brand owners, IP Students and attorneys with a very solid demonstration of both the strengths and pitfalls in relying upon New Zealand's unique reverse onus opposition ground under section 17 of its Trade Marks Act.
A key point for Australian and overseas brand owners is that, rather than demanding that Australia and New Zealand should be considered to be a single market when assessing intellectual property rights, brand owners would save much time, anguish and frustration if they simply registered all of their brands (including secondary brands such as slogans) in both Australia and New Zealand at the outset. That said, if all brand owners behaved that way than Australian and New Zealand attorneys would perhaps have much less to talk about...
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2. Para 19
3. (CIV 2004-485-2005)
4.  NZIPOTM15
5. Para 37
6. Para 39
7. Para 51
8. Para 52
9.  NZHC1599
10. Para 85
11.  NZCA311; (2014) 109IPR131
12. Paragraphs 80, 81
13. Para 105 -112
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.