IN THE COURT OF APPEAL OF NEW ZEALAND
CA461/2013 [2014] NZCA 311
BETWEEN SEXWAX INCORPORATED Appellant
AND ZOGGS INTERNATIONAL LIMITED Respondent
Hearing: 22 May 2014 (further submissions received 26 May 2014)
Court: O'Regan P, Stevens and Miller JJ
Counsel: N J Robb and C A Edmonds for Appellant J O Upton QC and T A Huthwaite for Respondent
Judgment: 9 September 2014 at 3.15 pm
JUDGMENT OF THE COURT
A The appeal is allowed.
B The direction given in the High Court that the respondent was entitled to register the ZOGGS mark is quashed.
C The determination of the Assistant Commissioner that the appellant’s opposition based on s 17(1) of the Trade Marks Act 2002 succeeds is reinstated.
D The respondent must pay the appellant costs for a standard appeal on a band A basis and usual disbursements.
E In the absence of agreement, any question of costs in the High Court is to be determined by that Court. ______
REASONS OF THE COURT
(Given by Stevens J)
SEXWAX INCORPORATED V ZOGGS INTERNATIONAL LIMITED CA461/2013 [2014] NZCA 311 [9 September 2014]
Table of Contents Para No Introduction [1] Background [8] Assistant Commissioner’s decision [15] High Court judgment [22] Statutory framework [26] Issue one: the MR ZOGS SEX WAX mark [31] Submissions of the parties [31] Our analysis [35] Issue two: reputation/awareness [43] Need for awareness of the opponent’s mark [43] The correct approach to s 17(1)(a) [48] Submissions on reputation/awareness [66] Our analysis [69] Issue three: likelihood of deception or confusion? [79] Submissions of the parties [79] Our analysis [83] Relief [88] Result [91]
Introduction
[1] The appellant Sexwax Incorporated (Sexwax) has since the 1980s marketed a large selling brand of surfboard wax through a New Zealand distributor. It does so using a distinctive unregistered mark or logo of which it is the proprietor, (the MR ZOGS SEX WAX mark):
[2] The respondent, Zoggs International Ltd (Zoggs), applied in December 2009 to register the trade mark (the ZOGGS mark):
ZOGGS
[3] Zoggs’ application was declined by the Assistant Commissioner of Trade Marks under a number of statutory provisions, including s 17(1)(a) of the Trade Marks Act 2002 (the Act), on the basis that its use in New Zealand would be likely to deceive or cause confusion.1
[4] Zoggs successfully appealed to the High Court.2 Simon France J found that there was no likelihood that the ZOGGS trade mark would be confused with the MR ZOGS SEX WAX mark if registration were allowed.3 He said the MR ZOGS SEX WAX mark was “quite dissimilar” to the ZOGGS mark, with the “predominant feature of the logo [being] the central Sexwax brand”. The concept of “Sex Wax” was “attention grabbing” and was the “single feature of the logo which would linger with people”.4 Those findings were enough to dispose of the appeal, but the Judge also concluded: “With less conviction, but on balance, I would also have allowed the appeal against the finding of a sufficient reputation”.5
[5] Sexwax appeals to this Court, contending there was a sufficiently substantial awareness of the MR ZOGS SEX WAX mark for goods covered by the proposed registration of the ZOGGS mark. Further, it contends Zoggs has not discharged the onus of establishing that there is no reasonable likelihood of deception or confusion resulting from the use of the ZOGGS mark.
[6] It follows that the key issues on appeal are:
(a) What was the nature of the mark owned by Sexwax?
(b) What is the reputation or awareness of that mark?
1 Zoggs International Ltd v Sexwax Inc [2012] NZIPOTM 31 (Assistant Commissioner’s decision). 2 Zoggs International Ltd v Sexwax Inc [2013] NZHC 1494 (High Court judgment). 3 At [68]. 4 At [61]. 5 At [63]. The Judge also upheld two other grounds of appeal, namely, against findings by the Assistant Commissioner that the application was made in bad faith (at [37]) and that there was no sufficiently definite intention to use the mark (at [45]). There was no appeal on these grounds.
(c) Has Zoggs discharged the onus of showing there is no reasonable likelihood of deception or confusion resulting from the notional use of the ZOGGS mark?
[7] The questions of reputation and awareness and the likelihood of deception or confusion were advanced before us in the context of the “relevant market”. In determining the above questions, therefore, we discuss whether and in what circumstances the concept of the market ought to be used in applying s 17(1)(a) of the Act.
Background
[8] Sexwax is owned by a Mr Frederick Herzog III of California, USA. Commonly known as Mr Zog, he has used the name Zog in connection with his business for over 38 years. He first started manufacturing surfboards under the “Zog” and “Wave Delineation” brands. These were sold through retail outlets in California and through surf shops on the East Coast of the United States. In 1972 the Zog Industries business began manufacturing and selling surfboard wax under the brand name MR ZOGS SEX WAX. The label embodying the logo, set out at [1] above, has remained largely unchanged.
[9] Mr Herzog’s business was originally named Zog Industries. It changed name formally in 1978 to Sexwax Incorporated, the name of the appellant, but has continued to use the name Zog Industries on all its business forms such as invoices, statements, sales and purchase orders and correspondence. Mr Herzog’s evidence is that the name Zog is integral to the mark by which the surfboard wax is sold. It is typically referred to or ordered as “a bar of SEX WAX” or “a bar of Zogs”. Mr Herzog states further that the phrase “MR ZOGS SEX WAX” is an integral part of the mark used by the business. The business has engaged in other activities such as publishing a newspaper, called the Zog Newsletter, and sells various other products featuring the mark, of which T-shirts and caps are examples.
[10] Zog Industries sells surfboard wax using different formulas. For example, it sells a product called MR ZOGS SEX WAX Quick Humps formula, and a hockey wax using the logo “MR ZOGS SEX WAX Hockey formula”. Other products
include a drumstick formula wax using the same logo and a wide range of products including T-shirts, sweat-shirts, rash guards, swimwear, wax combs and beach towels, which are labelled or decorated with either the words “MR ZOGS SEX WAX” and design mark or using the word “Zog”. The MR ZOGS SEX WAX logo or the mark SEX WAX have been registered in a number of countries throughout the world. No application for registration has been made in New Zealand.
[11] Zog Industries began selling its products in New Zealand through a primary distributor, Aerial Connection. The product is sold in retail shops all over New Zealand and is also sold on TradeMe. For the period November 1997 to June 2010, wax and surfboard related products accounted for 65 per cent of the product sales by Zog Industries to New Zealand. The balance of the sales (around 27 per cent) was made up mostly of T-shirts, which have either the complete logo or a dominant reference to SEX WAX on them. The MR ZOGS SEX WAX label, in whatever form it appears, is usually prominent and occupies the whole of the front or back of the T-shirt.
[12] The respondent, Zoggs, was founded in Australia in 1992. The original products sold comprised swimwear goggles, with the name Zoggs being an adaptation of that word, or more particularly, of the abbreviation of the word “goggs”. The goggles were sold in New Zealand through The Warehouse chain from around 1994. Zoggs then began manufacturing swimwear aimed primarily at the recreational and fitness/training pool swimmer market. These items were marketed in various countries including New Zealand under the label “Zoggs Toggs”. In 1996, that mark was registered in various countries, including New Zealand. This has since expired and, due to an oversight, was not renewed.
[13] In 2000 a decision was taken to combine the brands into “Zoggs”. The application to register the mark was intended to replace the existing mark registration of Zoggs Toggs and reflected the branding development. Zoggs International claims to be the largest leisure swimming brand in Australia, New Zealand and the United Kingdom. New Zealand sales under the Zoggs Toggs label commenced in the mid-1990s. Some 17,000 items have been sold between April
2006 and February 2011. The primary retail outlets in which its goods are sold include aquatic centres, swim schools and small aquatic retailers.
[14] The application in December 2009 was to register the mark ZOGGS in class 25 of the Nice Classification of Goods (10th ed), comprising as follows:
… clothing, footwear, headwear, swimwear, swim caps, warm-up suits, t-shirts, jackets, beachwear, leisure wear, ski wear, sports clothing and wetsuits.
Assistant Commissioner’s decision
[15] Assistant Commissioner Walden accepted that an opponent of an application to register a trade mark may rely on a name or an unregistered trade mark.6 She considered awareness and reputation required an identification of the market, and concluded the relevant market consisted of persons in New Zealand who are the prospective or potential purchasers of the goods on which the opposed mark may be applied and others involved in the purchase transactions.7 Having regard to the use of the opposed goods on a fair, notional use basis, she concluded the relevant market consisted of the general purchasing public and others involved in the purchase transactions such as retailers. The relevant market was large in size and not a specialist market.8 We address these findings later.
[16] As to the question of the reputation of the MR ZOGS SEX WAX mark, the Assistant Commissioner noted the opponent (in this case, Sexwax) must establish that the awareness of its mark is “sufficiently substantial” to lead to the possibility that the opposed goods would be identified with the opponent.9 She found, in applying that standard, there is likely to have been an awareness in the relevant market of MR ZOGS SEX WAX mark in relation to surfboard wax. Her reasons for this were:10
6 Assistant Commissioner’s decision, above n 1, at [24], citing The Council of Ivy Group Presidents (t/as The Ivy League) v Pacific Dunlop (Asia) Ltd (2000) 66 IPR 202 (HC) at 210. 7 Assistant Commissioner’s decision, above n 1, at [25]. 8 At [27]. 9 At [31], citing Pioneer Hi-Bred Corn Company v Hy-line Chicks Pty Ltd [1978] 2 NZLR 50 (CA) at 62 [Pioneer Hi-Bred CA], although correctly noting this is a relatively low threshold. 10 At [34] (footnotes and emphasis omitted).
34.1 Initial wax sales were in June 1972 under the opponent’s [Sexwax’s] mark, which have “remained basically unchanged since that date”.
34.2 The opponent’s wax has been sold in New Zealand since 1981 and has established itself as the number one selling surf wax. Langdon [the Director of the New Zealand distributor, Aerial Connections] states:
4. In 1981, we began importing other surf accessories including Mr Zog’s Surf Wax that complimented our own line of surfing wax. Mr Zog’s SEX WAX is now our number one selling surf wax. Aerial Connections imports approximately 20,000-30,000 blocks of Mr Zog’s Sex Wax every year.
5. Mr Zog’s Sex Wax has firmly and unarguably established itself as the primary brand, and is available in retail shops all over New Zealand. Mr Zog’s Sex Wax has been serving the surf industry in New Zealand since 1981 and has established itself as an iconic mark and product line. The name Zog is understood to represent the finest and most popular and widely available surfboard deck coating. Anyone who sees the name Zog will connect it with Mr Zog’s Sex Wax. I think any use of Zog or something similar would connect the product to Mr Zog’s Sex Wax.
34.3 The opponent’s wax is sold throughout New Zealand including in stores such as Amazon, the Billabong Store, Quiksilver, R&R Sport and Rip Curl.
34.4 The advertising of the opponent’s wax was in surf-oriented magazines such as Surfer Magazine in the 1980s and 1990s, which is circulated in most countries, including New Zealand.
34.5 The opponent’s wax has also appeared or been referred to in general publications such as Elle (May 1986), GQ magazine (June 1994), GQ magazine (August 2009), Men’s Health (article – August 1997), Wall Street Journal (29 August 1997), Vanity Fair (June 2010).
34.6 The opponent’s mark has also featured in the following films and television dramas – Fast Times at Ridgemont High (1982) – a MR ZOG’S SEX WAX t-shirt worn by Sean Penn; Point Break (1991) – a close-up shot of a bar of the opponent’s wax; Charlie’s Angels: Full Throttle (2003) – Sex Wax is mentioned by name; Smiley Face (2007) – Anna Faris wears a t-shirt featuring the opponent’s mark in multiple scenes; NCIS “Bikini Wax”; The Heartbreak Kid (2007) – stickers bearing the opponent’s mark are used as props.
[17] Having regard to the totality of the two marks at issue and their essential features (including their similarities), the Assistant Commissioner found they were “visually and aurally dissimilar”. However she considered:11
11 At 40 (footnotes altered).
… there is a strong [conceptual] similarity in the marks as a whole concerning the essential element: “Mr Zogs” in the case of the opponent’s mark and “Zoggs” in the opposed mark. “Mr Zogs” appears to be a reference to the name of the creator of the wax product. I consider that “Zoggs” could also be perceived in the same way except in relation to the opposed goods. I also consider that “Zoggs” might be perceived to be “Mr Zogs” without the “Mr”. My main reason for this is that Mr Zogs is a very unusual name, which is towards the fancy12 end of the continuum, and is likely to fix in the mind of the relevant market, along with the other unusual term “Sex Wax”, which is a reference to the opponent’s surfboard wax. Bearing in mind imperfect recollection, I consider that the relevant market may remember “Mr Zogs” as “Mr Zoggs” and “Zoggs” as “Zogs”.
[18] The core product of Sexwax is surfboard wax. The Assistant Commissioner found:13
… surfboard wax and the opposed goods are clearly not similar. However, I note that persons who purchase surfboard wax are also likely to purchase swimwear, boardshorts, t-shirts, wetsuits, leisurewear, and beachwear. I also note that the opponent’s surfboard wax is sold in the same kinds of stores where these kinds of clothing items are sold.
[19] On the issue of likelihood of deception or confusion, the Assistant Commissioner said:14
I am not satisfied that use of the opposed mark is not likely to deceive or confuse because:
45.1 the opposed mark consists entirely of the word “Zoggs” and the opponent’s mark includes “Mr Zogs” as an essential element of the opponent’s mark:
45.2 bearing in mind imperfect recollection, “Zoggs” could be remembered as “Zogs” and “Mr Zogs” could be remembered as “Mr Zoggs”:
45.3 “Zoggs” and “Mr Zogs” are towards the fancy end of the continuum:
45.4 “Zoggs” might be perceived by some persons in the relevant market as “Zogs” with the “Mr” component omitted:
45.5 although surfboard wax and the opposed goods are dissimilar, there is overlap in the relevant markets and the opponent’s wax is actually
12 Higgins Coatings Pty Ltd v Higgins Group Holdings Ltd HC Wellington CIV-2009-485-2594, 30 June 2010 at [15], which cited with approval a paragraph from Equity Access Pty Ltd v Westpac Banking Corp (1989) 16 IPR 431 (FCA) at 434 setting out and explaining the “fancy” continuum. 13 Assistant Commissioner’s decision, above n 1, at [44] (footnote omitted), applying British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281 (Ch) at 297. 14 At [45].
sold in the same kinds of retail stores where the opposed goods would be sold on a notional fair use basis:
45.6 persons in the surfing industry might be caused to wonder if “Zoggs” is a new clothing line for the opponent, which would explain why the “Sex Wax” part of the opponent’s mark has not been included.
[20] We note in particular the references in 45.4 and 45.5 to “relevant market” and “relevant markets”. The latter are said to be a subject of “overlap” between surfboard wax and the opposed goods, a topic to which we return later.
[21] Based on the above findings, Sexwax’s opposition succeeded.15
High Court judgment
[22] Simon France J noted that Sexwax’s opposition to registration relied on six unregistered marks, namely the logo at [1], as well as the phrases MR ZOGS SEXWAX; ZOGS SEXWAX; MR ZOG; ZOGS; and ZOG.16 Yet the Assistant Commissioner had only found there to be sufficient awareness of the logo, not the five other unregistered word marks. There was no appeal in respect of the finding of sufficient awareness only of the logo amongst the general purchasing public.17 As no independent reputation was found to exist in any of MR ZOGS SEXWAX; ZOGS SEXWAX; MR ZOG; ZOGS; and ZOG, the sole issue Simon France J identified was whether the registration of ZOGGS is likely to cause confusion because of an awareness in the New Zealand buying public of the “Sexwax complex logo”.18
[23] The reference to the “New Zealand buying public” is an endorsement by the Judge of the Assistant Commissioner’s finding that the relevant market for the application was the general purchasing public of New Zealand and any others involved in those purchases such as retailers.19 The Judge repeated the Assistant Commissioner’s finding that the relevant market was “very large in size and not a specialist market”. Using this market, the Judge concluded there was no risk of confusion between the “complex” SEX WAX logo and the ZOGGS mark, because:
15 At [46]. 16 High Court judgment, above n 2, at [47]. 17 At [60]. The Judge found this “significant” because it suggested Sexwax had no “independent reputation” in the other five word marks. 18 Namely, the logo reproduced above at [1]. 19 At [61], and quoted at [48] of the High Court judgment.
[61] … First and obviously they are quite dissimilar. One is a single block word; the other a complex circular device. Second, and deliberately so, the predominant feature of the logo is the central Sex Wax band. Third, and deliberately so, the concept of Sex Wax is attention grabbing. Mr Herzog says it is unique, and was intended to be provocative, funny and very different. If there is a single feature of the logo which would linger with people, it is this sex wax aspect.
[62] To say more would be just to repeat my essential conclusion, which is that the two marks are so different, no risk of confusion exists. Where I depart from the ruling under appeal is on the emphasis given to the “Mr Zog’s” component of the complex logo. I disagree for two reasons – I do not consider isolating that feature is consistent with the earlier conclusion that no reputation existed in any of those individual concepts; and I do not consider it is a prominent feature of the logo.
[24] The Judge said these findings were enough to dispose of the appeal in favour of Zoggs. But he went on to consider whether there was a sufficient reputation for Sexwax, which he said was “finely balanced”.20 We do not need to traverse the Judge’s reasoning. We observe only that the analysis contains implicit and explicit references to the general buying public of New Zealand as the market the Judge was using to test the finding of reputation and awareness of the Sexwax complex logo.
[25] The Judge concluded Zoggs had established that there was no likelihood of confusion with the MR ZOGS SEX WAX mark if registration were allowed. This was because the only SEX WAX mark with a “sufficient reputation” so as to invoke s 17(1)(a) was quite different from the ZOGGS mark. As noted, the Judge would also have allowed the appeal against the finding of a sufficient reputation in that mark.21
Statutory framework
[26] Section 17 of the Act provides:
17 Absolute grounds for not registering trade mark: general
(1) The Commissioner must not register as a trade mark or part of a trade mark any matter—
(a) the use of which would be likely to deceive or cause confusion; …
20 At [63]–[67]. 21 At [68].
[27] This is a public interest provision, designed to protect members of the general buying public in New Zealand as opposed to the commercial interests of competitors.22 There is no dispute that the key question to be determined under s 17 is identified in Smith Hayden & Co Ltd’s Application, which concerned the equivalent UK provisions.23 This Court, applying Smith Hayden in Pioneer Hi-Bred Corn Company v Hy-line Chicks Pty Ltd, held the question to be answered under s 17 is:24
Having regard to the reputation acquired by [the MR ZOGS SEX WAX mark], is the Court satisfied that the mark applied for [the ZOGGS mark], if used in a normal and fair manner … will not be reasonably likely to cause deception and confusion amongst a substantial number of persons?
[28] Where, as here, the goods are available to the general public for purchase and consumption or domestic use, the fact-finder is entitled to take into account his or her own experience and reaction as a member of the public. As these are not specialist products, there is no need to rely on evidence from persons engaged in that trade or industry.25
[29] Where a likelihood of deception or confusion is alleged, the following propositions discussed by this Court in Pioneer need to be considered:26
(5) In considering the likelihood of deception or confusion all the surrounding circumstances have to be taken into consideration, including the circumstances in which the applicant’s mark may be used, the market in which his goods may be bought and sold and the character of those involved in that market.
(6) But, it is the use of the mark in New Zealand that has to be considered and association of a similar mark with another trader in overseas countries or market is irrelevant, except in so far as it bears on the likelihood of deception or confusion in the New Zealand market.
(7) It is in relation to commercial dealings with goods that the question of deception or confusion has to be considered, and the persons whose states of mind are material are the prospective or potential
22 Pioneer Hi-Bred CA, above n 9, at 63. 23 Smith Hayden & Co Ltd’s Application (1945) 63 RPC 97 (HC) at 101. 24 Pioneer Hi-Bred CA, above n 9, at 57. 25 Pioneer Hi-Bred CA, above n 9, at 62, applying proposition 10 in the list therein. Indeed, in many cases, such evidence has been considered to be irrelevant: see Lees & Son (London) Ltd’s Application (1955) 72 RPC 75 (HC); In Re Edward Hack’s Application (1940) 58 RPC 91 (HC) at 100; and Smith Hayden & Co Ltd’s Application, above n 23. 26 Pioneer Hi-Bred CA, above n 9, at 61–62 (footnote added).
purchasers of goods of the kind to which the applicant may apply his mark and others involved in the purchase transactions.
…
(9) The test of likelihood of deception or confusion does not require that all persons in the market are likely to be deceived or confused. But it is not sufficient that someone in the market is likely to be deceived or confused. A balance has to be struck. Terms such as “a number of persons” (Jellinek’s Application), “a substantial number of persons” (Smith Hayden & Co Ltd’s Application), “any considerable section of the public” (New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV), and “any significant number of such purchasers” (Polaroid Corporation v Hannaford & Burton Ltd) have been used.27 …
[30] With respect to proposition nine above, the varying expressions emphasise it is not always necessary that a large number of people are likely to be deceived or confused. The requirement that a “substantial number” of individuals be at risk of deception or confusion is a judicial gloss, establishing that the s 17 threshold involves the exercise of judgment having regard to the commercial setting, comprising those who will be exposed to the applicant’s mark and those who know of the reputation the opponent’s goods enjoy.28 We return to this point below.
Issue one: the MR ZOGS SEX WAX mark
Submissions of the parties
[31] Sexwax contends the Judge was wrong to disregard the MR ZOGS element as being part of the identity of the trade mark because there was no independent reputation established for that part of the complex mark. Sexwax submits the MR ZOGS feature of its trade mark is unusual and distinctive. Although it does not constitute the entire identity of the trade mark, it is an integral, significant and memorable component of the complex mark. Moreover, the mark itself is at the “fancy end of the continuum” of trade marks.
27 Jellinek’s Application (1946) 63 RPC 59 (HC); Smith Hayden & Co Ltd’s Application, above n 23; New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV [1964] NZLR 115 (CA); and Polaroid Corporation v Hannaford & Burton Ltd [1975] 1 NZLR 566 (CA). 28 A view emphasised by Cooke J in the Supreme Court in Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1975] 2 NZLR 422 (SC) at 429 [Pioneer Hi-Bred SC].
[32] Sexwax also submits that the reputation of the trade mark is not crystallised in the fixed visual form. Rather, it is the awareness, knowledge or cognisance of the mark that constitutes the reputation acquired by it. That is informed not only by the visual representation but also by the way it is used and referred to. The distinctive elements, “Mr ZOGS” and “SEX WAX”, are used interchangeably, with the MR ZOGS element being just as well-known as the brand SEX WAX. This is evidenced by the various public and retail references to the product, which always includes the term MR ZOGS. Further, MR ZOGS is part of the house brand or indication of the origin of the wax itself.29
[33] For Zoggs, Mr Upton QC emphasises the Assistant Commissioner’s finding that the opponent had a reputation only in the logo and not in any of the other marks listed.30 While Sexwax may assert its reputation in this complex logo, there is no separate or independent reputation in any other component of the SEX WAX device – such as in MR ZOGS alone. Counsel submits almost all references to the reputation in MR ZOGS itself are overseas references. Thus Sexwax cannot now assert an independent reputation in MR ZOGS, arguing that whether or not MR ZOGS is an integral part of the SEX WAX device is irrelevant for the purposes of reputation. Sexwax either has a reputation in the SEX WAX device as a whole, or it does not.
[34] In the alternative, Zoggs submits that, if this Court disagrees with the approach of the High Court and considers that all of the appellant’s mark can be reassessed, there are further reasons why the appellant has no reputation in the elements MR ZOG and ZOGS:
(a) The SEX WAX mark consists of numerous devices and words in telegraphic format. It also includes non-word elements such as circles, lines and stars. Of all these elements, the predominant feature is SEX WAX. This is due to the central nature of the words within the round logo, the double-lined border around the words, the words
29 Sexwax points to an example being the reference to HOLDEN as the manufacturer or house brand and BARINA as the car brand referred to in Mainland Products Ltd v Bonlac Foods (NZ) Ltd [1998] 3 NZLR 341 (CA) at 349. 30 Assistant Commissioner’s decision, above n 1, at [34].
SEX WAX being in the largest font, and also the provocative nature of the words themselves. In its colour format, the words SEX WAX are the standout feature of the device.
(b) It is disingenuous for Sexwax to refer to the SEX WAX device as the MR ZOGS or ZOGS logo. In all of the examples of alleged use, SEX WAX is the crucial, central component of the appellant’s brand.
(c) By contrast, the use of MR ZOGS or ZOGS absent the SEX WAX logo is very limited and does not establish an independent reputation in those marks. The reality is that the brand created is SEX WAX.
Our analysis
[35] Sexwax does not seek to establish an independent reputation in the words MR ZOGS. Rather, it seeks to challenge the Judge’s reliance on the fact that MR ZOGS and SEX WAX are distinct and severable elements in the MR ZOGS SEX WAX mark, emphasising instead the overall features of the MR ZOGS SEX WAX logo itself.
[36] We agree with the Assistant Commissioner that MR ZOGS is a central and essential component of that logo.31 It is clearly featured on the trade mark and is a significant part of the reputation generated from the mark itself. It is true the Assistant Commissioner made no attempt to distil a stand-alone reputation from the mark MR ZOGS itself. That was because the key question was whether Zoggs could establish the absence of a reasonable likelihood of deception or confusion on the basis of the whole of the complex SEX WAX mark, including the MR ZOGS element. A corollary of that question was an assessment of the trade mark in its totality.
[37] We consider it artificial for Zoggs to attempt to sever the SEX WAX element from the other components of the logo. As was noted by North P in New Zealand Breweries Ltd:32
31 Assistant Commissioner’s decision, above n 1, at [45.1]. 32 New Zealand Breweries Ltd, above n 27, at 134.
… [W]hile it is true that it is necessary to have regard to “the totality” of the proposed trade mark, yet often enough the real risk of confusion may lie in some common feature in the two labels which is liable to linger in the minds of persons requiring a particular kind of goods. Sometimes indeed it will be a word appearing in the labels which either looks or sounds the same.
[38] Deception or confusion may arise by the use, not just of the whole of a mark or logo, but by using one or more of its essential features.33 Moreover, identification of an essential feature will depend partly on the Court or Tribunal’s own judgment and partly on the nature of the available evidence, particularly with regard to the goods in question. As Lord Radcliffe elaborated:34
A trade mark is undoubtedly a visual device; but it is well established law that the ascertainment of an essential feature is not to be by ocular test alone. Since words can form part, or indeed the whole, of a mark, it is impossible to exclude consideration of the sound or significance of those words. … It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole.
[39] This was the approach the Assistant Commissioner adopted in her analysis, comparing the whole of the MR ZOGS SEX WAX device, including the MR ZOGS portion in that logo. The Judge did not do so. We consider he erred in not doing so.
[40] It is often the case that products carry marks with elements with a different significance. The example of the Holden Barina is a case in point.35 Other examples exist in relation to similar “house brands”: such as DOC MARTENS shoes, or CONVERSE shoes. Each product has a specific name or brand attached to it, in addition to the house brand. The reputation established in a mark should not be assessed by reference only to the specific shoe type in question, to the exclusion of the primary brand of DOC MARTENS or CONVERSE. To do so would view the mark, and product to which it attached, narrowly and somewhat artificially.
[41] Assessing the MR ZOGS SEX WAX mark in its entirety requires reference to the MR ZOGS element inside the mark as one of its essential features. We are satisfied the MR ZOGS SEX WAX logo is recognised or remembered as a matter of
33 A proposition emphasised by Lord Radcliffe in relation to infringement of a trade mark in De Cordova v Vick Chemical Co (1951) 68 RPC 103 (PC) at 105–106. 34 At 105–106. 35 As noted above at n 29.
general reputation by reference to the MR ZOGS element, not least because it identifies the origin or source of the products concerned.
[42] Our own judgment and the available evidence support this conclusion. Having regard to the totality of the complex mark, we now consider the next question.
Issue two: reputation/awareness
Need for awareness of the opponent’s mark
[43] As noted, much of the argument before us focused on what, for the purpose of analysis under s 17(1)(a), is the “relevant market”; and what constitutes substantial awareness of the opponent’s mark in that market. This requires analysis of the role market definition plays under s 17.
[44] Section 17 itself makes no reference to the concept of a “market”. Neither does the section refer to products, goods or services. The part of the section dealing with likelihood of deception or causing confusion is concerned, rather, with general use of the trade mark, or any part thereof, for which registration is sought.
[45] The definition of “trade mark” in the Act explains what is meant by “use”. Relevantly it provides:36
Trade mark—
(a) means any sign capable of—
(i) being represented graphically; and
(ii) distinguishing the goods or services of one person from those of another person; …
[46] Section 17(1)(a) prohibits the Commissioner from registering an applicant’s mark, the use of which would be likely to deceive or cause confusion by leading people to wonder whether goods or services bearing the mark are those of the
36 Trade Marks Act 2002, s 5(1).
opponent.37 By focusing on use of the applicant’s mark, the legislation inquires whether those exposed to the applicant’s goods are likely to be confused. It is enough if members of the public are caused to wonder whether goods bearing the applicant’s mark are related or connected in trade to the opponent’s goods.38
[47] Cases historically applying s 17(1)(a) and its predecessor under the Trade Marks Act 1953 (and the earlier UK cases applying the legislation, on which the 1953 Act was modelled), do not require the individuals who may become deceived or confused to be actual purchasers of products bearing the marks in question. Nor do they require that use of the applicant’s mark must infringe a right held by the registered proprietor of an opposing mark or cause loss to that person. Rather s 17(1)(a) protects the public from the risk that similar marks or devices will deceive or cause confusion.
The correct approach to s 17(1)(a)
[48] To shed light on how this section should be approached, we make the following comments. When applying this section, the Commissioner begins by inquiring whether the opponent’s mark has a reputation in New Zealand at the relevant date. Such reputation need not be widespread; it all depends on the nature of the marks and the goods to which it is applied. Where marks are used in respect of goods with only a very narrow or specialised use or purpose, the mark may be known only to a small number of people.39 Pioneer Hi-Bred is a good example: the opponent to registration sold hatching eggs and breeding poultry, goods purchased only by those in the poultry breeding industry. It was only those in that industry who were aware of its existence, and therefore only among persons in that class that a reputation needed to be established.40 In other cases, a mark may be applied to goods sold very broadly or applied to numerous different goods under a brand’s
37 Pioneer Hi-Bred CA, above n 9, at 62. 38 We discuss below at [48]–[65] the question of the number of persons required to make up the class of persons likely to be deceived or confused, as discussed in proposition nine in Pioneer Hi-Bred CA, set out at [29] above. 39 See, for example Pioneer Hi-Bred SC, above n 28, at 429 and 434 per Cooke J; see also Re Transfermatic Trade Mark [1966] RPC 568 (HC) at 578. 40 Pioneer Hi-Bred CA, above n 9, at 60 per Richardson J.
penumbra.41 This is the initial inquiry into the “circumstances of trade”, against the background of which the marks are regarded as notionally in use.42
[49] Next, the Commissioner assesses the likelihood of deception and confusion. This is a fact-specific inquiry. It is a matter of assessing “practical business probabilities”, having regard to all the surrounding circumstances and the degree of similarity of the marks.43 Judicial decisions have established a materiality threshold for confusion or deception, requiring the applicant to prove that registration will not cause deception or confusion amongst a “substantial number of persons”.44 As courts in subsequent cases have noted, however, the terminology used in the judgments varies with the setting, and is ultimately a question of significance of the numbers in relation to the awareness of the marks in question.45
[50] This relationship, between reputation and the substantial number of persons who may be at risk of deception or confusion, can be illustrated by examples. Re Transfermatic Trade Mark concerned assembly-line rotation and transfer devices for machinery, sold to large-scale motor vehicle manufacturers.46 Buckley J emphasised that the question for him was whether confusion might exist among “a sufficient number” of those persons who might purchase such highly-specialised machinery.47 The evidence showed the reputation of the opponent mark extended to most of the major motor manufacturers in that industry.48 Even among the few entities identified, the risk of deception created was enough to prevent registration.
[51] In Re Edward Hack’s Application the registered proprietor of the mark “Black Magic” relating to chocolate successfully opposed the application of the mark
41 New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV, above n 27, for example, concerned beer sold into the retail market to the public at large. The marks concerned had broad recognition due to the widespread basis on which the products were sold: at 131. Products featuring the brand name “MERCEDES” are an example of the latter category mentioned above – the mark is applied to a wide variety of very diverse products and therefore brand recognition is extensive. 42 Pioneer Hi-Bred CA, above n 9, at 63 per Richardson J, citing Gaines Animal Foods Ltd’s Application (1951) 68 RPC 178 (HC) at 180. 43 Pioneer Hi-Bred CA, above n 9, at 76. 44 Smith Hayden & Co Ltd’s Application, above n 23, at 101. 45 Pioneer Hi-Bred SC, above n 28, at 429. 46 Re Transfermatic Trade Mark, above n 39, at 569. 47 At 576. In that case, in the United Kingdom market for the goods, the opponent to the registration of the mark had sold only one such device; the applicant only six. 48 At 574–575.
“Black Magic” in respect of laxative products.49 The registered mark was said to have become a “household word” in connection with chocolate products. A sufficient reputation or cognisance of the registered mark was established. The Court was satisfied that, even though the laxative and chocolate products would not be sold at the same stores (and if they were so sold, these would be general stores), and even though they were very different products, enough people would be caused to wonder, upon seeing a laxative sold under the name Black Magic, whether it was created by the opponent.50
[52] Another example is Lees & Son (London) Ltd’s Application.51 The registered proprietor of the mark “LEESONA” successfully objected to the registration of an identical word mark in respect of carpets, rugs and mats.52 The opponents manufactured and sold textile-winding machines. The reputation of the opponent’s mark in the field of textiles machinery was “very considerable”. The goods to which these competing marks were to attach were dissimilar – heavy-duty textiles manufacturing equipment, compared to the textiles products themselves. Nevertheless, the Judge considered there was a “not inconsiderable part of the population” whose daily work took them into the textile mills and factories where there was machinery on which the mark concerned was displayed.53 Having seen the machinery they would be familiar with that mark, and this would cause them to wonder when seeing the applicant’s carpets, whether there was a trade connection between the two.
[53] As already noted, Pioneer Hi-Bred Corn Co concerned the risk of confusion among the very few members of the live poultry breeding industry. That was considered sufficiently “substantial” by this Court to prevent the registration of a competing mark.
[54] These authorities demonstrate that the risk of confusion is properly measured by reference to those who may be exposed to the applicant’s goods and are aware of
49 Re Edward Hack’s Application, above n 25, at 94. 50 At 105–106. 51 Lees & Son (London) Ltd’s Application, above n 25. 52 At 79. 53 At 80.
the opponent’s mark. Absent exposure to goods bearing the applicant’s mark, there will be no risk of confusion.
[55] Courts have occasionally reached for the concept of a market to assist when inquiring whether a substantial number of persons are likely to be confused. Judges identify awareness by pointing to a market, and attempting to place the potentially confused persons within it. This approach was adopted in Pioneer Hi-Bred, first by Cooke J in the Supreme Court, and then applied by Richardson J again in the Court of Appeal. The opponent was a United States-based company with substantial sales internationally, but none in New Zealand. An Australian-based company sought to register a very similar mark in New Zealand. A central submission for the applicant Australian company was that the US opponent could not point to a relevant reputation, unless it had actually made sales in the New Zealand market. It was thus sensible to examine what was occurring in the local market when deciding whether the opponent had a relevant reputation there.
[56] Use of the concept of “the market” as the relevant frame of reference is, however, context-specific. Establishing presence in the “local market” or the “New Zealand” market was a necessary evidential hurdle for an internationally-based firm, seeking to establish that New Zealand poultry-breeders knew of its goods.
[57] Notwithstanding the limited utility of the notion of the “market”, it has still been employed in many subsequent cases in New Zealand.54 It may be a convenient analytical tool through which to assess reputation and measure the risk of deception. However, the legislation does not refer to or insist upon a market definition and the exercise is not always required. It is most likely to assist where the goods of the applicant and the opponent are identical or close substitutes, so as to clearly fall into the same product markets. In other situations, a market reference may not be necessary.
[58] This bears emphasis because the attempt to identify a single relevant market encompassing all the goods with which the competing marks may be associated may
54 For example, NV Sumatra Tobacco Trading Co v NZ Milk Brands [2011] NZCA 264, [2011] 3 NZLR 206 (CA); NV Sumatra Tobacco Trading Co v British American Tobacco (Brands) Inc [2010] NZCA 24.
lead decision-makers to underestimate either the reputation of the opponent or the risk of deception or confusion. In seeking to register the mark in a number of classes, applicants may wrongly require the opponent to establish a reputation in every one of those classes – to demonstrate a reputation in the requisite “market”. Further, the opponent could then be required to show a risk of deception amongst a substantial number of persons in that market. In both cases the threshold is likely to be high. This would allow the applicant, by choosing the nature and number of items within the class, to dictate the market definition, necessarily excluding or swamping the opponent’s goods and leading to registration of a mark that may confuse a substantial number of those familiar with the opponent’s goods. This is an incorrect application of s 17(1)(a) and would frustrate the public protection impetus behind it.
[59] This analysis is supported by the cases discussed. For example, in Lees & Son (London) Ltd and Re Edward Hack’s Application above, the competing marks applied to significantly different goods which could not be fitted into a single market. The Court’s inquiry was correctly framed by reference to the individuals aware of the registered mark and exposed to the applicant’s goods. There was no reference to a market – logically, no such common market would exist.
[60] Axiomatically the risk of confusion may be higher where the goods of the applicant and the opponent are the same or similar.55 But s 17(1)(a) is not confined to such cases. It is concerned with public confusion resulting from use of the applicant’s mark, regardless of whether the goods are the same, similar, or entirely different.
[61] In the present case, manifestly, surfboard wax and swimming goggles are not substitutes or near-substitutes, although they might sometimes be sold through the same outlets. Little is gained by trying to force them into a single market. A market that included both surfboard wax and swimming goggles would need to be defined so broadly as to include the entire New Zealand public.
55 There is a rebuttable presumption of an intention to use the mark applied for on all the goods included in the application: Newnham v Table for Six (1996) Ltd (1998) 44 IPR 266 (HC) at 269.
[62] Although the range of goods sold under each of the competing marks before us is not the same, there is some similarity. The evidence suggests they will often be advertised to similar groups of people, through similar methods. They are sold in similar large sport stores and other retail outlets. They relate to water sports and water-related leisure activities. There is a connection in the use of the goods.
[63] Applying the approach described above, we are satisfied that the Assistant Commissioner erred when, in purporting to apply proposition seven in Pioneer, she described the relevant market as consisting of “the general purchasing public”. The error comprises casting the relevant market so broadly to capture the different goods, being the entire purchasing public of New Zealand. Even as a statement of the market for the applicant’s goods, that is over-broad. The applicant sells swimming apparel and other goods adapted for particular uses. Not everyone is a purchaser of such goods.
[64] We consider the Judge too was in error when he adopted the Commissioner’s finding, affirming this statement of the “relevant market”.56 This error was compounded when the Judge referred to the next step as being “to assess if the opponent has established an awareness of its mark in the relevant market”.57 Later in the High Court judgment, there is further reference to whether the registration of ZOGGS is “likely to cause confusion because of an awareness in the New Zealand buying public of the complex logo”.58 Again, this is at odds with the methodology we have suggested above. It also tends to skew the Judge’s analysis of the question as to the opponent’s reputation, by framing the question so broadly.
[65] The correct focus is on the awareness of the opponent’s mark in relation to prospective purchasers of the goods to which its mark attaches and individuals and entities involved in that trade; not the entirety of the purchasing public of New Zealand. The question of likelihood of deception or confusion must then be assessed against that reputation, considering the fair, notional use of the goods bearing each of the marks. We now turn to that question of reputation in this case.
56 High Court judgment, above n 2, at [48]. 57 At [49]. 58 At [61].
Submissions on reputation/awareness
[66] Sexwax contends that a reputation for its MR ZOGS SEX WAX mark can be inferred from the existence of such reputation or awareness among:
(a) purchasers of surfboard wax;
(b) purchasers of t-shirts and other branded products of the applicant;
(c) purchasers of other products and browsers in outlets selling the appellant’s products, due to counter displays, store signage and decals;
(d) people who have viewed the branding outside the retail outlets, on t-shirts etc. worn by others, or stickers on cars;
(e) online viewers of the products for sale; and
(f) others who see the products on TradeMe, newspaper articles, and passing references in motion picture and television including spill-over reputation.
[67] Zoggs in response contends that Sexwax must prove its reputation among ordinary consumers in a broad market with a substantial population and has wrongly analysed its reputation from the starting point of the specialist surfing market. Counsel for Zoggs contends, regardless, consumers in a specialist market are more discerning and less prone to confusion, so a specialist market framework does not assist Sexwax.
[68] Zoggs further submits the evidence of the reputation of the MR ZOGS SEX WAX mark is exaggerated. There are few examples of advertising in this country and the evidence offered by Sexwax is limited to the surfing market. This is much more limited than the market for ordinary swimwear and clothing. Zoggs points to the fact that all the deponents for Sexwax are active in the surfing industry, that the evidence relates to surfboard wax and surf wear goods, and that the primary avenues of sales, advertising and promotion are all within the surfing industry.
Our analysis
[69] Again, the submissions of the parties are largely couched in terms of the “market”, as was the framework adopted by the Judge and the Commissioner below. We consider this to be in error in the present case. We analyse the parties’ positions rather in terms of the method we set out above.
[70] Further, we emphasise it is important not to conflate the test for establishing a reputation or awareness in an industry or in New Zealand, with the test for establishing that a substantial number of those persons are likely to be deceived or confused. Each of these aspects requires separate consideration. Assessment of reputation and awareness will occur first, taking into account the circumstances of trade of the opponent as a basis for comparison of the two marks, which must be regarded as notionally in use.59
[71] The Judge’s reasoning as to the inadequacy of the reputation of the MR ZOGS SEX WAX mark relied on the following factors:
(a) insufficient evidence as to spill-over reputation from overseas (limited isolated references in the magazines; movies that are outdated; TV show references that are sporadic and viewing figures not provided);
(b) the absence of actual advertising in New Zealand because of the iconic nature of the product in its specialised market;
(c) insufficient awareness in this specialised surfing community to meet the threshold of reputation in the general New Zealand buying public and there is no evidence as to the size of this specialised market; and
(d) insufficient reputation proportionate to the swim-wear buying population of New Zealand generally.
59 As Pioneer Hi-Bred CA, above n 9, citing Gaines Animal Foods Ltd’s Application, above n 42, at 180.
[72] Zoggs’ focus on the empirical evidence as to viewing numbers, the reach of various movies and circulation or saturation of advertising of the particular product is misplaced. This Court in Pioneer Hi-Bred emphasised “awareness” and “cognisance” are used in a broader sense. There, it was sufficient for this Court that a number of poultry keepers, and a grain and seed merchant knew of the opponent’s business at the date of application, and inferences could be drawn from analysis of the general standing of the opponent in international commerce and advertisements circulated in New Zealand industry publications. There is no necessary requirement that there be extensive advertising in New Zealand, targeted to the New Zealand market. We noted earlier, at [50]–[52], other cases in which tangible risk of confusion was sufficient, absent empirical or actual evidence of confusion.
[73] The facts before us support the existence of a reputation in New Zealand for the MR ZOGS SEX WAX mark, particularly in surf and beach wear and accessories. We refer in particular to the sale of between 20,000 and 30,000 units of surfboard wax each year from more than 180 retail outlets. These comprise a wide range of surf and sport outlets, including R&R Sports and Stirling Sports stores. Products sold also include caps and T-shirts as well as rash-guards, swimwear and wax combs. Promotional activities involve the use of stickers and merchandising such as keyrings. We are also satisfied that there is likely to be some spill-over reputation by virtue of sponsorship, including the international nature of surfing and through media references such as in movies and television. We consider the MR ZOGS surfboard wax is recognised generally as a popular and quality surfboard deck coating.
[74] This reputation exists in New Zealand among those exposed to the mark, including purchasers of the surfboard wax, purchasers of the T-shirts and other Sexwax branded products and purchasers of other products or those browsing in outlets selling Sexwax products. These would include counter displays, store signage and decals. Moreover, there is evidence of people who view the branding outside of retail outlets, such as on T-shirts worn by others and stickers on cars. Other sources generating awareness of the mark include online viewers of products for sale on TradeMe, as well as readers of newspaper articles, and the above-noted references in motion picture and television programmes.
[75] Parts of the High Court judgment appear to accept that there is a relevant reputation. For example, the Judge stated “[t]here can be no doubt that Mr Zogs Sex Wax and the accompanying logo has a reputation in the surfing market in New Zealand”.60 Later in the judgment the Judge found that the surf wax with the MR ZOGS SEXWAX logo “basically sells itself”. This is because “it is of undoubted quality, and is possibly even iconic, within the very specialised market in which it exists”.61
[76] The Assistant Commissioner concluded that Sexwax had established that there is likely to have been an awareness of the MR ZOGS SEX WAX mark as at December 2009, for the reasons referred to at [16] above. We agree with those findings.
[77] We conclude that Sexwax has established a reputation for the MR ZOGS SEX WAX mark in New Zealand. When the Judge said that “none of this justifies a conclusion that the 2009 general buying public of New Zealand would have awareness of the logo”, he was answering the wrong question. There was no necessity for him to determine that the reputation of the MR ZOGS SEX WAX mark existed among a substantial number of the New Zealand buying public. Rather, the question was whether, having regard to the reputation attaching to Sexwax’s mark, and in light of the potential products bearing the ZOGGS mark being advertised and sold in the classes for which it applied, there is a sufficient number of individuals aware of the opponent (Sexwax’s) mark, and exposed to the applicant’s (Zogg’s) mark, to engage s 17(1)(a). We are satisfied there is.
[78] We now turn to the final question as to the likelihood of deception or confusion of those individuals.
Issue three: likelihood of deception or confusion?
Submissions of the parties
[79] Sexwax contends that, because the reputation of the MR ZOGS SEX WAX
60 At [3]. 61 At [65].
logo is established amongst people who visit and purchase goods from surf and sport shops, there is a coincidence between the people who know of the appellant’s trade mark and those who may be exposed to some or all of the respondent’s goods. The likelihood of confusion is to be assessed in relation to any of the goods in ZOGGS’s application, on a fair or notional use basis. This includes clothing, footwear, headgear, swimwear, swim caps, warm-up suits, t-shirts, jackets, beachwear, leisure wear, ski wear, sports clothing and wet suits. Sexwax submits it is likely that people who know or are aware of the appellant’s trade mark will purchase beachwear, swimwear, wetsuits, t-shirts, footwear such as sandals and shoes, headgear such as caps or sunhats, clothing and snowboard wax.
[80] Counsel for Zoggs emphasises the Assistant Commissioner’s finding that the SEX WAX and ZOGGS marks were visually and aurally dissimilar. Thus the marks to be compared are not MR ZOGS and ZOGGS, but rather the SEX WAX device and ZOGGS. The marks are not conceptually similar, as the Assistant Commissioner held. They are conceptually dissimilar. Thus counsel submits there is no shared idea in the two marks because the SEX WAX element of the device is dominant, MR ZOGS is a reference to Mr Herzog, which is a nickname, as opposed to ZOGGS, which is the name itself and ZOGGS was chosen due to its association with the word “goggles” or “goggs”.
[81] Counsel submits that the fair and notional use of the ZOGGS brand will not result in a reasonable likelihood of deception or confusion, because:
(a) Zoggs has a pre-existing reputation in the New Zealand market for swimming-related goods, unlike other earlier cases. It is already known by this name;
(b) any confusion which is likely to arise would already have arisen and could have been produced in evidence. Zoggs has actively used its ZOGGS mark for goggles and swimming-related goods for years, and for subsequent various other goods. There is no evidence of actual deception or confusion by consumers or prospective purchasers; and
(c) the potential for confusion amongst consumers of Sexwax products is not sufficient to discharge the test. It must be “significant” amongst the individuals in question, who constitute a “large and non-specialist” portion of the entire purchasing public of New Zealand.
[82] Accordingly counsel submits the ZOGGS and the SEX WAX device cannot be associated with the same idea, given the lack of shared origin or real-world meaning of their marks.
Our analysis
[83] As already noted, in the High Court the Judge approached the question of likelihood of deception or confusion with regard to the purchasing public of New Zealand generally. He determined this question by assessing the surfboard owning or surfing community as a proportion of New Zealand’s total population, and asking whether that amounted to sufficient awareness to constitute relevant “reputation”.
[84] We consider this approach to be erroneous. It would significantly reduce the utility of s 17(1) as a public interest protection measure. There are few products outside very large international brands that could occupy a position in terms of awareness that, proportional to the entire population of a country, constitutes sufficient awareness in this manner. That arguably rules out the protection from deception or confusion afforded by s 17(1)(a) for any niche brand, or any niche area of the market that cannot command a requisite popularity or size. On that basis, some brands may never reach that level of awareness.
[85] For the purposes of assessment it is necessary to take into account all the likely circumstances of trade.62 We agree with Sexwax’s submission, that the possibility of confusion could extend not only to the sale of Zoggs products from surf shops, but also to people being aware of its mark, having encountered Zoggs-branded products in other retail outlets, particularly sports and beachwear
62 Mainland Products Ltd v Bonlac Foods (NZ) Ltd, above n 29, at 348.
stores. Given the similarities between the MR ZOGS element and the ZOGGS mark, there is a clear potential connection between the brands. Any retention of the SEX WAX element in the purchaser’s mind would not be enough to cancel out the ZOGS connection.
[86] We agree with the findings of the Assistant Commissioner on the issue of likelihood of deception and confusion set out at [19] above. Conceptual similarity does not need to evince a shared origin of the brands. Rather, the use of the MR ZOGS element in the complex mark and ZOGGS is enough to tie the brands together and spark a connection in the minds of consumers.
[87] There is an overlap or confluence in products sold in surf shops, sports shops, and surf retail outlets selling beachwear. Given the awareness of the MR ZOGS SEX WAX mark by the individuals concerned, we are satisfied there is a reasonable likelihood those individuals will be confused or deceived by the registration of the ZOGGS mark for goods falling within that intersection. Thus, individuals would be caused to wonder whether there is some connection between the two marks at issue. Zoggs has accordingly not established that there is no reasonable likelihood that the ZOGGS mark would cause deception or confusion.
Relief
[88] Following the hearing counsel for Zoggs filed a memorandum discussing the particular categories of class 25 for which this Court might consider registration of the ZOGGS mark. The memorandum repeated the full list in the specification set out at [14] above. Zoggs referred to the power in s 27(5) of the Act by which the Commissioner (and this Court on appeal) may grant registration “subject to conditions or limitations”.
[89] We reject that course of action. We consider that the findings we have made on the three issues require the appeal to be allowed. This is particularly so given our concerns at the approach to applying s 17(1)(a) taken by both the Assistant Commissioner and the Judge.
[90] If Zoggs wishes to seek registration of the ZOGGS mark for particular goods in certain categories in class 25, it should do so by filing a fresh application. That application can then be assessed by the specialist Tribunal in the light of the evidence filed in support and an analysis of the legal issues applying the principles set out in this judgment.
Result
[91] The appeal is allowed. The direction given in the High Court that Zoggs was entitled to register the ZOGGS mark is quashed. The determination of the Assistant Commissioner that Sexwax’s opposition based on s 17(1) of the Act succeeds is reinstated.
[92] The respondent must pay the appellant costs on a standard appeal on a band A basis and usual disbursements.
[93] In the absence of agreement, any question of costs in the High Court is to be determined by that Court.
Solicitors: A J Park Law, Wellington for Appellant Baldwins Law Limited, Wellington for Respondent