Daimler AG (formerly DaimlerChrysler AG) v Sany Group Co Limited

[2014] NZHC 532

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2008-485-002333 [2014] NZHC 532

UNDER  The Trade Marks Act 2002

IN THE MATTER             of an appeal from a decision of the Assistant Commissioner of Trade Marks dated 29 September 2008

AND  New Zealand Trade Mark No. 754229

BETWEEN  DAIMLER AG (FORMERLY DAIMLERCHRYSLER AG) Appellant

ANDSANY GROUP CO LIMITED Respondent

Hearing:                   12 March 2014

Counsel:                  R M Wallis for Appellant

M T Lennard for Respondent

Judgment:                21 March 2014

JUDGMENT OF COLLINS J

Introduction

[1]      Daimler AG1 (Daimler) appeals a decision of the Assistant Commissioner of

Trade Marks (Assistant Commissioner) in which she approved an application by

Sany Group Co Ltd (Sany) to register the following trade mark:

1 Formerly known as DaimlerChrysler AG.

(Sany’s mark)

[2]      Sany filed its trade mark application on 31 August 2006, which therefore is the relevant date.2   Prior to then Daimler had registered a number of trade marks in New Zealand, including:

(Daimler’s marks)

[3]      Daimler opposed the registration of Sany’s mark on five grounds:

(1)       That Sany’s mark was likely to deceive or cause confusion because of

its similarity to Daimler’s marks.3

(2)That allowing Sany to use its mark would be contrary to New Zealand law4 because it would breach ss 9, 10, 13 and 16 of the Fair Trading Act 1986 and/or amount to passing off.

(3)       That Sany’s application was made in bad faith.5

(4)       That Sany’s mark was not registrable under s 25(1)(b) of the Trade

Marks Act 2002 (the Act) because Sany’s mark is similar to Daimler’s

2      Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 (CA) at 61.

3      Trade Marks Act 2002, s 17(1)(a).

4      Section 17(1)(b).

5      Section 17(2).

marks, which are registered for similar goods and allowing Sany to use its mark would be likely to deceive or confuse.

(5)       That Sany’s mark was not registrable under s 25(1)(c) of the Act

because:

Daimler’s marks are well known in New Zealand;   Sany’s mark is similar to Daimler’s marks;

Sany’s application is in relation to goods which are the same or

similar to Daimler’s goods;

Allowing Sany to use its marks could indicate a connection in the

course of trade between Sany’s products and Daimler’s;  and

Allowing  Sany  to  use  its  marks  would  be  likely to  prejudice

Daimler’s interests.

[4]      The Assistant Commissioner rejected all of Daimler’s grounds of opposition. Daimler has now abandoned its claim that Sany’s application was made in bad faith but pursues its other four grounds of opposition in this appeal.

Background

Sany

[5]      Sany  was  incorporated  in  China  in  1989.     Its  core  business  is  the manufacture, leasing, importing and exporting of “building machines … road machines … hoist machinery … vehicles … new materials … [and] network communication equipment …”.6    By 2005 Sany was ranked number 256 in the top

500 companies involved in manufacturing in China.  Its products have been used in

the construction of major facilities in China such as the Tibet Railway, the Beijing

International Airport, the National Opera Theatre and the SanXia Project.   Sany’s

6      Declaration of Haobing Wang, 26 September 2007.

products  are  exported  around  the  world  and  were  advertised  extensively  on television, in print media and at trade exhibitions.

[6]      Mr Wang, the in-house counsel for Sany responsible for intellectual property matters, explains that Sany’s mark was created in 1989.  Mr Wang describes Sany’s mark as a “three 1s device” which he says:7

has strong significance in the Chinese community and portrays a strong, prosperous and first class image.   This part of the trade mark consists of three  “1”  symbols  all  pointing  towards  each  other,  but  not  actually connecting with each other.  The three “1” elements are displayed in such a way that they create a distinctive circle in the middle of them.   The three “1”s appear to be rotating, symbolising that Sany’s future development is like a snowball and is growing and thriving.  The three “1”s pierce the outer circle, breaking through the siege and radiating outside, meaning that Sany’s products  are  sold  on  a  global  basis  in  a  thoroughly  successful  manner. Further, the three “1”s comes from Sany’s three main goals, those are, (1) to establish a first class enterprise, (2) to cultivate first class people, and (3) to make a first class contribution.

[7]      Sany first applied to register its mark in China in 1989 in relation to welding materials.   Since then Sany’s mark has been registered in China in relation to all classes of the Ninth Edition of the International Trade Mark Classification System (ITMCS) adopted as part of the Nice Agreement.8

[8]      Sany has applied to register its mark in numerous countries, including the

United States, Australia, the United Kingdom and New Zealand.

[9]      Sany’s application in New Zealand is in relation to goods in Class 7 and

Class 12 of the ITMCS. Those classes relate to the following goods:

Class 7

Road rollers; excavators; diggers (machines); hydraulic pumps; concrete pumps; trailers and truck mounted concrete pumps; elevating apparatus; mixing machines; concrete mixers (machines); bulldozers; motor graders; asphalt pavers; horizontal directional drilling machines; cranes; asphalt mixing plants; concrete mixing plants; rotary pile drills; milling machines; mining machines; pumps (machines); extractors for mines; mine borers; drilling machines; mine working machines; rail laying machines; railroad construction machines; power shovels; road making machines; pumps (parts

of machines, engines or motors); belt conveyors; hydraulic controls for machines, motors and engines; and hydraulic components …

Class 12

Buses; lorries; sports cars; motor cars; motor buses; locomotives; concrete mixing vehicles; aerial conveyors; lifting cars (lift cars); automobile chassis; hydraulic circuits for vehicle; asphalt material transfer vehicles; automobile bodies …

Daimler

[10]     Daimler’s origins as an automobile manufacturer can be traced back to 1882 when the Daimler Motorengesellchaft company was formed in Stuttgart.   The company began to use the “three-pointed star” trade mark on its vehicles in 1909 and in New Zealand in 1911.  Today Daimler is the product of a number of mergers and acquisitions of vehicle and other manufacturing companies, such as Benz & Cic in

1926 and Chrysler Corporation in 1998.

[11]     Daimler is one of the world’s leading automobile companies.  It manufactures a range of cars, trucks, buses, UNIMOG multi-purpose heavy duty vehicles, diesel engines, turbines, rail vehicles, power generators and other industrial products. Daimler’s vehicles are today produced under the name “Mercedes-Benz”.  Daimler’s heavy duty vehicles are often adapted by “partner companies” to create vehicles that have, for example, cranes, winches, snow ploughs, fire appliance and rescue equipment. There is evidence of a Sany concrete pump being installed on the chassis of a Mercedes-Benz truck in the United States, although there is an issue about whether this arrangement was agreed to by Daimler.

[12]     Mr Moore, a trade mark attorney in London whose firm is the trade mark agent for Daimler, has made three declarations in this proceeding.  Mr Moore’s first declaration annexes information about the origins of Daimler’s marks.  The evidence is that in 1909 the sons of the founder of Daimler encouraged the board of Daimler to adopt a star as a symbol of the company.  In June 1909 the three-pointed star was registered.   From 1910 onwards the three-pointed star was placed on Daimler car radiators.  “The three-pointed star was supposed to symbolise Daimler’s ambition of

universal motorisation – ‘on land, on water and in the air’”.9    In August 1923 the three-pointed star enclosed in a circle became a registered trade mark in Germany and has been registered as trade marks in many countries throughout the world.  Mr Moore’s  evidence  established  that,  prior  to  Sany’s  application,  Daimler  had  18 “three-pointed star” marks registered in New Zealand, including the three I have set out in paragraph [2] of this judgment.

[13]     Mr  Moore’s  evidence  demonstrates  that  for  many  years  Daimler  has advertised its trade marks widely in publications in many countries throughout the world and in publications with major international circulations, such as Time Magazine, News Week and Fortune.  The advertising expenditure in New Zealand is considerable.  Mr Moore’s evidence was that in the years prior to the relevant date, Daimler’s expenditure on advertising in New Zealand increased from $515,128 in

2002 to $1,290,008 in 2006.   Sales of Mercedes-Benz cars and trucks during the period that preceded the relevant date were also significant.  In 2002 Daimler sold

926 Mercedes-Benz cars in New Zealand.  Its car sales during the period preceding the relevant date increased to 1,246 in 2003.  In 2006 Daimler sold 975 Mercedes- Benz cars in New Zealand.   Daimler also sold Mercedes-Benz trucks during this period.  The trucks’ sales figures ranged from 101 trucks being sold in 2002 to 43 trucks being sold in 2006.  These figures may appear low compared to international markets but they are reasonably significant in New Zealand.

Legal principles governing this appeal

[14]     This appeal is conducted as a rehearing.10     I am not bound to accept the Assistant Commissioner’s findings of fact and I am entitled to exercise any power or discretion available to the Assistant Commissioner.   I must exercise my own judgement but, where appropriate, I may give weight to the expressions of opinion of the Assistant Commissioner.

[15]     In Austin, Nichols & Co Inc v Stichting Lodestar, the Supreme Court said when considering a general appeal from a decision of the Assistant Commissioner the High Court is required to:11

... come to its own view on the merits.  The weight it gives to the decision of the Commissioner is a matter of judgment [sic].  If the High Court is of a different view from the Commissioner and is, therefore, of opinion that the Commissioner’s decision is wrong, it must act on its own view.

[16]     The Court went on to say:12

Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate Court, even where that opinion is an assessment of fact and degree and entails a value judgment [sic].  If the appellate Court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ. In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion.

In the present appeal there was no basis for caution in differing from the assessment of the tribunal appealed from.  The case entailed no question of credibility.  It turned on a judgment [sic] of fact and degree, not the exercise of discretion entrusted to the tribunal.  We are of the view that the Court of Appeal was not correct to suggest that, because the decision turned on a value judgment [sic] apparently open to the Assistant Commissioner, “the High Court Judge ought not to have embarked on a reconsideration of the issue  without  considering,  and  giving  weight  to,  the Assistant Commissioner’s conclusion”.   The High Court Judge was obliged to reconsider   the   issue.      He   was   entitled   to   use   the   reasons   of   the Assistant Commissioner to assist him in reaching his own conclusion, but the weight he placed on them was a matter for him.

[17]     I will apply the principles articulated by the Supreme Court in  Stichting

Lodestar when considering Daimler’s appeal.

First ground of appeal

[18]     Daimler’s first ground of appeal is based on s 17(1)(a) of the Act which

provides:

The Commissioner must not register as a trade mark or part of a trade mark any matter –

(a)       The use of which would be likely to deceive or cause confusion.

[19]     The Assistant Commissioner concluded:

(1)That the relevant markets were likely to consist of discerning and reasonably knowledgeable persons.13

(2)That at the relevant date there was likely to have been “a sufficiently substantial awareness in the relevant markets” of Daimler’s marks in New Zealand.14

(3)       That  Sany’s  and  Daimler’s  marks  are  visually  and  conceptually

different.15

(4)That a number of Daimler’s products are the same or similar to the goods covered by Sany’s application.16

(5)       That the relevant markets for Daimler’s and Sany’s goods could be

the same or overlap.17

[20]     Overall, the Assistant Commissioner concluded Daimler’s opposition based on s 17(1)(a) of the Act could not succeed because a substantial number of people in the relevant market were not likely to be deceived or confused because Sany’s mark and Daimler’s marks are visually and conceptually different.

[21]     Daimler’s first ground of appeal contains the following points:

(1)       The Assistant Commissioner erred when she concluded that Daimler’s

reputation in the relevant markets was confined to cars and trucks.18

13     Sany Group Co Ltd v DaimlerChrysler AG IPO T27/2008, 29 September 2008 at [21].

14 At [30].

(2)The  Assistant  Commissioner  placed  too  much  emphasis  on  the relevant purchasing public being “discerning” and “reasonably well- informed” and in limiting her consideration of the relevant market to actual purchasers.19

(3)Sany had failed to establish there was no reasonable possibility of confusion if Sany’s mark is registered and that the general public are likely to be confused or deceived into believing that Sany’s goods, if sold  under  Sany’s  name,  are  those  of  Daimler  or  have  some association or connection with Daimler.20

(4)The likelihood of deception is increased if allowance is made for imperfect recollection.21

(5)The  Assistant  Commissioner  erred  by  comparing  the  Sany  and Daimler marks by breaking down each of the marks into their component parts.22

(6)       The Assistant Commissioner placed too much emphasis on the word

“SANY” in Sany’s mark.23

(7)The Assistant Commissioner placed too much emphasis on the differences  between  the  Sany mark  and  the Daimler marks.    She failed to recognise the common idea or concepts of the parties’ marks and she failed to place enough weight on the distinctiveness of the

Daimler marks.24

19     At [68]-[69].

20     At [74]-[75].

(8)The Assistant Commissioner placed too much emphasis on Daimler’s reputation in relation to cars and trucks without sufficiently considering Daimler’s wider reputation.25

[22]     Daimler’s overall submission in relation to its first ground of appeal is that deception and confusion was inevitable because of the strength of Daimler’s reputation, the distinctiveness of its marks, the similarity between Daimler’s marks and Sany’s mark and the way the marks will be presented to the public.26

[23]     All of the points raised by Daimler in its first ground of appeal can  be addressed under the following headings:

(1)      Daimler’s reputation in the relevant market

(2)      The purchasing public

(3)      Confusion and deception

(4)      Comparison of the marks

Daimler’s reputation in the relevant market

[24]     It was necessary for Daimler “to establish a sufficiently substantial reputation in the New Zealand market to lead to the possibility that goods covered by [Sany’s] proposed trade mark would be identified with [Daimler]”.27

[25]     The  reason  for  this  “initial  inquiry”  was  explained  by  Richardson  J  in

Pioneer Hi-Bred Corn Co Ltd in the following way:28

... if the opponent's mark is wholly unknown in the New Zealand market in which the applicant's mark is proposed to be used, the use of the applicant’s mark could … not lead to deception or cause confusion.  Those concerned in that market would not be misled into drawing any false inferences as to the origin or quality of the goods or otherwise.   Nor would they be confused:

25 Appellant’s submissions, above n 18, at [116].

because of their lack of awareness of the applicant’s mark, there is nothing with which the applicant’s mark could be confused.

[26]     “Reputation”   in   this   context   means   “awareness”   or   “cognisance”   or

“knowledge” of Daimler’s marks in New Zealand.29

[27]     The Assistant Commissioner concluded Daimler’s reputation in New Zealand related to cars and trucks.  Daimler says the Assistant Commissioner erred:

(1)       “In defining the reputation of Daimler … too narrowly”;30   and

(2)When she said Daimler had not “established how, or the context to which, persons from, and/or who live in New Zealand have, or are likely to have, being exposed to [Daimler’s] worldwide reputation or to its trade marked goods in overseas markets”.31

[28]     The evidence before the Assistant Commissioner showed Daimler has an enviable reputation in New Zealand and internationally in relation to cars, trucks, buses, UNIMOGs, vehicle chassis, engines, turbines, heavy duty land and rail vehicles and power generation plants amongst other items of machinery.32    I agree with Daimler when it says its reputation extends beyond cars and trucks.  I also agree with Daimler that it did not need to rely on its international reputation.  Its extensive reputation in New Zealand sufficed.

The purchasing public

[29]     The basic purpose of s 17(1)(a) of the Act is to protect the public rather than the proprietary rights of traders.33   In economic terms, trade marks assist the public by lowering search costs and fostering quality control.34

[30]     Daimler says the Assistant Commissioner placed too much emphasis on the

relevant purchasing public being “discerning” and “reasonably well informed” and

29     Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd, above n 2, at 63.

30 Appellant’s submissions, above n 18, at [53].

31 At [62].

32 Declaration of David Simon Moore, 19 June 2007 at [5].

that she further erred in limiting her consideration of the relevant market to actual purchasers.

[31]     Daimler promotes itself as a producer of high quality cars, trucks, and a range of other machinery and equipment.   Individuals who purchase Daimler’s products are likely to be knowledgeable and informed.  Businesses which purchase Daimler and Sany products may involve a number of decision-makers who are likely to conduct research and undertake inquiries before their businesses purchase Daimler and Sany products.

[32]     The  cost  and  technical  specifications  associated  with  Daimler  and  Sany products means that those who are in the market for the parties’ respective products are likely to be “discerning” and reasonably “well informed”.   This includes employees of businesses involved in purchase decisions.  Daimler and Sany are the antithesis of businesses which produce cheap products that are able to be purchased over  shop  counters  or  in  supermarkets  by  impulse  buyers  who  may  not  be particularly discerning or well informed.

Confusion and deception

[33]     Sany needed to establish on the balance of probabilities that its mark was not likely to deceive or cause confusion.  This obligation was explained in the following way by North P in New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV when he said:35

[The] applicant must show that his proposed trade mark is not likely to deceive or cause confusion.  I interpret this to mean that there must be no reasonable probability that any considerable section of the public will be deceived or confused by the presence of the two marks.

[34]     In Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd Richardson J said:36

“Deceived” implies the creation of an incorrect belief or mental impression and causing “confusion” may go no further than perplexing or mixing up the minds of the purchasing public … Where the deception or confusion alleged is as to the source of the goods, deceived is equivalent to being misled into

35     New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV [1964] NZLR 115 (CA) at 133.

36     Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd, above n 2, at 62.

thinking that the goods bearing the applicant’s mark come from some other source and confused to being caused to wonder whether that might not be the case.

[35]     To support this aspect of its case Daimler adduced evidence from Mr Moore, which it says demonstrates the potential for the general public to be confused or deceived into believing goods sold under the Sany mark are those of Daimler or have some connection with Daimler.   In particular, Mr Moore provided evidence of the promotion by Sany of one of its cement pumps at an exhibition in the United States. A Sany cement pump was fixed to the chassis of a Mercedes truck. Apparently those responsible for the exhibition placed a sign reading “Sany” above Daimler’s three- star device within a circle at the front of the truck.  Sany responded to Mr Moore’s concern by explaining that the word “Sany” was only on a piece of cardboard affixed to the front of the truck to show that the concrete pump on the back of the truck was a Sany product.

[36]     In my assessment, Daimler has attempted to make too much of the concrete pump incident in the United States.  It is highly likely that any person involved in purchasing Sany or Daimler products who saw the Sany cardboard sign attached to the front of the Mercedes truck at the exhibition in the United States would not have been  confused  or  deceived.    I  am  sure  that  purchasers  (including  purchasing decision-makers) in the relevant markets would have instantly realised the Sany sign referred only to the cement pump on the chassis of the truck.

[37]     The absence of any convincing evidence of deception or confusion between Daimler and Sany’s products during the period of time that both companies have been trading in world markets underscores my conclusion that Sany discharged the burden of proving absence of confusion or deception in this case.

Comparison of the marks

[38]     In New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV, Turner J explained:37

37     New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV, above n 35, at 139.

The rules for comparison of word marks have been summarised as follows:

1. You must take the two words and judge of them both by their look and by their sound;  2.  You must consider the goods to which they are to be applied

and the nature and kind of customer who is likely to buy these goods;  and 3.

You must consider all the surrounding circumstances and what is likely to happen if each of the marks is used in a normal way as a trade mark for the goods of the respective owners of the marks;  ...

[39]     In addition, when comparing Sany’s and Daimler’s marks allowance needs to be made for imperfect recollection.   In De Cordova v Vick Chemical Co, it was explained:38

The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him, for orders are not placed, or are often not placed, under such conditions.  It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole. (emphasis in original).

[40]     It is important to consider the overall or net impressions of the marks when they are considered as a whole.39

[41]     Daimler says that the Assistant Commissioner erred in her comparison of the marks by:

(1)      Failing to allow for imperfect recollection.

(2)By comparing the Sany and Daimler marks by breaking down each of the marks into their component parts.

(3)By  placing  too  much  emphasis  on  the  word  “Sany”  without considering the way the comparatively small marks will be seen by members of the public at a distance.

(4)By placing too much emphasis on the difference between the Sany mark and the Daimler marks and not placing sufficient emphasis on

the common idea or concepts of the respective marks.

38     De Cordova v Vick Chemical Co (1951) 63 RPC 103 (PC) at 106.

39     Polaroid Corp v Hannaford & Burton Ltd [1975] 1 NZLR 566 (CA).

[42]     In comparing Sany’s mark with Daimler’s marks I have:

(1)Made an overall assessment of the marks and refrained from breaking down each of the marks into their component parts.

(2)Focused on  the similarities of the marks, including the ideas and concepts of the marks.

(3)       Kept in mind the significance of imperfect recollections.

(4)Taken into account the circumstances in which Sany’s mark may be used, the markets in which Sany’s goods may be bought and sold and the character of those involved in those markets.40

[43]     In my assessment, there are some similarities between Sany’s mark and the Daimler’s marks.  Both involve a circle with a three-pronged device that either abuts or slightly overlapses the edges of the circle.  The three-pronged devices are aligned in a similar way in both sets of marks.  However, those similarities are minor.  When

I look at the Sany mark I do not think of the Daimler marks.41   The Daimler marks

are clearly a representation of a star and symbolise superior quality.  The simplicity of the Daimler marks is one of their striking features.  On the other hand, the Sany mark looks like a spinning rotor.  It is a complicated device, the meaning of which is hard to discern by looking at the mark.  Purchasers in the relevant markets could not confuse the Sany mark with Daimler’s three-pointed star within a circle.  The device elements in the Sany and Daimler marks are not visually or conceptually similar.

[44]     In addition, the Sany mark is a composite mark.  It comprises the device part of the mark and the word “SANY”. The word “SANY” in Sany’s mark must remove any doubt that purchasers in the relevant markets might be confused or deceived into

thinking there is a connection between Sany’s mark and Daimler’s marks.

40     Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd, above n 2, at 61.

41     A similar conclusion was reached in Daimler AG v Sany Group Co Ltd [2009] EWHC 2581 (Ch)

at [80].

[45]     Daimler agrees that in this case aural comparisons are not helpful.  This is not a case in which it is necessary to compare the surrounds of the marks.

[46]   Accordingly, I agree with the conclusions reached by the Assistant Commissioner  in  relation  to  Daimler’s  case  based  on  s  17(1)(a)  of  the  Act. Daimler’s first ground of appeal fails.

Second ground of appeal

[47]     Daimler’s second ground of appeal is based on s 17(1)(b) of the Act, which provides:

17        Absolute grounds for not registering trade mark: general

(1)      The Commissioner must not register as a trade mark or part of a trade mark any matter—

...

(b)      the use of which is contrary to New Zealand law or would otherwise be disentitled to protection in any court;

...

[48]     Daimler’s case before the Assistant Commissioner was that registration of Sany’s mark would offend ss 9, 10, 13 and 16 of the Fair Trading Act 1986 or amount to passing off.

[49]     The Assistant Commissioner concluded she did not need to consider this aspect of Daimler’s case in detail because a higher threshold would be required to establish confusion under the relevant provisions of the Fair Trading Act 1986 or in an action for passing off than is required under s 17(1)(a) of the Act.

[50]     In this Court Daimler accepted the Assistant Commissioner’s approach was correct.42    Daimler properly accepted that if Sany was able to establish absence of confusion or deception for the purposes of s 17(1)(a) of the Act, then there was little

prospect of there being sufficient evidence to establish breaches of the Fair Trading

Act 1986 or passing off.

[51]     Accordingly, in view of my conclusions in relation to Daimler’s first ground of appeal it is not necessary for me to dwell on Daimler’s second ground of appeal. That ground of appeal must also fail.

Third ground of appeal

[52]     Daimler’s third ground of appeal is based on s 25(1)(b) of the Act, which

provides:

25       Registrability of identical or similar trade mark

(1)      The Commissioner must not register a trade mark (trade mark A) in respect of any goods or services if—

...

(b)       it is similar to a trade mark (trade mark C) that belongs to a different owner and that is registered, or has priority under section 34 or section 36, in respect of the same goods or services or goods or services that are similar to those goods or services, and its use is likely to deceive or confuse;

...

[53]     The key difference between ss 25(1)(b) and 17(1)(a) is that s 25(1)(b) is not dependent on Daimler’s actual use of its trade marks but upon its notional use of its trade marks.  Section 17(1)(a) on the other hand relates to Daimler’s actual use of its trade marks.43

[54]     The  Assistant  Commissioner  rejected  Daimler’s  opposition  based  upon s 25(1)(b) of the Act.  In doing so, the Assistant Commissioner ruled that Daimler could not rely on 16 other trade marks which it had registered prior to the relevant date   and   which   were   clearly   identified   in   Mr   Moore’s   declaration.      The Assistant Commissioner reached this conclusion because those 16 trade marks were not listed in Daimler’s notice of opposition.

[55]     As it transpires, nothing hinged on the Assistant Commissioner’s decision not to rely upon the 16 trade marks identified by Mr Moore.   The Assistant Commissioner’s decision was not affected by the number of trade marks that were registered by Daimler prior to the relevant date.

[56]     The Assistant  Commissioner  dismissed  Daimler’s  opposition  based  upon s 25(1)(b)  of  the  Act  when  she  concluded  that  Sany’s  mark  is  visually  and conceptually different to all of Daimler’s registered trade marks.

[57]     In this Court, Daimler submits that for the same reasons that it advanced in relation to its first ground of appeal, there is sufficient similarity between Sany’s mark and Daimler’s marks and goods that allowing Sany to use its mark is likely to deceive or confuse.

[58]     I have already concluded  in  relation  to  s  17(1)(a) that  Sany’s  mark  and Daimler’s marks lack sufficient similarity to deceive or confuse.   I am therefore driven to conclude that Daimler’s third ground of appeal must be dismissed.

Fourth ground of appeal

[59]     Daimler’s fourth ground of appeal is based on s 25(1)(c) of the Act, which

provides:

(1)       The Commissioner must not register a trade mark (trade mark A) in respect of any goods or services if—

...

(c)       it is, or an essential element of it is, identical or similar to, or a translation of, a trade mark that is well known in New Zealand (trade mark D), whether through advertising or otherwise, in respect of those goods or services or similar goods or services or any other goods or services if the use of trade mark A would be taken as indicating a connection in the course of trade between those other goods or services and the owner of trade mark D, and would be likely to prejudice the interests of the owner.

[60]     There are two limbs to Daimler’s fourth ground of appeal:

(1)The Assistant Commissioner erred when she held the evidence before her “fell short of supporting a finding that any of [Daimler’s marks] were well known in New Zealand” at the relevant date.44

(2)The Assistant Commissioner erred when she concluded Sany’s mark, or an essential element of it, was not similar to any of Daimler’s marks.

Logically I should first consider the second of these limbs because if an essential element of Sany’s mark is not the same as or similar to any of Daimler’s marks then it is not necessary to consider any of the other elements of s 25(1)(c).  However, as Daimler is particularly aggrieved at the Assistant Commissioner’s finding that its marks were not well known in New Zealand at the relevant date, I shall deal with that limb of Daimler’s appeal before considering if an essential element of Sany’s mark is the same as or similar to any of Daimler’s marks.

[61]     In NV Sumatra Tobacco Trading Co v New Zealand Milk Brands Ltd the Court of Appeal provided guidelines in relation to the application of s 25(1)(c) of the Act.   The Court of Appeal’s  approach was based on  Intellectual Reserve Inc v Sintes.45     The Court of Appeal said in NV Sumatra Tobacco Trading Co v New Zealand Milk Brands:46

Intellectual  Reserve47   provides  the  following  guidelines  with  regard  to s 25(1)(c) of the Act, substituting the parties in the present appeal:

(a)       Is the trade mark identical or similar to one of the marks of Milk Brands which is well known, or is an essential element of Sumatra’s trade mark identical or similar to that which is well known?

(b)      Are Sumatra’s goods and services the same as or similar to

the goods and services of Milk Brands? If not,

44     Sany Group Co Ltd v DaimlerChrysler AG, above n 13,, at [77].

45     Based on Intellectual Reserve Inc v Sintes, above n 42, at [40].

46     NV Sumatra Tobacco Trading Co v New Zealand Milk Brands [2011] NZCA 264, [2011] 3

NZLR 206 at [59].

47     Intellectual Reserve Inc v Sintes, above n 42, at [40].

(c)       Would use of Sumatra’s trade mark be taken as indicating a connection in the course of trade with Milk Brands?

(d)       If  the  answer  to  issue  (b)  or  (c)  is  yes,  would  use  of Sumatra’s trade mark be likely to prejudice the interests of Milk Brands?48

[62]     As the Court of Appeal noted in the footnote to the passage I have just quoted, there are issues about the completeness of the Intellectual Reserve formula for interpreting and applying s 25(1)(c) of the Act.  In particular, the second question in the Intellectual Reserve formula does not take account of other goods or services which are not similar to the opponent’s goods and services.  However, like the Court of Appeal in NV Sumatra Tobacco Trading Co v New Zealand Milk Brands, I do not have to resolve that deficiency because of the way I address the issues set out in paragraphs [60(1) and (2)] of this judgment.

Were Daimler’s trade marks “well known”?

[63]     Section 25(1)(c) of the Act protects “well known” trade marks from being diluted by similar trade marks.  The concept “well known” in s 25(1)(c) of the Act is derived from the Paris Convention on the Protection of Intellectual Property which was initially signed in 1883 and which has been revised on various occasions since then.  The term “well known” is not defined in the legislation but it is also used in s 89(1)(d) of the Act, which makes it an infringement to use an identical or similar sign  in  relation  to  dissimilar  goods  or  services  to  those  registered  where  the registered mark “is well known in New Zealand …”.

[64]     In my view the threshold for a trade mark to be “well known” is higher than the threshold which an opponent has to surmount when satisfying the “sufficiently substantial reputation” of a trade mark requirements of s 17(1)(a) of the Act.  I have reached this conclusion because Parliament adopted “well known” in s 25(1)(c) of the Act after a body of case law had evolved in relation to the requirements of the

predecessor to s 17(1)(a).   Had Parliament intended to replicate in s 25(1)(c) the

48     Sumatra pointed out that the Intellectual Reserve formulation of the questions with regard to s 25(1)(c) involves four stages and that the fourth stage must be undertaken in respect of all three categories of goods/services (same, similar or dissimilar).   This may be contrasted with the equivalent provisions in s 17 of the (now repealed) Trade Marks Act 1953, whereby the fourth stage was only an applicable inquiry if the goods were dissimilar.  However, it is not necessary for us to engage with the question of which interpretation is correct in this case.

“sufficiently substantial reputation” requirements of s 17(1)(a) of the Act it could easily have done so.  The fact Parliament adopted different terminology in s 25(1)(c) strongly suggests it intended a different concept from the “sufficiently substantial reputation” element of s 17(1)(a).

[65]     The term “well known” was referred to as meaning “iconic” in New Zealand Milk Brands v NV Sumatra Tobacco Trading Co Ltd in which Dobson J said ANCHOR was an iconic dairy products brand “and would meet the standard of reputation required for the tort of passing off”.49   The Court of Appeal did not take issue with this approach.50

[66]     In my assessment, it is not necessary for a trade mark to be “iconic” in order for it to be “well known”.  The two concepts are not synonymous. An “iconic” trade mark would be “well known” but a “well known” trade mark would not necessarily be “iconic”.

[67]     I have been assisted by approaches taken in other jurisdictions to the meaning “well known” for the purposes of determining the meaning of that term in s 25(1)(c) of the Act.   In particular, the judgment of the South African Supreme Court in McDonald’s Corporation v JoBurgers Drive-Inn Restaurant Pty Ltd is helpful as it concerned that part of the South African Trade Marks Act 1993 that protects well known marks.51   The Supreme Court held that the test for being “well known” was

similar to the reputation element52 in a passing off action.  The knowledge required

need only be within the relevant sector of the public.53

[68]     Factors that may assist in determining if a trade mark is well known for the purposes of s 25(1)(c) of the Act include:

49     New Zealand Milk Brands v NV Sumatra Tobacco Co  HC Wellington CIV-2007-485-2485,

28 November 2008 at [48].

50     NV Sumatra Tobacco Trading Co v New Zealand Milk Brands, above n 46, at [60].

51     McDonald’s Corporation v JoBurgers Drive-Inn Restaurant Pty Ltd [1996] 4 All SA 1 (A), (1996) 36 IPR 11.

52     See Reckitt & Coleman Products Ltd v Borden Inc [1990] 1 WLR 499, approved in Anheuser- Busch Inc v Budweiser Budvar National Corporation [2001] 3 NZLR 666 (HC) at 690.

53     Automobile Club d L’Ouest, ACO v South Pacific Tyres New Zealand Ltd HC Wellington CIV-

2005-485-248, 23 March 2006 at [124], citing McDonald’s Corporation v JoBurgers Drive-Inn
Restaurant Pty Ltd, above n 51.

(1)The degree to which it is recognised by a significant portion of the community of those interested in the goods and services to which the mark relates.

(2)       The period of time over which the mark has been promoted.

(3)The extent  of  the  geographical  area  in  which  the mark  has  been promoted.

(4)       The value associated with the mark.

(5)The extent to which the mark has been successfully found to be well known in cognate jurisdictions.

[69]     I agree with Daimler that the evidence before the Assistant Commissioner met the criteria for its trade marks to be considered “well known” for the purposes of s 25(1)(c) of the Act. The evidence from Mr Moore established:

(1)Daimler  has  been  selling  its  vehicles  and  other  products  in  New Zealand since 1911 and has used its three-pointed star within a circle trade mark since 1923.

(2)Daimler had  sold  5,246  Mercedes  cars during  the five  years that preceded Sany’s application.  All of those cars bore at least one of Daimler’s marks.

(3)Daimler  had  spent  extensive  sums  on  advertising  its  products including its marks in all major forms of media during the five year period that preceded Sany’s application.   It had also advertised its marks  in  international  publications  that  were  readily  available  in New Zealand.

(4)An exhibit from Mr Moores’s first declaration included an extract from  “Business  Week  International”  dated  1 August  2005.    That

publication ranked the world’s top 100 brands.  Daimler’s brand was

ranked as number 11 in that publication.

[70]     I  am  satisfied  the  evidence  of  Mr  Moore  should  have  led  the Assistant Commissioner  to  conclude  that  Daimler’s  marks  were   “…   well   known  in New Zealand through advertising or otherwise …” at the time of Sany’s application.

Was an essential element of Sany’s mark similar to any of Daimler’s marks?

[71]     In my assessment, Daimler’s fourth ground of appeal fails because of the way I must answer this question.  That is because Sany’s mark, or an essential element of Sany’s mark, is not identical or similar to any of Daimler’s marks.  Although Sany and Daimler’s marks involve a circle with a three-pronged device that either abuts or slightly overlapses the edges of the circle, and the three-pronged device is aligned in a  similar  way,  those  similarities  are  minor.    For  the  reasons  I have  set  out  in paragraph [43] of this judgment I am of the view that an essential element of Sany’s mark is not identical or similar to any one of Daimler’s marks.

[72]     Thus, although I have based part of my conclusions on reasons that differ from those that the Assistant Commissioner favoured, the Assistant Commissioner was right when she rejected Daimler’s opposition based upon s 25(1)(c) of the Act. Accordingly, Daimler’s fourth ground of appeal must be dismissed.

Conclusion

[73]     The appeal is dismissed.

[74]     Sany is entitled to costs on a scale 2B basis.

[75]     All orders made by the Assistant Commissioner remain in force.

Solicitors:

Baldwins Law Limited, Auckland for Appellant

Ellis IP Limited, Wellington for Respondent

D B Collins J