ABN AMRO Holdings NV v ABN Union Treasury Management Ltd HC Auckland CIV 2004-404-7200

[2005] NZHC 1260

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2004-404-7200

UNDER

the Trade Marks Act 2002 and the Fair Trading Act 1986

BETWEEN

ABN AMRO HOLDINGS NV

First Plaintiff

AND

ABN AMRO NEW ZEALAND LTD

Second Plaintiff

AND

ABN UNION TREASURY MANAGEMENT LTD

First Defendant

AND

ABN UNION BUILDING SOCIETY

Second Defendant

AND

COMMISSIONER OF TRADEMARKS

Counterclaim Defendant

Hearing:

7 February 2005

Appearances: M S Cole and E C Gray for Defendants (in support)

D S Alderslade and M C Sumpter for Plaintiffs (to oppose) No appearance by or on behalf of Counterclaim Defendant

Judgment:      9 February 2005

JUDGMENT OF HEATH J

Solicitors:

Chapman Tripp, Auckland for plaintiffs Simpson Grierson, Auckland for Defendants

ABN AMRO HOLDINGS NV And Anor V ABN UNION TREASURY MANAGEMENT LTD And Ors HC AK CIV 2004-404-7200 [9 February 2005]

Introduction

[1]    “ABN AMRO” is a well known brand within the financial sector. Trade marks for both “ABN AMRO” and “ABN” have been registered in New Zealand, the former in November 1996 and the latter in September 2000. The trade marks are owned by ABN AMRO Holdings NV, a Dutch company. ABN AMRO  New Zealand Ltd is licensed to use those trade marks in New Zealand. The trade marks were registered for use over a wide range of financial services, reflecting ABN AMRO’s world wide reputation in that field.

[2]    On 21 December 2004, the two ABN AMRO companies sought an ex parte interim injunction to restrain ABN Union Treasury Management Ltd and  ABN Union Building Society from using the “ABN” trade mark (or any similar mark) in New Zealand in “any form, on or in relation to banking, financial or commercial services or any of the other services for which ABN is registered and on or  in relation to similar goods or services.” An order to that effect was made ex parte by Priestley J, sitting as a vacation Judge, on 22 December 2004.

[3]    ABN Union Treasury Management Ltd and ABN Union Building Society apply to rescind the injunction.

[4]    For convenience, unless the context otherwise requires, I shall refer to the plaintiff companies as ABN AMRO and to the defendants as ABN Union.

Background to ex parte injunction

[5]    ABN AMRO Holdings NV operates banking and fund management businesses around the world under the “ABN AMRO” banner. That company operates in around 50 countries. It is listed on the New York Stock Exchange, as  well as other major exchanges.

[6]    ABN AMRO has had a presence in the New Zealand financial markets since 1998. It offers New Zealand based individual and corporate clients:

a)Corporate and investment banking services

b)Investment management services; and

c)Stock-broking and financial planning services.

[7]    In mid November 2004 it came to the notice of a director of ABN AMRO New Zealand Ltd, though an approach from an official from the Commercial Affairs Division of the Ministry of Economic Development, that a company might be operating in New Zealand under the name “ABN Union Bank”. An internet website for that entity was located at Discussions between a director of ABN AMRO and officials from the Reserve Bank of New Zealand in November 2004 disclosed that the Reserve Bank was also aware of a company called ABN Union Treasury Management Ltd. Subsequently, a private investigator retained by ABN AMRO ascertained the existence of ABN Union Building Society.

[9]    In an affidavit in support of the ex parte application Mr Kam, a director of ABN AMRO New Zealand, said:

28.The defendants’ adoption of our ABN trade mark in its promotional material, and the incorporation of our mark in each of their trading names, appears to have been designed to leverage off the very significant and valuable goodwill and reputation ABN AMRO enjoys in its ABN trade mark in New Zealand and around the world.

29.In doing so, I believe it inevitable that a substantial number of existing and potential ABN AMRO clients, along with members of the public, will be misled into thinking that the defendants  are part of the ABN AMRO Group and/or otherwise associated or affiliated with ABN AMRO New Zealand and/or ABN AMRO’s international activities.

30.This is not a state of affairs ABN AMRO can commercially tolerate given that any unfavourable comment about an “ABN” branded financial institution would destabilise and cause irreparable damage to ABN AMRO’s New Zealand activities (and potentially even ABN AMRO’s regional or global operations).

31.Should an “ABN” branded financial institution attract publicity (adverse or otherwise) or worse still, become, for example, the subject of a regulatory investigation, that would cause us immediate

and irreparable damage given the certainty that some people will be misled into thinking that the defendants’ activities are those of ABN AMRO or somehow associated or connected with us.

32.In the result, if ABN AMRO does not secure the interim injunction it seeks, leaving the defendants free to use our trade mark to brand their own financial products and services, we would find it very difficult to put a dollar figure on the damage to the ABN AMRO brand, the ABN trade mark, and ABN AMRO’s New Zealand business generally. I also harbour serious doubts about the defendants’ ability to meet our legal costs, let alone a successful damages claim against them.

Grounds of application

[10]   Three substantive grounds are advanced in support of the application to rescind:

a)The disclosure made on the ex parte application was so inadequate as to justify refusal of continuation of the injunction.

b)There is no seriously arguable case of trade mark infringement.

c)The balance of convenience favours the defendants because there  is no evidence that the plaintiff companies will suffer significant loss through the continued operation of the defendant companies pending trial.

[11]   I propose to express my reasons for judgment in summary form. I intend no disrespect to counsel in doing so. I hope I do them no injustice in the way I summarise the arguments. However, given that there is likely to be a trial in due course it is as well that I say as little as possible on substantive issues.

Disclosure issues

[12]   Mr Cole advanced a forceful argument that inadequate disclosure had been made by ABN AMRO on the ex parte application. He submitted that the inadequacy

of both ABN AMRO’s investigation and its subsequent disclosure to the Court were sufficient to discharge the injunction.

[13]   In making that submission, Mr Cole relied on well known expositions of the principle that the utmost candour is required on the part of any plaintiff who seeks an ex parte injunction: generally, see United Peoples’ Organisation (World Wide) Inc v Rakino Farms Ltd (No. 1) Ltd [1964] NZLR 737 (CA) at 738 and Thomas A Edison Ltd v Bullock (1913) 15 CLR 679 (HCA) at 681-682 per Isaacs J.

[14]   Three substantive matters were put before me as justifying a conclusion that there was a lack of candour. They were:

a)That the website to which reference was made was not the defendants’ but the website of a third party.

b)The defendants were not named or referred to in the website.

c)The website did not contain any offer of services by or on behalf of either of the defendants.

Mr Cole also submitted that the attention of the Court was not drawn to the fact that there was no credible evidence that the two ABN Union entities were themselves doing anything which had the effect of infringing ABN AMRO’s intellectual property right.

[15]I reject those submissions.

[16]   The information about the activities of ABN Union entities in New Zealand first came to ABN AMRO’s attention in November 2004. A prompt investigation was undertaken, including retaining a private investigator. The outcome of those investigations were made known to the Court. A full print-out of the  website  in issue was in evidence as an exhibit. The website information was there for the Judge to read.

[17]   While some mild criticism might be levelled against the solicitors for the plaintiffs in failing to proceed on a Pickwick basis (Pickwick International Inc (GB) Ltd v Multiple Sound Distributors Ltd and Anor [1972] 3 All ER 384) because they knew a solicitor had been instructed on behalf of ABN Union in New Zealand, that criticism evaporates as the Judge did not require the application to be dealt with in that way. Nevertheless, that is the preferred practice; at least the Pickwick procedure provides an opportunity to be heard on the injunction application, albeit in a limited way. In my view, the application was not so urgent that the Pickwick  procedure could not be used.

[18]   Additionally, there can be criticism of the inadmissible opinion evidence before the Court from the private investigator. However, the inadmissible rhetoric of that evidence is most unlikely to have swayed the Judge.

[19]   On balance I am satisfied that relevant material was drawn to the attention of the Court. Disclosure was adequate in the circumstances.

Injunction issues

[20]   The three stage framework for analysis on an application for an interim injunction is well known. It is set out in Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (HC) and (CA) at 142, per Cooke J delivering the judgment of the Court of Appeal.

[21]   The first issue is whether there is a serious question to be tried. In this case that turns on whether there is a sufficiently strong arguable case of infringement of trade mark under s89(1)(a) of the Trade Marks Act 2002. That provision states:

89   Infringement where identical or similar sign used in course of   trade

(1)      A person infringes a registered trade mark if the person does not have the right to use the registered trade mark and uses in the course of trade a sign—

(a)    identical with the registered trade mark in relation to any goods or services in respect of which the trade mark is registered; or

…

[22]   I do not overlook other causes of action advanced by ABN AMRO. I restrict my comments to the s89(1)(a) point because that, in my view, is determinative  of this issue.

[23]   The Dutch company owns the trade mark “ABN” in New Zealand.  There  was no opposition to that trade mark being granted when it was sought in 2000. The ABN Union entities were not operating in New Zealand at that time. Indeed, neither was formed until 2004.

[24]   Both ABN Union Treasury Management Ltd and ABN Union Building Society operate in the financial sector. To that extent the term ABN is being used by the ABN Union entities in respect of the same services (financial services) for which the trade mark was registered.

[25]   Whether ABN AMRO is using “ABN” as a brand in the New Zealand market (as opposed to “ABN AMRO”) is an issue that goes to balance of convenience rather than to whether a serious question to be tried exists. The one issue of substance advanced by the ABN Union entities is that it is necessary to isolate the sign ABN from the following words of ABN AMRO’s incorporated name. It is submitted that because both ABN Union Treasury Management Ltd and ABN Union Building Society are different “signs” to ABN simpliciter there is no arguable case that the ABN Union entities are using an identical sign. Mr Gray referred to two recent English cases: (Reed Executive Plc v Reed Business Information Ltd [2004] RPC 40 (CA), at para 33 and Compass Publishing BV v Compass Logistics Ltd [2004] RPC 41 at para 21, per Laddie J) to support that proposition.

[26]   Mr Gray relied on the principle stated by Jacob LJ, in Reed (applying art 9(1) of the European Council Trade Mark Regulation). Lord Justice Jacob held  that “Reed Business Information” was not identical to the registered trade mark REED. He said, at para 33:

But before I get to the question of identity here, there is a further preliminary matter. What is to be compared with the registered mark for the purposes of Art.5.1(a)? It is the defendant’s “sign”. So this must be identified first. In

many cases this is easy – the defendants’ sign in “Arthur et Flicie” is an example. And during the registration process, where there is a potential conflict with an earlier registered mark this preliminary question is self- answering. The fact that what the defendant’s sign is is often so obvious that it does not merit a thought, does not mean that one can overlook the preliminary question. There may be other cases where some difficulty is posed, particularly where descriptive or semi-descriptive words are added to what is obviously a word mark.

In reaching those conclusions both the Court of Appeal, in Reed, and Laddie J, in Compass, relied upon European jurisprudence, particularly a recent decision of the European Court of Justice in Case C-291/00 SA Société LTJ Diffusion v Sadas Vertbaudet SA [2003] FSR 1.

[27]   The English decisions are to be contrasted with Anheuser-Busch Inc v Budweiser Budvar National Corporation [2003] 1 NZLR 472 (CA). Delivering the unanimous judgment of the Court of Appeal on this issue, Gault P at 489, para [109] said:

[109]   I take the view also that  the use of the words “Budweiser  Budvar” on the four–bottle pack is use as a trade mark. However, in the case of the four–bottle pack and the bottle label used after May 1998, s 12(a) must be considered. Before proceeding to that, it is necessary to deal with the question whether, subject to s 12(a), the use of “Budweiser Budvar” as a trade mark infringes AB’s registrations. I do not see this as a serious issue. “Budweiser” is identical to the registered trade mark BUDWEISER. The additional features used with it do not obscure that identity: Decon Laboratories Ltd v Fred Baker Scientific Ltd [2001] RPC 293. “Budweiser” is the first word in the name and tends to attract the eye because of its position and relationship to the other words in the panel. Subject to s 12(a), there is infringing use. (my emphasis; section references are to the Trade Marks Act 1953, then in force)

[28]   To the extent that there is any difference in approach, while the English Court of Appeal and Laddie J were bound by the decision of the European Court of Justice, I am bound by the decision of the New Zealand Court of Appeal. I apply the approach evidenced in Anheuser-Busch.

[29]   On that basis I am satisfied that the initials “ABN” would tend to lead a participant in the New Zealand financial markets to draw an immediate link with ABN AMRO of a sufficient type to hold that there is a seriously arguable case that the ABN Union entities are infringing the ABN mark in New Zealand. “ABN” is a series of initials that, when articulated orally as such, would tend (in a financial

services context) to lead the recipient of that information to believe the term “AMRO” would follow.

[30]   In my view, the balance of convenience favours ABN AMRO for these reasons:

a)First, the ABN Union entities have no prior business connection in New Zealand. On the evidence of their director, Mr Allen, they are both associated with ABN Union Bank Ltd. That company is incorporated in the United Kingdom but operates in other countries, Latvia and Montenegro being specifically mentioned in evidence. ABN Union Bank is the sole shareholder of ABN Union Treasury Management Ltd and a majority shareholder of the building society. Thus, while there is no express reference to either of the defendant entities in the website maintained by ABN Union Bank there is clearly a connection between that company and the New Zealand entities.

b)Second, administrative arrangements for the Secretariat of ABN Union entities in New Zealand appear to have been put into place in a muddled fashion. That in turn gives rise to the likelihood of detriment to ABN AMRO’s goodwill if persons dealing with the ABN Union entities encounter difficulties and the market perceives an association with ABN AMRO.

c)Third, while Mr Allen, for the ABN Union entities suggests that extensive losses have been suffered by them due to the injunction being issued, the evidence is sparse on the nature of those losses. Indeed, many seem to arise from activities in Australia where there is no injunction restraining ABN Union entities from operating. Furthermore, in the short term, pending trial, the situation can be arrested by transferring contractual arrangements to a new company or to a new building society pending resolution at trial. The ABN Union entities are not barred from trading in New Zealand

unconditionally; they are only barred if they use “ABN” in their names.

d)Fourth, on the other hand, the potential damage to ABN AMRO from conduct that might undermine its reputation in the marketplace is serious.

e)Fifth, I am not prepared to give weight to the counterclaim to set aside the registered trade mark. A trade mark search was conducted  by ABN Union before forming the companies. That is clear from a letter from the solicitors for ABN Union Building Society to the Ministry of Economic Development dated 1 October 2004 in which, at least, a trade mark search in respect of the name “ABN Union Building Society” is said to have been undertaken. The issue of similarity with ABN AMRO’s name was addressed in the same letter, demonstrating that that issue was to the fore at that time. The ABN Union entities chose to enter the market with the knowledge of potential problems arising from the identical initials used.

f)Sixth, I am not swayed (for interim injunction purposes) by the suggestion that the abbreviation “ABN” might not have been registerable because the initials “ABN” were also used to abbreviate “Australian Business Number”. Market evidence would be  required to establish that.

g)Seventh, a trial could take place in about six months.

[31]   The factors which weigh with me on the balance of convenience are also relevant to the overall interests of justice.

[32]In my view, no basis has been made out for rescision of the injunction.

[33]   I have considered undertakings offered by the ABN Union entities but do not accept that, in their present form, they will adequately deal with the issues raised.

Quite clearly, ABN AMRO is likely to be able to meet any award of damages. There are other ways in which the ABN Union entities can seek to mitigate loss, some of the type I have already mentioned.

Timetabling issues

[34]It is clear that a prompt trial will be necessary.

[35]   I adjourn this proceeding for a case management conference before the Civil List Judge, Venning J, at 9.30am on 22 February 2005. At that conference, counsel should be ready to address timetabling issues for the disposal of the substantive proceeding.

[36]   I note, for Venning J‘s assistance, that both counsel have indicated to me it will take approximately six months to ready the proceeding for trial, with the trial being estimated to take between one and two weeks.

Costs

[37]   I did not hear from counsel on the question of costs and therefore reserve them. I indicate a provisional view that costs on a 2B basis would be sufficient. I would be disposed to order costs on a 2B basis against the two defendants jointly and severally in favour of both plaintiffs jointly. I would also propose to certify for second counsel and for reasonable disbursements.

[38]   If however there are any issues that counsel wish to raise on costs that cannot be dealt with by agreement, I will hear from counsel separately on that issue. I retain an open mind on the issue. A short hearing before me at 9am one morning to deal with costs should be sought from the Registrar if counsel wish to advance contested claims for costs.

Result

[39]   The  application to rescind  the  interim  injunction  is dismissed.    Costs are reserved.

[40]   The proceeding is adjourned for a case management conference at 9.30am on 22 February 2005.

[41]I thank counsel for their assistance.

P R Heath J

Delivered at 12noon on 9 February 2005