Jane Glover Barrister – Mediator – Adjudicator

section 17(1)(a) initial threshold test creeps higher

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Section 17(1)(a), which prohibits registration of a trade mark if its use is likely to deceive or cause confusion, is a funny provision in terms of onus. An opponent relying on an earlier mark must meet an initial threshold test of showing that the earlier mark has a sufficient reputation, and if it can do so then the onus of proof flips to the trade mark applicant.

Traditionally, that initial threshold test has been extremely low. In fact, it doesn’t seem that long ago that we were wondering whether the mere fact of a prior trade mark registration would be enough even in the absence of any trading activity (on the strength of an obiter statement by Glazebrook J in NV Sumatra v British American Tobacco (Brands) Inc (CA) suggesting that this might be the case, as registration is effectively notice to the world.)

Times change, though, and now it is clear that registration alone will not be enough. Woodhouse J clarified this in TomTom Communications Limited v TomTom International BV. His Honour did not consider that registration of the appellants’ marks supported their case to any relevant extent, as the legal consequence of registration did not bear on the evidential question of actual awareness and the extent of that awareness.

For what it is worth, I think that the approach taken by Woodhouse J is consistent with the consumer-protection focus of section 17(1)(a) of the Act. Technically, registration may amount to notice to the world, but the reality is that the average consumer is unlikely to be aware of, or care about, the niceties of the trade marks register when making purchasing decisions. From a consumer’s point of view, it is trading and advertising activity that is relevant.

More significant, then, is the issue of how much trading activity is enough. A couple of recent High Court decisions have both found that opponents who provided ‘real’ evidence of reputation in an earlier mark nonetheless failed to get across the line. Both failed to surmount the initial threshold hurdle, low though it might be.

In Comite International Olympique v Tempting Brands Netherlands BV [2019] NZHC 2476, the IOC clearly did its best to scrape together all of the evidence that it could find, but there just wasn’t enough there. Churchman J said that even though the initial threshold is relatively low, it does require an evidential foundation – assertions or statements of belief that a trade mark has acquired a reputation in New Zealand can be given little weight. His Honour endorsed the finding of Assistant Commissioner Aldred that the usual method of demonstrating awareness of a mark is to provide information about New Zealand market share, including sales figures, or information about advertising expenditure or consumer uptake of promotional material. Evidence that New Zealand consumers can purchase goods online from overseas websites should be backed up by evidence that such sales actually occurred.

In Energy Beverages LLC v Prolife Foods Ltd [2019] NZHC 1691, the chief executive of Energy Beverages said that “based on information and records available to me” Energy Beverages’ products had been sold under or by reference to the MOTHER brand in New Zealand supermarkets and other retail outlets since at least 2009 – but he gave no details such as advertising or sales data. Cull J held that the evidence was not sufficiently robust or reliable to show the necessary level of awareness. Undated evidence, hearsay, and evidence that post-dated the relevant date did not assist. (I’d hazard a guess that in this case the difficulty might have been a bullish international client giving its New Zealand counsel little to work with.)

The take-home message is that the initial threshold test seems to be creeping gradually higher, and opponents cannot just assume that they will sail over it. A decent evidential basis must be provided, and any evidence that is provided must be able to withstand rigorous scrutiny in terms of its probity and reliability.

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Jane Glover

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By Jane Glover
Jane Glover Barrister – Mediator – Adjudicator

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