NZ trade mark case - Wild Geese v Wild Turkey

In the recent decision of Austin, Nichols Inc v Stichting Lodestar [2007] NZSC 41, the Supreme Court of New Zealand has clarified the weight that should be given to the decision of the Commissioner of Trade Marks by the High Court on an appeal.

Background

An application for the trade mark WILD GEESE in respect of alcoholic beverages was opposed by the registered proprietor of the trade mark WILD TURKEY. The Assistant Commissioner of Trade Marks held that the two marks were “too dissimilar” to be deceptive or confusing and allowed registration of the trade mark WILD GEESE.

High Court

This was appealed to the High Court, which allowed the appeal and refused registration of the trade mark WILD GEESE. Whilst acknowledging that “judges, of course, invariably accord a Commissioner’s decision considerable weight because of his or her position as an expert tribunal”, Gendall J held that in his opinion the applicant had not discharged the onus or burden on it to satisfy the Court that use of the trade mark WILD GEESE would not be likely to cause confusion or deception.

Court of Appeal

The Court of Appeal allowed the applicant’s further appeal and granted the application for registration. In its judgment the Court of Appeal suggested that the High Court had arrived at its decision wrongly, because it had erred in giving insufficient weight to the Assistant Commissioner’s views. Controversially, the Court of Appeal expressed the view that:

[30] …the High Court Judge ought not to have embarked on a reconsideration of the issue without considering, and giving weight to, the Assistant Commissioner’s conclusion. He was, of course, entitled to reach a conclusion contrary to that reached by the Assistant Commissioner, but not to do so without giving weight to her views. If he had done that, we believe that he would have upheld the Assistant Commissioner’s decision. We are satisfied that that should have been the outcome of the High Court appeal.

The Court went on to agree with the Assistant Commissioner’s conclusion, holding that the two marks were unlikely to be confused.

Supreme Court

Leave to appeal was granted by the Supreme Court. The short point raised by the appeal was whether the High Court on an appeal under s27(6) of the Trade Marks Act 1953 must defer to the assessment of the Commissioner, if the conclusion he or she has reached is one on which reasonable minds may differ.

This case attracted a great deal of attention, notably from the International Trademark Association which sought and was granted leave to intervene, being concerned with certain passages in the Court of Appeal’s judgment and their possible implications for future trade mark appeals.

Finding

In its decision, the Supreme Court of New Zealand held that an appeal under the Trade Marks Act 1953 (and similarly the Trade Marks Act 2002) is a general appeal and the High Court is required to form its own opinion on the merits of the case.

The weight that an appellate court gives to the decision of the Commissioner is a matter of judgment; however it is an error for the High Court to defer to a tribunal or Lower Court’s assessment without forming its own opinion. Thus, the Supreme Court concluded that the approach adopted by the High Court Judge was “consistent with his appellate obligations” and that the Court of Appeal was wrong to imply that the High Court Judge had erred in his approach.

Nonetheless, the Supreme Court dismissed the appeal, being satisfied that the Court of Appeal had also considered the merits of the appeal and had come to its own decision.

Conclusion

The Supreme Court of New Zealand upheld the general principle that each court is entitled to come to its own decision on an appeal, in particular when that decision is a matter of reasoning or comparison.

This decision is in keeping with the well-established principles governing all general appeals. It should be a relief to those concerned at the prospect of a narrowed scope of appeal, which could only create additional jurisdictional hurdles for appellants.

Two retailers concurrent use of the same trade mark – “Colorado”

Colorado Group Limited v Strandbags Group Pty Ltd [2007] FCAFC 184 involved the concurrent use of the trade mark “Colorado” by different retailers, Colorado Group and its predecessor in title (together “CG”) and Strandbags and its predecessor in title (together “Strandbags”).

CG obtained trade mark registration for “Colorado” from 2001 for goods including bags, wallets, purses and backpacks. Both CG and Strandbags had used “Colorado” before 2001.

CG brought trade mark infringement proceedings against Strandbags for its sale of Colorado-brand handbags, wallets, purses and backpacks. Strandbags counterclaimed, alleging CG’s registration was not valid in relation to those goods.

The trial judge had found that CG’s registration was valid for backpacks only and Strandbags’ handbags, wallets and purses would not infringe that registration.

The Full Court found that “Colorado” did not distinguish the relevant goods under section 41, so it was not a valid registration for those goods. The Full Court’s decision reversed the trial judge’s somewhat controversial finding that “Colorado” was inherently adapted to distinguish the relevant goods and was registrable under section 41(3).

The Full Court also found that, if “Colorado” was registrable:
* CG was the first user of Colorado for backpacks and was entitled to register “Colorado” for backpacks.
* Backpacks are not the same kind of goods as handbags, wallets and purses. Given Strandbags first used “Colorado” for handbags, wallets and purses, CG’s first use for backpacks did not entitle CG to claim ownership and register “Colorado” for handbags, wallets and purses.
* The registration was not obtained by a false suggestion.

Allsop J considered that Strandbags’ handbags would prima facie infringe a valid registration for backpacks, because handbags were of the same description as backpacks. Interestingly, the trial judge had formed the opposite view, finding that handbags were not goods of the same description as backpacks. However, Allsop J considered that Strandbags could take advantage of the prior use defence to infringement under section 124, because it had used “Colorado” on handbags prior to the date of CG’s registration or CG’s first use of “Colorado” on handbags.

The Full Court agreed with the trial judge that there was no actionable passing off or breach of the Trade Practices Act by Strandbags.

“Colorado” is not inherently adapted to distinguish the goods At trial, Finkelstein J recognised that “Colorado” was a geographical location, and that “Colorado” conjured up notions of trekking, ruggedness, fashion, Rocky Mountains and so on. However, in a decision that surprised many commentators, His Honour found that “Colorado” was inherently adapted to distinguish bags, wallets, purses and backpacks under section 41(3) because those notions did not describe the bags, wallets, purses and backpacks themselves.

The Full Court disagreed and found that “Colorado” was not inherently adapted to distinguish bags, wallets, purses and backpacks because an honest trader may wish to make use of “Colorado” given the notions “Colorado” conveys for those types of goods.

If a mark is only to some extent inherently adapted to distinguish, registration may be obtained if it is found that the applicant’s use of the mark does or will distinguish the goods (section 41(5)). The Full Court found that it could not be said that CG’s use of “Colorado” as at 2001 does or will distinguish the goods as being CG’s goods and no other’s, particularly because Strandbags was also using “Colorado” by that time.

This outcome demonstrates the difficulty of obtaining registration under section 41(5) (or s41(6)) if there is another trader concurrently using the same mark.

Ownership

If a trade mark has been used prior to the date of application for registration (as “Colorado” had been in this case), in Australia it is the first user of the mark for certain goods who is entitled to register the mark in respect of those goods and goods of the same kind.

CG asserted that it first used “Colorado” from 1982, when the mark was embroidered on backpacks. However the evidence was somewhat unclear about whether “Colorado” was first used alone or together with a mountain logo. If “Colorado” was used along with the mountain logo, CG may not be entitled to claim ownership of “Colorado” alone. If CG could not claim to be the owner of “Colorado” alone, its registration would be invalid in light of later use by Strandbags.

CG relied on the evidence of a store employee, who recalled that in 1982 and 1983 CG was selling a style of backpack which had the word “Colorado” but no logo embroidered on it.

Strandbags bore the onus of proving that CG did not use “Colorado” alone on backpacks. Allsop and Kenny JJ found Strandbags did not discharge the onus, as it was not clear that CG was not the first user of the mark “Colorado” alone on backpacks. This result illustrates the difficult evidentiary burden faced by a party disputing another’s claim to ownership of a mark by first use.

In addition to backpacks, CG’s registration covered bags, purses and wallets.

However, Strandbags used “Colorado” for handbags, purses and wallets before CG (but after 1982). Therefore, CG’s registration would not validly cover handbags, purses and wallets unless they were goods “of the same kind” as backpacks. The trial judge and Allsop and Kenny JJ all agreed that backpacks were not the same kind of goods as handbags, wallets and purses. (The Court was divided as to whether handbags were the same kind of goods as wallets and purses.)

Kenny J noted that a policy reason for assessing narrowly which goods are goods of the same kind is that “if the acquisition of a mark by a prior user were to extend to a broad ill-defined set of goods, this would have the capacity to undermine the efficiency of the registration system” (at [19]).

False suggestion

Strandbags also alleged that CG’s registration was accepted because of a false suggestion made to the Trade Marks Office about the extent of Strandbags’ use of “Colorado”, namely, a statement conveyed the impression that nothing of relevance happened after 1990 or 1991 in relation to the activities of traders other than CG.

In actual fact, Strandbags continued to use “Colorado” after 1991.

False suggestion is an unusual ground of revocation and it was not accepted in this case, primarily because the statement to the Trade Marks Office merely conveyed an impression - it was not a clear statement and it was not intended to be a false suggestion.

Infringement

Because the Full Court found that CG’s registration for “Colorado” was not valid for the relevant goods, it was not necessary to consider whether Strandbags had infringed the registration. However Allsop J went on to consider infringement in any event. For Strandbags’ handbags, purses and wallets to infringe CG’s registration for backpacks, those goods had to be “of the same description” as backpacks, or the service of supplying those goods had to be “closely related” to backpacks (s 120(2)).

The trial judge had found that neither handbags, nor purses and wallets were goods “of the same description” as backpacks. Allsop J disagreed, finding that handbags and backpacks were goods “of the same description”, (despite having found they were not goods “of the same kind” for ownership purposes.) Allsop J did agree with the trial judge that wallets and purses were not goods “of the same description” as backpacks. Allsop J concluded Strandbags’ backpacks and handbags would prima facie infringe.

Prior use defence to infringement

Allsop J then considered whether Strandbags could take advantage of the prior use defence to infringement under section 124, which would be available if Strandbags had continuously used “Colorado” before the earlier of CG’s 2001 registration or CG’s first use of “Colorado”.

For Strandbags to take advantage of section 124, Allsop J interpreted the section as requiring Strandbags to have been using “Colorado” before CG on the goods of the same description as those for which registration was obtained (ie on handbags) before CG had used “Colorado” on those same goods (ie handbags). That is, even if CG used “Colorado” on the goods specified in the registration (backpacks) before Strandbags used “Colorado” on handbags, Strandbags could still take advantage of section 124.

In this case, Strandbags used “Colorado” on handbags before CG did and this was before 2001, so Strandbags had a defence to infringement under section 124.