A brand owner has been forced to disclaim the words in its trade mark and restrict the scope of its trade mark application significantly in the New Zealand trade mark opposition, Flujo Sanguineo Holdings Pty Ltd v Merisant Australia Pty Ltd and Merisant Company 2 SARL, [2021] NZIPOTM 11 (1 June 2021). This case is interesting as trade mark disclaimers are no longer required in New Zealand. It also provides a warning to brand owners (and their attorneys) who seek broad coverage when applying to register a trade mark in New Zealand.
Flujo Sanguieno applied to register the composite trade mark shown above in relation to a very broad range of goods in class 30 – extending from coffee to mustard, vinegar, chocolate and everything in between "including natural sweeteners, sweeteners, natural sweetening substances, sugar substitutes" (key goods). Merisant Australia Pty Ltd opposed registration of the mark, which led Assistant Commissioner Nigel Robb (AC Robb) to consider the role of disclaimers in New Zealand, as they have not been required under New Zealand Trade Mark law for almost twenty years.
What are disclaimers and where do they sit in New Zealand trade mark law?
AC Robb summarises disclaimers and their role in New Zealand1 very clearly, noting that:
- "Disclaimers are statements on the Register that disclaim exclusivity to elements of the trade mark, for example descriptive words"'2
- "Disclaimers may be entered either by the trade mark Applicant (i.e., to address an opposition) or as required by the Commissioner if necessary in the public interest"3
- "The disclaimed part of a trade mark is not ignored in the infringement context. It remains part of the identity as a whole. [However]... the mere use of a disclaimed part by a third party will not amount to infringement"4
What did Merisant want Flujo to disclaim?
Flujo's composite mark comprises numerous graphic images and two phrases:
- "the 100% NATURAL Sweetener"
- "Natural like sugar – only better"
Should these phrases be disclaimed, even though each only comprises a small part of the overall trade mark?
AC Robb thought so, noting that:
"The phrases are the dominant aural features of the trade mark. Visually the phrases play prominent parts of the getup of the trade mark. Similarly the ideas conveyed by the phrases are the dominant conceptual parts of the trade mark. I think the phrases are sufficiently prominent to raise questions about what extent the registration gives rights in the phrases"5.
AC Robb held that each phrase should be disclaimed, for three reasons:
- Each is strongly inherently descriptive;
- Each is prominent in the trade mark as a whole; and
- Flujo was reluctant to acknowledge that the phrases are non-distinctive.
This is really interesting as it seems that Flujo may have dug its own grave, by refusing to state on the public record that the phrases are non-distinctive. In this context AC Robb noted that there is public interest in clarifying the extent of rights in descriptive or non-distinctive parts of a trade mark and that the public (including other brand owners) "should not need to look for defences to use of non-distinctive words or features of a registration"6.
The scope of Flujo's Application also goes on a diet
Section 32(2) of the Trade Marks Act prohibits registration of a trade mark in respect of all goods/services in a class "or a large variety of goods or services, unless the specification is justified by the use or intended use of the sign".
AC Robb considered that the broad range of goods covered by the application "has strayed beyond what Flujo, based on the evidence, can be reasonably be said to intend to use the mark on"7, allowing registration only if the specification of goods were restricted to the key goods identified above.
Is this a "sweet" outcome for brand owners?
Not really. Merisant was very clever in this case, which gave rise to a decision that seems both prudent and reasonable. However, brand owners and their attorneys should remember this case, particularly if fighting international branding disputes. This outcome is one in which the Applicant's statutory rights were restricted significantly – not by an Opponent's prior rights or reputation, but simply by savvy legal arguments.
Footnotes
1. Para 34-49
2. Para 24
3. Para 35, and sections 69 and 71, Trade Marks Act 2002
4. Para 41
5. Paras 79, 80
6. Para 72 citing Australian Vintage Ltd v Barossa Valley Estate Pty Ltd [2018] NZIPOTM29
7. Para 94
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.
