Caterpillar Incorporated v Tigercat International Incorporated
[2018] NZHC 2808
•30 October 2018
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2018-485-271
[2018] NZHC 2808
BETWEEN CATERPILLAR INCORPORATED
Appellant
AND
TIGERCAT INTERNATIONAL INCORPORATED
Respondent
Hearing: 30 August 2018 Appearances:
J G Miles QC and L A Player-Bishop for the Appellant G F Arthur for the Respondent
Judgment:
30 October 2018
JUDGMENT OF CULL J
[1] This appeal concerns the power of the Commissioner of Trade Marks to permit an amendment to a party’s counterstatement, allowing an alternative claim of honest concurrent use of a trademark under s 26 of the Trade Marks Act 2002 (the Act).
[2] Caterpillar Inc (Caterpillar) appeals a decision of the Assistant Commissioner of Trade Marks (the Commissioner), who held that a second amended counterstatement filed by Tigercat International Inc (Tigercat) could be admitted into the proceedings.1 The Commissioner determined it was fair and reasonable to allow a new paragraph to be included in the counterstatement, which made an alternative claim of honest concurrent use.
1 Tigercat International Inc v Caterpillar Inc [2018] NZIPOTM 8.
CATERPILLAR INCORPORATED v TIGERCAT INTERNATIONAL INCORPORATED [2018] NZHC 2808
[30 October 2018]
[3] The key issue to be determined is whether the Commissioner erred in allowing the amendment to be made to Tigercat’s counterstatement, by determining that it was fair and reasonable in the circumstances to allow the amendment.
Factual background
[4] On 28 October 2015, Tigercat lodged an application to register the “TIGERCAT” trade mark in relation to class 7 for forestry machines, equipment, parts and accessories. On 26 February 2016, Caterpillar filed a notice of opposition to prevent the registration of the mark.
[5] On 2 May 2016, Tigercat filed a counterstatement setting out why the trade mark should be registered. Both parties subsequently filed their evidence in chief in support of their respective positions as to the registration of the trademark in October 2016 and March 2017.
[6] On 27 March 2017, Tigercat requested to amend its counterstatement under s 194 of the Act. One of the amendments Tigercat sought was to introduce a new paragraph [12] into the counterstatement, which read:
The Applicant has continuously used the Trade Mark in New Zealand on and in relation to the Applicant’s Goods since at least 2002. Such use has been honest, and concurrent with use of the Opponent’s trade marks. The exception for honest concurrent use or other special circumstances, in section 26 of the Act, applies.
[7] Caterpillar opposed the request, primarily, on the basis that the amendment was a substantive change to the original application.
[8] On 30 May 2017, the Intellectual Property Office of New Zealand (IPONZ) issued a decision which concluded that the amendment was a substantive change and in all the circumstances it was not fair and reasonable to allow the amendment.2 On that basis, the amendment was excluded from the counterstatement.
2 Letter from Emma Kelly (Hearings Case Officer for the Commissioner of Trade Marks) to Henry Hughes IP Ltd and Hudson Gavin Martin regarding proceeding correspondence in proceeding 2969 (30 May 2017).
[9] Tigercat requested a hearing on the issue, as it considered it was adversely affected by the IPONZ decision. After both parties filed written submissions, the Commissioner released her decision which is the subject of this appeal.
The Commissioner’s decision
[10] The Commissioner determined that it was fair and reasonable in the circumstances to allow Tigercat to file its amended counterstatement, because she considered that the majority of the paragraphs did no more than repeat, in fuller detail, matters pleaded in the original counterstatement. The Commissioner considered there was no prejudice in allowing them in.
[11] In relation to the contested new paragraph [12], the Commissioner determined that it did expand Tigercat’s case and Caterpillar ought to have had notice of this prior to filing its evidence-in-chief. However, the Commissioner agreed with Tigercat that Caterpillar could address any matters arising from the proposed amendment in its reply evidence.
[12] The Commissioner considered it was fair and reasonable to allow the new paragraph [12] on the basis that it is desirable for the real controversy to go to trial so as to secure the just determination of the proceeding.3 The Commissioner determined it was unlikely that there was potential prejudice to Caterpillar, given that they still have the opportunity to file evidence in reply. If Caterpillar remained of the view that the scope for filing evidence in reply was too narrow and prevented it from adequately presenting its case on the pleading of honest concurrent use, the Commissioner was prepared to allow Caterpillar to file further evidence-in-chief, limited to this point.4
[13] The Commissioner rejected Caterpillar’s other submissions. Any resulting delay in disposition of the proceeding is more likely to prejudice Tigercat, who is seeking to register its trade mark, rather than Caterpillar. Further, if Caterpillar is put to any further cost that it can reasonably attribute to the late amendment, it is open to Caterpillar to raise that in the context of any costs award.
3 Tigercat, above n 1, at [26], citing Thornton Hall Manufacturing Ltd v Shanton Apparel Ltd [1989] 3 NZLR 304 (CA).
4 Under the Trade Mark Regulations 2003, reg 82.
Approach to appeal
[14] Section 170 of the Act allows for any “person who is aggrieved by a decision of the Commissioner” under the Act the right to appeal to the High Court.5 In determining an appeal, s 173 provides that the Court may:
(a)confirm, modify, or reverse the Commissioner’s decision or any part of it:
(b)exercise any of the powers that could have been exercised by the Commissioner in relation to the matter to which the appeal relates:
…
[15] The High Court has previously held that appeals against a decision by the Commissioner to allow for an amendment to pleadings in the context of the Trade Marks Act,6 and Patents Act 1953,7 are appeals against the exercise of a discretion.
[16] In an appeal from the exercise of a discretion, the decision may be set aside where the decision-maker erred in principle, took into account some irrelevant consideration, failed to take into account a relevant consideration or was plainly wrong.8
The appeal
[17] Caterpillar submits the Commissioner erred in law and principle in allowing the amendment to be included. Caterpillar argues the decision must be set aside on the basis that the Commissioner failed to take into account a number of material factors and/or was plainly wrong.
[18] Caterpillar submits the Commissioner, when exercising her discretion, failed to take into account that the amendment was not fair and reasonable for the following reasons:
5 Trade Marks Act 2002, s 5 defines the “Commissioner” as including the Assistant Commissioner of Trade Marks and also defines “court” as the High Court for the purpose of the appeal provisions.
6 Fantech (NZ) Ltd v Systemair Aktiebolag [2017] NZHC 234 at [21].
7 Bayer New Zealand Ltd v Merial Ltd [2017] NZHC 2946 at [104]–[105].
8 May v May (1982) 1 NZFLR 165 (CA) at 170.
(a)it substantially alters and expands the nature of Tigercat’s claim by introducing an additional exception in support of its application for registration;9
(b)it was requested at a late stage in the proceeding, when the primary evidential stages were complete and after the proceeding had been on foot for over a year;10
(c)it was open to Tigercat to include the amendment at the time it filed its counterstatement and there has been no recent law change or change in the facts to justify the late inclusion;11
(d)the amendment will cause prejudice to Caterpillar as it has already prepared its evidence through “a prism of a particular cause of action”, focussed on showing likelihood of and cases of confusion between the two trade marks, and would be required to respond to an entirely different case than the one it prepared for;
(e)the substantive hearing will be delayed further as Caterpillar will be required to review its whole case as pleaded, its 18 statutory declarations submitted as evidence and prepare and file significant additional evidence;
(f)the inconvenience caused by the amendment cannot be remedied by the benefits of filing extra evidence and/or an award of costs;
(g)the integrity of the original pleading cannot be maintained;12 and
9 Where the alteration results in a substantially different case it is less likely the amendment will be allowed: Mixi, Inc v Monster Energy Co [2018] NZIPOTM 9 at [17].
10 Hangzhou Gema Suitcases & Bags Co Ltd v Gianni Versace Spa [2007] NZIPOTM 15 at 8; Wyeth v Sanofi Pasteur [2008] NZIPOTM 36 at [26]; New Zealand Milk Brands Ltd v Anchor Foods Pty Ltd [2010] NZIPOTM 6 at [34]; and Actervis GmbH v Warimex Waren-Import Export Handels GmbH [2015] NZIPOTM 10 at [68].
11 Mixi, above n 9, at [43]–[44].
12 Transworld International Trading Ltd v Bell [2010] NZIPOTM 30 at [18].
(h)if the Commissioner’s decision is upheld, Caterpillar will, through no fault of its own, be in a seriously disadvantaged position to deal with unexpected higher stakes.13
[19] Tigercat opposes the appeal and submits the Commissioner was correct in exercising her discretion, which she did, consistent with the principles for amendments of pleadings. She did not err or wrongfully consider any factors.
[20] Tigercat submits that its original counterstatement raised the defence of honest concurrent use, as it had pleaded use in New Zealand since 2002.14 Although the matter was not pleaded as clearly as it could have been, Tigercat submits that the proposed amendment clarifies the pleading and does not add a new ground. Tigercat seeks to argue honest concurrent use in the alternative to its claim, that the Tigercat trade mark is not likely to cause confusion.
Relevant law
[21] Section 194 of the Act governs the grounds on which documents (other than a trade mark application) can be amended. It provides:
194 Amendment of documents other than application
The Commissioner may, at the written request of the person who has made an application (other than an application for the registration of a trade mark), or filed a notice or other document for the purposes of this Act, or, at the written request of the person’s agent, amend the application, notice or document,—
(a)to correct a clerical error or an obvious mistake; or
(b)if the Commissioner is of the opinion that it is fair and reasonable in all the circumstances of the case to do so.
[22] Regulation 11A of the Trade Mark Regulations (the Regulations) provides for the procedure for making requests to amend pleadings, as follows:
11A Request to amend pleadings
13 At [17].
14 Trade Marks Act 2002, s 26(b) provides that honest concurrent use is an exception to the prohibition in s 25 of the Act prohibiting registration of a trade mark which is confusingly similar to another mark on the Register.
(1)In this regulation, pleading means—
(a)a notice of opposition; or
(b)an application for rectification or revocation, declaration of invalidity, cancellation, or alteration; or
(c)a counter-statement.
(2)A request under section 194 of the Act to amend a pleading must, in addition to complying with regulation 11, be made prior to the hearing to which the pleading relates.
(3)If a request to amend a pleading is made,—
(a)the Commissioner must, on receipt of the request, notify the opposite party of the request; and
(b)the opposite party may make submissions on the request within a time specified by the Commissioner; and
(c)the Commissioner must, after considering those submissions (if any), notify the parties of the decision that the Commissioner intends to make on the request.
(4)If the Commissioner intends to allow an amendment to a pleading described in subclause (1)(a) or (b), the Commissioner must give the opposite party an opportunity to file, within a time specified by the Commissioner, an amended counter-statement.
[23] The other relevant provision in the context of this appeal is s 26(b) of the Act, which provides that honest concurrent use is an exception to the prohibition in s 25 that the Commissioner must not register a trade mark that is identical or similar to another owner’s mark.
[24]Section 26(b) provides:
26 Exceptions
The Commissioner must register trade mark A if –
…
(b)the Commissioner or the court, as the case may be, considers that a case of honest concurrent use exists, or other special circumstances exist, that, in the opinion of the court or the Commissioner, makes it proper for the trade mark to be registered subject to any conditions that the court or the Commissioner may impose.
[25]I will deal with the issues raised on the appeal under the two following issues:
(a)Did the Commissioner err in exercising her discretion under s 194(b) of the Act in permitting the amendment as fair and reasonable?
(b)Did the Commissioner lack jurisdiction to issue the evidence directions?
(a) Did the Commissioner err in exercising her discretion under s 194(b) of the Act in permitting the amendment as fair and reasonable?
Application of authorities
[26] In advancing the grounds of appeal on behalf of Caterpillar, Mr Miles QC submits that the Commissioner erred in applying the decision of Thornton Hall Manufacturing Ltd v Shanton Apparel Ltd, which was relied on by the Commissioner in her determination. The Commissioner decided that it was fair and reasonable to allow the proposed amendment “on the basis that it is desirable, in the words of the Court of Appeal in Thornton Hall … for the real controversy to go to trial so as to secure the just determination of the proceeding.”15
[27] Mr Miles also relied on four propositions arising from the authorities relied on by Tigercat. They were:
(a)several of the authorities were decided under a wider discretionary ambit than is permitted under s 194 of the Act;
(b)amendments have been granted where the applicant has sought leave to file further evidence, not where an amendment is based on a new ground as here;
(c)amendment is not permitted where there is a tactical switch to a new ground altogether; and
15 Tigercat, above n 1, at [26], citing Thornton Hall, above n 3, at 309.
(d)it is wrong in principle and unfair to allow an amendment, where the nature of the case is fundamentally changed, because of the prejudice it causes.
[28] Although Mr Miles is correct that Thornton Hall involved an amendment to a prayer for relief, the plaintiff there wished to pursue its claim in the alternative, and its application to amend was made on the morning of the fixture in the High Court. The Court of Appeal upheld the decision to grant leave to amend. The Court held that there was no prejudice to the defendant or the plaintiff had not acted in such a way as to give rise to estoppel by representation, the plaintiff did not have to elect the desired course, until the evidence had established the facts, upon which an election could fairly be made.16
[29] The point remains, however, as several cases have affirmed, it is desirable that the full case, with all relevant evidence, is before the Commissioner at the substantive hearing to determine the real controversy.17 The following cases, referred to by the parties, show the application of the principle in Thornton Hall, in permitting amendments to a counterstatement, notice of opposition, or relocation application.
The Fresh Juice Co Ltd v Lepionka:18 The Assistant Commissioner allowed an amendment to the applicant’s counterstatement in relation to an application to register a trade mark. The amendments included clarification of grounds in the original counterstatement as well as new grounds which alleged the opponent’s conduct has extinguished any proprietary rights. The Assistant Commissioner observed it was difficult to see how the 16 Thornton Hall, above n 3, at 309.
17 This principle has been upheld in a number of different contexts, see Amadeus Global Travel v Sabre Inc HC Wellington AP126/02, 14 March 2003, at [24]–[25] (appeal against a decision of the Commissioner refusing filing of further evidence in support of an opposition to a patent application); Bayer, above n 7, at [135]–[137] (appeal against a decision of the Commissioner allowing a party to amend a notice of opposition and statement of case as well as admit further evidence in support of an opposition to a patent application); Heinz Wattie’s Ltd v Goodman Fielder Consumer Foods Pty Ltd HC Auckland CIV-2007-404-6946, 10 December 2008 at [40] and [46] (application to amend or expand grounds relied upon for revocation of a trade mark); Monster Energy Co v Ox Group Global Pty Ltd [2016] NZHC 2124 at [53] (application to add a further ground of objection to opposition of registration of a trade mark); and Thornton Hall, above n 3, at 309 (appeal against decision granting leave to amend a statement of claim in relation to liability for breach of copyright).
18 The Fresh Juice Co Ltd v Lepionka [2000] NZIPOTM 9. This case was decided under the former Trade Marks Regulations 1954, reg 97. That regulation provided for amendment on a narrower basis than under the Trade Marks Act 2002, where the Commissioner thought the amendment “fit” and where it was without detriment to the interests of any person. However, Fresh Juice Co is still relevant as the Commissioner there took into account similar factors as those considered in current decisions.
opposition process could operate effectively if documents which formed part for the process could not be amended to introduce new issues that arise. The Assistant Commissioner noted that it was a late stage in the proceedings for the amendments to be made (all the preparative steps had been completed, although no hearing date had been set to hear the application). However, it was important for all relevant issues to be before the Commissioner and it was better for all parties if the issues
were dealt with at one hearing.
Mixi, Inc v Monster Energy Co:19 The Assistant Commissioner allowed only minor amendments to a notice of opposition to a trade mark application (removal of a ground of opposition and change to opponent’s address). The Assistant Commissioner rejected amendments seeking to include an additional pleading (likely to deceive or cause confusion) and a new ground of opposition (that the applicant was not the owner of the mark). The Assistant Commissioner held it would not be fair and reasonable to allow these amendments: the additional ground of opposition did not have any real prospect of success; the amendment would be at a late stage of the proceeding as all evidence has been filed and the substantive case is ready to be heard; and there is public interest in ensuring oppositions are dealt with in a fair and timely manner. Hangzhou Gema
Suitcases & Bags Co Ltd v Gianni Versace Spa:20
The Assistant Commissioner allowed the opponent’s request to file an amended notice of opposition, subject to the applicant having the opportunity to file an amended counterstatement (if it wishes) within two months. The amendments concerned relying on an additional trade mark to support its opposition under the Act. The Assistant Commissioner held it was fair and reasonable to allow the amendment because it was early in the proceedings (no evidence had yet been filed); there is a public interest in the issues being properly considered; and there will be some
prejudice but this is outweighed.
Wyeth v Sanofi Pasteur:21 The Assistant Commissioner rejected a request by the applicant to file a second amended application for partial revocation of a trade mark. The application specified a different date from which revocation would take effect. The Assistant Commissioner held the amendment was substantive and was not a minor procedural or technical pleading issue – an earlier revocation date is relevant to defining the period for which the owner must establish use of the mark; an earlier date should be pleaded if it is relied
upon; the amendment was sought at a late stage in the
19 Mixi, above n 9.
20 Hangzhou, above n 10.
21 Wyeth, above n 10.
proceedings (only five days before the hearing for the substantive matter was set down); further delay is inevitable whatever the outcome; and the trade mark owner has already been prejudiced by the application because the hearing was deferred. New Zealand Milk
Brands Ltd v Anchor Foods Pty Ltd:22
The Assistant Commissioner rejected a request to amend a notice of opposition. All evidence, including evidence in reply, had already been filed and the hearing date was already set down. The Assistant Commissioner held that the amendment was more than a mere clarification, as it challenged a claim to ownership, and was akin to a fresh cause of action; the proposed amendment prejudiced the applicant as there was now a different case to which it needed to respond; the amendment had arisen at a late stage after the evidential stage had been completed; and the prejudice could not be mitigated with certainty by filing new evidence for what could possibly be a fresh ground of
opposition.
Actervis GmbH v Warimex Waren-Import Export Handels GmbH:23 The Assistant Commissioner rejected a request, two days before the hearing date, to amend a notice of opposition. The opponent’s sought to update the trade mark registrations relied on for its grounds of opposition. The Assistant Commissioner held this amendment was sought at a very late stage (after evidence was filed, two days before the hearing and over a month after parties had been advised of the date); there was public interest in ensuring that the issue of deception or confusion was fully considered before a decision as to registration was made however this could still be considered regardless of the amendment; there was also public interest in not vacating fixtures so close to the date; the other party was prejudiced because it would be a different case and the evidential stage was complete; and this would cause delay to the applicant in having their mark
registered.
Transworld International Trading Ltd v Bell:24 The Assistant Commissioner rejected a request to amend the application for revocation of a trade mark. A range of amendments were proposed: format changes, stylistic changes, technical edits, clarifications, and substantial changes (converting the proceeding into a full revocation claim from a partial one). The Assistant Commissioner held it was not fair and reasonable to allow the amendments in their entirety as the owner has always treated this as a partial revocation claim; converting these proceedings at such a
late stage could not be remedied by the filing of extra evidence and/or an award of costs; the owner would be
22 New Zealand Milk Brands, above n 10.
23 Actervis, above n 10.
24 Transworld, above n 12.
seriously disadvantaged and dealing with unexpected higher stakes; although some minor amendments were allowed.
[30] After pointing to the wider discretion for the Commissioner to direct further evidence or to allow amendments in respect of patent cases,25 Mr Miles placed reliance on Fantech (NZ) Ltd v Systemair Aktiebolag,26 to demonstrate that there were real limits to the exercise of discretion under s 194 of the Act and reg 11A of the Regulations.
[31] In Fantech, Clark J reinforced that s 194 does not expressly or impliedly empower the Commissioner to do anything other than grant or not grant properly-made requests to amend a pleading, and noted that “pleading” includes a counterstatement in reg 11A.27 However, Clark J clarified that amendment was not what Fantech sought. Fantech sought to file a counterstatement out of time, which was not filed in the first place, and relied on s 194 as permitting that step. Clark J concluded that the Commissioner did not have discretion to permit the filing of an original counterstatement. The Commissioner only had discretion to permit an amendment to a counterstatement, where it had previously been filed. The Fantech decision is distinguishable from the facts in this case.
[32] Mr Miles also placed reliance on Heinz Wattie’s Ltd v Goodman Fielder Consumer Foods Pty Ltd,28 where an application to amend pleadings in a trade mark revocation action was allowed. Stevens J said:29
There is no good reason why it should not be open for an applicant who advanced only one ground in the application to include a further ground at a later point in the proceeding if evidence emerged to support it.
[33] In Monster Energy Co v Ox Group Global Pty Ltd, I granted leave to add a further ground of objection on appeal, following Monster Energy’s receipt of four items of correspondence after the hearing before the Assistant Commissioner.30 Although Mr Miles pointed to the difference between permitting additional evidence
25 Bayer, above n 7.
26 Fantech, above n 6.
27 Trade Marks Regulations 2003, reg 11A(1)(c).
28 Heinz Wattie’s, above n 17.
29 At [40].
30 Monster Energy, above n 17.
which had emerged after the hearing as opposed to a “substantially new case”, the grant of leave in Monster Energy added a further ground of objection on appeal and avoided both parties engaging in “the ritual of another action”.31 Like many of the above cases, Monster Energy demonstrates the appropriateness of allowing an amendment to ensure the real issue between the parties is properly heard, where it is in the interests of justice and any issues of delay or prejudice can be mitigated.
[34] From the authorities, there are a number of factors here, which support the granting of the amendment sought:
(a)The stage of proceedings is not so late that an amended counterstatement filed with Tigercat’s evidence, prevents Caterpillar from addressing any matters arising within an acceptable timeframe before the hearing. The filing of evidence was not completed and no hearing date had been set down.
(b)The type of amendment proposed by Tigercat clarifies the pleading, which raised the issue of concurrent use (as discussed below)32 but was inadequately pleaded, with no reference to the relevant provisions of the Act.
(c)The matter can proceed to a hearing, without unnecessary delay or the need for a further hearing.
(d)Any prejudice to Tigercat can be mitigated, by the grant of leave to adduce additional evidence-in-chief, as proposed by the Commissioner.
[35] I consider it was fair and reasonable to allow the amendment sought. There is a public interest in all the issues being considered, without the need for two hearings and further cost and delay.
31 At [49], citing Commodore Pty Ltd v Perpetual Trustees Estate and Agency Co of New Zealand Ltd [1984] 1 NZLR 324 (CA) at 335.
32 See [45] of this judgment.
[36] The Commissioner’s application of Thornton Hall is consistent with the other authorities, in ensuring that the full case, with all relevant issues and evidence, is before the Commissioner at the substantive hearing to determine the real controversy, obviating the ritual of another action. I reject Caterpillar’s submission that the Commissioner erred in her application of Thornton Hall in this case.
Prejudice
[37] I turn then to consider whether the exceptions in Thornton Hall apply here, namely, whether there is prejudice to Caterpillar.
[38] Tigercat submits that the amendment was not of a substantive nature, but seeks to clarify its earlier pleading.
[39] Mr Arthur, on behalf of Tigercat, submits that Tigercat’s first counterstatement raised honest concurrent use. The original pleading was:
[39] The Applicant has invested considerable amounts of time and resources designing and developing TIGERCAT branded products since the year 1992 and in that time has never been made aware of any confusion with respect to the co-existence of the Applicant’s marks and the Opponent’s marks.
[40] Mr Arthur submits that although the counterstatement did not use the words “honest” or “concurrent use” or refer to s 26(b) of the Act, the co-existence of the trade marks and a pleading of use in New Zealand since 1992 are relevant to, and indicative of, concurrent use. The applicant further stated in the original counterstatement they are the rightful owners of the Tigercat mark. While these pleadings are relevant to confusion, Mr Arthur says that they are also relevant to concurrent use.
[41] Although accepting that the matter was not pleaded as clearly as it should have been, Tigercat sought the amendment to its counterstatement, to avoid argument at the substantive hearing. In the amended counterstatement, the amendment reads:
[12] The Applicant has continuously used the Trade Mark in New Zealand on and in relation to the Applicant’s Goods since at least 2002. Such use has been honest, and concurrent with use of the Opponent’s Trade Marks. The exception for honest concurrent use or other special circumstances, in section 26 of the Act, applies.
[42] Caterpillar rejects Tigercat’s submission that the amendment was a clarification of its first counterstatement, submitting that the amendment substantially alters and expands the nature of Tigercat’s case, by introducing an additional or fresh exception in support of its application to register the Tigercat mark. In Tigercat’s cover letter with its amended counterstatement, Caterpillar points to the fact that Tigercat referred to the amendments, comprising the addition of paragraphs [7] to [12], which expand on paragraph [6] and specifies the provisions of the Act on which Tigercat relies.
[43] In support of its submission, Caterpillar relies on New Zealand Milk Brands, where the Assistant Commissioner said:33
It is my view that, if the proposed section 32 amendment to the notices of opposition is not merely clarificatory and is a fresh cause of action, the applicant will be prejudiced as the case it has to meet will be different, and that difference has arisen after the evidential stage in the proceedings has been completed.
[44] Further, Caterpillar relies on Mixi, Inc, where the Assistant Commissioner held that it was a substantially different case for Monster Energy to seek to rely on confusion or deception arising from similarities between the mark “Monster Strike” and the third party mark, “Monster Rancher”, when the original pleading alleged that confusion or deception was likely to arise because of similarities between the mark Monster Strike and the opponent’s trade marks.34 The Assistant Commissioner held that characterising the amendments as mere “particulars” did not alter his view that this was a substantively different case.35
[45] I consider that Tigercat’s amendment arises in different circumstances to the above two cases. Importantly, unlike New Zealand Milk Brands Ltd, the amendment has not arisen after the evidential stage in the proceedings has been completed. As the Commissioner observed, reply evidence can still be used to address any concerns that have arisen. Further, I do not consider Tigercat has raised a substantively different case, as in Mixi, Inc. It arises from the same matrix of historical facts of the use of
33 New Zealand Milk Brands, above n 10, at [34].
34 Mixi, above n 9.
35 At [17].
Tigercat’s mark, but pleads an alternative that the concurrent use of the Tigercat mark falls within the exception of s 26(b) of the Act.
[46] I do not consider that the Commissioner erred. The Commissioner accepted that although the amendment, which expands Tigercat’s case, should have been given to the opponent prior to filing its evidence-in-chief, Caterpillar should not have any difficulty addressing matters arising from the proposed amendment in its reply evidence. On that basis, the Commissioner found it was fair and reasonable to allow the proposed amendment, on the basis that it is desirable to have the real controversy go to trial. I concur with the Commissioner’s findings.
[47] I turn then to the second limb of Caterpillar’s argument, that it is prejudiced because it will have to file a second set of evidence to address honest concurrent use from a number of the same deponents who have already filed substantial evidence in respect of the issue of confusion. Mr Miles urged that to ensure that the hearing is done properly and is procedurally correct from the outset, the secondary proceedings filed by Tigercat alleging honest concurrent use should be the hearing where all matters are addressed properly, rather than in the present proceedings as a result of an amended counterstatement. On that basis, Caterpillar submits the amendment should be refused and the subsequent proceeding should be the venue for hearing all issues between the parties.
[48] In making that submission, Mr Miles submits that the Commissioner has reversed the onus on Caterpillar, so Caterpillar now has to file evidence-in-chief when it is an opponent. The onus, he says, is on Tigercat to explain why it was trading honestly and continued to do so, and then Caterpillar would reply. The Commissioner has wrongly reversed the onus on Caterpillar.
[49] The normal sequence of pleadings and the filing of evidence is highly relevant here. The sequence in this case was as follows:
Date Description 28 October 2015 Tigercat lodged an application to register the TIGERCAT mark in class 7. 26 February 2016 Caterpillar filed a notice of opposition to prevent the registration of the TIGERCAT mark.
2 May 2016 Tigercat filed a counterstatement setting out why the TIGERCAT mark ought to be registered. 3 October 2016 –
12 October 2016
Caterpillar filed evidence in chief in support of its opposition against registration. 27 March 2017 Tigercat filed evidence in chief in support of its application for registration. 27 March 2017 Tigercat requested to amend its counterstatement pursuant to s 194(b) of the Act. 10 May 2017 Caterpillar filed a letter opposing the request. 30 May 2017 IPONZ issued a decision which inter alia concluded that the amendment was a substantive change and it was not fair and reasonable in all the circumstances to allow the amendment. On that basis, the amendment was excluded from Tigercat’s counterstatement. 13 June 2017 Tigercat considered it was adversely affected by the IPONZ decision and requested a hearing on the issue. 19 December 2017 Tigercat filed a second amended counterstatement. 31 January 2018 Both parties filed submissions regarding the request. 22 March 2018 The Commissioner issued her decision which concluded that it was fair and reasonable to allow the amendment. 23 April 2018 Caterpillar filed a Notice of Appeal on the basis that, inter alia, the Commissioner had erred in law in allowing the amendment.
[50] Mr Arthur rejects Caterpillar’s submission that the evidence will be out of sequence and that it reverses the onus. He relies on the normal sequence of filing evidence in opposition. Whether Tigercat pleaded honest concurrent use properly from the outset or not, Mr Arthur points to the procedures to demonstrate that Caterpillar’s evidence would have come first, as the above chronology shows. Thus, Caterpillar files its notice of opposition to Tigercat’s application; files its evidence in support of its opposition to Tigercat’s registration and Tigercat in turn files evidence- in-chief in support of its application for registration.
[51] Importantly, Mr Arthur says that the onus is on Tigercat to establish honest concurrent use and the vast bulk of the evidence comes from the applicant, Tigercat. He rejects, therefore, the submission from Caterpillar that it has to go back and redo all of the evidence and start a new case afresh. For that reason, the Commissioner expected that Caterpillar would be able to deal with the honest concurrent use evidence filed by Tigercat in its reply evidence, which it would normally file after receiving the applicant’s evidence-in-chief.
[52] As the chronology shows, on 27 March 2017 Tigercat filed its evidence-in- chief, including the evidence in relation to the honest concurrent use. On the same day, Tigercat filed its request to amend its counterstatement to introduce paragraph [12], with its claim of honest concurrent use under s 26(b) of the Act.
[53] After taking into account the chronology, the stage of the claim to date, the procedure under the Act for the filing of pleadings and evidence, and the fact that Tigercat has filed all its evidence-in-chief in respect of both of its claims on confusion and honest concurrent use, I accept Mr Arthur’s submission that the bulk of Caterpillar’s evidence in an honest concurrent use claim is in reply. That is the position in which Caterpillar is presently placed.
[54] I am unable to uphold Caterpillar’s submissions that it is prejudiced by the sequence of evidence as a result of the amendment. In the interests of fairness, the Commissioner has allowed Caterpillar to file further evidence-in-chief under reg 82, limited to honest concurrent use, if the scope for filing evidence strictly in reply is too narrow and does not permit Caterpillar to adequately put its case in relation to the amended pleading of honest concurrent use.36 In all of those circumstances, I do not accept that Caterpillar is prejudiced by the amendment.
[55] Caterpillar further submits that the amendment should not be allowed because, consistent with Thornton Hall, Tigercat has acted in such a way as to give rise to an estoppel by representation.37 I do not accept that Tigercat’s conduct induced Caterpillar to believe that they had definitely adopted one course and relinquished others. However, if Caterpillar does find it needs to file new additional evidence as a result of the amendment, it still has the opportunity to do so in the form of reply evidence.
[56] I find that the Commissioner did not err in exercising her discretion under s 194(b) of the Act in finding that the amendment was fair and reasonable in the circumstances.
36 Tigercat, above n 1, at [28].
37 Thornton Hall, above n 3, at 309.
[57] I turn now, for completeness, to a further issue raised by Caterpillar regarding the Commissioner’s jurisdiction to make evidence directions.
(b) Did the Commissioner lack jurisdiction to issue the evidence directions?
[58] Caterpillar submits the Commissioner erred in law as she lacked jurisdiction to issue the following evidence directions:
(a)Caterpillar can file evidence strictly in reply to the amendment within one month of the decision; and
(b)if Caterpillar felt it could not properly characterise its evidence as reply evidence, it could file further evidence-in-chief within two months of the decision. Tigercat would then have two months to file evidence in reply, and Caterpillar would have a further month to file reply evidence.
[59] Caterpillar says the sole direction open to the Commissioner was to grant or refuse the amendment.38 As these directions cannot stand, Caterpillar submits the amendment will prejudice Caterpillar, as the Commissioner acknowledged.39
[60] In response to Caterpillar’s submissions that the Commissioner lacks jurisdiction to give evidence directions, Tigercat submits reg 35 of the Regulations allows the Commissioner to give leave to file further evidence. Any prejudice to Caterpillar because it has completed its evidence in chief is clearly remediable and the Commissioner has indicated this remedy. Caterpillar cannot say it is prejudiced because it elects not to seek to file further evidence.
[61] Regulations 34 and 35 of the Regulations provide for evidence to be filed out of time. Specifically, reg 34(3) provides:40
34 Evidence out of time
…
(3)The Commissioner may allow the evidence to be filed only if—
38 Relying on Fantech, above n 6, at [30].
39 Tigercat, above n 1, at [27]–[28].
40 Emphasis added.
(a)the Commissioner considers that there are genuine and exceptional circumstances that justify filing the evidence; or
(b)the evidence could not have been filed earlier.
[62] Evidence must not be filed out of time unless the party has applied to the Commissioner for permission to file it under reg 35 and the Commissioner allows it under reg 34. However, it was open to the Commissioner to exercise this discretion under the regulations and allow evidence to be filed as directed. Importantly, it ensures that any possible prejudice that may arise to Caterpillar from allowing Tigercat’s amendment can be met. Given Caterpillar’s concern about the prejudice such an amendment will make, I consider this was a pragmatic and sensible use of the Commissioner’s discretion under the regulations, and was advantageous to Caterpillar, in ensuring that Caterpillar can adduce such evidence as it wishes, either in reply or as further evidence-in-chief.
[63] I do not consider that the Commissioner has erred in principle, taken into account some irrelevant consideration, or failed to take into account relevant considerations. Nor was she plainly wrong. In turning her mind to all of the relevant considerations, the Commissioner has ensured that the full dispute between the parties is litigated at the substantive hearing, thereby avoiding further issues arising later. The Commissioner has exercised her discretion in relation to evidence directions, to ensure that no prejudice is suffered by Caterpillar as a result of the approved amendment.
[64] Further, Caterpillar, if put to any further cost that it can reasonably attribute to the late amendment of the counterstatement, can apply for a departure from scale costs, as the Commissioner directed.
Result
[65]The appeal is dismissed.
Cull J
Solicitors:
Anthony Harper, Auckland for Appellant
Caterpillar Incorporated v Tigercat International Incorporated [2018] NZHC 2808
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