Dr August Wolff GmbH & Co KG Arzneimittel v Combe International Ltd

[2020] NZHC 1679

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-485-410

[2020] NZHC 1679

UNDER

the Trade Marks Act 2002

IN THE MATTER

of an appeal from a decision of the

Intellectual Property Office of New Zealand

BETWEEN

DR AUGUST WOLFF GMBH & CO. KG ARZNEIMITTEL

Appellant

AND

COMBE INTERNATIONAL LIMITED

Respondent

Hearing:

12 May 2020

Appearances:

R C Watts and R H Lockie for the Appellant

K T Glover and A N Birkinshaw for the Respondent

Judgment:

14 July 2020

JUDGMENT OF GAULT J

This judgment was delivered by me on 14 July 2020 at 4:00 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors:

Mr R C Watts and Mrs R H Lockie (nee Etherington), Simpson Grierson, Auckland Mr K T Glover, Barrister, Auckland

Ms A N Birkinshaw (respondent’s instructing solicitor), Buddle Findlay, Auckland

DR AUGUST WOLFF GMBH & CO. KG ARZNEIMITTEL v COMBE INTERNATIONAL LTD [2020] NZHC 1679 [14 July 2020]

[1]    Dr August Wolff GmbH & Co. KG Arzneimittel (Dr Wolff) appeals against a decision of Assistant Commissioner of Trade Marks Aldred dated 27 April 2018,1 directing that Dr Wolff’s trade mark application for VAGISAN not proceed to registration due to the successful opposition by Combe International Ltd (Combe) based on its VAGISIL trade marks.

[2]    The New Zealand proceedings form part of a global dispute between the parties. In some countries, as in New Zealand, Combe has resisted Dr Wolff’s use of the name VAGISAN; in others Dr Wolff has resisted Combe’s use of the name VAGISIL.

Factual background

[3]    Dr Wolff is a German company specialising in dermatological and gynaecological preparations and products, described as feminine intimate products. Dr Wolff was founded in 1905 and began marketing its products outside Germany about 1990 and outside Europe in 2007 under the trade mark VAGISAN. It has not yet sold products in New Zealand but plans to do so.

[4]    Combe is a company based in the United States of America that has traded since 1949. It first used its VAGISIL mark in the USA in 1973 in connection with medicated creams and has subsequently extended the use of that mark to other personal care products for feminine use, including powders, moisturising lubricants, wipes and cleansers/washes. It has used the VAGISIL mark in New Zealand since 1994 in respect of these goods.

[5]    Combe has various registered trade marks in New Zealand, dating back to 1976. A list of Combe’s New Zealand registered trade marks is set out in schedule 1, showing the particular goods specified for each mark within the applicable class of goods. Six of Combe’s seven New Zealand registered trade marks are word marks. Mark 959830 is a combined word and device mark, with a stylised V device above the stylised word Vagisil. The goods specified refer variously to female, feminine and/or vaginal use.

1      Dr August Wolff GmbH & Co Arzneimittel v Combe International Ltd [2018] NZIPOTM 10.

[6]    On 27  May  2015  Dr  Wolff  requested  that  its  international  registration no. 985168 for the trade mark VAGISAN be extended to New Zealand in respect of specified goods in classes 3 and 5 as set out in schedule 2.

[7]    Combe  opposed  Dr  Wolff’s request for extension  of  protection  to New Zealand. Each party filed evidence. At the hearing before the Assistant Commissioner, Combe pursued four grounds of opposition, two of which succeeded:2

(a)Dr Wolff’s VAGISAN mark would be likely to deceive or cause confusion pursuant to s 17(1)(a) of the Trade Marks Act 2002 (the Act); and

(b)Dr Wolff’s VAGISAN mark is similar to Combe’s VAGISIL mark that is registered in respect of the same or similar goods, and the use of VAGISAN is likely to deceive or confuse under s 25(1)(b) of the Act.

Approach on appeal

[8]    This is an appeal under s 170 of the Act.3 This Court’s approach on a general appeal such as this is settled following the Supreme Court’s decisions in Austin, Nichols & Co Inc v Stichting Lodestar,4 which concerned a trade mark appeal, and Kacem v Bashir.5 The appellate court has the responsibility of considering the merits of the case afresh.6 The appellate court must be persuaded that the decision is wrong,7 but the weight it gives to the reasoning of the court below is a matter for the appellate court’s assessment.8 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

2      It is unnecessary to consider the unsuccessful grounds.

3      On such an appeal, s 172(1) provides that the Court must hear the parties and the Commissioner, although the Commissioner has taken no steps to appear on this appeal.

4      Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [13] and [16]. Although a decision under the former Trade Marks Act 1953, the Supreme Court indicated the Trade Marks Act 2002 continues to provide a right of general appeal from the decision of the Commissioner (at [7]).

5      Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [31]-[32].

6      Kacem v Bashir at [31].

7      Austin, Nichols at [13].

8      Kacem v Bashir at [31]. No deference is required beyond the customary caution appropriate when seeing the witnesses provides an advantage because credibility is important; see Austin, Nichols at [13]; and Green v Green [2016] NZCA 486, [2017] 2 NZLR 321 at [27]-[32].

assessment of fact and degree and entails a value judgment. 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.9

[9]    Although there was common ground as to this approach, including that the weight given to the reasoning of the Assistant Commissioner’s decision is a matter for my assessment, counsel differed as to the extent of deference I should choose to give. Mr Glover, for Combe, emphasised that in another, more recent, trade mark case, Crocodile International Pte Ltd v Lacoste, the Supreme Court stated:10

In this case, the issue for decision is focused on the aural, visual and conceptual qualities of a trade mark containing a device and a stylised word.11 Given the wide range of trade mark decisions that Commissioners are called upon to make, they may be expected to have a broader and more nuanced appreciation of the trade mark Register than judges, whose experience will generally be limited to the particular contested applications that come before them. This may mean that, where an appeal raises this type of issue, the appellate court should hesitate to depart from the Commissioner's qualitative assessment (although being prepared to do so if ultimately satisfied that the Commissioner's view is erroneous). As this Court said in Austin, Nichols & Co Inc:12

The tribunal may have had a particular advantage (such as technical expertise or the opportunity to assess the credibility of witnesses, where such assessment is important). In such a case the appeal court may rightly hesitate to conclude that findings of fact or fact and degree are wrong.

This is an issue on which we have not heard argument and which we do not need to resolve in the present case.

[10]   I was also referred to the recent decision of Comite International Olympique v Tempting Brands Netherlands B V, in which Churchman J referred to Crocodile International Pte Ltd v Lacoste and stated that:13

…where an appeal in relation to a trade mark raises issues such as the aural, visual and conceptual qualities of a trade mark containing a device and a stylised word, an appellate court should hesitate to depart from the

9      Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [16]; and

Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [32].

10     Crocodile International Pte Ltd v Lacoste [2017] NZSC 14, [2017] 1 NZLR 679 at [66].

11     The marks in the present case could be seen as raising issues of more subtlety and nuance than in

Austin, Nichols & Co Inc which concerned marks with words only: at [8].

12     Austin, Nichols at [5].

13     Comite International Olympique v Tempting Brands Netherlands B V [2019] NZHC 2476 at [12].

Commissioner’s qualitative assessment unless ultimately satisfied that the Commissioner’s view is wrong.

[11]   Mr Glover submitted that the Assistant Commissioner’s technical appreciation of the trade mark Register was a factor I should take into account.

[12]   On the other hand, Mr Watts, for Dr Wolff, submitted that where the determination of likelihood of confusion rests upon a comparison of the marks themselves, the appellate court is in as good a position as the trial tribunal to come to a conclusion,14 and that where goods are sold or may be sold to the general public for consumption or general use, the judge or officer making the decision is entitled to take into account his or her experiences, to the extent relevant, and reactions as a member of the public when considering whether deception or confusion is likely.15

[13]   I consider the Supreme Court in Crocodile International has not changed the test in Austin, Nichols. The weight given to the reasoning of the Assistant Commissioner’s decision  remains  a  matter  for  the  appellate  court’s  assessment. I consider it appropriate though to take into account the point made about the technical appreciation of the trade mark Register in my assessment.

Grounds of appeal

[14]   In short, Dr Wolff says that the Assistant Commissioner erred in fact and law by finding that the VAGISAN and VAGISIL marks were similar, such that deception or confusion was likely to arise from use of Dr Wolff’s mark in terms of ss 17(1)(a) and 25(1)(b) of the Act.

[15]   The appeal concerns the Assistant Commissioner’s application of the relevant legal tests to the facts rather than real debate about the legal tests.   In  particular,    Dr Wolff submits that the Assistant Commissioner:

14     VB Distributors v Matsushita Electric Industrial Co Ltd (1999) 9 TCLR 349 (HC) at 355.

15     General Electric Co v General Electric Co Ltd [1972] 1 WLR 729 (HL) at 738.

(a)placed undue weight on the commonality of the “VAGI-” element of the respective marks, notwithstanding that this was acknowledged to be descriptive of the relevant goods;

(b)gave insufficient weight to the distinctive (non-descriptive) elements of the marks (-SAN and -SIL), which are dissimilar;

(c)failed to take proper account of the nature of the goods and the likely behaviour of the purchasing public of such goods and, as a result, incorrectly found that relevant consumers would, in the relevant circumstances, be more likely than not to be deceived or confused as to origin between the VAGISAN and VAGISIL marks; and

(d)incorrectly assessed confusion by disregarding the evidence of absence of confusion in overseas markets where VAGISAN and VAGISIL co- exist and relying on an inadmissible opinion by Combe’s in-house counsel as to risk of confusion.

Issues

[16]The two key issues to be determined on the appeal are whether:

(a)having regard to the reputation acquired by Combe, the VAGISAN mark, if used in a normal and fair manner, will not be reasonably likely to cause deception and confusion amongst a substantial number of persons (the s 17(1)(a) issue); and

(b)the VAGISAN mark is similar to the VAGISIL mark, and its use is likely to deceive or confuse (the s 25(1)(b) issues). Dr Wolff accepts that the parties’ goods are similar.

[17]   There is a degree of overlap between the issues under s 17(1)(a) and s 25(1)(b) but it is common ground that they have a different frame of reference. Section 17(1)(a) requires an assessment of the likelihood of deception or confusion arising from use of VAGISAN in light of the reputation in Combe’s VAGISIL marks. This reputation

reference point requires focus on Combe’s actual use of its marks. The comparison in s 25(1)(b) is the fair and notional use of both marks. I therefore deal with the two provisions separately.

Section 17(1)(a)

[18]   Registrability of trade marks is governed by Part 2 of the Act. One of the absolute grounds for not registering a trade mark in Subpart 2 of Part 2 is set out in   s 17(1)(a), which provides:

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

(a)the use of which would be likely to deceive or cause confusion; or

…

[19]   The basic purpose of the provision is to protect the public rather than the proprietary rights of traders.16

[20]   There was common ground as to the applicable test and approach under        s 17(1)(a) albeit that counsel emphasised different authorities in relation to the application. The test for determining the likelihood of deception or confusion under  s 17(1)(a) remains the test that was applied under s 16(1) of the Trade Marks Act 1953, namely:17

…having regard to the reputation acquired by [the opponent’s mark], is the Court satisfied that the mark applied for, if used in a normal and fair manner,

… will not be reasonably likely to cause deception and confusion amongst a substantial number of persons.

The Assistant Commissioner correctly referred to this test.

16 Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 (CA) at 54 and 63; and

Sexwax Inc v Zoggs International Ltd [2014] NZCA 311, [2015] 2 NZLR 1 at [27].

17    Re Smith Hayden & Co Ltd’s Application [1946] 63 RPC 97 (HC) at 101; applied in Pioneer at 57 and 61-62; Hannaford & Burton Ltd v Polaroid Corp [1976] 2 NZLR 14 (PC) at 18; N V Sumatra Tobacco Trading Co v British American Tobacco (Brands) Inc [2010] NZCA 24, (2010) 86 IPR 206 at [14]; NV Sumatra Tobacco Trading Co v New Zealand Milk Brands Ltd [2011] NZCA 264, [2011] 3 NZLR 206 at [78]; and Sexwax at [27] and [49].

[21]   The first step is inquiring whether the opponent’s mark has a reputation in New Zealand at the relevant date, before assessing the likelihood of deception and confusion.18 It is common ground that the onus is on the opponent to registration to establish that its mark has a reputation in New Zealand at the relevant date.19 Once this onus is discharged, the onus reverts to the applicant to establish, on the balance of probabilities, that use of its mark is not likely to deceive or cause confusion.20

Relevant date

[22]   As a preliminary matter, I deal with the relevant date. It is common ground that the relevant date for determining the parties’ rights in relation to each of the grounds of opposition is the priority date of Dr Wolff’s mark. In the Assistant Commissioner’s decision, the relevant date is recorded as 18 June 2015.21 Although the parties agreed that nothing turns on the date in this case, neither agreed that the relevant date was 18 June 2015. At the appeal hearing, they agreed the relevant date was 1 June 2015. Mr Glover submitted that it would be worthwhile stating the approach as in some cases a difference of a few days can be important.

[23]   It was common ground that in this case, where the request for extension to protection to New Zealand is made subsequent to the international registration, the priority date is the date on which the request is recorded in the international register.22 International Register is defined to mean the international register of trade marks maintained by the International Bureau of the World Intellectual Property Organization for the purposes of the Madrid Protocol.23  As indicated, the  date of   Dr Wolff’s request for extension of protection to New Zealand was 27 May 2015, which I was advised was the date of the request at the German Trade Mark Office.  In the International Register, this is noted as the “Effective Date”. The “Date of Recordal” is noted as 1 June 2015, which I was advised was the date of recording in

18     Sexwax Inc v Zoggs International Ltd [2014] NZCA 311, [2015] 2 NZLR 1 at [48]-[49].

19     Roby Trustees Ltd v Mars New Zealand Ltd [2012] NZCA 450, (2012) 98 IPR 353 at [44].

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

Roby Trustees Ltd v Mars New Zealand Ltd [2012] NZCA 450, (2012) 98 IPR 353 at [44].

21     Dr August Wolff GmbH & Co Arzneimittel v Combe International Ltd [2018] NZIPOTM 10 at [10].

22     Regulation 12(3)(b) of the Trade Marks (International Registration) Regulations 2012.

23     Definitions of International Register, International Bureau and Madrid Protocol in reg 5.

the international register at WIPO. The International Register also notes 18 June 2015 as the “Notification Date”. On the basis that the Date of Recordal is the date on which the request is recorded in the International Register as defined, the relevant date in this case was 1 June 2015.

Reputation acquired by Combes in VAGISIL

[24]   At the hearing before the Assistant Commissioner, counsel  for  Dr  Wolff (not Mr Watts) accepted that the opponent had established the necessary reputation in the relevant market of consumers or potential consumers of feminine hygiene products, for the purposes of s 17(1)(a). The issue was addressed in written submissions on appeal but at the hearing Mr Watts did not seek to resile from that concession. He accepted that the initial threshold test for reputation was relatively low and that Combe can show awareness of the VAGISIL word marks as well as the stylised device. But he submitted Combe’s reputation was only just over the threshold, which is relevant to the test for confusion.

[25]   I agree that the extent of Combe’s reputation remains relevant to the assessment of the likelihood of deception and confusion. That is because the correct focus of the threshold enquiry is on the reputation (awareness) of Combe’s mark “in relation to prospective purchasers of the goods to which its mark attaches and individuals and entities involved in that trade” and “[t]he question of likelihood of deception or confusion must then be assessed against that reputation”.24

[26]   Not only do I consider that Mr Watts’ concession was properly made, I am satisfied that Combe has established a reputation in New Zealand for its VAGISIL word marks in relation to feminine intimate products,  particularly for vaginal use.25  I do not characterise this reputation as only just over the threshold. Combe has used the VAGISIL mark in New Zealand since 1994. While its earlier sales were modest, in the several years before  1 June  2015  its  relevant  sales  and  advertising  in  New Zealand were substantial. Its products are sold through approximately 600

24 Sexwax Inc v Zoggs International Ltd [2014] NZCA 311, [2015] 2 NZLR 1 at [65] (emphasis added).

25 Based on its common law rights as the Assistant Commissioner noted that Combe did not plead reliance on its registered marks: Dr August Wolff GmbH & Co Arzneimittel v Combe International Ltd [2018] NZIPOTM 10 at [16], fn 2.

supermarkets, pharmacies and other retailers throughout New Zealand. While its visual advertising always includes the V device, the VAGISIL word mark is also used other than in its stylised form and in conjunction with the V device.

Likely to deceive or cause confusion

[27]   Once the opponent has established reputation, the Commissioner next assesses the likelihood of deception and confusion. As indicated, the onus reverts to the applicant to establish, on the balance of probabilities, that use of its mark is not likely to deceive or cause confusion. As Mr Watts said, this is the nub of the appeal.

[28]   Relevant both to ss 17(1)(a) and 25(1)(b), likelihood of deception or confusion are alternatives. Confusion is a lower threshold. 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. As the Court of Appeal observed in Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd:26

Where the deception or confusion alleged is as to the source of the goods, being deceived is equivalent to being misled into thinking that the goods or services bearing the applicant’s mark come from some other source and confused to being caused to wonder whether that might not be the case.

[29]   The similarity does not need to evince a shared origin of the brands, it “is enough to tie the brands together and to spark a connection in the minds of consumers”.27 Here, the parties’ submissions focused on confusion rather than deception.

[30]   As the Court of Appeal said in Sexwax, and the Assistant Commissioner acknowledged, the likelihood of deception and confusion “is a fact-specific enquiry. It is a matter of assessing “practical business probabilities”, having regard to all the surrounding circumstances and the degree of similarity of the marks”.28 Referring to the well-established test derived from Re Smith Hayden & Co Ltd’s Application, set out at [20] above, the Court of Appeal in Sexwax continued:29

26     Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 (CA) at 62.

27     Sexwax Inc v Zoggs International Ltd [2014] NZCA 311, [2015] 2 NZLR 1 at [86].

28 At [49].

29     At [49] (footnotes omitted).

Judicial decisions have established a materiality threshold for confusion or deception, requiring the applicant to prove that registration will not cause deception or confusion amongst a “substantial number of persons”. As courts in subsequent cases have noted, however, the terminology used in the judgments varies with the setting, and is ultimately a question of significance of the numbers in relation to the awareness of the marks in question.

[31]   The Court of Appeal also cautioned against defining a market to assist when enquiring whether a substantial number of persons are likely to be confused. It may not be necessary and may lead to underestimating either the reputation of the opponent or the risk of deception or confusion.30 This is particularly so where the competing marks apply to different goods. That is not an issue in this case – Dr Woolf accepts that the parties’ goods are similar. As the Court of Appeal said, “[a]xiomatically the risk of confusion may be higher where the goods of the applicant and the opponent are the same or similar”.31

[32]   A comparison of the marks is required. As Mr Watts submitted, and the Assistant Commissioner acknowledged, the test for comparing the marks is that summarised by the Court of Appeal in New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV:32

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 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: In re Pianotist Co.’s Application (1906) 23 RPC 774, 777.

[33]   I consider the Assistant Commissioner applied the correct legal test and approach based on the authorities. I turn to her assessment.

[34]   Given Dr Wolff’s concession and my view that Combe has established a reputation for its VAGISIL word marks, I focus first on comparing the VAGISAN and VAGISIL word marks without the V device.

30     Sexwax Inc v Zoggs International Ltd [2014] NZCA 311, [2015] 2 NZLR 1 at [58].

31 At [60].

32     New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV [1964] NZLR 115 (CA) at 139.

Look and sound of the word marks

[35]   In this case, the look and sound of the marks can be considered together. It was common ground that the words should be seen as comprising the prefix VAGI- followed by the suffixes -SAN and -SIL, and that their pronunciation was consistent with that.

[36]   Mr Watts submitted that the common prefix VAGI- was descriptive, meaning vaginal, and that more regard should be paid to the distinct suffixes -SAN and -SIL, citing Broadhead’s Application, Mond Staffordshire Refining Co Ltd v Harlem and Sabel BV v Puma AG, Rudolf Dassler Sport.33 He submitted that where the name is descriptive, a slight difference will be a sufficient distinction,34 whereas here the two words are entirely dissimilar, and the common descriptive idea was insufficient.35

[37]   Addressing Dr Wolff’s first and second primary submissions regarding the weight given to each part of the word marks together,36 the Assistant Commissioner did discount the significance of the identical prefixes VAGI-. She accepted that the prefix VAGI- is a descriptive term and accepted Dr Wolff’s submission, relying on Broadhead’s Application, that the proper approach was to focus on the non-descriptive part of the marks, the last three letters, while not disregarding the similarity arising from the letters that the two marks have in common. Mr Watts accepted this approach. I do not consider the Assistant Commissioner placed undue weight on the commonality of the “VAGI-” element of the respective marks, nor gave insufficient weight to the -SAN and -SIL elements of the marks.

[38]   In terms of look and sound, I consider the VAGI- component is descriptive of vagina and the suffixes -SAN and -SIL look and sound more different than similar.    I also accept that, with appropriate emphasis on the distinct suffixes, the similarity of the words is reduced. But this should not be overstated. The eye and ear may be drawn to the beginning of the word (aurally New Zealanders have a tendency to clip

33  Broadhead’s Application (1950) 67 RPC 209 (EWCA) at 215; Mond Staffordshire Refining Co  Ltd v Harlem [1929] HCA 6, (1929) 41 CLR 475 at 477; and Sabel BV v Puma AG, Rudolf Dassler Sport [1998] 115 RPC 199 (ECJ).

34 Office Cleaning Services Ltd v Westminster Window and General Cleaners Ltd [1946] 63 RPC 39 (HL).

35     Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd [1952] HCA 15, (1952) 86 CLR 536.

36     At [15](a) and [15](b) above.

and slur final syllables37) and here the prefix is unlikely to be disregarded merely because the last two letters differ. Even focusing on the distinct suffixes, in an overall assessment and allowing for imperfect recollection,38 I consider some visual and aural similarity remains.

Nature of the goods and customers

[39]   As indicated, Dr Woolf accepts that the parties’ goods are similar. Applying the British Sugar factors endorsed by our Court of Appeal,39 the extent of the close similarity here is significant. The products are feminine intimate products, particularly for vaginal use, and so the focus when assessing confusion is on the prospective purchasers of those products.

[40]   Dr Wolff’s third main submission attacks the Assistant Commissioner’s key conclusion of sufficient similarity on the basis that the Assistant Commissioner failed to take proper account of the nature of the goods and the likely behaviour of the purchasing public of such goods.40 The essential complaint is that the Assistant Commissioner failed to consider that the nature of these products – for therapeutic feminine, and particularly vaginal use – meant that prospective purchasers would take a high level of care despite the modest price and would therefore not likely be confused. Mr Harras-Wolff commented in his declaration for Dr Wolff that feminine intimate products tend to be products which a consumer buys with care, after a study of the product and its properties – such products are not normally bought as quick, casual sales.

[41]   Mr Glover submitted that the average consumer’s level of attention is likely to vary according to the category of goods, but all of the goods here fall toward the lower end of the spectrum in terms of consumer involvement. He submitted that goods such as soap, essential oils, cosmetics and hair lotions are low involvement purchases. Even the more “medical” goods are often sold through mass market chains and

37 Noted in New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV [1964] NZLR 115 (CA) at 141.

38 Lloyd Schuhfabrik Meyer & Co GmbH v Klijsen Handel BV [2000] FSR 77 (CJEC) at [26]-[27].

39 NV Sumatra  Tobacco  Trading  Co  v  New  Zealand  Milk  Brands  Ltd  [2011] NZCA 264, [2011] 3 NZLR 206 at [38], applying British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281 (Ch) at 296-297.

40 At [15](c) above.

supermarkets, although he accepted that more care would be taken in purchasing goods of this type. He noted that the purchaser may not be the consumer, for example a partner may be the purchaser. He also referred to cultural considerations whereby purchasers might be hurried in relation to their choice of products of this nature because of embarrassment.

[42]   The Assistant Commissioner accepted that the products are likely to be purchased with care and more than passing consideration given their intended application. But she considered this did not preclude the possibility of confusion or reduce it so as to displace the application of s 17(1)(a). Mr Watts submitted she should have given this more emphasis.

[43]   The nature of the goods and their customers is an important component of the comparison under Pianotist. Here, I accept that at least some products in the range involve intimate vaginal health, that is having a therapeutic rather than solely cosmetic function. A reasonable degree of care may be expected given the nature of the goods, especially for the therapeutic products. This is a relevant consideration when comparing the marks. But the effect of this reasonable degree of care on name recognition should not be overstated at least because the range of goods extends beyond those having a therapeutic function.

Concept or idea of the marks

[44]   It is relevant to have regard to the idea of the mark, if known.41 Mr Watts submitted that, while the marks share the same VAGI- element with its associated meaning  referred  to  above,  the  -SAN  and  -SIL  suffixes  differ  conceptually.  He submitted that -SAN is readily associated with ‘sanitary’ or similar, conveying an association with health and cleanliness, whereas -SIL has no clear or relevant meaning and Combe did not provide evidence of a concept.

[45]   Mr Glover acknowledged that the VAGI- component is allusive but he submitted that, like -SAN, -SIL also has medical and health connotations. He relied

41 Hannaford & Burton Ltd v Polaroid Corp [1976] 2 NZLR 14 (PC) at 19; N V Sumatra Tobacco Trading Co v British American Tobacco (Brands) Inc [2010] NZCA 24, (2010) 86 IPR 206 at [29]; and CPC (United Kingdom) Ltd v Keenan [1986] FSR 527 (Ch D) at 531.

on registered trade marks with the suffix -SIL for medical, cleaning and health-related goods. He submitted this conceptual similarity reinforces the similarity between the marks.

[46]   The Assistant Commissioner accepted Dr Wolff’s submission that the suffix -SAN is strongly suggestive of the word sanitary whereas -SIL has no obvious meaning. Despite the other registered marks for health-related goods, like the Assistant Commissioner, I doubt that -SIL has any such clear connotation. Therefore, I do not accept that the idea or concept of the -SIL suffix reinforces the similarity between the marks. But the lack of a similar conceptual connotation does little itself to differentiate the two marks.

Use in conjunction with V device

[47]   Mr Watts also relied on Combe’s use of the stylised V device. Under s 17(1)(a) the focus is on actual use of VAGISIL so it is appropriate to take into account Combe’s use of the V Device in conjunction with its word mark. I accept that use of a device may make it less likely that consumers will be confused.   In this case, the stylised   V device is prominently used in conjunction with the stylised word mark on Combe’s products and in its visual advertising. Even though there are instances on its website and in its visual advertising where the word mark is used other than in conjunction with the V device, the V device is invariably prominent on the page. I consider that materially reduces the similarity of the marks.

Conclusion on comparison of the marks

[48]   Even discounting the marks’ identical prefixes, the Assistant Commissioner concluded that comparing the marks in terms of their overall impression, they are sufficiently similar that consumers in the relevant market would be caused to wonder whether they shared a similar trade origin. The Assistant Commissioner had regard to the evidence of the manner in which Combe has used its mark and particularly the frequent references to “cleansing” and “washing” in the advertisements for VAGISIL products.

[49]   Even focusing on the suffixes in an overall assessment, I have concluded that some visual and aural similarity remains. I take into account a reasonable degree of care by customers, especially for the therapeutic products in the range. As indicated, in the s 17(1)(a) context where the focus is on Combe’s actual use of its marks, Combe’s use of the V Device in conjunction with its word mark is relevant and I have concluded that materially reduces the similarity of the marks in this case. But that is offset to some extent by the fact that, as the Assistant Commissioner noted, Combe’s use includes frequent references to “cleansing” and “washing”, which is similar to the association with health and cleanliness in Dr Wolff’s -SAN suffix.

Evidence as to confusion

[50]   Dr Wolff’s fourth main submission comprises two evidential complaints relevant to the Assistant Commissioner’s assessment of the risk of confusion.42 First, Mr Watts submitted that the Assistant Commissioner disregarded the evidence of absence of confusion in overseas markets where VAGISAN and VAGISIL co-exist. Mr Watts acknowledged that a lack of confusion can be difficult to show but he relied on the Privy Council’s statement in Hannaford & Burton Ltd v Polaroid Corporation that the fact that the Solavoid mark had been on the register for about four years was important when considering the inference to be drawn from the lack of evidence of actual confusion with the Polaroid trade mark which had been circulating side-by-side with  it.43  I accept  that   evidence  of   absence   of  confusion  may  be   relevant. But Hannaford related to co-existence in the New Zealand market. Here, of course, there has been no co-existence in New Zealand so there was no evidence of confusion or lack of confusion in the New Zealand market.

[51]   However, as Mr Watts submitted, there was some evidence of co-existence in other markets and no evidence of confusion. Mr Harras-Wolff stated that the trade marks co-exist in the market in Austria, Germany, Jordan, Netherlands, Poland and UK. He said that in all of the countries in which both trade marks are in use in the same market, he was not aware of any instances of confusion between the two trade marks. I accept that the Assistant Commissioner did not specifically refer to this

42     At [15](d) above.

43     Hannaford & Burton Ltd v Polaroid Corp [1976] 2 NZLR 14 (PC) at 17-18.

evidence of lack of confusion, but that does not necessarily mean she overlooked it. Mr Watts submitted that the Assistant Commissioner should have given more weight to this evidence, although he ultimately accepted not a lot of weight. He submitted there was nothing to suggest that confusion is more likely in New Zealand. But, as Mr Glover submitted, evidence of co-existence in other countries may be of limited value in assessing the risk of confusion here. Circumstances may be different in particular jurisdictions for any number of reasons – for example, different trade mark laws, therapeutic goods regulation and sales channels, product range, pricing or consumer behaviour (for cultural or other reasons). Circumstances may mean that confusion is not monitored in some jurisdictions. Evidence of actual confusion is often elusive.44 Here, Mr Harras-Wolff gave no further detail about the other markets or the monitoring of instances of confusion. I do not consider it should be assumed that the circumstances in various overseas  markets  are  the  same  as  in  New  Zealand.  The respondent does not bear an onus to identify differences.

[52]   I note that Stewart J in the recent Federal Court of Australia decision between the parties found that there was “no evidence of actual confusion notwithstanding that similar products under the names VAGISAN and VAGISIL have been traded in competition with each other in the United Kingdom since 2013”.45 It appears that the evidence in the Australian case may have been more specific at least in relation to co-existence in the UK. Given the limited and general evidence before the Assistant Commissioner here, and the absence of any evidence as to market similarity, I do not consider the Assistant Commissioner erred in not explicitly placing weight on the absence of confusion in the six named countries where the marks co-exist.

[53]   Secondly, Mr Watts submitted that the Assistant Commissioner relied on an inadmissible opinion by Combe’s in-house counsel, Ms Quintano. The Assistant Commissioner said:46

In particular, I accept as reasonable Ms Quintano's opinion that

There is a substantial risk that the Applicant's use of the trade mark "Vagisan" will result in consumer deception and confusion, in that

44     National Mini Storage Ltd v National Storage Ltd [2018] NZCA 45, (2018) 131 IPR 538 at [69].

45     Dr August Wolff GmbH & Co LG Arzneimittel v Combe International Ltd [2020] FCA 39 at [172].

46     Dr August Wolff GmbH & Co Arzneimittel v Combe International Ltd [2018] NZIPOTM 10 at [43].

consumers may mistakenly believe that the goods being provided are an updated version or an extension of the VAGISIL Goods, and therefore somehow associated with or connected to the VAGISIL Goods provided by my Company under the VAGISIL mark.

[54]   Mr Watts submitted that this opinion was baseless and should have been given no weight – Ms Quintano was not a qualified expert but a lawyer at Combe since 2013

–   but the opinion found its way into the Assistant Commissioner’s decision. I accept that Ms Quintano’s declaration did not qualify her as an expert to give this opinion evidence. She was a lawyer with approximately three years’ experience at Combe at the time. I also accept, as Mr Watts submitted, there was no third party evidence that confusion was likely – although that is of course not a prerequisite. Indeed, “[o]pinion evidence that the marks are or are not confusingly similar is of limited value”.47

[55]   Mr Glover acknowledged that this statement by Ms Quintano was really submission rather than expert opinion evidence, but he characterised the Assistant Commissioner’s decision as merely adopting the submission in her own reasoning. On its face, however, I consider the decision takes into account an opinion that should have been treated as no more than a submission.

Australian Federal Court decision

[56]   Mr Watts relied on the Federal Court of Australia decision allowing Dr Wolff’s appeal against a decision upholding Combe’s opposition to registration of the VAGISAN mark in Australia.48 In that case, Stewart J concluded that it was not established that because of the reputation of the VAGISIL marks a significant or substantial number of potential consumers might be confused or deceived by the VAGISAN mark such as to wonder whether there is any connection between it and VAGISIL.49 That conclusion was based on the several factors. First, the lack of deceptive similarity between the relevant marks. Secondly, that confusion is likely to be less because the VAGISIL mark is always used in conjunction with the striking V device (except in non-visual uses), which clearly distinguishes it from the VAGISAN mark that has no similar device.  Thirdly, VAGISIL is not a household name that is

47     Anheuser-Busch Inc v Budweiser Budvar National Corporation [2003] 1 NZLR 472 (CA) at [66].

48     Dr August Wolff GmbH & Co KG Arznzeimittel v Combe International Ltd [2020] FCA 39.

49     At [170]-[173].

likely to be known by just about everyone. Fourthly, as mentioned, there was no evidence of actual confusion notwithstanding that similar products under the names VAGISAN and VAGISIL have been traded in competition with each other in the United Kingdom since 2013. Stewart J noted that “[e]vidence of actual confusion is of course not necessary, but its absence can be telling in circumstances where the competing marks have been used side by side in the same market”.50

[57]   Mr Watts submitted that given the highly similar trade mark regimes, similar markets and consumer behaviour and lack of material evidential differences, the Australian decision should be considered to be persuasive. He relied on Toogood J’s observation in Muzz Buzz Franchising Pty Ltd v JB Holdings (2010) Ltd,51 that “[i]n 2013, it can hardly be doubted that New Zealand and Australia may, for the purposes of enforcing intellectual property rights, be regarded as one market”.

[58]   As Mr Glover submitted, Muzz Buzz concerned the issue of spill-over reputation in the passing off context. Toogood J was referring to the market, not the trade mark regimes. I accept that, despite different statutory wording, the underlying principles relevant to trade mark registration in New Zealand and Australia are similar. But each case is to be decided applying local law to the evidence. I understand a further appeal has been filed in Australia. In this global dispute, decisions in other jurisdictions have gone both ways. As Hinton J said in Beiersdorf AG v Unilever Plc, in the context of registrability under s 18, evidence of successful registration or opposition elsewhere is of limited assistance here, unless there is a clear evidentiary link to circumstances in New Zealand.52

[59]   Apart from possible differences in the evidence between this case and the case in Australia (for example, relating to co-existence in the UK), it is important to note the different onus of proof that applies in Australian trade mark opposition cases –

50     Dr August Wolff GmbH & Co KG Arzneimittel v Combe International Ltd [2020] FCA 39 at 172, citing Notaras v Barcelona Pty Ltd [2019] FCA 4, (2019) 138 IPR 304 at [354].

51     Muzz Buzz Franchising Pty Ltd v JB Holdings (2010) Ltd [2013] NZHC 1599 at [74].

52     Beiersdorf AG v Unilever Plc [2019] NZHC 44 at [22].

the opponent to registration bears the onus to prove that the grounds of opposition are made out.53

Conclusion

[60]   Taking into account my conclusions on the similarity of the marks, reduced by Combe’s invariable use of the prominent V device, and on the evidence as to confusion, that is acknowledging Mr Harras-Wolff’s limited evidence of absence of confusion and disregarding Ms Quintano’s opinion, I am satisfied (by a small margin) that the mark applied for, if used in a normal and fair manner, will not be reasonably likely to cause deception and confusion amongst a substantial number of persons.     I differ from the Assistant Commissioner primarily because of Combe’s use of the   V device, which I have concluded materially reduces the risk of confusion in terms of s 17(1)(a).

Section 25(1)(b)

[61]   Subpart 3 of Part 2 of the Act contains relative grounds for not registering a trade mark. One of those grounds concerns the registrability of identical or similar trade marks set out in s 25 of the Act. The paragraphs in s 25(1) deal separately with identical, similar and well-known marks. Relevantly, s 25(1)(b) provides:

(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; or

…

53 Dr August Wolff GmbH & Co KG Arzneimittel v Combe International Ltd [2020] FCA 39 at [10], citing Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, 185 FCR 9 at [26]-[34].

[62]   The applicant (Dr Wolff) bears the onus of establishing that the opposed mark is not likely to deceive or confuse.54

[63]   As the Court  of  Appeal  said  in  NV  Sumatra  Tobacco  Trading  Co  v  New Zealand Milk Brands Ltd, with regard to s 25(1)(b) the order of inquiry should be:55

(a)Is an applicant’s proposed mark (or marks) in respect of the same or similar goods or services covered by any of the opponent’s trade mark registrations?

(b)If so, is the applicant’s proposed mark (or marks) similar to any of the opponent’s trade mark registrations for the same or similar goods identified in the first inquiry?

(c)If so, is use of the applicant’s proposed mark likely to deceive or confuse?

[64]   Acknowledging there is some interdependence between these questions, I deal with each of them in turn – by brief reference back to my earlier conclusions where relevant. Counsel agreed that much of the analysis is the same as for s 17(1)(a).

Similarity of goods

[65]   As indicated above at [39], Dr Woolf accepts that the parties’ goods are similar. The extent of the close similarity is significant.

Similarity of marks

[66]   Again, the Pianotist test applies.56 Under s 25(1)(b), the comparison is the fair and notional use of both marks (rather than Combe’s actual use),57 which the Assistant Commissioner correctly noted. More specifically, the comparison is between the fair and notional  use of Combe’s registered marks  and  any fair and notional  use of    Dr Wolff’s mark on any of the goods applied for. I therefore leave to one side Combe’s use of the V device with the word marks.

54     New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV [1964] NZLR 115 (CA) at 132.

55     NV Sumatra Tobacco Trading Co v New Zealand  Milk  Brands  Ltd  [2011] NZCA 264, [2011] 3 NZLR 206 at [32].

56 See above at [32].

57     Anheuser-Busch Inc v Budweiser Budvar National Corp [2003] 1 NZLR 472 (CA) at [30].

[67] In relation to the word marks, I have concluded at [49] above that, even focusing on the suffixes in an overall assessment and acknowledging a reasonable degree of care by customers, some visual and aural similarity remains. For those reasons, I agree with the Assistant Commissioner that, for the purposes of s 25(1)(b), Dr Wolff’s proposed VAGISAN mark is similar to Combe’s VAGISIL trade marks (for the same or similar goods).

Likely to deceive or confuse

[68]   While noting the different comparison, s 25(1)(b) requires the same fact specific enquiry to which I have referred,58 that is assessing in a practical way, having regard to all the surrounding circumstances and the degree of similarity of the marks, whether a substantial number of persons (in the sense outlined) would likely be deceived or confused.

[69]   The Assistant Commissioner correctly noted that where the goods in question are sold to the general public for consumption or domestic use, a decision-maker is entitled to take his or her personal experiences and reactions into account when making the assessment.59

[70]The Assistant Commissioner also correctly noted that the use of Combe’s mark

–   and in particular her reliance on Combe’s extensive references to “cleansing” and “washing” – were not relevant under s 25(1)(b). However, she nevertheless concluded that given the nature of the goods, notional use of the VAGISIL mark would be highly likely to see it applied in a context suggestive of sanitising, washing or cleansing, so that the use of VAGISAN might well bring to mind the VAGISAN (sic) mark and cause consumers to wonder whether the brands had a common source.

[71]   Mr Watts acknowledged that actual use is relevant to notional use. I agree with the Assistant Commissioner that, given the nature of the goods to which the VAGISIL marks apply, even notional use would likely involve sanitising, washing or cleansing,

58     At [30] above.

59     Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 (CA) at 62.

which is similar to the association with health and cleanliness in Dr Wolff’s -SAN suffix.

[72]   Overall, putting to one side Combe’s actual use – its references to “cleansing” and “washing” and use of the V device – and considering the close similarity of the goods and the similarity of the word marks, while acknowledging Mr Harras-Wolff’s limited evidence of absence of confusion  and disregarding Ms  Quintano’s opinion, I consider that Dr Wolff falls short of establishing that its proposed VAGISAN mark is not likely to deceive or confuse. I am not persuaded that the Assistant Commissioner’s s 25(1)(b) conclusion was wrong.

Conclusion

[73]   Despite my different conclusion in relation to s 17(1)(a), the Assistant Commissioner’s decision  in  favour  of  Combe’s  opposition  is  upheld  based  on  s 25(1)(b).

[74]   I am grateful to counsel for their helpful presentations despite the constraints of an AVL hearing due to the COVID-19 situation.

Result

[75]The appeal is dismissed.

[76]   Combe is entitled to costs on a 2B basis. If costs cannot be agreed, I will receive  memoranda  (not  exceeding  three  pages)  on  behalf  of  Combe  within   20 working days and on behalf of Dr  Wolff  within  a  further  10  working  days, and determine costs on the papers.

Gault J

SCHEDULE 1

Trade mark registration no.	Mark	Priority date	Goods 60
117376	VAGISIL	26 Oct 1976	Class 5: medicated, deodorising, and sanitary preparations and substances, all for female use
797516	VAGISIL	10 Oct 2008	Class 10: vaginal pH testing kits containing test swabs and colour guides
848612	VAGISIL	1 Sept 2011	Class 5: medicated products for feminine use, including pre- moistened feminine wipes and feminine anti-itch creams; and vaginal lubricants
848911	VAGISIL	7 Sept 2011	Class 3: cosmetic products for feminine use including feminine washes, feminine deodorants, pre-moistened feminine wipes, feminine anti-itch creams, and vaginal moisturisers
958689	VAGISIL The Expert in Intimate Skin	11 May 2012	Class 3: non-medicated products for feminine use, including feminine anti-itch creams, feminine deodorants, vaginal moisturisers, feminine washes and pre-moistened feminine wipes Class 5: vaginal lubricants; medicated products for feminine use, including feminine anti-itch creams and pre-moistened feminine wipes

60 Together with the Class according to the Nice Classification under the  Nice  Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks adopted at Nice on 15 June 1957, as amended from time to time.

Trade mark registration no.	Mark	Priority date	Goods 60
959830	31 May 2012	Class 3: non-medicated products for feminine use, including feminine anti-itch creams, feminine deodorants, vaginal moisturisers, feminine washes and pre-moistened feminine wipes Class 5: vaginal lubricants; medicated products for feminine use, including feminine anti-itch creams and pre-moistened feminine wipes
1019068	VAGISIL	7 May 2015	Class 3: feminine antiperspirant creams, gels, lotions, powders, and sprays; feminine deodorant creams, gels, lotions, powders, and sprays; non-medicated feminine soothing creams, gels, lotions, powders, and sprays for the skin; non-medicated douches; non-medicated moisturisers for the skin at the external vaginal area; non- medicated pre-moistened feminine towelettes and wipes; non-medicated feminine hygiene washes Class 5: preparations for external and internal lubrication and moisturisation of the vagina; medicated feminine anti-itch creams, gels, lotions, powders, and sprays for the skin; medicated douches; vaginal lubricants; vaginal moisturisers; medicated pre- moistened feminine towelettes and wipes; medicated feminine hygiene washes Class 10: massagers

SCHEDULE 2

Application No.	Mark	Date of request	Goods
1021848	VAGISAN	27 May 2015	Class 3: soaps, perfumery, essential oils, cosmetics, hair lotions, all aforementioned goods not for the indication and application of tired legs and/or arms Class 5: pharmaceutical products, sanitary products for medical purposes, dietetic substances for medical purposes, all aforementioned goods not for the indication and application of tired legs and/or arms