Anheuser Busch Inc v Budweiser Budvar National Corporation

IN THE COURT OF APPEAL OF NEW ZEALAND

CA158/01

BETWEEN	ANHEUSER BUSCH INCORPORATED
Appellant

AND	BUDWEISER BUDVAR NATIONAL CORPORATION
First Respondent

AND	BEER FORCE INTERNATIONAL (1993) LIMITED
Second Respondent

Hearing:	24 and 25 June 2002
Coram:	Gault P McGrath J Glazebrook J
Appearances:	B W F Brown QC and G F Arthur for Appellant J G Miles QC, B M Sullivan and D A Laurenson for Respondents
Judgment:	19 September 2002

JUDGMENTS OF THE COURT

Judgments

Paras Nos

Gault P [1] – [142]
McGrath and Glazebrook JJ [143] – [150]

GAULT P

The appellant, a Missouri corporation, and the first respondent, a corporation registered in the Czech Republic under the name Budejovicky Budvar, Narodni Podnick, have extended their continuing international trade mark and trade name dispute to New Zealand. At its foundation are claims they both make to entitlement to use the name BUDWEISER in relation to beer.
In its New Zealand manifestation the dispute involves claims by the appellant to rectify the Trade Marks Register by the removal of marks registered in the name of the first respondent, infringement of its own registered marks, passing-off and breaches of the Fair Trading Act 1986.
Interesting though it is, the history of the dispute is made largely irrelevant by the territorial nature of the rights in trade marks and trade names. That history is set out concisely in the judgment under appeal, delivered in the High Court by Doogue J on 1 June 2001. It is traced in greater detail in the judgment of Allsop J in corresponding Australian litigation in the Federal Court (NG 194 of 1998, NSW Registry, judgment 5 April 2002).
The appellant, Anheuser-Busch Incorporated (AB, to adopt Doogue J’s abbreviation) for many years (since 1876) has used the trade marks BUDWEISER and (for a lesser period) BUD in relation to beer sold extensively in the United States of America and other countries. Those two trade marks have been registered in New Zealand in the name of AB. The registrations relied upon in this case are the following.

Number	Mark	Registration Date	Class	Goods
150926	BUDWEISER	26 January 1984	32	Beer, ale and porter
75141	BUD	6 February 1964	32	All goods in this class but not including preparations in the form of buds for making beverages
231287	BUDWEISER	21 October 1993	25	Articles of Clothing, footwear and headgear
231288	BUD	21 October 1993	25	Articles of clothing, footwear and headgear

AB has sold beer in New Zealand under and by reference to the trade marks BUDWEISER and BUD since at least 1980. Presumably clothing items have been disseminated in promotion of the beer. Doogue J found the two trade marks to be both known and used in New Zealand.
In 1996 the first respondent (for which the abbreviation BB is used) began selling in New Zealand, through the second respondent, its beer, described on the label as a lager but said in evidence to be more truly a pilsener. It is the labelling of this product that is objected to by AB. The 330ml brown glass bottles carry three labels. They were changed to some extent in May 1998.
All three labels, one around the neck of the bottle, one, the principal label, across the front of the lower part of the bottle, and the third on the back of the bottle opposite the principal label, bear prominently the words BUDĔJOVICKý BUDVAR. On the neck label those words are printed as a circular surround of the representation of a castle with a shield superimposed as if to form an impression in a red wax seal over a band showing on either side the letter B in a script lettering. That script is the same as is used on both the principal and back labels for the word combination BUDĔJOVICKý BUDVAR. In both of those labels the printing is in red within white panels with gold borders. The script presentation of these words is in the form in which they have been registered by BB in New Zealand in four classes including class 32 for beer. The trade mark as registered appears in this form:

There is a separate registration of the principal label incorporating the script mark but showing none of the additional printed matter carried on the label.

The labels used by BB up to May 1998 are reproduced as annexure BB1 to the judgment of Doogue J. The wording in the lower (red) panel of the principal label is important. In four lines of white printing it states:

Brewed and bottled by the brewery
BUDWEISER BUDVAR
National enterprise
České Budĕjovice (Budweis) Czech Republic

The first and fourth lines are in very small fine print. The third line, though not capitalized, is bolder and bigger. The second line is bolder and bigger again and considerably more prominent.
The bottles so labeled were sold in a 4-bottle pack bearing similar labeling. In the lower red panel on one side the wording is the same (save for “Corporation” instead of “enterprise”) as on the bottle. On the other side the wording was in the Czech language with the second line as “Budějovický Budvar” and the third line as “NARODNI PODNIK”.
AB alleges that the use by BB of each of the marks BUDWEISER, BUDĔJOVICKý and BUDVAR in these labels on beer infringed each of the trade mark registrations of BUD and BUDWEISER in class 32.
Under s8(4) of the Trade Marks Act 1953 there is no infringement where the marks used are themselves registered so as to entitle use that would otherwise infringe. This provision protects BB’s use of its registered mark BUDĔJOVICKý BUDVAR in the registered script and label forms so long as its registrations remain. AB therefore included in its claim allegations that the BB trade marks were wrongly registered and that the Register should be rectified by their removal. The allegations extended to the registrations in classes 16 and 25 as well as class 32 covering beer.
The grounds for revocation were that the registrations were obtained in contravention of ss16 and 17 of the Trade Marks Act having regard to the prior use and registration by AB of its marks BUD and BUDWEISER.
AB alleges in further causes of action that the marketing activities of the respondents, using the marks concerned, constituted passing-off and breaches of ss9, 10, 13 and 16 Fair Trading Act. The defence provided by s8(4) Trade Marks Act does not extend to these causes of action. Presumably this is the reason AB’s advisers included these additional causes of action. If so, that is understandable, but it has considerably complicated the proceeding.
The background to BB’s use of the labels in issue is that BB claims to be entitled to use in relation to its beer the name BUDWEISER. That is because historically the name of the town in which BB and its predecessors have brewed beer for centuries has, at times, been called Budweis. That name was used by German speaking inhabitants and to this day it appears in some maps and encyclopaedias and on some road signs in nearby German-speaking Austria. The name of the town, which is in the Czech Republic is České Budĕjovice. According to the evidence of Mr Hajn of BB:

The town of České Budĕjovice was founded in South Bohemia.
A very strong community of Germans lived here (with the Czech people) from the very beginning and this was the reason why the term “Budweis” was an official name of the town until 1918, i.e. by the time the Czech people gained independence and the Czech Republic was founded. From that period until 1939 (beginning of Nazi occupation of Bohemia) the name of the town was “České Budĕjovice”. The name “Budweis” was used again from 1939 to 1945. After 1945 the town began to use its Czech name “České Budĕjovice” again and it has been used to these days.

The term “Budějovický” is the adjective formed from the name “Budĕjovice”. Similarly the word “Budweiser” is the adjective formed in German from the name Budweis. Contrary to claims throughout the evidence that “Budweiser” is a translation of Budějovický, it is not. It is another name for the same place used by people who speak a different language. It is no more a translation than Aotearoa is a translation of New Zealand.
Nevertheless, perhaps because it would be meaningful to a section of the market for the BB product, the name BUDWEISER was used. BUDVAR is a coined word from the first three letters of Budĕjovice and the last three letters of the Czech word for brewery “pivovar”. Budvar was first registered as a trade mark in Czechoslavakia in 1930. The combination BUDĔJOVICKý BUDVAR was adopted and registered as a trade mark in 1967 when some reconstruction resulted in BB’s current corporate form and the adoption of the name “Budějovický Budvar, narodni podnik”. The trade and companies register records (in translation) the entry of 1 February 1967:

Registered Name: Budějovický Budvar, národni podnik
In other languages: English:Budweiser Budvar, National
Corporation

French: Budweiser Budvar, Enterprise
Nationale

German: Budweiser Budvar, Nationalunternehmen

The combination BUDĔJOVICKý BUDVAR and its equivalent BUDWEISER BUDVAR have become the primary trade marks of BB under which it has expanded internationally. The use of the name “Budweiser” led inevitably to a “trade collision” with AB as it too expanded internationally using BUDWEISER as its trade mark. BB uses its marks BUDĔJOVICKý BUDVAR and BUDWEISER BUDVAR as alternatives for various markets, presenting them in the same script form in otherwise identical labels. Except on close inspection, bottles carrying BB’s respective labels are not readily distinguished.
At some point BB adopted and registered in some countries the abbreviation BUD.
Having ascertained that AB was using and had registered in New Zealand its trade marks BUD and BUDWEISER, BB, when approached by the second respondent to supply its beer to New Zealand, selected the BUDĔJOVICKý BUDVAR version of its label. The same situation prevailed in Australia.
In May 1998, for both the Australian and New Zealand markets, BB adopted a modified principal label on its bottles. The wording and print sizes in the lower red panel were changed. The print in the top and bottom lines is slightly bigger. The second and third lines on the earlier label were combined onto the same line and the wording changed to “Budweiser Budvar, National Corporation” in capitals and in print smaller than that of the second line in the earlier label but larger than the earlier third line. Although this occurred after the proceeding commenced, AB’s allegations were considered in relation to both the earlier and later label versions. The four-bottle packs, assuming use from an earlier date, did not change.
The second respondent ceased importing from BB in 1999 but is keen to resume once this proceeding is determined.
From as early as October 1998 other parties have imported BB’s beer. They were not supplied by BB. Those who did supply them must have done so in breach of contractual obligations to BB not to do so. At least some of the beer imported in this way carried the BUDWEISER BUDVAR version of BB’s label. One local supplier of that product has been sued by AB.
In this proceeding AB has accepted that these “parallel imports” have not been sold in New Zealand by or with the authority of BB and no relief is sought in this case in respect of those sales. It has been contended, however, on behalf of AB that the presence, in this market, and in overseas markets, of beer labelled in this manner is a circumstance to be taken into account in assessing how the BB product may be perceived by the purchasing public.

The High Court Judgment

After describing the background and summarising the evidence given by the parties, Doogue J addressed first AB’s claim for removal of the BB trade mark registrations. He set out the relevant statutory provisions and the principles by which they are to be applied in terms that were unchallenged before us. They were drawn largely from the decision of this Court in Pioneer Hi-Bred Corn Company v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 and the cases cited in the judgments in that case. Viewing the matter at the date the BB marks were registered (20 November 1996), AB had to establish under s17 that use of each of the BB marks would have been likely to deceive or cause confusion, being identical with or similar to a mark of AB already on the Register (s17(1)), or well-known in New Zealand (s17(2)), in respect of the same or similar goods. Section 17(2) expressly extends to a translation of a well-known trade mark. The persistent assertions to the contrary in the evidence of BB witnesses notwithstanding, as already mentioned, “Budějovický” is not a translation of the word “Budweiser”.
Under s16 AB had to show that use of the BB marks “would be likely to deceive or cause confusion or would be contrary to law or would otherwise be disentitled to protection in a Court of Justice”. The pleaded grounds relied on likely deception or confusion in light of the use and reputation of AB’s trade marks. In this respect it is difficult to see any difference from the ground provided by s17(2). Additionally, it was pleaded that use of the BB marks would be contrary to law in that it would constitute passing-off and breach of the Fair Trading Act. But each of those allegations rests on the same likely deception or confusion arising from the similarity of the marks to those of AB. Accordingly, as the Judge recognised, at the centre of the revocation claim is the issue of the deceptive resemblance of the BB mark BUDĔJOVICKý BUDVAR and AB’s marks BUD and BUDWEISER.
The Judge noted that the exact relation between ss16 and 17 is not easy to assess. He quoted a passage from the judgment of Richardson J in the Pioneer Hi-Bred Corn Company case at 61, but at the time that case was decided s17(2) in its present form was not part of the Act. That sub-section now has even greater overlap with s16, though s16 is, of course, wider than s17(2). However, in this case there were not identified any matters that might be relied upon successfully by AB under s16 that would not lead to the same outcome under s17(2). There were two matters raised, though not specifically by reference to s16 only. Both were rejected by the Judge.
One was the requirement in rr4(1)(c) and 5 Food Regulations 1984 that every food (and beverage) package must carry legibly and in English the name of the “manufacturer or seller or packer of the article, or the owner of the rights of manufacturer, or of the principal or agent of any of them”. It was contended that BB, because it used as its name for the purpose of registration the version “Budweiser Budvar, National Corporation”, it was a circumstance to be taken into account that the use of the BB trade marks would be accompanied by this name which would give rise to a greater likelihood that the BB marks would be associated with AB or its products. The Judge did not accept this saying:
So far as Reg 4(1)(c) of the Food Regulations 1984 is concerned, it seems to me that as part of New Zealand law in November 1996 it would have to be part of the surrounding circumstances in respect of the consideration of the marks. However, the content of the regulation cannot and does not assist AB. The particular method of conformity with its requirements cannot be necessarily inferred. The notional use of BB’s proposed mark cannot postulate a particular method of compliance with the regulation. The existence of the regulations does not therefore assist AB. The method adopted by BB of complying with the regulation must be irrelevant in respect of the notional consideration of its proposed mark.
The other matter relied on as constituting a relevant circumstance to be taken into account in considering deceptive resemblance was the availability in other markets familiar to tourists and New Zealand travellers, and in the New Zealand market as a result of parallel imports, of BB beer carrying labels showing prominently, in the same script form as is used for the BB registered marks, the words BUDWEISER BUDVAR. It was argued that this too would increase the likely false association of products on which the mark BUDĔJOVICKý BUDVAR is used with those of AB. In rejecting this the Judge said:
So far as the parallel importing of BB’s other product is concerned, there is no evidence that it was known in November 1996 that an amendment was to be made to the Copyright Act permitting parallel importing into New Zealand. In any event, even if that had been known, it could not be postulated in November 1996 that any parallel importing of any product of BB would take place in any particular way, so that what subsequently occurred could not be relevant for the purposes of a consideration of BB’s mark on a notional use basis in November 1996.
On his comparison of the trade marks themselves Doogue J correctly recognised that he was required to consider not the actual use of the BB marks but a notional use. The test of likely deception or confusion under s17(1) is applied to any fair use of each mark in relation to any of the goods covered by the registration. Under ss16 and 17(2) the comparison is between the actual use of the AB mark (which is encompassed by the notional fair use) and any fair use of the BB marks. The Judge recognised also that the comparison is not of the marks side by side, but taking into account imperfect recollection and all circumstances in which the goods might be sold. He set out at some length the case advanced on behalf of AB in support of the claim of likely deception or confusion. Mr Brown QC acknowledged that his arguments were fairly summarised. The Judge then made an assessment of AB’s case independently of evidence given on behalf of BB. I set this out in full:
There can be no visual confusion between the competing marks and any confusion could only result from imperfect recollection or aural confusion resulting from the assumption that somehow BB’s mark could be regarded as “Bud” or “Budweiser” or be associated with one of those marks.
The registered form of “Budějovický Budvar” is in a stylized script with the letters joined and the opening letters given particular emphasis, and with the noticeable feature of the Czech diacritical elements above the “e” and the “y” of Budějovický. Critically, the mark is for two words not one. AB’s argument depends upon the two words being likely to be reduced to a single syllable. There is no evidence whatever of that occurring or being likely to occur within the trade or the market. Certainly the professor of linguistics did not suggest that that might occur. If there is any shortening of two words, it appears to be more likely to be to whichever word the English speaker is more comfortable. On the New Zealand market the evidence relating to “Stella” Artois was the most significant, with that name being abbreviated not to a single syllable but to the first name, “Stella”. One can reasonably postulate that if the name were “Artois Stella” the New Zealand purchaser would still have taken the name easiest for the English speaker, namely “Stella”. An analogous two-worded name referred to in the trial was “Jim Beam”, where there was acceptance the latter name alone might be used to describe the product.
When the multi-syllabled, double-barreled name Budějovický Budvar” has no immediate similarity either visually or orally with either “Budweiser” or “Bud” other than the common first syllable, there is and can be no real likelihood of confusion.
The professor of linguistics had not been asked to consider both names but accepted that a New Zealand speaker would have little difficulty with the word “Budvar”, as the evidence established in respect of actual usage. “Budvar” has two short and crisp syllables, making it far less likely that it would be abbreviated in the same way as longer words such as “Budweiser”. As the professor of linguistics acknowledged, the word Budějovický is such a mouthful for the English speaker that it is difficult to know how it would be abbreviated by a New Zealand English speaker. The professor did not challenge the view that the New Zealand English speaker would have little difficulty with the short name “Budvar". He did not address how New Zealand English speakers would approach a name consisting of two foreign words. The evidence of the professor of linguistics was more supportive of BB’s case than AB’s.
The evidence from the market survey was directed not to the marks but to BB’s new bottle. Even allowing and assuming that the survey had some relevance for the present issues, which BB disputes, the survey did not, to my mind, come near to establishing that there would be a reasonable likelihood of deception or confusion arising among a substantial number of persons if “Budějovický Budvar” was used in a normal and fair manner for bottled beer. At the very most it showed that a small and certainly not a substantial or significant number of New Zealanders might, through poor recollection in a non-purchasing situation, confuse or associate “Budějovický Budvar” with “Budweiser” when the word “Budweiser” was also on the object presented to them.
The psychologist’s evidence is equally unhelpful to AB in respect of this part of the case. BB disputes the admissibility of his evidence upon other grounds, but, even taking it at face value, his evidence, which was addressed to BB’s new bottle, relied not only on the presence of the first syllable “Bud” in both words but on the presence of “Budweiser” upon that bottle.
Thus none of AB’s evidence is supportive of its contentions that there would be a reasonable likelihood of deception or confusion among a substantial number of persons in respect of the marks.
I regard it as of some significance that AB not only called no evidence of any confusion from its distributors but that its exclusive distributor until July 2000 had in fact purchased BB’s products from BB’s exclusive distributor. This is at the very least an indication that AB’s own distributor was not overly concerned that there might be confusion between the competing marks.
Put at its strongest, AB’s case in respect of ss16 and 17(1) relies upon the proposition that, because of imperfect recollection, a potential purchaser of “Budweiser” or “Bud” would be likely to confuse it with “Budějovický Budvar” through association dependent on the common first syllable “Bud”. I recognise, as the evidence from one interviewee in the market survey indicated, that there will always be a possibility of a confused customer. However, there is no evidence from which I could reasonably infer that a substantial or significant number of persons would be so confused. It is clear if the marks are together there could be no confusion. I cannot accept there is a likelihood of confusion if a person seeking AB’s mark is confronted with BB’s mark. AB has simply failed to satisfy me on the balance of probabilities in respect of the test in relation to either s16 or s17(1).
In respect of s17(2) I regard AB’s case as even more fundamentally flawed. There can be no more likelihood of confusion under this section as a result of “Budějovický” and “Budweiser” being comparable words in the Czech German languages than there can be under s16 or s17(1).

The Judge went on to refer to BB’s evidence, and the arguments of counsel for BB, particularly those which challenged the views of the professor of linguistics, the psychologist and the market survey witnesses. He expressed preference for the evidence of the professor of marketing and of persons with experience in the liquor trade. He found that the market survey did not address the reality of the market situation. Generally it may be said that his review of the BB case strengthened his view that AB had not shown that there would be a reasonable likelihood of deception or confusion among a substantial or significant number of persons if BUDĔJOVICKÝ BUDVAR was used in a normal and fair manner for bottled beer at the time of its registration in 1996.
That conclusion meant, the Judge said, that, in addition to the claim for rectification of the Register, AB’s claims for infringement, passing-off and breach of the Fair Trading Act, so far as they are directed to the use of BUDĔJOVICKý BUDVAR also failed.
Doogue J then turned to the remaining issues. He dealt briefly with the allegation of trade mark infringement by use of the words BUDĔJOVICKý BUDVAR on the neck labels of the BB bottles. This is not in the registered script form and so is not protected by s8(4). But in light of the conclusion already reached, this inevitably failed.
The Judge then grappled with the claim that before and after 1998 the use in the lower panel of each of the BB labels of the words BUDWEISER BUDVAR infringed the AB registrations of BUDWEISER and BUD. He referred to the relevant provisions of the Trade Marks Act. They are the definition of “trade mark”, s8, defining what constitutes infringement, and ss12(a) and 13 which qualify that to some extent.
To amount to infringement the use by BB must breach AB’s exclusive right to use the trade marks BUD and BUDWEISER in relation to beer (s8(1)). That is deemed to occur if the use by BB in relation to beer is of a sign (which includes a word or words) that is identical with or similar to the registered trade marks if such use would be likely to deceive or cause confusion and that use is likely to be taken as being use as a trade mark or as importing a reference to the trade mark proprietor or its goods (s8(1A)). Section 12(a) qualifies that by providing that no registration shall interfere with “any bona fide use by a person of that person’s own name”. However, s13 then provides that it shall not of itself be a defence that the infringement arose from the use of the name under which a company has been registered.
In applying those provisions the Judge was required to consider whether the words “Budweiser Budvar” on the BB labels are deceptively similar to AB’s BUDWEISER and BUD trade marks. If so, was their use likely to be taken as use “as a trade mark” or as “importing a reference” to AB as the proprietor of its trade marks or its goods? If that was established, the next issue was whether s13 has the effect of excluding companies from the “own name” defence provided by s12(a). If not the issue was whether the use in the BB labels of “Budweiser Budvar” was a bona fide use of BB’s own name so as to be immune from the infringement claim.
The Judge’s findings do not follow this sequence. But in summary he concluded that in respect of the pre-1998 label:
(a)There was no evidence whatever as to whether “Budweiser Budvar” is a mark identical with AB’s marks or so nearly resembling one or other of them as to be likely to deceive or cause confusion.
(b)In the absence of evidence that the words “Budweiser Budvar” have been taken as a mark he could not find for AB.
(c)That, s13 notwithstanding, s12 does apply to the use by a company of its name having regard to the interpretation of “person” in s29 Interpretation Act 1999.
(d)That the use of “Budweiser Budvar” highlighted and above the words “national enterprise” did not constitute use of BB’s own name so as to be protected by s12(a).
(e)That there was no infringement. He said:
BB’s trading with its old bottle has been so limited that the consequences would in any event be de minimis. I think the best approach is to declare that BB’s old bottle did not have the protection of s12 and that, while it has not been established in the present proceeding that BB’s old bottle has infringed AB’s marks, any future use of BB’s old bottle would be likely to lead to an opposite conclusion.
With reference to the label used by BB after May 1998, the Judge found that the use of the words “Budweiser Budvar” in the name “Budweiser Budvar, National Corporation does enjoy the protection of s12(1). He:
(a)rejected the submission that the prominence given is such that the viewer would see it not as a name but as a brand.
(b)held there was no evidence that anyone took the name or part of the name as being use of “Budweiser” as a trade mark.
(c)rejected in strong terms the submission that the use of the name was not “bona fide” stating:
I do not intend to traverse what I regard as the trifling evidence upon which AB bases this last submission. It is not based upon any evidence of substance. It is an invitation to the Court to infer that BB is endeavoring to deceive consumers and to trade on the goodwill of AB. Having regard to BB’s history, the declaration in 1911, BB’s registration of the name “Budweiser Budvar” in many European countries, the geographical location of Budĕjovice/Budweis, and its linguistic and political history, I regard the assertion by AB that BB is not acting bona fide in the way alleged as unworthy of it. BB or its predecessor has clearly regarded itself as entitled to use the term “Budweiser” since the 19^th century, and “Budvar” has been used by it since 1930. I unhesitatingly reject the suggestion the name “Budweiser Budvar” has been used by BB other than bona fide.
In the result the Judge held that no infringement had been made out.
The passing-off claim was disposed of by the Judge quite briefly. He regarded his conclusions on the revocation and infringement claims as conclusive. He said there were no other extraneous elements such as “get-up” upon which AB could rely to establish a claim independently of the language on the bottles. He went further than that, finding that even if he had found a real likelihood of confusion between the competing trade marks, he would not have held for AB on this cause of action. This view was based on his acceptance of evidence that the beers of the respective parties were different in type if not in price bracket, aimed at different markets and the subject of quite different promotion strategies. He went on to comment upon the market survey evidence which AB had relied upon in the passing-off and Fair Trading Act claims. He said he found the evidence of little assistance but did not decide whether the survey was fundamentally flawed as had been claimed. He did, however, accept criticisms that the survey structure meant that it was far removed from a practical purchasing situation. He also accepted that one of the questions was leading and this significantly affected the result on the point to which it related.
The allegations of breach of the Fair Trading Act were treated by the Judge as effectively disposed of by his findings on the other heads of claim.

The Federal Court Judgment

The case brought by AB in the Federal Court of Australia appears to have related to alleged infringement of the same trade marks of AB by use of the same two labels on beer imported, or to be imported (see para 103 of the judgment), from BB. While the evidence presented will have been different, the key issues were the same. BB’s marks were not registered in Australia so that the comparison of the use of BUDĔJOVICKý BUDVAR with the AB marks was undertaken in the context of infringement claims rather than for rectification of the Register.
Allsop J held that the two-word composite mark Budějovický Budvar was not deceptively similar to AB’s trade marks. On the evidence, he found that abbreviation to “Budvar” was more likely than to “Bud” and that the common first syllable was not sufficient to give rise to deception or confusion. His was a close and detailed comparison by reference to the established principles and the evidence. He went on to consider whether the appearance on the labels in proximity to “Budějovický Budvar”, of the word “Budweiser” affected his conclusion. He concluded that it did not [227].
Allsop J, however, found that the use of the words “Budweiser Budvar” in the lower panel of the principal labels on both pre 1998 and the later labels infringed. He considered that in each label the words were used as a trade mark or trade marks i.e. so as to distinguish the goods, noting that the usage of a word may fulfil more than one purpose on a label.
Section 122(1)(a)(i) of the Australian Trade Marks Act 1995 (Cth) corresponds with our s12(a), save that the words good faith are used instead of the Latin. There is in Australia no provision corresponding with our s13. The approach of Allsop J to the defence claim that the section protected the use of “Budweiser Budvar” in the lower panel was different from that adopted by Doogue J. He went beyond the finding of subjective honesty of purpose of those in BB responsible for selecting the particular label. Although he accepted they had a strong and honestly held view as to the moral and historical entitlement to the word “Budweiser”, he held they must have been aware of AB’s existing reputation in Australia and therefore of the possibility that the use of the words “Budweiser Budvar” on the bottle label would give rise to confusion. He noted that BB was under no obligation to use the particular version of its name on the labels.
The Judge referred to the approach to ‘bona fide’ taken in the English cases of Baume & Co Ltd v A H Moore Ltd [1958] RPC 226, 235 and Adrema Ltd v Adrema Werke GmbH [1958] RPC 323, 334 and the Australian case of Johnson & Johnson v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326, 355. Those cases refer in varying formulations: the absence of intention to deceive or to make use of the goodwill of another, and, where the existence of a closely resembling mark is known, to an honest belief that no confusion would arise. Allsop J, on the facts before him considered it was hard to see how BB could hold the view that no risk of confusion would arise. He saw an element of risk taking by BB which was not sufficient to damn BB’s conduct as dishonest or fraudulent but which was sufficient to deny the conduct the blessing of the characterisation of good faith. He regarded that approach as consistent with the benefits and protections intended to be afforded by registration.
Allsop J found for AB also in passing-off and under s52 of the Trade Practices Act (on which s9 Fair Trading Act is based). His conclusion is to be contrasted with that of Doogue J. He considered that the inclusion of the word “Budweiser” dictated that result. He said [246]:
Ms Strachan’s view was that the totality of the effect of the label, its Gestalt, was sufficiently strong as to overwhelm any effect of ‘Budweiser’ on the strip, or that people would not read or look at this part of the label. I do not agree. The word is tolerably well-known. It means or evokes the applicant’s beer. It is used on the front label. It tells the reader of an association with ‘Budweiser’. That the brewery is in the Czech Republic (as the smaller writing says) does not deny the association brought about by the word. The bottle may well be placed adjacent or near to the applicant’s beer in the specialty beer section of shops. I accept that perhaps not everyone looking at the bottle will take in this part of the label, but a significant number, I think, will. For them, this is the hook which associates the first respondent’s beer with the applicant’s. I do not think that the balance of the get-up or information on the bottle would prevent the assumption being created in a consumer that this was a European version of the applicant’s beer. Whilst this would be contrary to the applicant’s promotion of the values referred to at [25], it would be a result, I think, of the usage of ‘Budweiser’ with its clear associations with the applicant, and could be perceived as a product or brand extension.
Even if I had been of the view that the first respondent had made out a case under para 122(1)(a)(i) of the TM Act, my views as to s52 and passing-off are such that I would be prepared to grant relief under these heads.

The Appeal

On appeal Mr Brown and Mr Arthur mounted a comprehensive challenge to the findings of Doogue J. They seek reversal of virtually all of the essential findings upon a reassessment of the evidence and argument. While Mr Brown accepted that there are limits upon the review of findings of fact made by a trial Judge who has had the advantage of seeing and hearing the witnesses, he submitted that in this field where the ultimate issues such as confusing or deceptive resemblance are in the nature of jury questions, the Court on appeal should make its own assessment. He emphasised that the appeal did not involve any challenge to findings on the credibility of witnesses.
While we heard submissions on narrow points of law, in the main, counsel took no issue with the statements of applicable legal principles in the judgment. It is in the application of those principles that it was said the Judge erred.
Although the submissions did not deal with the issues in the same order as the Judge, they can be summarised in that order.
It was submitted that the Judge’s assessment that use of the trade mark Budějovický Budvar would not be likely to deceive or cause confusion having regard to the registration and reputation of BUDWEISER and BUD was wrong. It was said, in particular, that he gave insufficient weight to, and wrongly rejected, aspects of the evidence of the professor of linguistics; that in accepting evidence of the likely abbreviation in use of BUDĔJOVICKý BUDVAR to “Budvar” he failed to give weight to the likelihood that the abbreviation to “Bud” also was likely and that, in any event, BUDVAR is deceptively similar to BUDWEISER and BUD; that he wrongly rejected the evidence of the psychologist; that he wrongly rejected the likelihood that there would appear in use in proximity to the mark BB’s name including “Budweiser Budvar” in compliance with r4(1)(c) Food Regulations; that he should have taken into account that a section of the purchasing public would encounter overseas or as a result of parallel importation, BB’s product labelled identically but with the word “Budweiser” substituted for “Budějovický”; that, although he described the correct test, he did not apply it in that he relied on evidence of the significance of visual factors in the actual use of BB’s marks that are irrelevant to the comparison of the trade marks.
With reference to the use of the words “Budějovický Budvar” on the neck label of BB’s bottles it was submitted that the Judge’s finding that his conclusions on the revocation claim meant that this separate claim to infringement “inevitably fails for the same reasons” overlooked a material difference. The Judge noted that because the words did not appear in the registered script form the s8(4) defence was not available, but did not take account of the different date at which the comparison of marks is to be undertaken and the fact that it is BB’s actual (rather than notional) use of the marks that must be considered. This brings in factors increasing the likelihood of confusion or deception such as the proximate use of the word “Budweiser” and the influence of the later parallel imports.
Counsel submitted that after having found that the use of the words “Budweiser Budvar” in the lower panel of the principal label of the pre-1998 bottles did not have the protection of s12(a) (own name use), the Judge was wrong in not finding infringement. It was submitted that identity or deceptive resemblance is self evident; that amendments to the Trade Marks Act in 1994 have the effect that it is no longer necessary to infringe that the use must be as a trade mark; that if counsel’s interpretation is not accepted, the use was as a trade mark or so as to “import a reference”; that it was not open to the Judge to decline to find infringement on the ground that the infringing use was de minimis – the evidence was of continuing business from April 1996 to May 1998 involving at least 1485 cartons of 24 bottles each.
The Judge did not deal with the separate claim that the use of “Budweiser Budvar” on the 4-bottle pack infringes AB’s trade marks. Counsel submitted that this should have been done and that the layout is substantially the same as the principal label on the pre-1998 bottle so that the same considerations should apply.
It was submitted that the Judge was wrong to hold that s12(a), providing immunity from infringement for the use by a “person” of his own name, applies to the use of company names. This was said to be the effect of s13 which has no counterpart in the equivalent statutes of other countries. It therefore makes cases decided with reference to those equivalent statutes (and relied on by Doogue J) inapplicable.
In the alternative, it was submitted that if companies can invoke s12(a), the Judge was wrong to conclude, solely on the basis of his rejection of lack of honesty, that the use on the post-1998 BB label of “Budweiser Budvar” in the phrase “Budweiser Budvar, National Corporation” attracted the s12(a) protection. It was argued by reference to English decisions (on the substantially different test in the Trade Marks Act 1994) that the test should be objective. On any test, it was submitted, the evidence showed that prior to entering the New Zealand market and selecting a label for the purpose, BB ascertained that AB’s trade marks were registered and its beer enjoyed some reputation here. BB had available label versions used in other countries in which the word “Budweiser” was not used (Ireland, Denmark). The choice of label was not explained and BB cannot distance itself from the pre-1998 label and the 4-bottle pack when contending for bona fides in retaining the words “Budweiser Budvar” on the replacement label. It was submitted, that although in smaller print than in the previous label and now on the same line as the words “National Corporation”, the words serve a branding function and must be taken to have been intended to do so. Counsel invoked the reasoning of Allsop J on this aspect of the case.
On passing-off and breach of the Fair Trading Act it was submitted that the Judge wrongly treated his finding in the revocation claim as conclusive of absence of any misrepresentation on the BB bottles. In doing that he ignored the inclusion on the labels of the words “Budweiser Budvar”; incorrectly considered the protection of s12(a) Trade Marks Act applied in those causes of action (see s6); wrongly took into account that BB’s acts were unintentional; erroneously compared the labels side by side omitting consideration of imperfect recollection, and wrongly used extensive awareness of AB’s product as a reason why the products would be distinguished. It was submitted also that the Judge gave too much weight to the absence of evidence of instances of actual confusion or deception (notoriously difficult to locate) when there was some evidence in the survey.

The First Respondent’s Submissions

It does less than justice to the full and careful argument of Mr Miles QC and Mr Laurenson to state that counsel supported the judgment almost in its entirety. Mr Miles was not able to support the application by the Judge of the de minimis principle to the alleged infringement by use of the words “Budweiser Budvar” on the lower panel of the principal label on the pre-1998 bottle. He maintained, however, that this would not be taken as use as a trade mark or as “importing a reference”.

The essential submission was that the Judge was entitled to assess the evidence as he did and that the criticisms of the judgment are “selective, minor and largely irrelevant”. Counsel emphasised that lack of evidence of actual confusion though the respective products were on the market side by side for some three years.
It was submitted that the 1994 amendments to the Trade Marks Act have not affected the established interpretation of s8 and the corresponding s4 in the English Trade Marks Act 1938. To infringe, the impugned use must be use likely to be taken as a trade mark or as “importing a reference” and that was not established in respect of the use of the words “Budweiser Budvar” on either of BB’s labels. The use is, in each case, use as part of a name. Argument for the appellant that the survey evidence indicated that the words were taken as a brand was rejected with reference to the cross-examination of the interviewees who gave evidence.
The Judge’s findings that s12(a) is available to companies and protects the use by BB of the name “Budweiser Budvar, National Corporation” on the post-1998 bottles were supported. It is a requirement of the Food Regulations that the name be shown “in English”.
With reference to the 4-bottle pack it was submitted that, although the Judge made no finding, it was inevitable that he would have found that too did not infringe. It was said he would have found this usage also was simply use of the company name.
It was argued that there is ample evidence to support the Judge’s findings on the passing-off and Fair Trading Act claims, particularly that directed to the different product types, the different market segments in which they are traded and the different promotional strategies.
Mr Laurenson, by reference to the evidence of Professor Hoek, subjected the market survey evidence to detailed criticism and supported the Judge’s conclusion that the survey evidence did not advance AB’s case but rather negated it.

Observations on the Evidence

In a case such as this, in which causes of action resting on different legal principles are advanced, it is important to keep in mind at each stage the relevant test and to assess the evidence accordingly. The challenge for the parties is to present evidence that appropriately bears upon the material issues. Less than clear recognition of this appears to underlie the divergence in evidential focus between the parties and the criticisms of some of the evidence presented.
The comparison of trade marks to ascertain whether there is deceptive or confusing similarity contrary to s17(1) Trade Marks Act so as to establish a ground for removal of registrations is an entirely notional exercise. It contemplates any fair use of the marks in relation to any of the goods covered by the registrations. Opinion evidence that the marks are or are not confusingly similar is of limited value. That is for the court. Evidence of what actually is occurring in the market place reflects particular forms of use and cannot fully answer the question. Evidence of the absence of actual confusion might be explained by reference to particular factors such as additional label features or market circumstances that will not always be present. By way of example, in the present case, when the Judge dealt with the passing-off claim (in which actual usage is at issue) the Judge said that even if he had found the trade marks deceptively similar he could still have rejected passing-off because of the distinguishing market factors such as market sectors, likely customers, and promotion strategies. Those factors might explain the absence of confusion but have no relevance in the trade mark comparison by reference to any fair use of the marks.
In similar vein, the criticism by BB of the market survey for failing to take account of the market segments identified by the beer cognoscenti, cannot undermine the survey evidence so far as it might be relevant to the trade mark comparisons.
A difficulty, however, with the survey is that those who designed it do not seem to have been instructed on the points sought to be tested. Persons interviewed were tested for their responses to a 30 second exposure to the BB post-1998 bottle (along with two other imported beers).
The results are of little assistance in assessing likely confusion between BUDĔJOVICKý BUDVAR and BUD or BUDWEISER because of the presence on the BB bottle label of the word “Budweiser”. It is not possible to say of many of those who in recalling the bottle mentioned “Bud” or “Budweiser” that it was because that is what they took for BUDĔJOVICKý BUDVAR or because they had read “Budweiser” on the lower panel of the label. To the extent that it was the latter, the answers would support the contention that they took the word “Budweiser” as distinguishing the product (i.e. as a trade mark) but that could be relied on only where it was clear that the answer was prompted by the word “Budweiser” on the label.
Insofar as the survey evidence may be relevant to support the passing-off claim, the criticism of it on behalf of BB on the ground of the remoteness of the interviews from the retail situation, seems to have overlooked the imperfect recollection test.
The evidence of Dr Bauer, Professor of Linguistics, was directed to how New Zealanders might react upon perceiving difficult foreign words. He expressed the opinion that the difficult-to-pronounce “Budějovický would be shortened and referred to as “bud” or “bud-something-or-other”. That is confirmed to some extent, by answers given in the survey. The Judge concluded that the professor’s evidence was more supportive of BB’s case than AB’s. That was because, in cross-examination he acknowledged that if “Budějovický Budvar” were consistently abbreviated to “Budvar” it would not surprise him if there was no confusion in the market. However, the professor did not accept the premise that it would be shortened to Budvar which rested on the evidence not of members of the public but of those experienced in the trade who know the two products and obviously adopt means to distinguish them. They could speak for the purchasing public only by reference to their own observations.
Mr Winsborough, a practicing psychologist, gave evidence of the way people process information. His opinion, based on his experience of human perceptual behavior, was that when presented with the unfamiliar beer brand BUDĔJOVICKý BUDVAR and familiar with the beer brands BUD and BUDWEISER potential customers would “extend the schema of the American BUDWEISER to incorporate BUDĔJOVICKý BUDVAR”. The Judge found this evidence unhelpful in the trade mark comparison because the witness rested his view, in part, on the presence of the word BUDWEISER on the BB label. The Judge also was inclined to reject the opinion evidence because the witness was not qualified to offer opinion on the application of his theories to particular market situations. In the absence of any suggestion that beer purchasers think or react differently from other New Zealanders that seems rather harsh. I would not entirely discount this evidence in areas where it is relevant.
In making these general comments on some of the evidence I am not to be taken as suggesting that Doogue J misapplied the evidence. He was careful to adopt the appropriate legal approach to the various issues. My purpose is to indicate my general assessment of the evidence in light of the submissions we heard. In the course of our consideration of each of the points to be determined I will draw upon the evidence as I find it relevant in light of the general comments I have made.

Comparison BUDĔJOVICKý BUDVAR with BUDWEISER and BUD

I approach the comparison of the trade marks postulating any fair use of the respective marks in relation to beer. That is the approach most favourable to AB for the purpose of the claim for removal of BB’s registrations. It is that required under s17(1). If AB cannot meet this test it cannot satisfy those under s16 or s17(2).The marks are to be compared as they would be encountered in the usual circumstances of trade. That contemplates wholesale and retail transactions, knowledgeable and uninformed purchasers, purchases for on-premises consumption, and for subsequent consumption bearing in mind the varying conditions that may prevail from noisy bars and clubs to self-service stores. Purchases will be made by oral requests (including telephone) and on appearance alone. The products will not necessarily be presented side by side. There may be prospective purchasers who, have previously encountered one product and imperfectly recalling its mark, then see or hear of the other.
Guided by the evidence of trade circumstances it is for the Court to determine the likelihood of deception or confusion. It is necessary to consider how the trade marks be regarded and how they will be pronounced and heard by those to whom they will be presented in the course of trade. The impression or idea conveyed by the marks is important in assessing how they will be recalled.
These marks in sight, sound and impression are very different. There is the common first syllable “Bud”. It is repeated in the second word of the combination “Budvar”. But in sound, however the combination BUDĔJOVICKý BUDVAR is likely to be pronounced in New Zealand, it is quite distinct from BUDWEISER and BUD.
In appearance and in general impression (given none of the marks conveys meaning) BB’s mark consists of complex foreign-looking words, not of the same language as AB’s marks. There can be no real likelihood of BUDĔJOVICKý BUDVAR being taken as either BUDWEISER or BUD. Visually the BB mark has a distinctiveness, emphasised by the diacritical elements, that is striking because of its unusual appearance to the eyes of New Zealanders.Taking into account all of these factors, I am not persuaded that the resemblance between the marks themselves is such that deception or confusion among a substantial number of persons is likely. The common syllable “Bud” (in both words in BB’s mark) is not of itself enough given the overall differences. I do not consider the comparison should be between each of BUDWEISER or BUD on the one hand and BUDĔJOVICKý and BUDVAR separately on the other. BB’s mark is, and is represented as, a composite two-word mark as is emphasised by the script presentation. In essence I am in full agreement with the assessment made on these comparisons by Allsop J. Those conclusions accord with the findings of Doogue J.
More difficult is the comparison, particularly with AB’s trade mark BUD, if the notional use of BUDĔJOVICKý BUDVAR is to encompass that mark being abbreviated and known simply as BUD or BUDVAR. This proposition is really at the heart of AB’s case. We were referred to Seixo v Provenzende (1865) LR 1 Ch 192. That was a passing-off case involving the sale of port in England. Though the marks on the casks were not similar when compared side by side, the evidence showed that the plaintiff’s port had become known and was referred to as “Crown Seixo Wine” and that it was almost inevitable that the defendant’s product would be bought by some believing it was the wine generally known as “Crown Seixo Wine”. Lord Cranworth LC said (196):
What degree of resemblance is necessary from the nature of things, is a matter incapable of definition à priori. All that courts of justice can do is to say that no trader can adopt a trade mark so resembling that of a rival, as that ordinary purchasers, purchasing with ordinary caution, are likely to be misled.
It would be a mistake, however, to suppose that the resemblance must be such as would deceive persons who should see the two marks placed side by side. The rule so restricted would be of no practical use.
If a purchaser looking at the article offered to him would naturally be led, from the mark impressed on it, to suppose it to be the production of the rival manufacturer, and would purchase it in that belief, the Court considers the use of such a mark to be fraudulent. But I go further. I do not consider the actual physical resemblance of the two marks to be the sole question for consideration. If the goods of a manufacturers have, from the mark or device he has used, become known in the market by a particular name, I think that the adoption by a rival trader of any mark which will cause his goods to bear the same name in the market, may be as much a violation of the rights of that rival as the actual copy of his device. It is mainly on this ground that I have come to the conclusion that the decision of the Vice-Chancellor in the present case was correct.
Mr Brown also cited In the Matter of an Application by Geo Cording Ltd (1916) 33 RPC 325. In that case the House of Lords held that decisions to remove a registration in one class and refuse registration in another class of the word GNIDROC were right because of likely deception arising with the established name CORDING as GNIDROC would be recognised as CORDING spelt backwards.
Neither of these cases provides strong support for AB contending that, at the time BB’s marks were placed on the Register, confusion or deception was a real likelihood. The prominent underlining of the first syllable of the word Budějovický in the script form taken with the difficulty for English speakers with the remainder of the word, is said to invite abbreviation to BUD. And there are many trade mark cases in which a tendency to emphasise the importance of first syllables has been recognised. The potential for such an abbreviation is surely recognised by BB in its separate registration of BUD as a trade mark in some overseas countries. There is also the evidence adduced by BB that the abbreviation to “BUDVAR” came to be consistently used in New Zealand.
It is one thing to say that one or other abbreviation might be employed to overcome the difficulty of pronunciation of the whole mark. It is another to infer from that that in use the abbreviation will be adopted so as to lead to deception or confusion with the AB trade marks. “BUD-something” may be a deliberate differentiation from the known BUDWEISER beer. Similarly the adoption of the abbreviation BUDVAR may be undertaken in full recognition that it is shorthand for the full mark which is so hard to pronounce.
Looking at the matter as at the 1996 registration date of the (then unused) BB trade marks, I am not satisfied that there was a sufficient basis in the evidence to infer that beer to which the BB marks would be applied would likely become known and referred to by reference to abbreviations BUD or BUDVAR in a way that would give rise to deception or confusion in light of the registration or reputation of AB’s trade marks.
That a trade mark will be taken in trade in such a way as to lead to goods to which it is applied becoming known by a part only of the mark cannot easily be inferred in the absence of evidence. I do not find the evidence of Professor Bauer and Mr Winsborough carries the matter far enough. Nor do I consider Doogue J erred in treating as he did the arguments based on the Food Regulations and the parallel imports to the effect that in use the BB marks would be linked with the word “Budweiser” so as to increase the likelihood of confusion.
The Judge did not expressly deal with the likely impact of exposure overseas of potential purchasers to the BB product labeled with the words “Budweiser Budvar” in the same script as in the New Zealand trade marks. Again there is a lack of evidence from which to draw the inference contended for. There is some evidence of the use of the alternative version of the label in overseas countries (including the United Kingdom) but there is nothing on which to gauge its impact on prospective New Zealand purchasers, nor of the influence it might have on any reaction to the BB marks if encountered in New Zealand. Accuracy and extent of recollections of the kind suggested cannot be simply assumed.
I have considered particularly the submission that because the mark “Budějovický Budvar” is likely to be abbreviated to “Budvar” it so nearly resembles Bud and Budweiser as to be likely to cause confusion or deception. It was contended that the likelihood of abbreviation to “Budvar” would lead to BB beer being taken as another in the family comprising Budweiser and Bud. We were referred to evidence of instances of more than one beer type being sold under the same “house mark” and of a single enquiry of a retailer whether there was any connection between “”Budvar” and Budweiser. This argument rests on an assumption that the BB beer to which its trade mark Budějovický Budvar is applied will be known and referred to solely by reference to the name “Budvar” and entirely dissociated from the striking (though hard to pronounce) word “Budějovický”. I do not consider this can be assumed without supporting evidence, particularly in relation to an unused mark as at 1996. Having regard to the context of the mark as a whole for which the abbreviation “Budvar” is postulated, I am not persuaded that the product would be taken as another in a family comprising Budweiser and Bud. It is an assessment the Court must make. The appearance, pronunciation and overall impression given by the BB trade mark are so clearly different from the AB trade marks as to overcome any real likelihood of association with the AB trade marks. In taking this view I have borne in mind the acceptance by Mr Brown that in New Zealand the AB mark Budweiser is pronounced as “Bud (as in mud) wiser” so that there is not the ‘v’ sound in common with “Budvar” as might occur elsewhere.
I therefore find myself unable to differ from the conclusion reached by Doogue J (which is the same as that reached in Australia by Allsop J) that the trade marks do not have the necessary degree of resemblance to give rise to likely confusion or deception in the course of trade. The BB trade mark registrations remain on the Register. Their use cannot infringe the AB trade mark registrations.
The use of the words “Budějovický Budvar”, again as a two-word combination, on the neck labels is not in the registered script form so that the s8(4) defence to infringement is not available. Further, the test for infringement requires consideration of those words in actual use. The comparison is made at a later time and may take into account the appearance on the same bottle of the word “Budweiser”. The presence in the market of the other BB labels through parallel importation arguably is a factor to be taken into account.
The essential issue remains whether the use of the words “Budějovický Budvar” as they appear on the neck labels constitutes use of a word or words similar to either of the AB trade marks which is likely to deceive or cause confusion in the course of trade (s8(1A)). Even taking into account the additional factors I have mentioned I am not persuaded that the manner of this use is likely to confuse or deceive in light of any fair use of AB of its trade marks (which must encompass use of a neck label for beer bottles. The words are just not too close. Any misconceptions flowing from proximate use or awareness of the word “Budweiser” more likely would flow from the identity of that word not because it would influence perceptions of the words “Budějovický Budvar”.
I am satisfied the Judge was right to reject this claim for trade mark infringement.
We do not need to decide whether and in what circumstances the trade mark BUDVAR if it were to be used separately in New Zealand in relation to beer would infringe AB’s registered trade marks.

The use by BB of “Budweiser Budvar”

Having already referred in brief summary to the material provisions of the Trade Marks Act relating to infringement, it is now necessary to examine them in more detail. Infringement of marks registered in Part A of the Register is provided for in s8. Subsections (1) and (1A) are set out:
(1)Subject to the provisions of this section, and of sections 11 and 12 of this Act, the registration (whether before or after the commencement of this Act) of a person in Part A of the register as proprietor of a trade mark (other than a certification trade mark or collective trade mark) in respect of any goods or services shall, if valid, give or be deemed to have given to that person the exclusive right to the use of the trade mark in relation to those goods or services.
(1A)Without limiting subsection (1) of this section, the right conferred by that subsection shall be deemed to be infringed by any person who, not being the proprietor of the trade mark or a registered user of it using by way of the permitted use, uses in the course of trade –
(a)A sign identical with it in relation to any goods or services in respect of which the trade mark is registered: or
(b)A sign identical with it in relation to any goods or services that are similar to any goods or services in respect of which the trade mark is registered, if such use would be likely to deceive or cause confusion; or
(c)A sign similar to it in relation to any goods or services that are identical with or similar to any goods or services in respect of which the trade mark is registered, if such use would be likely to deceive or cause confusion, -
And in such manner as to render the use of the sign likely to be taken –
(d)As being use as a trade mark; or
(e)In a case in which the use is use upon goods or in physical relation to goods or in an advertising circular or other advertisement issued to the public relating to goods, as importing a reference to some person having the right either as proprietor or as registered user to use the trade mark or to goods with which such a person is connected in the course of trade; or
(f)In a case in which the use is in relation to services or in an advertising circular or other advertisement issued to the public relating to services, as importing a reference to some person having the right either as proprietor or as registered user to use the trade mark or to services with which such a person is connected in the course of trade.

The history of these provisions helps understanding their present form, but does little to illuminate their meaning. Section 39 of the Trade Marks Act 1905 in England was substantially the same as our present s8(1). It conferred the exclusive right to use the registered mark on or in connection with the goods. The exclusive right was interpreted as preventing (and so being infringed by) the use of an identical or confusingly similar mark “as a trade mark” – see e.g. Edward Young & Co Ltd v Grierson Oldham & Co Ltd (1924) 41 RPC 548, 574. The predecessor provision to subsec (1A) was introduced in the 1938 English Act to over-rule the decision of the House of Lords in Irving’s Yeast-Vite Ltd v F A Horsenail (1934) 51 RPC 110 which held that the registration of the trade mark YEAST-VITE was not infringed by use of “Yeast Tablets a substitute for ‘Yeast-Vite’”. Importing a reference to the registered proprietor or his goods” became an infringement. Just what impact this change had on the scope of the exclusive right conferred by the section never became clear in England before the section was repealed in 1994. The case of Bismag Ltd v Amblins (Chemists) Ltd (1940) 57 RPC 209 reflects varying judicial views. They were the subject of some comments in the House of Lords in Aristoc Ltd v Rysta Ltd (1945) 62 RPC 65. The commentary in Kerly’s Law of Trade Marks and Trade Names (12^th ed) reviews the difficulties. The view of the majority in Bismag v Amblins was accepted in this Court in Villa Maria Wines Ltd v Montana Wines Ltd [1984] 2 NZLR 422, 430 to the extent it was applicable to that case. The English provision of 1938 was brought into the New Zealand Act by amendment in 1939 and retained in 1953. Subject to some change of format it is now to be found in s8(1A)(e).
There seems little need to interpret the exclusive right as wider than use as a trade mark as was the position before 1938, extending it only to encompass the use within para (e) of subsec (1A). The effect of this is that although subsec (1A) opens with the words “Without limiting subsection (1)”, suggesting the exclusive right may be infringed by acts wider than those deemed to infringe by subsec (1A), that is not so. There is nothing in the judgment of this Court in the Villa Maria Wines case inconsistent with that.
Therefore, the alleged infringing use must be likely to be taken either as use as a trade mark (to distinguish the infringer’s goods) or as importing a reference to the trade mark proprietor or its goods (also a trade mark use but in relation to the proprietor’s goods). In the present case we are concerned with the former.
Mr Arthur submitted that after the amendment to the definition of “Trade mark” in 1994 the exclusive right in s8(1) is no longer to be interpreted as limited to use as a trade mark expanded only to encompass use falling within subsec (1A)(e). In 1994, as required by the “TRIPS” Agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights), the definition of “Trade mark” was changed. For the present purpose the material change was to the words “… a mark used or proposed to be used for the purpose of indicating, or so as to indicate a connection in the course of trade” between the goods and the proprietor. The new definition substituted “any sign … capable of distinguishing the goods … of one person from those of another”.
No change material for present purposes was made to the infringement sections at the same time (although a corresponding change to s9(2) might have been expected). Insofar as those sections include “trade mark” the new definition must apply. To the extent that there is a difference, s8(1A)(d) was thus changed. But the submission was that the exclusive right to use the trade mark conferred by s8(1) changed so as no longer to require the historical construction that required use as a trade mark to infringe.
I can accept that to the extent that capacity to distinguish goods can encompass broader significance than “connection in the course of trade” the exclusive right is broadened. There will be few instances, however, where a sign or mark is capable of distinguishing the goods of one person from those of another, yet does not indicate a connection in the course of trade between the goods and the proprietor.
Beyond this I am unable to see any necessary linkage between the amendment to the definition and the interpretation of s8(1) in respect of the exclusive right it confers.
As I understand the argument, it rests on the exclusion from the definition of the element “used or proposed to be used … for the purpose of indicating, or so as to indicate” a trade connection. It is contended that because it is no longer an essential element of a trade mark that it is used or proposed to be used in this way, the exclusive right conferred by s8(1) can be infringed by usage that does not convey that significance and so need not be trade mark usage. It is the last conclusionary step I cannot accept. It simply does not follow.
Some reliance was placed upon views expressed in English judgments on the new 1994 Trade Marks Act. We were referred to British Sugar plc vJames Robertson & Sons [1996] RPC 281, 291 where Jacob J was not prepared to read a trade mark use qualification into s10(1) of the English Act. A similar view was taken by Aldous LJ (with whom the other members of the Court agreed) in Philips Electronics NV v Remington Consumer Products Ltd [1999] RPC 809, 823. The point is before the European Court of Justice. We were given the opinion of the Advocate General in Arsenal Football Club plc v Reed (Opinion of Advocate General Colomer, Case C-206/01, Eur Ct J, 13 June 2002 (Court decision not yet issued)) in which the opposite view is expressed. See also Intellectual Property by W R Cornish (4^th ed) 17-89. In view of the very different structure of the infringement provisions in the English Trade Marks Act and the European Directive on which it is based, I gain little assistance from these authorities.
The argument advanced before us, if accepted, would mean a very substantial change to the law as applied for a long time. I would need far more convincing argument before finding such a change had been effected by the side-wind of the change in the definition of “Trade mark”.
I proceed then on the same basis as Doogue J and Allsop J, that to infringe the use of “Budweiser Budvar” on the BB labels must be likely to be taken as use as a trade mark. Taking the current definition it must be use likely to be taken as capable of distinguishing the beer of BB from that of others.
In this respect, Allsop J in the Australian decision considered it was not impermissible, in assessing how the words might be taken, to have regard to the reputation in the market of the mark BUDWEISER (para 187). In the New Zealand statutory context that would perhaps be more probative of “importing a reference” to AB or its product (s8(1A)(e)).
I have little difficulty in reaching the same view as Doogue J on the use of the words “Budweiser Budvar” in the lower panel of the principal label used up to May 1998. The words stand prominently against the background. Their location beneath the difficult principal trade mark would bring them to attention in a search for something more easily read and pronounced. These factors indicate to me that the words would, for some considerable number of New Zealanders, serve as a means for distinguishing the product. I note that “Budweiser Budvar, National Enterprise” is not the name of the company.
The use of the same words in the labels used after May 1998 is more difficult. On this Doogue J and Allsop J reached different conclusions. The words are undoubtedly used as part of the name “Budweiser Budvar, National Corporation”. But because the use is of a name does not mean it is not use as a trade mark. I agree with Allsop J that usage of a word on a label may fulfil more than one function. Company names frequently are used as trade marks. They plainly have the capacity to distinguish the goods of one trader from those of another: Patience & Nicholson (NZ) Ltd v Cyclone Hardware Pty Ltd [2001] 3 NZLR 490. Section 13 of the Act recognises that.
Doogue J was influenced by the absence of evidence that anyone took the use of the name as being use of “Budweiser” as a trade mark. At the end of the day it is a matter for the court. But there is some evidence that assists. As the Judge pointed out, Mr Winsborough, the psychologist, based his view on how the label would be perceived by New Zealanders substantially on the presence of the word “Budweiser”. A considerable number of persons interviewed in the survey, after viewing the BB bottle, when asked to recall the product, referred to “Budweiser”. Some of those expressly mentioned having seen that word on the label. For them plainly the word was the means by which they distinguished that beer. I do not consider their evidence in this respect was undermined by their acknowledgements in cross-examination that on closer inspection they could see that the product was not the American BUDWEISER beer. Close scrutiny is the antithesis of imperfect recollection.
In addition, in addressing how the word “Budweiser” on the post-1998 label would be taken, I place considerable weight on the likely influence of the prior use of the earlier label version and of the concurrent use of the word much more prominently on the 4-bottle pack. Having used the word prominently and (as the Judge held) not as use of the corporate name, thereby infringing AB’s trade marks, BB face the difficulty that the label, after the minor change, will be taken in the same manner as the previous version. As this Court said in a somewhat similar situation of a change of mark after the grant of an injunction in Taylor Bros Ltd v Taylors Group Ltd [1990] 1 NZLR 19, 23. “The signs … were unmistakenly aimed at creating the impression of continuity”.
It is for these reasons that I respectfully differ from Doogue J on this point.
I take the view also that the use of the words “Budweiser Budvar” on the 4-bottle pack is use as a trade mark. However, in the case of the 4-bottle pack and the bottle label used after May 1998, s12(a) must be considered. Before proceeding to that, it is necessary to deal with the question whether, subject to s12(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 s12(a), there is infringing use.
Sections 12 and 13 of the Trade Marks Act read:
12.Saving for use of name, address, or description of goods or services – No registration of a trade mark shall interfere with –
(a)Any bona fide use by a person of that person’s own name or of the name of that person’s place of business, or of the name, or of the name of the place of business, of any of that person’s predecessors in business; or
(b)The use by any person of any bona fide description of the character or quality of that person’s goods or services, not being a description that would be likely to be taken as importing any such reference as is mentioned in paragraph (e) or paragraph (f) of subsection (1A) of section 8 of this Act or paragraph (e) or paragraph (f) of subsection (3A) of section 47 of this Act.
13.Infringement by use of name of company – In an action for infringement of a trade mark it shall not of itself be a defence that the infringement arose from the use of the name under which a company has been registered.
Since the hearing there has been delivered the judgment of the High Court in Advantage Computers Ltd v Advantage Group (28 June 2002, High Court Auckland, CL41/99, Chambers J). In that judgment Chambers J reached a conclusion contrary to that of Doogue J on the availability of s12(a) to corporate defendants. He did so by reference to the legislative history not referred to by Doogue J, although it was mentioned in argument before us.
Section 12 is the same as s8 of the 1938 English Act. Section 13 is unique to the New Zealand Act and appears to have been enacted to give effect to a recommendation of the Evans Commission (Commission to Inquire into and Report upon the Law of Patents, Designs, and Trade Marks – 1950). The recommendation was for an amendment to provide “that use of a registered trade mark … as part of the name of a limited liability company is such use as would constitute infringement of the registered trade mark under section 6, subsection (1) of the Patents Designs and Trade Marks Amendment Act, 1939” [now s8(1)]. At the same time it was recommended that the Registrar of Companies should be required to cause a search to be made of the Register of Trade Marks and be entitled to refuse to register any company with a registered trade mark in its name and having a main trading object including manufacturing or vending goods covered by the trade mark.
The enactment of s13 of the Trade Marks Act 1953 and ss31(3) and 32(2) of the Companies Act 1955 must have resulted from these recommendations.
It is clear to me that the legislative intention at the time was to give effect to the recommendations that companies should not trade in goods covered by a trade mark registration under a name comprising the registered trade mark, and could be required to change offending names. What is less clear is whether the provisions of the Trade Marks Act manifest that intention, given the wording of s13 and its relationship to s12(a). It is couched not as a statement of what infringes, but as an exclusion of a defence.
The Companies Act 1993 does not continue the provisions dealing with trade mark conflicts in company name approvals. Recommendations of the Law Commission in that respect were not adopted. Conflicts now are left to be resolved under other legislation and in the courts. There is thus not to be found in the current provisions any legislative understanding that use of a company name, whether or not bona fide, infringes a registered trade mark.
The Evans Commission report makes no reference to s10 of the 1939 Amendment Act (now s12) and gave no hint that the use of company names that should infringe ought to be limited to use that was not bona fide. It seems safe to assume that the infringing use contemplated was use that would fall within s6 (now s8) – that is use as a trade mark. Section 13 is consistent with that, since no question of a defence would arise if the use did not otherwise infringe under s8.
If s12(a) extends to companies as undoubtedly it did prior to the enactment of s13, what then was s13 intended to cover? In its terms it excludes a defence that otherwise infringing use is immune from infringement where it involves (“arose from”) use of a name under which a company has been registered. Such a defence might possibly be based on mandatory use requirements under the Companies Act and such provisions as in the Food Regulations. But such use would have been protected by s12(a) in any event.
An alternative view is that s13, because of the inclusion of the words “of itself”, is to be construed more narrowly so that it can operate with s12(a). This construction has s13 excluding as an absolute defence to trade mark infringement that the impugned name has been approved and registered by the Registrar of Companies, while still leaving available the further defence under s12(a) that the use was a bona fide use of the name. The difficulty with that is that s13 is doing no more than what s12(a) already does. It could hardly be suggested that it was necessary to exclude a defence that use of a company of its own name mala fide should not infringe. That plainly was always a consequence of s12(a). Merely preventing a defendant from seeking to shelter non-bona fide use behind a registered company name is a long distance from the recommendation of the Evans Commission.
A further alternative is that s13 is not intended as a qualification of s12(a) but as a clarification of s8. It could be said to simply exclude any possible contention that because it is a registered company name it cannot be use as a trade mark so as to infringe. But such a contention had long been rejected as noted in the Patience & Nicholson judgment already mentioned.
Accordingly, I am driven to the conclusion that s13 was intended to deprive companies of the own name defence to trade mark infringement and amounts to a context dictating the non-application of s29 Interpretation Act 1999 to the word “person” in s12(a).
The words “of itself” in s13 appear intended to indicate that even though the own name defence may be excluded, other defences such as that the use is not as a trade mark or that the name is not too close to the registered trade mark, remain.
Because the conclusion I have reached, that s12(a) cannot avail a company, is not shared by the other members of the Court, it is necessary to examine whether the use by BB of the name “Budweiser Budvar, National Corporation” was a “bona fide” use within s12(a). I would approach the matter in a similar manner to that adopted by Allsop J in the Australian case.
It is clear from the evidence that BB knew from the time of the first approach from the second respondent seeking to purchase BB’s beer for re-sale in New Zealand that the AB beer sold under the trade mark BUDWEISER was on the market here. It was the practice of BB, before commencing deliveries to any new territory to undertake market research and to search trade marks’ registers. The second respondent was told at the outset that the BB beer could not be sold in New Zealand under the same BUDWEISER BUDVAR label as was on the market in the United Kingdom. All of this was because of sensitivity to the conflicts with AB in many countries.
Knowing of the use and registration in New Zealand of AB’s trade mark BUDWEISER, BB selected from the various labels it uses throughout many countries, the pre-1998 label incorporating prominently the word BUDWEISER. That was not as part of the “English” version corporate name (which has the word “Corporation” not “Enterprise”), and, even if pursuant to a belief in entitlement to use the word as a geographical designation, could not be accepted as use which was genuinely believed to be unlikely to give rise to any confusing association with the AB product. When that use was the subject of objection, a change in the bottle label was made while still maintaining the word “Budweiser” standing proud from surrounding descriptive material and while still maintaining the more prominent presentation of that word on the 4-bottle packs. This conveys an impression of a determination to continue to use the word “Budweiser” on New Zealand labels and devising a justification for doing so. I consider Mr Brown was correct in his submission that BB cannot, when seeking to justify the modified label, distance itself from the factors which influenced the choice of the earlier label and the 4-bottle pack label.
For the reasons I have set out, I reach a different conclusion from the Judge on the use of the word “Budweiser” in the lower panels of the principal labels of the BB bottles and take the same view of the use of the word on the 4-bottle pack. This use infringes the registered trade mark BUDWEISER No 150926.

Passing-off and Fair Trade Act Claims

It follows from the findings I have made that the use of the word “Budweiser” on the principal labels of the BB bottles and on the 4-bottle pack may contravene s16 Fair Trading Act. The trade mark is falsely applied to the goods, but the act of application occurred outside New Zealand. In context the prohibited act in s16(1)(b) would likely be regarded as continuing while the trade mark serves its intended function. We heard no argument on the point and it is of no practical significance in this case because the same acts constitute infringement for which all necessary remedies are available.

The other provisions of the Fair Trading Act relied upon all relate to misleading or deceptive representations said to be conveyed by the presence on the BB labels of the trade marks “BUDĔJOVICKý BUDVAR” and “BUDWEISER”. Such misrepresentations are also at the centre of the allegations of passing-off. In their various formulations the allegations are that because of the resemblance or identity of these marks and the AB trade marks as used in the New Zealand market, people will be misled or deceived into believing falsely that there is some connection or association between the BB beer and AB or AB’s beer.
I have already determined, in agreement with Doogue J, that there is not such resemblance between “BUDĔJOVICKý BUDVAR” and BUD or BUDWEISER as is likely to give rise to deception or confusion in use. For that purpose I considered any fair use of the AB marks. The test for passing-off is different. That calls for comparison between the AB product presentation as a whole with the BB product presentation as a whole in the circumstances of actual use. Like the Judge, I can find nothing in the particular presentation or get-up of the products that is likely to increase the likelihood of deception beyond that inherent in the trade marks. There is, of course, the presence of the word BUDWEISER on the BB label. That was sufficient for Allsop J in Australia to find passing-off and breach of the Trade Practices Act. In the New Zealand context, on the evidence before us, I am not persuaded to that view.
The AB beer is, and is promoted as, an American beer. It has red white and blue labelling which overall is quite different visually from that used by BB. The superficial similarities in bottle size, and label positions (on the neck and lower part of the bottle) are common. The trade mark BUDWEISER on the principal label is (on one version) in a script form but not of any real similarity to BB’s script form of BUDĔJOVICKý BUDVAR.
Inspection of the BB labels sufficiently closely to make out the word “Budweiser” also discloses that the product is a Czech lager with a name that is certainly not English or American. Any apprehension of possible connection could not rise above “cause to wonder” which may constitute confusion but not deception: see The Pioneer Hi-Bred Corn case per Richardson J at 423. It is the latter that underlies passing-off and misrepresentation under the Fair Trading Act.
There is also the extensive evidence accepted by the Judge of the different market sectors in which the respective products appeal.
Accordingly, appreciating that the BB labels incorporate what I find to be infringing use of “Budweiser”, and cognisant of the different considerations applicable to these heads of claim, I am satisfied they have been rightly rejected.
I do not consider the Judge incorrectly included as an essential element of passing-off intention to mislead. As I understand the relevant passage in his judgment he was merely recording his view that there was no intention to deceive. I accept, of course, that passing-off may occur unintentionally.
I have considered carefully the survey evidence, particularly the recorded answers of those persons who mentioned the name “Budweiser” in answers recalling the BB bottles they were shown. I do not find in that evidence a basis for any different view. The leading form of question designed to draw out evidence of mistaken association, and the unsatisfactory failure of interviewers to follow instructions as to whom it should be posed, mean the evidential value of the answers is seriously undermined.
On one point I express a reservation. Both in the evidence of Professor Hoek and in the judgment there are suggestions that because AB’s product is so well known, the likelihood of the BB product being confused with it is minimised. Such an argument does not take account of the dynamic nature of product markets with new purchasers entering as others depart. Further, if it were to become established as a principle, it would conflict with New Zealand’s international obligations to protect “Well-known marks” in Art 6bis of the Paris Convention for the Protection of Industrial Property and Art 16.2 of the TRIPS Agreement.
The presence, through parallel imports, of the BB product with labels showing as the predominant brand BUDWEISER BUDVAR instead of BUDĔJOVICKý BUDVAR is of unproven impact. If this labelling becomes well-known, not only will it increase the likelihood that the BUDĔJOVICKý BUDVAR product will be referred to as “Budweiser” so as to be taken for or connected with AB’s product, but it will also tend to erode the distinctiveness of AB’s trade mark. There is virtually no evidence before us on these matters.
I would uphold the judgment on the passing-off and Fair Trading Act claims. It is unnecessary to go into the issue whether there is an “own name” defence for companies in passing-off and, if so, its scope. As with trade mark infringement, there is to be kept in mind that any such defence would constitute a licence to practise deception on the public. The judgment of Somers J in New Zealand Farmers’ Co-operative Association of Canterbury Ltd v Farmers Trading Co Ltd (No.2) (1979) 1 NZIPR 212, 231 gives instructive background to that issue.

Result

The Court being unanimous the appeal is allowed on the cause of action alleging trade mark infringement so far as it relates to the use on the BB labels of the word “Budweiser”. In all other respects the appeal is dismissed.
AB is entitled to an injunction restraining the first and second respondents from importing, advertising, offering for sale or selling beer under or by reference to the name “Budweiser” or otherwise infringing Registered Trade Mark No 150926.
There will be an order for the delivery up to the appellant or destruction on oath of all product, labels, advertisements or other promotional material in the possession or under the control of the respondents the use of which would offend against the injunction granted.
Although there will be obvious difficulties in assessing the influence of the word “Budweiser” on sales made, the appellant is entitled to elect an enquiry as to damages or an account of profits. Any issues arising should be the subject of application to the High Court.
The appellant may be entitled to some costs on the appeal having succeeded in part. However, all questions of costs in this Court and the High Court are reserved. If necessary memoranda may be filed.

McGRATH AND GLAZEBROOK JJ

We agree with the judgment prepared by Gault P, except in one particular. These relate to the meaning of s13 of the Trade Marks Act and whether it excludes the “own name” defence in s12(a).
Section 13, which had no equivalent in the corresponding UK or Australian legislation, was first enacted in the Trade Marks Act 1953. On its ordinary meaning s13 says that the fact that a company is registered under a particular name does not of itself provide a defence to an infringement action if the use of the company name infringes. There is nothing in its wording to indicate that s13 is intended to qualify s12(a) which provides that no registration is to interfere with any bona fide use by a person of that person’s own name, place of business or those of that person’s predecessors. Section 12 first appeared in New Zealand legislation in 1939. If s13 had been intended as a qualifier to s12(a) one would have expected Parliament to have said so in the 1953 Act, either by restricting s12(a) to persons other than companies, or by otherwise making the interrelationship between the two provisions clear.
We accept, as Gault P points out, that the Courts have long rejected the contention that because a name is of a registered company it cannot be used as a trade mark so as to infringe. The legislative history of s13, however, indicates that Parliament perceived there was a problem of competing registrations (that of the company and the trade mark) and, as is not unusual, considered it appropriate to endeavour to put trade mark law in this area beyond all doubt.
As Gault P observes, s13 appears to have been enacted in response to the recommendations of the Evans Commission which inquired into the law of patents, trade marks and designs in 1950. It made few recommendations in the trade mark area. The relevant paragraphs in the Commission’s report for present purposes are as follows:
324.One recommendation which we desire to make relates to the possibility of greater co-operation between the Registrar of Companies and the Commissioner of Patents. At the present time it is possible for a company to be registered having as an essential part of its name the registered trade-mark of another person. Once a company is registered it is necessary for any person aggrieved thereby to seek an appropriate remedy in the Supreme Court, with the attendant expense.
325.We recommend either or both of the following provisions:-
(a)That the Patents, Designs, and Trade-marks Act be amended to provide that the use of a registered trade-mark or a word so closely resembling same as to be calculated to deceive or cause confusion as part of the name of a limited liability company is such a use as would constitute an infringement of the registered trade-mark under section 6, subsection (1), of the Patents, Designs, and Trade-marks Amendment Act, 1939.
(b)That the Companies Act, 1933, be amended to provide that the Registrar of Companies may refuse to register any company –
(i)The name of which comprises a registered trade-mark or a word so closely resembling the same as to be calculated to deceive or cause confusion; and
(ii)The main trading object or objects of which include manufacturing or vending foods covered by such registered trade-mark, and to that end he should cause a search to be made in the Register of Trade-marks before registering a company in a name which is or contains a word or words capable of registration as a trade-mark.
We think that it is undesirable to make it mandatory for the Registrar of Companies to refuse to register a company under the circumstances set forth in this paragraph because in some cases it is possible that the registered trade-mark may cover goods in respect of which it has not been used.
The mischief the Evans Commission saw in the trade marks legislation, identified in para 324 of the Report, was that a company could be registered with the registered trade mark of another person forming part of the company’s name. Once registration of the company was obtained an aggrieved proprietor of the mark, who wished to seek a remedy, had to bring proceedings in the Supreme Court. The Evans Commission’s recommendations in para 325 were designed to obviate the need for such litigation.
The recommendation in para 325(a) of the Evans Commission report, in essence, was that the law be amended to provide that “the use of a registered trade mark…as part of the name of a…company is such a use as would constitute an infringement of the registered trade mark.” The recommendation was that use of a registered trade mark as part of a company name should be deemed to be an infringement, and without any requirement to show any use of the company name as a trade mark or that the business of the company was in the same field as the trade mark registration. There was no reference in the Evans Commission report to s10 of the 1939 Act, the then equivalent of s12(a), and how it would operate together with the deemed infringement proposed in para 325(a). Conceivably, if the use of a trade mark as a registered company name was to be deemed an infringement, the Commission may have intended that the then equivalent of s12(a) remain as a defence. The Evans Commission in para 325(b) further proposed that, in addition to or in conjunction with what it proposed in para 325(a), the Companies Act should be amended to empower the Registrar of Companies to refuse to register a company the name of which comprised a registered trade mark.
While s13 of the Trade Marks Act 1953 was an apparent legislative response to the recommendation in para 325(a), it was enacted some years later and in a form far removed from the recommendation. Section 13 does not create an infringement; it excludes a defence. We have not been able to locate anything in the Parliamentary debates or elsewhere that explains the change in approach or the purpose behind the current form of s13. We consider it likely, however, that the purpose was to address the concern stated in para 324, but in a different manner, by putting it beyond doubt that registration of a company under a name containing a trade mark does not in itself constitute a defence. Anticipating perhaps in 1953 that the recommendation in para 325(b) would also be adopted, and the Registrar of Companies given a new power to refuse registration of a name comprising a registered trade mark, Parliament apparently felt it necessary to counter any suggestion that, if the Registrar allowed registration, that was in itself a defence. What was proposed in para 325(b)(i) was in fact enacted as s31(3) of the Companies Act 1955. We consider this view of the purpose of the provision is more in accord with the language of s13 in its context than the interpretation favoured by Gault P.
Even though we disagree with Gault P’s view that s13 renders a defence under s12(a) unavailable for companies, this does not lead us to differ from Gault P as to the result of this appeal. This is because we agree that the s12(a) defence is not made out by BB in this case for the reasons set out by Gault P at paras [122] to [124] above.

Solicitors
A J Park, Wellington for Appellant
Henry Hughes & Co, Wellington, for First Respondent

[2002] NZCA 264

19 September 2002