IP Round-up: Recent decisions from the Court
New Zealand Intellectual Property Journal (NZ)

Dr Rob Batty, Associate Professor, University of Auckland

Manuka Doctor Ltd v Hill

[2024] NZHC 766

In this case, the High Court dismissed an appeal from a decision of the Assistant Commissioner who had found an opposition to registration of the trade mark MANUKA MEDIC unsuccessful.¹ Rory Hill had applied to register MANUKA MEDIC in Class 1, covering “botanical extracts, other than essential oils, for use in making cosmetics and in Class 3, covering “aromatic essential oils”. The Intellectual Property Office accepted the application. The application was subsequently opposed by Manuka Doctor Ltd. Manuka Doctor Ltd relied upon three grounds of opposition — ss 25(1)(b), 17(1)(a) and 25(1)(c).

The appeal centred on s 25(1)(b). Radich J agreed with the Assistant Commissioner that there was no reasonable likelihood of confusion by Hill’s use of MANUKA MEDIC for the goods covered by his application. Accordingly, the appeal was dismissed.

The similarity of the goods

Manuka Doctor Ltd, in its s 25(1)(b) ground of opposition, primarily relied upon its existing trade mark registration for MANUKA DOCTOR in Class 3 and Class 5. The specification for Class 3 of this registration included the goods “cosmetics; soaps” and “non-medical skincare products and preparations”. The specification for Class 5 of the registration included the goods “skincare products and preparations”. The Assistant Commissioner found that Mr Hill’s goods in Class 3 were similar to such goods. However, the Assistant Commissioner found Mr Hill’s goods in Class 1 were not similar.

On appeal, Manuka Doctor Ltd argued that the Assistant Commissioner had erred on the similarity of goods point. Radich J agreed. The Judge found that “botanical extracts” in Class 1 of Mr Hill’s application were similar goods to those goods covered in the MANUKA DOCTOR registration, observing they “have the same characteristics — they either are, or contain, botanical extracts”.² This finding was supported by case law, which had also found that “certain goods, as ingredients,” were similar to goods or services “which use or integrate them”.³

The similarity of the marks

The judgment recorded that there was some debate about the Assistant Commissioner’s precise finding on the similarity of the marks. On balance, it appeared that the Assistant Commissioner considered that MANUKA MEDIC and MANUKA DOCTOR were similar.⁴ Manuka Doctor Ltd did not challenge this finding of the Assistant Commissioner but disagreed with elements of the reasoning.⁵ By contrast, Mr Hill’s counsel argued that the shared “manuka” element had a low level of distinctiveness and, therefore, the similarity inquiry ought to focus on the difference between the “doctor” and “medic” elements. These were said to be quite different.⁶

Radich J agreed that the elements “doctor” and “medic” were quite different.⁷ The words looked and sounded different. The Judge also accepted the point made by Mr Hill that there ought not to be de facto ownership over a name that incorporates a common plant and the “notion that it brings health benefits, as might a health professional”.⁸ Radich J said:⁹

The Court should in my view be slow to conclude that there could be similarities in those circumstances to such an extent as to enable exclusivity for Manuka Doctor over any name that combines a reference to mānuka with a reference to health benefits or a provider of health benefits.

The Judge concluded that the marks were not similar for the purposes of s 25(1)(b).¹⁰

Likelihood of confusion

Radich J went on to consider whether the use of MANUKA MEDIC would be likely to deceive or confuse (but see my comments below). In this section of the judgment, the Judge referred to distinctiveness in influencing the assessment of likelihood of confusion, and the role of imperfect recollection. Drawing on Brands Ltd v Bed Bath ‘N’ Table Pty Ltd, Radich J observed that the more descriptive a mark, the less likely that an average consumer would draw a connection with it and the mark of another party.¹¹ Imperfect recollection was relevant as the respective products would not always be found next to each other.¹²

The judgment recorded the arguments of Manuka Doctor Ltd that there could be several scenarios where the use of MANUKA MEDIC could lead to confusion. For example, a teenager who has seen an advertisement for a MANUKA DOCTOR product may be confused when they see an acne essential oil cleanser branded MANUKA MEDIC in a health store. However, for Radich J, such scenarios were “premised on consumers recalling only the manuka element of the mark together with a reference to a health practitioner”.¹³ Average consumers with imperfect recall would focus on the distinctive rather than the descriptive elements. Accordingly, such consumers would not “think that all things ‘mānuka medical’ stem from the same source”.¹⁴ Radich J accordingly held there would be no likelihood of confusion.

Section 17(1)(a)

Radich J briefly considered the s 17(1)(a) ground of opposition. Mr Hill accepted that Manuka Doctor Ltd had a reputation associated with MANUKA DOCTOR in New Zealand at the relevant date. However, for the same reasons that disposed of the s 25(1)(b) ground, Radich J was satisfied Mr Hill could establish that there would be no likelihood of confusion caused by the use of his mark in light of the reputation associated with MANUKA DOCTOR.¹⁵

Comment

The case may serve as a further reminder of the risk of traders adopting trade marks with descriptive features.¹⁶ As Ellis J remarked in Brands Ltd — echoing longstanding judicial authority — the use in another mark of the same descriptive feature lessens the risk that consumers will be confused (even though there may be a degree of similarity between the marks).¹⁷

At a more general level, the case perhaps highlights the need for further appellant judicial guidance on the nature of the s 25(1)(b) inquiry. A leading case on s 25(1)(b) — NV Sumatra Tobacco Trading Co v New Zealand Milk Brands Ltd (and one cited in the judgment) — suggests a step-by-step or sequential approach to s 25(1)(b).¹⁸ That is, first, an adjudicator must assess whether there is similarity between the goods or services covered by the trade mark applicant’s application and the earlier registration, and “if so”, then consider if the marks are similar. If so, the adjudicator must finally consider whether use of the mark applied for would be likely to deceive or confuse.¹⁹ A structured “step-by-step” approach is favoured in Singapore in relation to the equivalent provision.²⁰

However, Radich J, at [16], appeared to favour a more holistic approach to the assessment of whether s 25(1)(b) prohibited registration, observing that the similarity of marks, goods/services and a likelihood of confusion inquiries are interrelated and “have a global flavour”.²¹ A global approach is taken in the United Kingdom and in Europe. Under this approach:²²

... the elements of similarity between marks and goods or services, whilst still necessary ingredients in the confusion inquiry, are elided with other factors going towards the ultimate question of whether there is a likelihood of confusion.

Moreover, the Court of Justice of the European Union has said there can be interdependence between similarity of marks and similarity of goods or services, meaning “a lesser degree of similarity between these goods or services may be offset by a greater degree of similarity between the marks, and vice versa”.²³ The application of this global approach has, in turn, introduced some debate as to whether there is a threshold of similarity between marks and goods/services that needs to be met before a likelihood of confusion can be assessed.²⁴

I agree with Wylie J that in the majority of cases, differences between the step-by-step and the global approaches may be largely a matter of semantics and will typically not affect the outcomes of cases.²⁵ However, further appellant guidance on s 25(1)(b) may address some practical concerns. My main practical concern is that some decisions of the Intellectual Property Office of New Zealand (IPONZ) and the courts appear to be structurally “messy”. This is because, historically, the leading test for similarity of marks has been one of “confusing similarity”.

Re Application by Pianotist Co Ltd, where this test was articulated by Parker J, calls for an adjudicator to consider the look and sound of the marks and “all the surrounding circumstances”.²⁶ Even the very useful reformulation of the test of similarity under s 25(1)(b) in Pharmazen Ltd v Anagenix IP Ltd emphasises consideration of extraneous or external factors that go beyond the inherent resemblance of the marks, such as the imperfect recollection of consumers and the usual circumstances of trade relevant to the goods or services at issue.²⁷

Some cases tend to show that when this test of confusing similarity is applied, and the questions of similarity of marks and a likelihood of confusion are separated out, there can be overlaps and repetition in the analysis. For example, in Geneva Marketing (1998) Ltd v Johnson & Johnson (though, an infringement case), the Court of Appeal identified a general factor suggesting a likelihood of confusion was the phonetic, visual and conceptual similarity of the marks.²⁸ This case was applied and followed in Vec Ltd v Vapeman NZ Ltd. ²⁹ As a result, similarity — primarily visual and phonetic similarity — was considered twice.³⁰ In Freightways Express Ltd v Palletline (NZ) Ltd, the question of similarity was addressed having regard to various principles, like the look and sound of the relevant marks, imperfect recollection and the dominant and distinctive elements of the relevant marks.³¹ Some of this analysis was then repeated, and indeed, Pianotist was cited and applied when considering a likelihood of confusion.³²

In the present case, Radich J referred to imperfect recollection when considering the similarity of the marks,³³ and also when considering a likelihood of confusion.³⁴ The Judge, though, placed weight on the distinctiveness of the earlier mark (or elements of the earlier mark) at the likelihood of confusion stage.³⁵ Ultimately, the nature of such analysis was not problematic in the sense of reaching the wrong result. However, it may be useful for further guidance as to the appropriate nature and order of the inquiry under s 25(1)(b). For example, if a structured approach to s 25(1)(b) is followed (albeit one with a “global flavour”), it may be that factors extraneous to the inherent resemblance of the marks but which go to the impact of that resemblance on the minds of the average consumer — like the imperfect recollection of consumers, the normal way consumers would select or purchase the goods or services at issue, and the distinctiveness of the earlier mark³⁶ — are best addressed at the likelihood of confusion stage of analysis.³⁷

Siasi Uesiliana Tau’Ataina ‘O Tonga ‘I Nu’Usila Trust Board v Free Wesleyan Church of Tonga in New Zealand Trust Board

[2024] NZHC 1725

In a judgment issued on 27 June 2024, Isac J dismissed an appeal from a decision of Assistant Commissioner Alley declaring a trade mark registration owned by the Siasi Uesiliana Tau’Ataina ‘O Tonga ‘I Nu’ Usila Trust Board (the Appellant) invalid.³⁸ The Appellant had successfully registered SIASI UESILIANA TAU’ATAINA ‘O TONGA ‘I NU’ USILA as a trade mark with a deemed date of registration of 28 August 2013. The Free Wesleyan Church of Tonga in New Zealand Trust Board (the Respondent) subsequently applied to invalidate the registration.

The Appellant’s mark (referred to in the judgment as the “Tongan Language Mark”), when translated to English, is “the Free Wesleyan Church of Tonga in New Zealand”. Before Isac J, the appeal centred on two grounds. First, whether the Assistant Commissioner was correct to find that registration of the Tongan Language Mark was prohibited by s 17(1)(a) of the Trade Marks Act 2002 (2002 Act) at the relevant date of 28 August 2013. Second, whether the Assistant Commissioner was correct to find that under s 32(1) of the 2002 Act, the Appellant was not the legitimate owner of the Tongan Language Mark at the relevant date.

Background

In 1984, Siasi Uesiliana Tau’Ataina ‘O Tonga ‘I Nu’ Usila was established in New Zealand. Two charitable trusts were incorporated under the Charitable Trusts Act 1957 for the Respondent. One trust used a shortened version of the Tongan Language mark, “Siasi Uesiliana Tauataina O Tonga Trust Board”. This name was later changed to the full Tongan Language Mark. The other trust used a variant of the Tongan Language Mark, “Siasi Uesiliana Tauataina O Tonga”.

In 1994, the Respondent chose to change its name on official documentation from Tongan to English. The second trust became the Free Wesleyan Church of Tonga in New Zealand (English Language Mark).

The duplication of these trusts was a mistake. Despite the name change, though, both trusts continued to be separately incorporated. However, in 2013, the Respondent wrote to the Registrar of Incorporated Societies suggesting the trusts be merged. This was done, and the Respondent continued as the Free Wesleyan Church of Tonga in New Zealand Trust Board. The 2013 decision to change the name from Tongan to English was confirmed by the Respondent by way of a rule change.³⁹ However, this change and other issues “caused a schism within the New Zealand congregation”.⁴⁰ Mr Tonga and other persons, dissatisfied with the change of name and the “removal” of the “second” trust, registered a new charitable trust under the name Siasi Uesiliana Tau’Ataina ‘O Tonga ‘I Nu’ Usila. Mr Tonga then organised for this trust to apply to register SIASI UESILIANA TAU’ATAINA ‘O TONGA ‘I NU’ USILA to “protect it from third parties”.⁴¹ When this came to light, Mr Tonga and another person were excommunicated, and another church was started using the Tongan Language Mark.

The s 17(1)(a) ground

The Appellant raised several challenges to the Assistant Commissioner’s decision in relation to the s 17(1)(a) ground. These included both pleadings and evidence points. However, Isac J was:⁴²

... clearly satisfied that not only was the conclusion reached by the Assistant Commissioner on the risk of confusion open to her on the evidence and pleadings, it was also the correct decision.

The Appellant argued that the Respondent’s evidence had not established a reputation associated with the Tongan Language Mark. However, there was no dispute that the Respondent had a reputation in the English Language Mark. For Isac J, the core issue was whether the Tongan Language Mark and English Language Mark were sufficiently similar such that use of the Tongan Language Mark by the Appellant would be likely to cause deception or confusion (at the deemed date of registration).⁴³

The Appellant argued that the Assistant Commissioner had placed too much weight on the conceptual similarities between the marks, given that the marks were visually and aurally dissimilar. However, Isac J found that the Assistant Commissioner’s conclusion that the s 17(1)(a) ground of invalidity was made out was “inevitable”.⁴⁴ The relevant section of the market were bilingual Tongan and English speakers. The ideas of the marks were identical. It was not necessary for the Respondent to establish a reputation associated with the Tongan Language Mark (although Isac J thought the evidence did establish this). The key assessment was of the “English and Tongan language marks against the affected section of the market”.⁴⁵ The lack of evidence of actual confusion did not mean that there was no risk of confusion — Isac J considered it may just mean the “parties’ own members are sufficiently well informed to avoid the risk of confusion”.⁴⁶

The s 32(1) ground

The Assistant Commissioner found that the Respondent was the first user of the Tongan Language Mark and did not abandon this mark.⁴⁷ As such, the Appellant did not have a legitimate claim to ownership of the Tongan Language Mark pursuant to s 32(1).

On appeal, the Appellant challenged the finding of abandonment. This challenge centred on the decision in 1994 to change its name from Tongan to English and whether this amounted to abandonment of the Tongan Language Mark. The Appellant also criticised the decision of the Assistant Commissioner on the basis that she found that a modified version of the Tongan Language Mark was not pleaded and could not be relied upon for the s 17(1)(a) ground of invalidity. However, the Assistant Commissioner relied upon the modified Tongan Language Mark in relation to the s 32(1) ground of invalidity.⁴⁸

Isac J found that the Assistant Commissioner’s decision on s 32(1) was “clearly correct”.⁴⁹ The evidence established that the Respondent was not only the first user of the Tongan Language Mark but continued to use it up to the deemed date of registration of the Appellant’s Mark.⁵⁰ The change of name did not amount to an intentional abandonment of the Tongan Language Mark.⁵¹ Further, Isac J considered that evidence from a pastor established that the Respondent never intended to abandon the Tongan Language Mark when it amended its name in 1994. Isac J observed that the Assistant Commissioner’s “approach to the modified Tongan Language Mark does not appear to be entirely consistent between the first and second grounds of invalidity”.⁵² However, given the use of the reputation of the English Language Mark, “the criticism of the Assistant Commissioner’s approach to the modified Tongan language mark cannot affect the outcome of the appeal”.⁵³

Comment

This case highlights two interesting issues of trade mark law and practice. The first is how to address the registrability of non-English trade marks. The judgment made reference to the United States doctrine of foreign equivalents.⁵⁴ This doctrine is used as a guideline by the United States Patent and Trademark Office and by United States courts when assessing the distinctiveness of non-English foreign words, as well as whether a mark applied for is too similar to an existing registered trade mark.⁵⁵ Adjudicators consider whether the language is a common language. If so, an adjudicator must determine whether the ordinary American consumer familiar with the language would translate the mark. If that is the case, the English translation of the mark must be used to determine whether the mark is confusingly similar to another registered trade mark or sufficiently distinctive to be registered.⁵⁶

The Intellectual Property Office Practice Guidelines discuss a broadly similar approach in relation to s 18 grounds of objection. Such guidelines state that a relevant consideration is whether the language at issue “is generally known to the relevant class of persons being a class of persons in New Zealand”.⁵⁷ Further:⁵⁸

IPONZ will only object to the registration of word marks which are likely to be recognised as a description of a characteristic of the goods or services or otherwise be descriptive of the goods/services in the application.

The Practice Guidelines do not contain explicit guidelines on how to assess objections under s 25 in cases involving foreign words. It may be appropriate for guidelines to be developed. There may also be scope for the Practice Guidelines to confirm that the approach taken in respect of te reo Māori words in relation to s 18,⁵⁹ should extend to s 25.⁶⁰

The second issue is abandonment. Registered trade mark law abides by a “use-it-or-lose-it” philosophy.⁶¹ Three years of continuous non-use from the actual date of registration exposes a registered trade mark to revocation on the application of an aggrieved person. By contrast, the law concerning “common law” (unregistered) trade marks adopts a more (tangible) proprietary approach to the loss of ownership. Abandonment of a tangible item of property is thought to require a person to physically part with the item and have a clear and unequivocal intent to abandon ownership.⁶² Historically, English courts adopted the same principle when considering the loss of ownership of unregistered trade marks.⁶³ Application of this principle may cause undesirable issues when combined with the “law of proprietorship” under s 32(1). In North Face Apparel Corp v Sanyang Industry Co Ltd, the Court of Appeal said (in relation to s 32(1)), “a person cannot claim to be the owner of the mark if another person has previously used that mark”.⁶⁴ Prior — but long ceased — use of an unregistered trade mark may, therefore, prevent a person from legitimately registering the same mark.⁶⁵

In International Consolidated Business Pty Ltd v S C Johnson & Son Inc, the Court of Appeal indicated that — at least in respect of a trade mark that has been registered and removed for non-use — continuous non-use of the registered trade mark eliminates the ability of a person to subsequently rely on use which pre-dates the continuous period of non-use to challenge ownership under s 32(1).⁶⁶ The present case is not completely analogous with the facts in International Consolidated. Unlike in International Consolidated, the Respondent had never sought registration, and its rights in the Tongan Language Mark were unregistered. The Assistant Commissioner engaged with this issue in light of International Consolidated Business and observed: “While the trade mark in the present case was not registered by the applicant/first user, I consider the same reasoning applies.”⁶⁷

As explained above, both the Assistant Commissioner and Isac J found that the evidence did not show the Respondent had not abandoned the Tongan Language Mark. Nevertheless, further appellant-level guidance may be useful to confirm the Assistant Commissioner’s view that the comments of the Court of Appeal in International Consolidated that first use does not necessarily determine ownership in perpetuity equally applies unregistered trade marks.⁶⁸

Lacoste v Crocodile International Pte Ltd

[2024] NZHC 1333

n this case, Grau J heard a dispute about a determination made by an Assistant Commissioner of Trade Marks at a case management conference (CMC). The dispute emerged in the context of non-use revocation proceedings filed by Crocodile International Pte Ltd (Crocodile) in relation to Lacoste’s trade mark registration for the mark below (the Registered Trade Mark):

The non-use proceedings were scheduled for a hearing. However, after receiving Crocodile’s submissions, Lacoste became concerned Crocodile was raising new matters in its submissions that had not been pleaded. The Intellectual Property Office of New Zealand (IPONZ) declined a request from Lacoste that Crocodile be directed to abandon what were alleged to be unpleaded grounds or amend its pleadings. After IPONZ declined Lacoste’s request to be heard, Lacoste requested the pleadings issue be dealt with at a CMC.⁶⁹

At the CMC, the Assistant Commissioner concluded that Crocodile’s pleadings were not defective, and Crocodile could not be prevented from proceeding with certain arguments in its submissions. The Assistant Commissioner, accordingly, found there was no basis to grant Lacoste leave to file further evidence concerning the use of the Registered Trade Mark. The Assistant Commissioner directed that the non-use revocation proceedings should proceed to a substantive hearing without further delay.

Lacoste appealed the determinations of the Assistant Commissioner made at the CMC. Crocodile, in response, applied to strike out the appeal, arguing that there was no jurisdiction to hear an appeal from a direction made by an Assistant Commissioner at a CMC.

The application to strike out

Crocodile argued that the Assistant Commissioner had made a direction at the CMC rather than a decision. Section 170 of the Trade Marks Act 2002 (2002 Act) only provides for an appeal for a person “aggrieved by a decision of the Commissioner” under the 2002 Act — not a direction.⁷⁰ Counsel for Crocodile pointed to several regulations in the Trade Mark Regulations 2003 (Regulations) that distinguish between “directions” and a “decision”.

Grau J accepted that the Trade Mark Regulations 2003 (Regulations) appeared to draw a distinction between a direction and a decision.⁷¹ However, Grau J emphasised that “what matters is the substance of the [Assistant Commissioner’s] determination, rather than the label used”.⁷² Grau J reasoned that IPONZ, in essence, had conducted a hearing about the pleading issue at the CMC. The CMC resulted in a decision. The Assistant Commissioner then directed that the matter should proceed to a substantive hearing. This direction followed the Assistant Commissioner’s decision on the issue of the pleadings.⁷³ Lacoste, therefore, had a right of appeal under s 170 of the 2002 Act, and the Court has jurisdiction to hear the appeal.⁷⁴ The Judge, therefore, declined Crocodile’s application to strike out the appeal.⁷⁵

The sufficiency of Crocodile’s pleadings

Lacoste argued that Crocodile’s pleadings were insufficient to put them on fair notice in respect of two arguments that Crocodile had made in its submissions. First, whether Lacoste’s use of the Registered Trade Mark amounted to use as a trade mark. Second, in the alternative, that Lacoste’s use, at best, only amounted to use in relation to tshirts, so the specification of the Registered Trade Mark (covering “articles of clothing”) ought to be partially revoked. The Assistant Commissioner concluded that there was no defect in the pleadings.

Grau J found no error with the decision of the Assistant Commissioner.⁷⁶ Relying on the leading case of Ansul BV v Ajax Brandbeveiliging BV,⁷⁷ Crocodile argued that its pleading that the Registered Trade Mark was not put to genuine use was sufficient to encompass the argument that there had been no use of the Registered Trade Mark as a trade mark. The Judge agreed with this argument.⁷⁸ The Judge also placed weight on the Assistant Commissioner’s experience that it was common for pleadings in non-use proceedings to simply recite the wording of s 66 of the 2002 Act. The Judge observed that:⁷⁹

... in light of the power to revoke registration of a mark in its entirety or in relation to “only some of the goods or services” under s 68(1)(b), it would be a strange outcome if a revocation order could only be made to the extent that it is particularised in an application for revocation.

Finally, Grau J observed that “pleadings define the evidence, not the other way around”.⁸⁰ Thus, the Judge agreed with Crocodile that its pleadings were not insufficient simply because evidence was not filed by the other party which might be relevant.⁸¹ The Judge, therefore, rejected Lacoste’s argument that adequately put on notice of Crocodile’s arguments about use as a trade mark and the possibility of establishing partial non-use.⁸²

Result

Grau J found that the issue of whether Lacoste ought to be allowed to adduce further evidence fell away given the conclusion that Crocodile’s pleadings were sufficient.⁸³ Grau J declined Lacoste’s application to admit evidence on appeal.⁸⁴ Thus, in sum, Crocodile’s appeal to strike out Lacoste’s appeal failed. However, Lacoste’s appeal and application to file further evidence were also unsuccessful.

Technopak Ltd v Monzeal Ltd

[2024] NZHC 1420

This case involved a copyright dispute involving automated bag-filler machines. The plaintiff, Technopak Ltd (Technopak), claimed that the first defendant, Monzeal Ltd (Monzeal) infringed its copyright in its designs for 10 different parts or assemblies incorporated within Technopak’s bag-filling machines. The plaintiff also claimed the second and third defendants, James Garrick and Scott Leaning — shareholders and directors of Monzeal — authorised the infringement and/or were joint tortfeasors with Monzeal for such infringement. In a judgment issued on 31 May 2024, Tahana J dismissed the plaintiff’s claim, finding that the defendants had not infringed the plaintiff’s copyright.

Background

As explained in the judgment, automated bag-filler machines fill bags with powdered substances (like milk powder). Such machines do this by picking up a bag, presenting the bag to a filling spout (which fills the bag with powder), sealing the bag, and then transporting the bag to be packed away.⁸⁵ Technopak was incorporated in 1999 and manufactured and distributed automated bag-filler machines.

James Garrick was employed at Technopak as a design engineer from 2004 to January 2012. Scott Leaning was also contracted to Technopak as a project engineer from 2009 to April 2012. Their company, Monzeal, was incorporated in June 2012 and started designing and manufacturing automated bag-filler machines. A website for Monzeal was launched in August 2012. The website contained images, renderings and a video depicting an automated bag-filling machine.

In August 2012, some customers of Technopak expressed concern that Monzeal was creating “rip-offs” of Technopak’s machines. Lawyers’ letters followed. However, the dispute appears to have come to a head when, in 2017, both Technopak and Monzeal quoted to supply an automated bag-filling machine to a potential client in the United States. Monzeal was successful. Technopak issued proceedings in October 2018.

The copyright works

Technopak claimed it owned copyright in CAD Models for two of its “Compak” machines and “drawing packs” for these machines. One of the Compak machines was supplied to New Zealand Food Innovation (Waikato) Ltd (Innovation Waikato). Mr Garrick and Mr Leaning were responsible for the bulk of the design of this machine. The other Compak machine was supplied to Danone. Mr Garrick worked on the 3D modelling for this machine.

Technopak claimed that Monzeal had infringed copyright in its CAD models and/or drawings in respect of the following parts or assemblies:

• bag loader swing arms and tie rod (including the geometry of these particular components) (bag loader swing arms);
• hexagonal filling spout (hexagonal filling spout);
• bag clamp (including its bag clamp silicon rubber componentry) (bag clamp);
• collocation of its hexagonal filling spout design, bag clamp design, bag loader swing arms and tie rod design, and top pick manifold and tail (Scorpion) (collocation);
• adjustable bag width side guide posts (bag stack guides);
• locking side-pivot backstop (bag back stop);
• two-flight bulk auger design (two flight auger);
• reject conveyor and/or reject arm (reject conveyor and reject arm);
• plastic roll feed (plastic roll feed design); and
• p down conveyor (up down conveyor).

Framework for analysis and preliminary issues

Tahana J first considered whether copyright subsisted in each of the above parts or assemblies before considering whether Monzeal had infringed such copyright. Evidence was adduced from two of Technopak’s witnesses and three witnesses from Monzeal (including Mr Garrick and Mr Leaning).

The analysis was also informed by several principles of law derived from Oraka Technologies Ltd v Geostel Vision Ltd,⁸⁶Zhang v Sealegs International Ltd,⁸⁷ and UPL Group Ltd v Dux Engineers Ltd.⁸⁸ First, originality reflects the skill and labour expended by an author in the creation of a work. The greater the originality involved in a work, the greater protection copyright law will provide.⁸⁹ Second, functional constraints can affect the degree of protection provided to a work. If functional constraints are relevant to a product, similarities between a defendant’s design and the plaintiff’s copyright work may be attributable to such constraints rather than the misappropriation of the author’s skill and labour which “the law of copyright seeks to protect”.⁹⁰ Third, in assessing objective similarity between the plaintiff’s copyright work and the defendant’s design — in cases of engineering drawings — the visual similarity must be assessed through the eyes of an engineer.⁹¹ Further, when assessing objective similarity, a court ought to take into account the extent to which the plaintiff’s copyright work is dictated by functional constraints.⁹² Small differences may be sufficient to rebut an inference of copying.⁹³

Tahana J also followed the order of analysis from Oraka when determining whether the defendants had infringed. That is, by first considering objective similarity between the defendant’s design and the plaintiff’s copyright work, secondly determining a causal connection and thirdly assessing whether the defendant’s design has reproduced a substantial part of the plaintiff’s copyright work.⁹⁴

A preliminary issue was whether the defendants were relying on an affirmative defence of copying. Mr Leaning gave evidence that suggested that Technopak had copied some of its designs from other automated bag-filling machines. However, Tahana J found that the defendants’ submissions were directed to the extent of originality of Technopak’s copyright works. These arguments were not directed towards an affirmative defence. In an event, the Judge found the defendants “failed to establish that the designs on which Technopak relies were copied from other third-party designs”.⁹⁵

Further preliminary issues related to the inferences to be drawn from Mr Leaning and Mr Garrick’s previous involvement with Technopak. Mr Garrick had retained “commercial off-the-shelf drawings”, which were labelled with Technopak’s name. Such drawings were said to have been obtained to assist the defendants in their defence to the copyright proceedings. Tahana J accepted this evidence and evidence that Mr Leaning and Mr Garrick did not retain any of Technopak’s CAD models or drawings that were not commercial off-the-shelf drawings. The Judge also did not consider the creation of Monzeal’s website in 2012 created an inference of copying. Mr Leaning’s evidence was that most of the parts contained in the images on the website were commercial off-the-shelf drawings that could be easily downloaded from the Internet.⁹⁶ Mr Garrick acknowledged that Monzeal had copied Technopak’s website’s terms and conditions. However, Tahana J did not consider that this indicated a propensity to infringe copyright.⁹⁷ Technopak also pointed to the fact that elements of Monzeal’s bulk feed auger had almost exact measurements to Technopak’s bulk feed auger. While Technopak did not claim Monzeal infringed copyright in the design of its bulk feed auger, this was a “fingerprint” of copying Technopak’s designs.⁹⁸ Tahana J accepted that “as a general proposition that there was an opportunity for copying by reason of Mr Garrick and Mr Leaning having worked at Technopak”.⁹⁹ However, she went on to consider each alleged infringement separately.

The findings on infringement

Tahana J considered each of Technopak’s 10 designs using the framework outlined above. One theme that emerged in this analysis was that Technopak’s copyright works were original, and copyright, therefore, subsisted in its designs.¹⁰⁰ However, the extent of the originality was, generally, low in relation to Technopak’s designs.¹⁰¹ Here the Judge also distinguished between the originality of the idea or concept underlying Technopak’s designs and the expression of such an idea in the designs.¹⁰²

A second theme was a lack of objective similarity between Technopak’s copyright works and the defendants’ designs, assessed from the perspective of an engineer and taking into account the functional constraints and common subject matter.¹⁰³

A third theme is that Tahana J did not accept that there was a causal connection between Technopak’s copyright works and Monzeal’s designs. That is, Tahana J rejected that Technopak’s copyright works were the source (directly or indirectly) of Monzeal’s designs.¹⁰⁴ The Judge thought that the defendants had followed an independent design path.¹⁰⁵

As part of her overall conclusion, Tahana J stated:¹⁰⁶

There is some merit in the defendants’ submission that Technopak has selected a small number of drawings from thousands in an attempt to establish copying. I am satisfied that the defendants followed an independent design path to arrive at the Monzeal designs and that any similarities between the designs arise because of functional constraints. Further, many of the parts incorporated within an automated bag-filler machine are commonplace. All automated bag-filler machines perform the same functions of presenting the same standard sized bag to a filling spout for filling with the same quantity of powder and conveying the bags to be packed away. It is unsurprising that there are similarities between the designs due to those common functions.

It was held that the defendants had not infringed Technopak’s copyright.¹⁰⁷

Comment

New Zealand has long had a copyright system that appears to favour the owners of industrially applied copyright works, perhaps even unjustifiably so.¹⁰⁸ The expansive category of “drawings” and “models”, a low standard of originality,¹⁰⁹ the wide definition of copying and infringement (by indirect copying),¹¹⁰ and the fact that copyright protection remains available to artistic works that are commercially exploited as three-dimensional designs for products¹¹¹ has meant that New Zealand copyright jurisprudence is dominated by cases involving mundane and functional products.¹¹² In this context, judicial application of the “rough practical test that what is worth copying is prima facie worth protecting” arguably risks tipping New Zealand copyright law towards overprotection.¹¹³ It may also eliminate the benefits of, and incentives for, traders seeking design registration.

As Ken Moon has identified in his “Design Copyright” commentary,¹¹⁴ the earlier Court of Appeal decisions in UPL Group v Dux Engineers Ltd,¹¹⁵ Beckmann v Mayceys Confectionery Ltd,¹¹⁶ as well as the more recent Zhang decision,¹¹⁷ could be interpreted as signalling the application of a more “pro-competition philosophy” whereby “copying is only unlawful if it is ‘too close’”. This case appears to align with this philosophy. It also indicates that the idea/expression dichotomy continues to have some teeth in industrial copyright cases, particularly those involving products with functional constraints.

Trafalgar Group Pty Ltd v Boss Fire and Safety Pty Ltd

[2024] NZHC 982

In this case, the High Court dismissed appeals to two decisions made by the Assistant Commissioner stemming from a dispute between Boss Fire and Safety Pty Ltd (Boss) and Trafalgar Group Pty Ltd (Trafalgar).¹¹⁸ The dispute centred on the registration of the trade marks FIREBOX and FYREBOX in relation to passive fire protection products. Boss and Trafalgar have also been in dispute about the use of these trade marks in Australia.

On 30 August 2016, Boss successfully applied to register FYREBOX in New Zealand in Class 19. On 24 October 2017, Trafalgar applied to register FIREBOX and FYREBOX in Class 9. Boss filed a notice of opposition to registration of these applications. Trafalgar applied to invalidate Boss’ FYREBOX registration, relying on ss 32(1), 17(1)(a), 17(1)(b) and 17(2) of the Trade Marks Act 2002 (2002 Act).

In the invalidity decision, the Assistant Commissioner found that the s 32(1) ground was not made out as Boss — not Trafalgar — was the first to use the FYREBOX trade mark in New Zealand. The other grounds of invalidity were also not made out. In the opposition decision, the Assistant Commissioner found that Boss’ opposition under s 25(1)(b) to registration of FIREBOX and FYREBOX was successful.

On appeal, Grau J recognised that the outcome of the appeal to the invalidity decision would also dispose of the appeal to the opposition decision.¹¹⁹ If Boss was the first user of the FYREBOX trade mark, its trade mark registration would be valid, and this earlier registration would prevent Trafalgar’s registration of FIREBOX and FYREBOX.

Who was the first to use the trade mark?

Grau J confirmed that Trafalgar (as the application for invalidation) bore the onus to establish that Boss’ existing trade mark was invalid. The Judge rejected Trafalgar’s contention that Boss had the onus to establish it was the first to use FYREBOX in New Zealand. Rather, Boss had an evidential onus to establish first use in response to Trafalgar’s contention and evidence of use. This evidential onus did not change the legal onus on Trafalgar to establish the s 32(1) ground of invalidation.¹²⁰

The Assistant Commissioner considered that email exchanges adduced in the evidence from Boss’ managing director, Mr Price, established that FYREBOX was used as a trade mark in New Zealand in December 2015. In the exchange, an employee of Boss responded to a potential customer about an enquiry concerning “Fyrebox Cable Transits”, noting that its New Zealand distributor could “help you with prices”. Mr Price then asked the employee to telephone the potential customer to give information about the product, because the potential customer had already been in contact with the distributor.

Trafalgar attacked the Assistant Commissioner’s conclusion on the basis that the email exchange did not amount to trade of, or indicate an offer to trade, FYREBOX products.¹²¹ Grau J, though, sided with Boss on the categorisation the email exchange, observing:¹²²

I agree the exchange read as a whole indicates an intention by Boss to deal with a potential customer in New Zealand, although the product will ultimately be supplied by its New Zealand distributor. I agree that Mr Bryant’s reference to “Fyrebox Cable Transits” is use by Boss of the trade mark FYREBOX in relation to goods in New Zealand.

The Judge thought it was clear that Boss had a distributor for its FYREBOX product and that it was willing to provide information about the product, but not pricing — as this was a matter for its distributor.¹²³

The Judge discussed a further issue with Mr Price’s evidence about verbal use of FYREBOX in New Zealand from 2014 onwards. Trafalgar was highly critical of the reliability of this evidence, and that it was not permitted to crossexamine Mr Price on it. Ultimately, Grau J did not place a great deal of weight on this evidence and noted that it was not necessary to, given the finding about the email exchange.¹²⁴ Nevertheless, Grau J thought such evidence provided “some support” to Boss’ argument that FYREFOX was being used as a trade mark (both externally and internally) to refer to its cable transit product.¹²⁵

Boss was, therefore, found to have used the trade mark FYREFOX before Trafalgar. This finding disposed of the appeal. Grau J, though, went on to consider an interesting issue with a LinkedIn post.

Trafalgar’s LinkedIn post

Before the Assistant Commissioner, Trafalgar argued that it made first use of FYREBOX by dint of a LinkedIn post by John Rakic (the Australian-based managing director of Trafalgar) on 14 March 2016. Mr Rakic’s post announced the launch of Trafalgar’s FYREBOX product. This post received “likes” from at least three New Zealand-based followers. The Assistant Commissioner did not need to consider whether this post amounted to first use, given his finding that Boss had used FYREBOX prior to 2016. Nevertheless, the Assistant Commissioner’s “preliminary view” was that that the post was not use of the FYREBOX trade mark in New Zealand.

Grau J agreed with the Assistant Commissioner’s preliminary view. Drawing on 800-Flowers Trade Mark Application, Valley Girl Co Ltd v Hanama Collection Pty Ltd and Malibu Boats West Inc v Catanese,¹²⁶ the Judge emphasised the need for there to be an “active step to be taken to show that a product is available [in] New Zealand”.¹²⁷ There was no active step with the LinkedIn post. The post was on a social media platform, and this was not the same as being “‘sent’ directly and purposefully to a particular known recipient”.¹²⁸ Further, the post made no reference to New Zealand. The contact provided was an Australian email address. The post did not indicate that Trafalgar had the intention or ability to supply products to New Zealand customers. In Grau J’s opinion, a New Zealand-based person looking at the post “would have no reason to believe the product would be available in New Zealand”.¹²⁹ The fact the post was “liked” by people based in New Zealand “means little”.¹³⁰ The Judge found that the LinkedIn post did not constitute use for the purposes of s 32(1).¹³¹

Grau J did not consider the other grounds of appeal, given the key finding that Boss had used the mark FYREBOX before Trafalgar. The appeals in relation to the invalidity decision and the opposition decision were, therefore, dismissed.

Comment

This case is a useful reminder that the threshold for use in terms of s 32(1) is startlingly low. An analogy can be drawn from the email exchange Boss relied upon and the facts of the Australian case of Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd.¹³² In that case, a defendant in infringement proceedings successfully cancelled the plaintiff’s trade mark registrations on the basis the plaintiff was not the owner of the trade marks. The defendant had made prior use of identical and substantially identical marks in electronic copies of a slide presentation, which was included as an email attachment sent to potential institutional investors in Australia. One significant difference with the position in Australia is that s 75 of the 2002 Act — which limits the grounds of invalidity after seven years of registration — provides a degree of protection to registered trade mark owners when there are challenges to ownership.

While the threshold of use is low, the case also illustrates that not every reference to a trade mark that is published to a New Zealand audience will qualify as use for the purposes of s 32(1). Any use (in the form of advertising and promotion) relied upon must be the purposes of “creating a market”,¹³³ “soliciting orders”,¹³⁴ or “an active step to show the product is available in New Zealand”.¹³⁵

The IP Round-up: Recent decisions from the Courts was published in New Zealand Intellectual Property Journal (NZ). To enquire about New Zealand Intellectual Property Journal (NZ) subscription, submit the form below: