Energy Beverages LLC v Frucor Suntory New Zealand Limited
[2022] NZCA 536
•11 November 2022 at 10.30 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA38/2021 [2022] NZCA 536 |
| BETWEEN | ENERGY BEVERAGES LLC |
| AND | FRUCOR SUNTORY NEW ZEALAND LIMITED |
| Hearing: | 30 November and 1 December 2021 |
Court: | Cooper, Brown and Courtney JJ |
Counsel: | G F Arthur KC, R C Watts and A N Birkinshaw for Appellant |
Judgment: | 11 November 2022 at 10.30 am |
JUDGMENT OF THE COURT
AThe appeal is dismissed.
BThe appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements. We certify for second counsel.
____________________________________________________________________
Table of Contents
Para no
Introduction [1]
Obtaining and removing registered trade marks [5]
Registration [5]
Invalidity [10]
Revocation [12]
Factual background [13]
The Assistant Commissioner’s decisions [19]
The use challenge [20]
The validity challenge [22]
The High Court judgment [25]
The validity challenge [25]
The use challenge [30]
The issues on appeal [34]
Issue 1: Did the Judge err in holding that the time bar in s 75
prevents a challenge to the Registration under s 18(1)(a)? [35]
Issue 2: Does the use of the phrase “predominant colour” cause
the Registration to be unclear and for more than one sign? [55]
The contest [56]
The law and practice governing trade mark applications [61]
(a) A representation of the trade mark [61]
(b) Colour marks [66]
The chronology of the application for TM 795206 [69]
The meaning of “predominant” [74]
(a) Quantitative analysis[79]
(b) Qualitative assessment [82]
Whether a registration may cover multiple signs? [90]
Issue 3: Did the Judge err in holding that the Registration
should be interpreted as being defined by the written description
of the colour on the register, namely Pantone 376C? [107]
Issue 4: Does the difference between the darker shade of green
in the image on the register and written description Pantone 376C
mean the Registration is ambiguous and too imprecise? [117]
Result [118]
REASONS OF THE COURT
(Given by Brown J)
Introduction
Trade mark 795206[1] of the respondent (Frucor) was registered on 23 June 2012[2] (the Registration) as a representation comprising a swatch of green colour together with the following explanation:[3]
- The mark consists of the colour green (Pantone 376c), as shown in the representation attached to the application, applied as the predominant colour to the goods, their packaging or labels. Section 18(2) of the Trade Marks Act 2002 applies.
[1]In class 32 of the Nice Classification system for “[e]nergy drinks; none of the aforementioned being cocoa-based beverages”.
[2]With a deemed date of registration of 29 August 2008.
[3]Pantone 376C is a reference to the Pantone Matching System of colour coding created by Pantone LLC.
However the scan by the Intellectual Property Office of New Zealand (IPONZ) of the green metal specimen affixed to the paper application generated a different shade of green from Pantone 376C. The different shades are as follows:
The appellant, Energy Beverages LLC (EBL), applied:
(a)on 20 June 2017 for revocation of the Registration on the ground of non-use of the colour green appearing in the representation on the register; and
(b)on 8 August 2017 for a declaration that the Registration was invalid on the ground that it comprised a sign that did not qualify as a trade mark.
Both applications sought removal of Frucor’s trade mark from the register of trade marks.
Those applications were declined by the Assistant Commissioner of Trade Marks.[4] EBL’s appeal in the High Court was dismissed.[5] EBL now appeals on both its non-use and invalidity contentions. Frucor supports the judgment both in its terms and on other grounds.
Obtaining and removing registered trade marks
Registration
[4]Energy Beverages LLC v Frucor Suntory New Zealand Ltd [2020] NZIPOTM 5 [Revocation decision]; and Energy Beverages LLC v Frucor Suntory New Zealand Ltd [2020] NZIPOTM 6 [Invalidity decision].
[5]Energy Beverages LLC v Frucor Suntory New Zealand Ltd [2020] NZHC 3296, (2020) 157 IPR 176 [High Court judgment].
The definition of “trade mark” in s 5(1) of the Trade Marks Act 2002 (the Act) states:
trade mark—
(a)means any sign capable of—
(i)being represented graphically; and
(ii)distinguishing the goods or services of one person from those of another person; …
…
A “sign” is defined in s 5(1) as including:
(a)a brand, colour, device, heading, label, letter, name, numeral, shape, signature, smell, sound, taste, ticket, or word; and
(b)any combination of signs.
An application for registration must contain a clear representation of the trade mark.[6] Regulation 44(g) of the Trade Marks Regulations 2003 (the 2003 Regulations) provides that if the trade mark is a colour or colours an applicant must supply a description acceptable to the Commissioner of Trade Marks of the colour or colours before their application can be accepted.
[6]Trade Marks Regulations 2003, reg 42(1)(b).
Part 2 of the Act contains several provisions which preclude the Commissioner from registering trade marks. Of significance for this case are ss 17 and 18. Section 17 materially states:
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—
(a)the use of which would be likely to deceive or cause confusion; or
(b)the use of which is contrary to New Zealand law or would otherwise be disentitled to protection in any court; or
(c)the use or registration of which would, in the opinion of the Commissioner, be likely to offend a significant section of the community, including Māori.
(2)The Commissioner must not register a trade mark if the application is made in bad faith.
…
Section 18 provides:
18 Non-distinctive trade mark not registrable
(1) The Commissioner must not register—
(a) a sign that is not a trade mark:
(b) a trade mark that has no distinctive character:
(c) a trade mark that consists only of signs or indications that may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, time of production of goods or of rendering of services, or other characteristics of goods or services:
(d)a trade mark that consists only of signs or indications that have become customary in the current language or in the bona fide and established practices of trade.
(2)The Commissioner must not refuse to register a trade mark under subsection (1)(b), (c), or (d) if, before the date of application for registration, as a result of either the use made of it or of any other circumstances, the trade mark has acquired a distinctive character.
On registration of a trade mark the Commissioner must enter on the register the actual date of registration and the deemed date of registration[7] and, in the case of an application for the registration of a series of trade marks, must register the trade marks as a series in one registration.[8] The register[9] is prima facie evidence of any matters required or authorised by or under the Act to be entered in it.[10] The contents of the register are prescribed by s 182 of the Act.
Invalidity
[7]Trade Marks Act 2002, s 51(a).
[8]Section 51(c).
[9]Which, according to s 181(2), may be kept in any manner that the Commissioner thinks fit, including, either wholly or partly, by means of a device or facility—
(a) that records or stores information electronically or by other means; and
(b) that permits the information so recorded or stored to be readily inspected or reproduced in usable form.
[10]Section 181(3).
The power to remove an invalidly registered trade mark is provided in s 73 of the Act:
73 Invalidity of registration of trade mark
(1)The Commissioner or the court may, on the application of an aggrieved person (which includes a person who is culturally aggrieved), declare that the registration of a trade mark is invalid to the extent that the trade mark was not registrable under Part 2 at the deemed date of its registration.
(2)Despite subsection (1), the registration of a trade mark that has acquired a distinctive character after its registration must not be declared invalid even though the trade mark was not registrable under section 18(1)(b), (c), or (d) at the deemed date of its registration.
…
However, after seven years from the date of application for registration certain trade marks are presumptively valid. Section 75 states:
75 Presumption of validity of registration of trade mark
The registration of a trade mark is, after the expiration of 7 years from the deemed date of registration, deemed to be valid unless—
(a)the registration was obtained by fraud; or
(b)the trade mark should not have been registered on any of the grounds set out in section 17(1) or (2); or
(c)the registration may be revoked on any of the grounds set out in section 66.
Revocation
Validly registered trade marks may be revoked on various grounds prescribed in s 66 of the Act. One such ground is that at no time during a continuous period of three years or more was the trade mark put to genuine use in the course of trade in New Zealand, by the owner for the time being, in relation to goods or services in respect of which it is registered.[11]
Factual background
[11]Section 66(1)(a).
A paper application to register a shade of green as a trade mark was received by IPONZ from Frucor on 29 August 2008 by post. The application comprised a paper form with a green coloured metal specimen (the colour swatch) stapled to that form. It was date‑stamped 29 August 2008 by IPONZ and allocated the trade mark application number 795206.
What next occurred is conveniently recorded in a written statement of the Commissioner:[12]
5.At the time application no. 795206 was lodged, IPONZ was transitioning to a paper-less system. Part of the transition involved digitalising physical applications received. In accordance with digitalisation process, the paper application (TM application no. 795206) was scanned along with the attached metal specimen of the mark on 2 September 2008.
6.The application was examined on the basis of the application as it appeared digitally on the IPONZ online system after scanning and in conjunction with the other material provided, including the Pantone reference for the colour in the metal swatch.
7.[Frucor] submitted evidence in support of registration on 5 August 2009, 8 July 2010 and 18 March 2011 in physical form. The evidence included a physical sample of [Frucor’s] aluminium can packaging featuring the colour to be registered as a trade mark along with print outs of photographs and other printed promotional materials. The examiner was satisfied that the evidence of acquired distinctiveness demonstrated use of Pantone 376c or a colour closely approximating it.
[12]This statement dated 18 February 2021 (subsequent to the delivery of the High Court judgment) was filed in the High Court in connection with an application by Frucor for rectification of the register, which is yet to be heard.
The application as filed did not contain a description of the colour. On 4 May 2011 a written description was lodged. The final written description, which was settled upon on 24 November 2011, read:
The mark consists of the colour Green (Pantone 376c) as shown in the representation attached to the application, applied as the predominant colour to the goods, their packaging or labels.
The genesis of this litigation is as follows. Frucor and EBL both marketed their energy drink products in containers which were partially coloured Pantone 376C green. Frucor maintained that EBL’s use of Pantone 376C on its products infringed TM 795206 and indicated it would bring court proceedings for infringement.
In 2017 EBL filed its applications for revocation of the Registration and a declaration of invalidity. The former application was made in reliance on s 66(1)(a) of the Act and contended that Frucor had not applied the representation of green shown on the register as the predominant colour to its goods, packaging or labels for a continuous period of three years or more.
The grounds for the invalidity application made under s 73 included that the representation was for a sign that did not qualify as a trade mark for the following reasons:
The use of the word ‘predominant’ opens the door to a multitude of different visual forms as a result of its implied reference to other colours and other visual material not displayed or described in the Registration condition/explanation and over which the Pantone 376C may predominate. It is a Registration of a shade of colour ‘plus’ other undefined material, not of just … an unchanging application of a single colour.
Consequently, the Registration is for not one sign but multiple signs with different permutations, presentations and appearances, which are neither graphically represented nor described with any certainty or precision.
The Assistant Commissioner’s decisions
The Assistant Commissioner released separate decisions on the use and validity challenges on the same day.
The use challenge
The Assistant Commissioner accepted Frucor’s submission that the written explanation of the mark defines the trade mark, not the image of the mark on the register.[13] She viewed the relevant representation as being that attached to the trade mark application as specified in the written explanation. She did not consider that the different representation of the colour on the register was relevant to the assessment of use under s 66 of the Act.[14] On the basis of the evidence of the colour of the labels, cans and shrink wraparounds for Frucor’s product “V”, the Assistant Commissioner concluded that EBL failed to establish that Frucor had not put the trade mark to genuine use in New Zealand for a continuous period of three years or more following the actual date of registration.[15]
[13]Revocation decision, above n 4, at [51].
[14]At [55].
[15]At [87].
In discussing EBL’s argument the Assistant Commissioner observed:
63.[EBL] would require an intermediate step, which is to examine the description of the mark to decide whether the two elements of the description together constitute a representation of the mark that can ever be used as a trade mark. I tend to agree with the owner that this additional step would require me to go behind the registration: essentially, the present challenge might be regarded as a challenge to whether the mark was capable of registration as a trade mark under s 5 of the Act in the first place, rather than being about use of the mark at all.
The validity challenge
In accepting Frucor’s contention that EBL’s application, filed almost nine years after the deemed date of registration, was time‑barred, the Assistant Commissioner observed that the legislature had made a deliberate decision to extend a degree of indefeasibility to a trade mark after seven years of continued registration except in the circumstances specified in s 75, relevantly that the trade mark should not have been registered on any of the grounds set out in s 17(1) and (2).[16] Noting that registration in breach of s 18 (for non-distinctiveness) is not a ground that overcomes the presumption of validity under s 75, the Assistant Commissioner stated:
44.In summary, I accept [Frucor’s] characterisation of the first ground as an attempt to dress up [EBL’s] objection to the Trade Mark as an objection under s 17, when in fact the applicant is seeking to challenge the registration for non-distinctiveness under s 18. That is not a permitted ground of challenge after seven years of registration under s 75.
[16]Invalidity decision, above n 4, at [40].
The Assistant Commissioner went on to consider the substance of EBL’s argument, advanced in reliance on Société des Produits Nestlé SA v Cadbury UK Ltd (Cadbury UK), that TM 795206 lacked the required certainty and specificity to be classified as a trade mark at all.[17] She was satisfied that the written description of the mark, including the reference to the predominant application of the relevant colour, was sufficiently clear in meaning to be capable of graphical representation and therefore registration.[18]
[17]Société des Produits Nestlé SA v Cadbury UK Ltd [2013] EWCA Civ 1174, [2014] RPC 7.
[18]Invalidity decision, above n 4, at [56].
She reasoned:
54.In this regard, the starting point must be a consideration of what a reasonable person would understand by the wording of the written description of the mark in question. I think it is clear that the reference to a ‘predominant’ colour in the context of a trade mark will be generally understood to mean the colour that catches the attention of consumers as being the main or most memorable colour used on the goods or in respect of the services covered by the registration.
55.I do not think that asking whether a colour is predominant if it constitutes say 50% of the colour on packaging, for example, is helpful. In some cases (for example, if the packaging features a significant proportion of another colour such as white or grey) the colour may still be predominant, in the sense of being the most eye‑catching or obvious. Ultimately, whether a colour is predominant in any given context will depend on the particular circumstances. The fact that this might be a difficult judgement to arrive at in some cases does not automatically mean that the formula “application as the predominant colour” will render a mark insufficiently clear to be capable of graphical representation under s 5.
The High Court judgment
The validity challenge
Dobson J first addressed the validity challenge. In renewing its validity challenge on the ground that the registration was of a sign not capable of graphic representation, EBL sought leave to rely on s 18(1)(a) rather than s 17(1)(b). EBL argued that the separate references in both ss 18(2) and 73(2) of the Act to s 18(1)(b), (c) and (d) reflected Parliament’s intention to treat the circumstances in which the Commissioner must not register a sign that is not a trade mark, pursuant to s 18(1)(a), differently from the other circumstances where registration cannot occur. In opposing leave Frucor responded that the legislature should be taken to have intended consistency of approach between ss 73 and 75. Both should be interpreted as treating the status of registration as, first, what can be challenged under s 73, but second, what is protected by s 75 after a period of seven years.
Dobson J was not persuaded that a challenge advanced under s 18(1)(a) of the Act could be brought after the expiration of seven years from the deemed date of registration of the trade mark.[19] He considered that the presumption of validity in s 75 prevented the argument being raised, stating:
[33] … [The] submission [of counsel for EBL] that there is policy justification for purging the register of marks that ought not to be there has to yield to the policy aim of affording owners of trade marks a measure of certainty in respect of their rights after a period of seven years. I accept [counsel for Frucor’s] points about the interpretation of the scope of s 75. It follows that I find there is no basis on which to grant leave for EBL to advance a challenge to the validity of the trade mark under s 18(1)(a) of the Act.
(Footnote omitted.)
[19]High Court judgment, above n 5, at [33].
Like the Assistant Commissioner, the Judge proceeded to consider the substance of the validity challenge. EBL had attacked the Assistant Commissioner’s conclusion at [55][20] as being erroneous and out of step with what was said to be the correct approach taken in the United Kingdom, Europe and Australia. Invoking the reasoning of overseas authorities,[21] EBL contended that the mark could not be represented graphically because its description encompassed numerous alternative representations. Permitting a description referring to a predominant use of Pantone 376C would render it impossible to draw the distinction between the identical and deceptively similar forms of potential infringement (the umbra and penumbra of the trade mark) when considering a competitor’s use of what is arguably the same colour.
[20]See [24] above.
[21]Société des Produits Nestlé SA v Cadbury UK Ltd, above n 17; Glaxo Wellcome UK Ltd v Sandoz Ltd(No 2) [2017] EWCA Civ 335, [2017] FSR 33; and Frucor Beverages Ltd v Coca-Cola Company [2018] FCA 993, (2018) 358 ALR 336.
Finding for Frucor on this issue, the Judge did not accept that the strict requirements for the definition of a mark in the European jurisprudence were either necessary or appropriate in the context of the Act.[22] He explained that the analysis in Cadbury UK reflected an expectation that the terms of the written explanation of the mark must necessarily be distinctive of its whole appearance. However that approach did not contemplate acceptance of a mark that is described in less than entirely exhaustive detail, in part at least because that would enable non-material details to be present in more than one form.[23]
[22]High Court judgment, above n 5, at [66].
[23] At [67].
Nor did the Judge accept that permitting a formula of words including reference to the predominant use would necessarily lead to an applicant acquiring rights over a multitude of signs. He explained:
[70] … Rather, the mark prevents use by others of the get up for the relevant class of goods that uses the specific nominated shade of green predominantly. Use of that formula of words is likely to reduce the scope of the umbra, and require proof of deceptive similarity in the penumbra, but that does not prevent use of this formula of words for a colour trade mark.
Consequently, even if jurisdiction existed for a challenge to the trade mark under s 18(1)(a) the Judge agreed with the Assistant Commissioner’s view that the ground could not be made out.[24]
The use challenge
[24]At [75].
EBL submitted that the trade mark was ambiguous because it included reference to a colour that was not the shade described in the reference to Pantone 376C. Reliance was placed on Frucor Beverages Ltd v Coca-Cola Company, where Yates J ruled that persons inspecting the register were entitled to assume the colour shown on the Register conformed to the description of that colour by reference to a colour system such as Pantone.[25] Those searching the register would not have access to the application, which included the correct shade of green, so the reference in the explanation for the mark to the colour as shown in the representation “attached to the application” was of no use. In response to Frucor’s point that the state of the register was not the result of any fault on its part, EBL submitted that Frucor could not be treated as entirely faultless because it had been on notice for many years that the uploaded colour swatch was not Pantone 376C and had done nothing to correct the confusion that inconsistency was liable to cause.
[25]Frucor Beverages Ltd v Coca-Cola Company, above n 21, at [121]–[122].
Adopting the approach in Levi Strauss & Co v Kimbyr Investments Ltd,[26] the Judge held that the wording in the description ought to dictate the interpretation of what is subject to trade mark protection. Noting the requirements of the IPONZ practice guidelines for precision in written descriptions of colour marks, the Judge considered it suggested primacy was given to the code of colour and the written description of that colour nominated in the application. While recognising that casual readers of the explanation for the mark might well be misled by the incorrect swatch reproduced, the Judge considered those competitors wishing to be certain of the particular shade of green, use of which was precluded by the trade mark, might equally be expected to check the Pantone coding.[27]
[26]Levi Strauss & Co v Kimbyr Investments Ltd [1994] 1 NZLR 332 (HC).
[27]High Court judgment, above n 5, at [91]–[92].
Consequently the Judge agreed with the Assistant Commissioner’s conclusion that non-use of the mark was not established, given the acknowledged consistent use by Frucor throughout the relevant period of Pantone 376C as a predominant colour.[28]
[28]At [96].
Recognising that the problem in this case was unlikely to be an isolated occurrence, the Judge offered a suggestion:
[94] It appears likely on the details of other colour marks referred to in [counsel for Frucor’s] submissions that the transposition of other shades of colours that are distinguishable from the Pantone colours cited in the related application is something of a systemic problem. The preferable solution to such a problem is to correct the register in those cases rather than have errors by IPONZ deprive the registered owners of their property rights in the trade marks that registration entitles them to assume subsists.
[95] It is similarly illogical to hold Frucor as having protection only for a darker shade of green than it has ever intended to use, and in respect of which it has never attempted to make out sufficient use to establish the distinctive character justifying registration. The answer is to correct the register and, depending on the circumstances, for any allegations of infringement during the period in which the register has misled third parties to have regard to the potentially misleading state of the register.
The issues on appeal
The parties were unable to agree on the formulation of the issues. With the benefit of oral argument we consider the following issues arise for determination:
(a)Did the Judge err in holding that the time bar in s 75 prevents a challenge to the Registration under s 18(1)(a)?
(b)If the answer to (a) above is in the affirmative, did the Judge err in declining EBL leave to bring a challenge under s 18(1)(a)?
(c)Is the representation a sign capable of being represented graphically and hence a trade mark? In particular:
(a)Does the use of the phrase “predominant colour” cause the Registration to be unclear and to include more than one sign?
(b)Does the difference between the darker shade of green shown on the representation on the register and the written description Pantone 376C mean the Registration is ambiguous and too imprecise?
(d)Did the Judge err in holding that the Registration should be interpreted as being defined by the written description of the colour on the register, namely Pantone 376C?
Issue 1: Did the Judge err in holding that the time bar in s 75 prevents a challenge to the Registration under s 18(1)(a)?
EBL contends that it would be an absurd result if a sign, which failed to qualify as a trade mark in terms of s 18(1)(a) (and hence should never have been registered as a trade mark), should be immune from challenge when (as here) seven years have elapsed from the deemed date of registration. Frucor responds that, as s 18 is not included in the list of exceptions in s 75, TM 795206 is now deemed to be valid. The contest is essentially one of statutory interpretation. We have concluded, not without some hesitation, that Frucor’s argument is correct. These are our reasons.
It is convenient to start by reference to the Trade Marks Act 1953 (the 1953 Act) and the predecessor to s 75. Prior to the 2002 Act the register comprised two parts. For registration in Part A, a high degree of distinctiveness in the mark was required.[29] The essential characteristic of being “adapted” to distinguish the owner’s goods from those of others was to be contrasted with the requirement for a Part B registration that the mark was “capable” of so distinguishing the owner’s goods.[30] This Court held in McCain Foods (Aust) Pty Ltd v Conagra Inc that the capacity to distinguish had to be shown at the date of application.[31] It needed to be inherent in the mark or proved to exist in fact by reference to use of the mark or by other circumstances.[32]
[29]Trade Marks Act 1953, s 14(1).
[30]Section 15(1).
[31]McCain Foods (Aust) Pty Ltd v Conagra Inc [2002] 3 NZLR 40 (CA).
[32]At [41].
The predecessor to s 75 was s 22(1) of the 1953 Act, which deemed only those trade marks registered in Part A of the register to be valid after seven years, unless the registration was obtained by fraud or the trade mark offended against s 16.[33] Speaking with reference to the equivalent provision in the Trade Marks Act 1938 (UK), Brightman LJ in Imperial Group Ltd v Philip Morris & Co Ltd observed that in respect of Part A registrations there was an irrebuttable presumption that the original registration was valid save in the excepted cases.[34] In respect of a trade mark registered in Part B of the register under the 1953 Act, there was no temporal limitation on launching a validity challenge or raising an invalidity defence.
[33]Section 16 was essentially similar to the current s 17(1) of the Trade Marks Act 2002.
[34]Imperial Group Ltd v Philip Morris & Co Ltd [1982] FSR 72 (CA) at 88.
The division of the register into two parts in ss 14 and 15 of the 1953 Act was abandoned in the 2002 Act. The requirement for distinctiveness is now addressed in s 18, which is a substantial reproduction of s 3(1) of the Trade Marks Act 1994 (UK).
Fundamental to the argument of Mr Arthur KC for EBL is the distinction between signs which are trade marks — that is, signs capable of (i) being represented graphically and (ii) distinguishing the goods or services of one person from those of another person — and signs which lack such capability. He submits that s 75 deems valid “the registration of a trade mark”. If what has been registered is not a “trade mark” it follows that there is nothing to deem valid. Hence he contends that the time bar does not preclude an application for a declaration of invalidity if advanced on the basis that the registration is for a sign which lacked the capability to be a trade mark.
Mr Brown KC for Frucor responds that both ss 73 and 75 use the phrase “the registration of a trade mark” as the qualifier which, given the desirability of internal consistency, should have the same meaning in both provisions. The sections were drafted to operate together and should not be considered in isolation. The former provides a mechanism to challenge the validity of a trade mark registration while the latter prevents that mechanism from being used after seven years (except in three listed circumstances). Non-compliance with s 18 is not an excepted ground under s 75. This omission was deliberate and should not be undermined.
Focussing on the reference to “registration” of a trade mark in both provisions, Mr Brown further contends that it is the Commissioner’s “action” of registering the mark by placing it on the register which is deemed to be valid. Were it otherwise he suggests that s 75 could have simply stated that “a registered trade mark is deemed to be valid unless …”. He argues that by using the words “registration … is … deemed to be valid”, Parliament sought to increase commercial certainty by guaranteeing that registrations that may not have been valid are nonetheless deemed to be so after the effluxion of the specified period.
There is a certain logic to Mr Arthur’s argument grounded in the philosophy of the concept of a trade mark. Section 18(1) distinguishes between a sign that is not a trade mark (s 18(1)(a)) and signs which, although not registrable, are trade marks (s 18(1)(b)–(d)). That distinction is recognised in both s 18(2) and s 73(2). The former provides that the Commissioner must not refuse to register a trade mark under s 18(1)(b)–(d) if, before the date of application for registration, as a result of either the use made of it or of any other circumstances, the trade mark has acquired a distinctive character. Similarly, s 73(2) provides that the registration of a trade mark that has acquired a distinctive character after its registration must not be declared invalid even though it was not registrable under s 18(1)(b)–(d) at the deemed date of its registration. No such saving applies to the prohibition in s 18(1)(a) against the registration of signs that are not trade marks.
Those provisions recognise that trade marks identified as not registrable could, by the acquisition of a distinctive character, secure validity while signs the subject of s 18(1)(a) could not. Hence Mr Arthur submitted that EBL’s interpretation of s 75 was consistent with the distinction in the Act between invalidity under s 18(1)(a), which, in his words, could “never be cured”, and invalidity under the other provisions of s 18(1) which could be cured via either s 18(2) or s 73(2).
Given the recognition in the legislation of that clear and principled distinction, it may be thought surprising that, even after a period of seven years from the deemed date of registration, the registration of a sign which is not capable of even serving as a trade mark should be forever immune from challenge. To express it in simple terms by reference to the second limb of the definition of sign,[35] why should an erroneous registration of say “car” for motor vehicles or “kai” for food products remain the perpetual monopoly of one trader?
[35]Trade Marks Act 2002, s 5(1).
However our task is not to determine what the legislative drafter might ideally have stated but rather to determine the meaning of what the drafter in fact said.[36] That meaning is to be ascertained from the text of the enactment and in light of its purpose and its context.[37]
[36]See Stock v Frank Jones (Tipton) Ltd [1978] 1 WLR 231 (HL) at 236 per Lord Simon.
[37]Legislation Act 2019, s 10(1); and Commerce Commission v Fonterra Co-operative Group Ltd [2007] NZSC 36, [2007] 3 NZLR 767 at [22].
The practical difficulty which Mr Arthur’s submission must confront is this. If the reference to trade mark in the expression “the registration of a trade mark” in s 75 is not to include an erroneously registered s 18(1)(a) sign then, assuming the phrase in s 73 is similarly construed, where is the statutory source of jurisdiction to declare such a registration invalid? Mr Brown contends that there would be no jurisdiction to do so because s 73(1) would not extend to erroneously registered signs.
Mr Arthur endeavours to overcome that difficulty by according s 73 (and s 18(1)(a)) a purposive interpretation. He submits:
37.Section 73 is the general provision allowing for a declaration of invalidity of a trade mark registration “to the extent that the trade mark was not registrable under Part 2 at the deemed date of registration” (emphasis added). So if what has been registered is not a trade mark, it was not registrable in the first place and can be declared invalid.
38.This is consistent with s73(2), which “saves” trade marks that were not registrable under s18(1)(b), (c), or (d) at the deemed date of registration, if they have acquired a distinctive character. Again, no such saving applies where the registration is invalid on the basis of s18(1)(a).
39.It follows that a purposive interpretation of ss18(1)(a) and 73 necessarily permits a declaration of invalidity where what has been registered is not a ‘trade mark’.
By contrast he maintains that it is unnecessary to resort to a purposive interpretation for s 75 as there is no need for an expansion of the express and literal words chosen.
We agree with Mr Brown that adopting an interpretation, which involves reading the same significant phrase differently in the two provisions, is strained. In short, we do not consider that Parliament can have intended that s 73 should extend to address the erroneous registration of s 18(1)(a) signs while s 75 does not. The result would be an internal inconsistency in a small group of provisions which together address the concept of invalid registrations. If that was Parliament’s intention we consider that a much more obvious course would have been to include s 18(1)(a) in the list of exceptions in s 75.
While our interpretation has been reached without reliance on the legislative history, it is apparent that the extension of the presumption of validity to all registered trade marks was not accidental. As Mr Brown observed, a report of the Ministry of Economic Development provided to the Commerce Select Committee[38] addressed a submission questioning the utility of such a provision, stating:
This clause exists because of the abolition of Parts A and B of the Trade Marks Register. It extends the current protection afforded to a trade mark registered under Part A to all registered trade marks. It provides that a trade mark cannot be challenged if it has been on the register for a period of seven years, subject to certain exceptions. The advantage of this is that automatic validity helps create certainty in the law of registration. It also reduces expense for trade mark owners when defending their trade marks in Court.
[38]It contained a detailed analysis of substantive issues raised on submissions on the Bill together with the Ministry’s comments and recommendations.
The New Zealand Institute of Patent Attorneys voiced a concern that trade marks not subject to the list of exceptions would be deemed valid after seven years. It drew attention to fact that, because s 18 was not included in the exceptions, a trade mark that had not acquired a distinctive character would be deemed valid after seven years. With refence to that submission the departmental report stated:
Disagree. If the trade mark has been registered for such a significant period of time without challenge, it should be allowed to remain on the register subject to the stated exceptions.
The Institute also questioned whether s 75 should remain in light of the provisions of s 73(2). The Ministry’s report made reference to an earlier report to the Commerce Committee concerning the drafting of s 73(2), containing a recommendation (which was adopted) that the original reference to “Part 2” should be replaced by the reference to s 18(1)(b),(c) and (d).
Collectively this legislative history assists in providing the cross-checking which Commerce Commission v Fonterra Co-operative Group Ltd requires and tends to indicate that the purpose of s 75 aligns with how we have construed its meaning.[39]
[39]Commerce Commission v Fonterra Co-operative Group Ltd, above n 37, at [22].
Finally we note that EBL placed reliance on the fact that neither the Trade Marks Act 1994 (UK) nor the Trade Marks Act 1998 (Singapore) contains an equivalent to s 75 and hence in those jurisdictions such erroneous registrations would not be immune from challenge. However, as Mr Brown observed, the UK Act was drafted so that the United Kingdom could comply with the European Trade Mark Directive (the Directive) which, as a matter of EU policy, provided for invalidity grounds to always be available.[40] There is weight in Mr Brown’s submission that the deliberate retention by Parliament in 2002 of the presumption in s 75 some eight years subsequent to the 1994 UK Act lends support to Frucor’s argument.
[40]Directive 89/104 of 21 December 1988 to approximate the laws of the Member States relating to trade marks [1989] OJ L40/1.
Consequently we agree with the Judge and the Assistant Commissioner that as EBL’s application was filed more than seven years after the deemed date of registration it was time-barred. However, if we had reached a different view we would have been prepared to hear argument on the validity issue because, although EBL’s application stated that it was brought under s 17(1)(b), the application was sufficiently clear as to the basis of the argument that the sign did not qualify as a trade mark. Adequate particulars having been provided of the basis of its contention,[41] we would not have declined to entertain the argument on the ground that the wrong statutory provision was invoked.
Issue 2: Does the use of the phrase “predominant colour” cause the Registration to be unclear and for more than one sign?
[41]See [18] above.
If our conclusion on Issue 1 is correct, there is no need to consider Issue 2. However in case this matter goes further we proceed to do so. It is appropriate to consider Issue 2 for the further reason that there should be clarity for the future concerning the registrability of colours as trade marks. Frucor’s submissions noted that there were 123 “live” colour trade mark registrations on the register, 21 of which used the same or substantially similar wording to the explanation in TM 795206. In addition there were 26 others which used another evaluative concept to describe the extent of the use of the colour on goods or in relation to goods.[42] While as a consequence of our conclusion on Issue 1 the validity of such registrations may not be open to challenge, a decision on Issue 2 may be of relevance for future similar applications.
The contest
[42]For example “substantially”; “as applied to the majority of the outer surfaces of the goods”; “uniformly distributed”; and “used in combination”.
The thrust of EBL’s contention is captured in Mr Arthur’s submission that:
The “explanation” in the Registration uses the imprecise term “predominant colour”. As a result, the Registration is not just for a single colour with unchanging application, but for a multitude of different applications unlimited in number and scope of application. As such, the Registration lacks the clarity and precision required to be capable of being represented graphically and is an invalid registration for more than one sign.
(Footnote omitted.)
EBL’s attack is two pronged: first, that the adjective “predominant” is inherently imprecise; secondly, that even if the word has a clear meaning, its use renders the Registration insufficiently precise because it covers a range of signs.
Frucor’s rejoinder is that the words “applied as the predominant colour to the goods, their packaging or labels” were simply a practical recognition by the Commissioner that packaging and labelling, particularly of a beverage, is required by law to have other labelling information. Frucor contended that without the word “predominant”, the mark “would have been too broad, preventing any use of that shade on the goods made by another trader”.
Nevertheless, it is apparent that Frucor intends that the trade mark registration should provide it with flexibility as to the way in which it deploys the colour on its products and packaging. As it submitted:
An applicant should not be required to file a new colour mark application every time product packaging is modified so that the colour in question takes up more or less of the packaging (whilst remaining the colour ‘predominantly applied to the packaging’).
If one assumes that in order to fulfil its function as an indication of origin a trade mark must be perceived uniformly, the underlying issue as we see it is whether a trade mark can be registered for a sign which is so defined as to permit many permutations of form. We will consider that issue in four stages:
(i)the law and practice governing trade mark applications;
(ii)the chronology of the application for TM 795206;
(iii)the meaning of “predominant”; and
(iv)whether a registration may cover multiple signs.
The law and practice governing trade mark applications
(a) A representation of the trade mark
Under the 1953 Act applications for trade mark registration were to be made in a prescribed form which contained or had attached to it a representation of the mark.[43] Speaking of the equivalent United Kingdom provision, Lord Diplock stated:[44]
The Trade Marks Rules 1938 do not in terms require the application for registration of a trade mark to contain a verbal description of the mark, but rule 23 does require the application to contain a “representation” of the mark. In the ordinary way the representation would be a drawing or other pictorial representation of the mark, but rule 28 authorises the registrar to accept instead a specimen or copy of the trade mark in such form as he thinks most convenient, and to deposit in the office a specimen or copy of any trade mark which cannot conveniently be shown by a representation.[45]
[43]Section 26(1); and reg 20 and Form 5 of the Trade Marks Regulations 1954. If dissatisfied with any representation of a mark the Commissioner was empowered by reg 21 to require that another representation satisfactory to him or her be substituted before proceeding with the application.
[44]Smith Kline & French Laboratories Ltd v Sterling-Winthrop Group Ltd [1975] 1 WLR 914 (HL) at 918.
[45]Regulation 22(2) of the Trade Marks Regulations 1954 was the equivalent of r 28 of the Trade Marks Rules 1938 (UK).
The Trade Marks Amendment Act 1994 substituted a new definition of trade mark, which introduced the requirement that a trade mark comprise a sign “capable of being represented graphically”.[46] No form of application is prescribed under the 2002 Act, but reg 42(1)(b) of the 2003 Regulations requires that an application must contain “a clear representation” of the trade mark. With reference to that requirement the IPONZ practice guidelines state:
4.3 Clear representation
An application to register a trade mark must contain a clear graphic representation of the mark in order to obtain a filing date.[47]
The graphic representation of the mark must be suitable for examination purposes, the determination of infringement actions, and public inspection of the register. In the [Ty Nant Spring Water] case, the Appointed Person stated that:[48]
These provisions call for a fixed point of reference: a graphic representation in which the identity of the relevant sign is clearly and unambiguously recorded.
A representation that attempts to define a sign too broadly may be at risk of the mark being considered ambiguous and may therefore not qualify for a filing date.[49]
The representation should not assume that the reader has prior knowledge of the actual sign used by the applicant. Instead, “the description must stand on its own to identify the trade mark”.[50]
[46]The definition also referred to the sign being capable of distinguishing the goods or services of one person from those of another person.
[47]Regulations 42(b) and 42(c) of the Regulations.
[48]Ty Nant Spring Water Ltd’s Trade Mark Application [2000] RPC 55 at 56. [An appointed person is a person appointed under s 77 of the Trade Marks Act 1994 (UK) to hear and decide appeals under that Act.]
[49]See Orange Personal Communications Services Ltd’s Application [1998] ETMR 460, which concerned an application to register a mark that was described as consisting of the colour “orange”. No representation of the colour was provided, and the colour was not defined by reference to a particular colour standard.
[50]See the comments of Mr Simon Thorley QC, as the Appointed Person, in Swizzels Matlow Ltd’s Application for a Three Dimensional Trade Mark [1999] RPC 879.
It seems that the reference to a “graphic representation” derives from the reference in the definition of a trade mark as meaning a sign “capable of being represented graphically”. We agree with the view of Simon Thorley QC (the Appointed Person) in Swizzels Matlow Ltd’s Application for a Three Dimensional Trade Mark that this phrase does not import a requirement for some form of visual image. As he explained:[51]
In the case of sounds, the relevant sound could be represented by musical notation. In such a case, the notation is an accurate description of the notes in question when considered by a person conversant with the practice of musical notation. This is no different, to my mind, from the use of an ordinary English word as a trade mark when the combination of letters conveys a description to an English speaking person. … Likewise colours can accurately be described by reference to conventional colour charts. It cannot therefore be that the words “represented graphically” of themselves require the representation of the mark to be some form of visual image of it. Further, I do not think it is helpful in this context to try and determine the meaning of the word “graphically” by reference to English dictionaries. The word has its origin in the Directive and more assistance can be obtained from considering the purpose for which the provision is there.
[51]Swizzels Matlow Ltd’s Application, above n 50, at 884–885.
Mr Thorley went on to draw attention to the fact that in both the Trade Marks Act 1994 (UK) and the Directive (and likewise in s 89 of the 2002 Act), a distinction is drawn between the powers of the registered proprietor to restrain infringement where an alleged infringer uses a sign which is identical to the registered trade mark, as opposed to one that is merely similar to it. He said:[52]
It is thus essential for traders to be able to identify with clarity what the registered trade mark is. The first question that arises when infringement is in issue is whether or not the alleged infringing mark is identical to the trade mark registered. If it is, and is used in relation to the same goods, the trade mark proprietor has an absolute monopoly. Where, however, the mark is not identical but merely similar, the monopoly is restricted to uses which create the necessary likelihood of confusion on the part of the public.
This is a fundamental aspect of the law and it is for this reason that the graphical representation, being the means by which the trade mark is defined, must be adequate to enable the public to determine precisely what the sign is that is the subject of the registration.
[52]At 885.
We endorse that view. Clarity and precision are important for all statutory intellectual property rights, but particularly so in the case of registered trade marks given the significance of the distinction between identical and similar signs. The implications of the distinction were recently recognised by the Supreme Court in Crocodile International Pte Ltd v Lacoste when explaining the terms umbra and penumbra:[53]
[46] We interpolate that the term umbra is used to denote the protection given to trade marks by stopping anyone else from using, or seeking to register, the exact trade mark registered. This is the strongest protection available. The term penumbra is used to denote the protection given to trade marks by stopping anyone else from using, or seeking to register, a similar trade mark to the trade mark registered. This protection is not as strong as the umbra.
(b) Colour marks
[53]Crocodile International Pte Ltd v Lacoste [2017] NZSC 14, [2017] 1 NZLR 679 (footnote omitted).
The 1994 Amendment Act introduced “colour” to the definition of “sign”. Although there was no amendment at that time to the Trade Marks Regulations 1954 (the 1954 Regulations), it seems that the Commissioner proceeded to adopt the United Kingdom practice of requiring applicants for colour trade marks to specify the exact colour using a recognised colour standard such as Pantone. That practice was formalised in the 2003 Regulations, with reg 44 specifying that the information that an applicant must supply before an application can be accepted includes:
(g)if the trade mark is a colour or colours, a description acceptable to the Commissioner of the colour or colours; and
(h)if the trade mark is limited as to colour, a description acceptable to the Commissioner of the colour or colours in the trade mark; …
…
In relation to colour marks the IPONZ practice guidelines state:
4.3.1 Colour marks
Where an applicant seeks to register a colour or colours as a trade mark, the applicant will be required to file with the application either:[54]
· a representation of the colour(s), or
· a description of the colour(s) using a widely known and readily available colour standard (such as the colour indexing scheme of the Pantone ® colour system).
The description of the trade mark should also include information on how the colour(s) are being used, or are to be used, in relation to their goods or services, such as in this example:
The mark is the colour blue (Pantone xxx) as shown in the representation attached to the application, applied to the exterior surface of the goods.
Where the applicant does not file either a representation of the colour(s) or an acceptable description of the colour(s), the application will be deemed not to meet the requirements of regulation [42(1)(b)] of the [2003] Regulations, and accordingly an application number and a filing date will not be allocated.
[54]This relates only to applications to register a colour or colours as a trade mark, not where colour is an element of a device or pictorial mark.
To the extent that the guidelines suggest (in two places) that a description of the colour is merely an alternative to a representation of the colour, we do not consider that the guidelines accurately reflect the obligation in reg 44. Although the colour description may be supplied subsequent to filing the application, the applicant must supply the description before the application can be accepted.
The chronology of the application for TM 795206
As originally filed on 29 August 2008 the application for registration simply stated:
The colour swatch, in the form of a roughly square piece of green painted aluminium, was affixed by a staple to the application form. There was no verbal description.
The compliance report of 21 October 2009 addressed both the requirement for a colour explanation and the manner of use of the colour on the goods. It stated:
Written explanation
Regulation 44(g) of the [2003 Regulations] requires that, in addition to the pictorial representation of your mark you have provided, you also must supply an appropriately worded explanation before the mark can be accepted.
The explanation must contain a description of the colour(s) using a widely known and readily available colour standard, such as the colour indexing scheme of the Pantone® colour system. The explanation may also include information about where/how the colour(s) will be used in relation to the goods/services. For example:
The mark is the colour blue (Pantone ® 123), as shown in the representation attached to the application, applied to the exterior surface of the goods.
Please provide us with the appropriate colour explanation for your mark. As no amendment of the written explanation is allowed after entry on the register we will only enter the written explanation of the mark after the wording has been agreed with the Office.
(Footnote omitted.)
Frucor proceeded to gather evidence in support of its application and sought additional time for its prosecution. By March 2011 Frucor had provided sufficient evidence of use that the Commissioner was prepared to allow the application to proceed to acceptance on the basis of acquired distinctiveness. However in the compliance report of 2 May 2011 the Commissioner stated:
Before we can do so we require an explanation of the mark describing how it is used. The explanation would be worded along the lines of the following example:
The mark consists of the colour green (Pantone 376c) as shown in the representation attached to the application, applied as the predominant or predominant background colour to the packaging of the specified goods
We await your advice on the applicant’s suggested explanation.
After some negotiation between Frucor and IPONZ during 2011, agreement was reached on the formulation of the explanation which appears in the registration, namely:
The mark consists of the colour green (Pantone 376c), as shown in the representation attached to the application, applied as the predominant colour to the goods, their packaging or labels. Section 18(2) of the Trade Marks Act 2002 applies.
Thus, although the trade mark as originally sought comprised merely the colour swatch as the representation, in its final form the subject matter of the application comprised the colour swatch as a sample of the colour, the specified Pantone shade and the verbal description.[55]
The meaning of “predominant”
[55]Similar to that in Société des Produits Nestlé SA v Cadbury UK Ltd, above n 17, at [6].
While contending that the natural plain meaning of “predominant” provides sufficient certainty “as to what is covered” by the Registration, Frucor did not advance a specific meaning of the word in the context of the phrase “predominant colour”. However the tenor of its submission was that the word imported a quantitative description:
Frucor’s trade mark is for Pantone 376c applied as the main colour on the packaging of energy drinks or their labels. A competing producer of energy drinks could therefore avoid infringement by selecting a different shade of green that was not confusingly similar to Pantone 376c, or by applying Pantone 376c only as a minor part of its packaging or labels. Only a competitor seeking to use Frucor’s exact shade to a large extent on the packaging of energy drinks would face uncertainty about the exact limits of the mark.
(Emphasis added.)
Mr Brown drew attention to several other colour trade mark registrations in which different formulae were used to identify the extent of the coverage of the goods the subject of the trade marks. One example was the explanation in TM 801503 which stated:
- The mark consists of the colour beige (Munsell notation no. 3.9Y 7.12/1.4), which is a close approximation of Pantone 7534 or RGB No. 208 204 184, as shown in the representation attached to the application, as applied to the majority of the outer surfaces of the goods. The provisions of section 18(2) of the Trade Marks Act 2002 apply.
(Emphasis added.)
Another example was TM 614236, the explanation for which stated:
- The mark consists of the colour Mauve (Pantone 14-3904) applied to one surface of the goods as shown on the representation attached to the application. This mark was advertised before acceptance under section 27(1) of the Trade Marks Act 1953.
(Emphasis added.)
A still more specific example is TM 806560, the explanation for which stated:
- The mark consists of the colour blue (Pantone PMS-072 C), as shown in the representation attached to the application, applied to the tips of the goods covered by the application. The provisions of section 18(2) of the Trade Marks Act 2002 apply.
(Emphasis added.)
Yet another example which focused on the spatial application is TM 285611, which employs the adverb “predominantly” but without qualification of the colour:
- The mark consists of the colour purple (Pantone 2685C), as shown in the representation attached to the application, as applied predominantly to the packaging of the goods.
(Emphasis added.)
In each of those four examples the image shown on the register is an oblong of a colour.
However the word “predominant” can convey both quantitative and qualitative notions. For example in Black’s Law Dictionary the word is defined as:[56]
More powerful, more common, or more noticeable than others; having superior strength, influence, and pervasiveness.
[56]Bryan A Garner Black’s Law Dictionary (11th ed, Thomson Reuters, St Paul, 2019) at 1426.
These different modes of assessment were recognised by Sir Timothy Lloyd in Cadbury UK:[57]
[Counsel for Cadbury UK]’s primary contention was that a colour was predominant, in this context, if it covered more than 50% of the surface area in question. If this is right, and if that is what was intended, then it might be possible to achieve certainty by spelling that out in the registration application. It could have read: “applied to the whole visible surface, or to more than 50% of the area of the visible surface, of the packaging of the goods”. But it is not difficult to imagine other tests which might be applied to determine predominance in respect of colour. If the contrast is between two different colours, one which is stronger or more eye-catching, or is applied to a more prominent part of the packaging, might be seen as predominant even if it was applied to a smaller area than another colour (including white).
[57]Société des Produits Nestlé SA v Cadbury UK Ltd, above n 17, at [63].
For the purposes of analysis it is convenient to consider separately the quantitative and qualitative methods of assessment of colour predominance.
(a) Quantitative analysis
Let us assume that the application of a colour to 60 per cent of the surface of a beverage can constitutes a predominant application. The tenor of Mr Arthur’s argument appears to be that there are many ways in which a single colour (say green) may be applied to a beverage can which would result in a coverage between 60 per cent and 99 per cent. Thus it would include a reasonably extensive background coverage, as is the case in respect of Frucor’s product “V”.
However it would also include a style of decoration of a beverage can comprising green coloured geometric shapes, such as circles, triangles and stars, against a contrasting background such as silver. Similarly it would include decoration by green coloured images in the shapes of hearts, diamonds, spades and clubs set against a contrasting (silver) background. It could also encompass vertical or horizontal stripes, whether as straight, jagged or wavy lines, of green colour against a contrasting (silver) background.
It appears from the evidence that none of those variants have been used by Frucor. However each of them could be deployed so as to cover at least 60 per cent of the beverage can. On a quantitative basis therefore they would all constitute the predominant colour. Hence they would all be signs within the umbra of the Registration. We did not understand Frucor to take issue with that proposition.
(b) Qualitative assessment
Sir Timothy Lloyd in Cadbury UK referred to the further scenario of colour predominance where one colour is stronger or more eye-catching than a second contrasting colour, even though the first has a lesser area of coverage than that second colour.[58]
[58]Société des Produits Nestlé SA v Cadbury UK Ltd, above n 17, at [63].
In developing that theme by reference to well-known colour combinations, one might ask whether the red circle on the Japanese flag is the predominant colour? Although its coverage is less than the white background, it might be viewed as predominant, either by reason of being more eye-catching or as a result of its central location (or both). However would a red circle cease to be predominant if set against another vivid colour, such as green in the flag of Bangladesh? Similarly would the yellow circle or the blue background be the predominant colour in the flag of Palau?
Furthermore, might the perceived “predominance” of one colour over another be affected by the manner of their juxtaposition? Staying with the flag method of analysis, is the predominant colour of the Swedish flag the blue (which covers the larger area) or the yellow comprising the cross? And might blue or white be said to be the predominant colour of the Scottish flag? Perhaps both? For, in the materials supplied by Mr Brown with his submissions, there were examples of trade mark registrations specifying two and three colours as “predominant”. One such example was the explanation in TM 829135 which stated:[59]
The trade mark consists of the colours ORANGE, specifically identified as RAL2010 and GREY specifically identified as RAL7035, as depicted in the representation attached to this application, as the predominant colours applied to the exterior surface and packaging of the goods covered by this application …
Another example was TM 1061668 which included the following explanation:
The trade mark consists of the colours HYPER GREEN (PMS 388C), DARK GREY (PMS 446C) and LIGHT GREY (PMS Cool Grey 5C), as the predominant colours applied to the exterior of the goods, as shown in the representation attached to the application. …
In both instances the representation appears to be a rectangle comprising blocks of the respective colours.[60]
[59]Other examples of registrations for dual predominant colours were yellow/blue and orange/black.
[60]In both registrations it was stated the provisions of s 18(2) of the Trade Marks Act 2002 applied.
In theory, at least, it could be contended that the colour Pantone 376C could be applied to a beverage can so that it covered less than 60 per cent (or even less than 50 per cent) of the surface of the can but, because of the neutral shade of the contrasting colour or colours (or their multiplicity), the Pantone 376C green was the predominant colour.
For these reasons we agree with Sir Timothy Lloyd that the use of the adjective “predominant” to qualify the colour comprising a trade mark renders the description too subjective and imprecise. We find unconvincing the reasoning of the Assistant Commissioner that whether a colour is predominant in any given context “will depend on the particular circumstances”.[61] Actual or potential competitors are entitled to know the scope of the mark applied for and registered. It is the function of the register to provide that information. The information which the register should convey to an inquirer should not be dependent on the “particular circumstances”.
[61]Invalidity decision, above n 4, at [55]. See [24] above.
Nor do we consider it appropriate that the act of ascertaining that knowledge from the register should require “a difficult judgement”.[62] That observation of the Assistant Commissioner seems to us to contemplate the process of making a determination on trade mark infringement. That was certainly how the Judge appears to have construed that observation when stating:[63]
The Assistant Commissioner acknowledged that whether a competitor was using the sign that was identical or merely similar to the registered trade mark might involve a difficult judgement.
[62]At [55].
[63]High Court judgment, above n 5, at [58].
However the issue with which we are concerned is the clarity of the register itself. In our view, absent further particularity either by way of a written description or an appropriate visual representation, the description of a colour trade mark by means of the phrase “the predominant colour” (albeit accompanied by the requisite reg 44(g) description) will generally be an insufficient mode of identification of a trade mark.
Of course, where the colour in question is explicitly confined to use as a background colour, against which various logos or product information are set, then the description of “a predominant background colour” might be acceptable. However the proposal for the inclusion of such a phrase was rejected by Frucor in the course of its negotiations with IPONZ[64] and hence we did not hear argument on that proposition.
Whether a registration may cover multiple signs?
[64]See [71] above.
We turn to consider Mr Arthur’s second argument, which is that even if the use of “predominant” in the Registration is unambiguous, nevertheless the consequence of its use is that the Registration would cover a range of signs. Mr Arthur again invokes the reasoning in the Cadbury UK decision, where the application was for a trade mark shown as a rectangular purple block and was described as:[65]
The colour purple (Pantone 2685C), as shown on the form of application, applied to the whole visible surface, or being the predominant colour applied to the whole visible surface, of the packaging of the goods.
[65]Société des Produits Nestlé SA v Cadbury UK Ltd, above n 17, at [5].
If the description at issue in Cadbury UK had been confined to the application of the colour purple to the whole visible surface of the packaging of the goods, then we apprehend that no difficulty would have arisen. The application would have been for only one sign. However, as Sir John Mummery explained, the inclusion of the alternative mode of colour treatment incorporating use of the word “predominant” opened the door to a multitude of different visual forms.[66] It was not just an unchanging application of a single colour. Rather there was wrapped up in the verbal description of the mark an unknown number of signs.[67]
[66]At [50].
[67]At [55].
This point was reiterated in a judgment delivered on the same day by the same Court of Appeal panel in JW Spear & Son Ltdv Zynga Inc, which concerned a registered trade mark (the tile mark) associated with the popular word game Scrabble.[68] The verbal description stated that it consisted of a three-dimensional ivory-coloured tile on the top surface of which was shown a letter of the Roman alphabet and a numeral in the range 1 to 10. Following Cadbury UK the Court held that the tile mark was not a sign because it potentially covered many signs achievable by numerous permutations, presentations and combinations of the subject matter of the registrations. There was no graphic representation of the sign which met the requirements of clarity, precision and objectivity.[69]
[68]JW Spear & Son Ltdv Zynga Inc [2013] EWCA Civ 1175, [2014] 1 All ER 1093.
[69]At [32]. Those requirements had to be met to comply with art 2 of Directive 95/2008 of the European Parliament and of the Council of 22 October 2008 to approximate the laws of Member States relating to trade marks [2008] OJ L299/25.
The approach in the Cadbury decision was followed in a further decision of the Court of Appeal of England and Wales in Glaxo Wellcome UK Ltd v Sandoz Ltd (No 2).[70] In the course of his judgment Kitchin LJ (as he then was) explained:
[35] Secondly, the function of the graphic representation is, in particular, to define the sign so that the subject matter for which protection is sought or has been secured can be clearly and precisely identified by the competent authorities and the public. Moreover and importantly, in order to fulfil its role as a trade mark and meet the requirements of precision and clarity, the sign must always be perceived unambiguously and uniformly. In my judgment it follows that if the authorities and the public are left in a state of confusion as to the nature of the sign then these requirements will not be satisfied.
[36] The reasons for these requirements are plain to see. A mark must always be perceived unambiguously if it is to fulfil its function as an indication of origin. …
[70]Glaxo Wellcome UK Ltd v Sandoz Ltd (No 2), above n 21.
The thrust of EBL’s argument is that, in addition to the use of Pantone 376C as the background colour (which appears to have been the nature of the use relied upon to establish the requisite distinctiveness to secure registration), the Registration would also embrace all the various styles of decoration described at [80] above. In short, it would cover the use of Pantone 376C as the predominant colour “in every conceivable form”. That was the express form of explanation of the scope of the trade mark sought in Heidelberger Bauchemie GmbH, where the trade mark consisted of the applicant’s corporate colours (a rectangle with the upper part blue and the lower part yellow).[71]
[71]Case C-49/02 Heidelberger Bauchemie GmbH [2004] ECR I-6152 at [10].
Mr Arthur’s contention is that, even though it is most unlikely that Frucor would have used any of those other variants of colour application, and certainly not to such an extent as to cause people to perceive them all as trade mark use, the consequence of the vague description comprising the Registration (the colour swatch and the “predominant colour” formula) was that each and every such variant would be captured by the umbra of the trade mark. Use of any of them by another trader would constitute an infringement as an identical mark. The need to demonstrate confusing similarity would not arise.
To illustrate the umbra point, if upon the silver background of a beverage can there was applied either the Coca-Cola or Guinness names in Pantone 376C green and in sufficient size or repetition so as to cover 60 per cent of the surface of the can, such use would be within the umbra of TM 795206. Hence it would constitute an infringement, notwithstanding that it bore no similarity to Frucor’s background use of the colour and could not be confused with Frucor’s use.
Mr Brown did not shrink from supporting that proposition. He contended that if 60 per cent of a competitor’s energy beverage can is coloured in Pantone 376C green, whether in the form of stars or hearts or diamonds or clubs, that would be within the scope of the umbra and infringe. Indeed, save for what he described as the “carv[e] back” in the form of the written explanation required by IPONZ, the Registration would have covered any use of Pantone 376C green on the packaging “however many variations there were”.
His contention, that in New Zealand law a single sign may comprise many permutations, was based on two primary arguments: first, the definition of “sign” in the Act; secondly the different legislative regimes in the United Kingdom, Europe and New Zealand. So far as the former was concerned, he drew attention to the fact that the definition of “sign” in s 5(1) of the Act is an inclusive one.[72] After the list in (a) of brand, colour, device, heading, label, letter, name, numeral, shape, signature, smell, sound, taste, ticket, or word, he emphasised that (b) refers to “any combination of signs”. He construed that phrase as not merely permitting a sign comprised of multiple components but also a sign comprising many different permutations.
[72]See [6] above.
The use of the phrase “or any combination thereof” in the definition of “mark” dates back to at least the Trade Marks Act 1905 (UK) and the Patents, Designs, and Trade-marks Act 1911. That phrase is designed to accommodate a mark which combines more than one of the indicia listed in (a), such as the tab of contrasting colour on the rear pockets of jeans manufactured by the plaintiff in Levi Strauss.[73] We do not accept the proposition that the absence of that phrase in the Trade Marks Act 1994 (UK) or in the Directive resulted in a dramatic narrowing of the law in Europe, whereas by contrast New Zealand law permits a single registration that incorporates multiple signs. The only qualification is the statutory concept of series marks, which have long been recognised.[74]
[73]Levi Strauss & Co v Kimbyr Investments Ltd, above n 26, at 338.
[74]See the definition of “series of trade marks” in s 5(1) of the Trade Marks Act 2002.
Turning to the second justification, in the High Court Mr Brown distinguished the requirements for clarity and precision of trade marks in the European jurisprudence from the requirements in the 2002 Act, emphasising that the European decisions require a graphically represented sign to be “clear, precise, objective, durable, self‑contained, easily accessible and intelligible” in order to comply with art 2 of the Directive.[75] The Judge endorsed that proposition, stating that he did not accept that the “strict requirements” for the definition of a mark in the European jurisprudence was either necessary or appropriate in the context of the New Zealand Act.[76] Mr Brown renewed that submission in this Court, as reflected for example in the following contention:
Similarly Glaxo concerned an EU trade mark which, as the [Court of Appeal of England and Wales] noted, has the requirement in Art 4 [of Regulation 207/2009 of 26 February 2009 on the European Union trade mark] “as interpreted by the … CJEU … that the sign is capable of being represented on the register … in a clear and precise way which enable[s] the relevant authorities and the public to determine the precise subject matter of the protection….” Again this is not part of the New Zealand [Act].
(Footnote omitted and emphasis in original.)
[75]High Court judgment, above n 5, at [60]; and Directive 89/104 of 21 December 1988 to approximate the laws of the Member States relating to trade marks, above n 40.
[76]High Court judgment, above n 5, at [66].
We do not accept the distinction Mr Brown seeks to draw. As earlier noted,[77] it is essential for traders, whether in Europe or in New Zealand, to be able to identify “with clarity” the identity of a registered trade mark and hence the scope of the umbra, the penumbra, and what lies beyond the penumbra.[78] The emphasis in New Zealand on the requirement for clarity is manifest from the introduction of the adjective “clear” in reg 42(1)(b) of the 2003 Regulations, qualifying the word representation.[79] The economy of language in the New Zealand legislation, in contrast to the collection of criteria in the European jurisprudence (described by the Judge as “strict”), cannot sustain the proposition that there are gradations of clarity. A representation is either clear or it is not.
[77]At [64]–[65] above.
[78]Swizzels Matlow Ltd’s Application, above n 50, at 885.
[79]By contrast prior to the 2019 amendment s 32 of the Trade Marks Act 1994 (UK) referred to a “representation” simpliciter.
As Williams J observed in AA Insurance Ltd v AMI Insurance Ltd, unless a trade mark communicates the origin of a product in trade it will not be entitled to the monopoly advantages registration provides.[80] We endorse the Glaxo Wellcome proposition that a mark must always be perceived unambiguously if it is to fulfil its function as a trade mark.[81] If the authorities and the public are left in a state of uncertainty or confusion as to the nature of a sign, then it is insufficiently clear to be registered as a trade mark. In our view the Registration offends in that respect.[82] We also agree with the further point made by Kitchin LJ that trade marks of uncertain scope offend against the principle of fairness because the uncertainty as to the subject matter of the mark gives its owner an unfair competitive advantage.[83]
[80]AA Insurance Ltd v AMI Insurance Ltd [2012] 1 NZLR 837 (HC) at [1].
[81]See [93] above.
[82]Glaxo Wellcome UK Ltd v Sandoz Ltd (No 2), above n 21, at [35]–[36].
[83]At [80].
In 1909 Sir Herbert Cozens-Hardy MR said:[84]
Wealthy traders are habitually eager to enclose part of the great common of the English language and to exclude the general public of the present day and of the future from access to the enclosure.
The lexicon of English words is broad. However, as Mansfield J observed in Philmac Pty Ltd v Registrar of Trade Marks,[85] while in a scientific context the range of colours available to traders for application to goods is in fact infinite, in the context of trade mark law that is not the case.[86] The authors of the current edition of Kerly’s Law of Trade Marks and Trade Names suggest that most applicants for signs which simply comprise a block of one colour or a combination of colours “decline to specify just how vague their sign really is”.[87] They maintain it is important to understand what is being claimed. We agree. The argument on this appeal has highlighted such importance.
[84]Re an Application by Joseph Crosfield & Sons Ltd to Register a Trade Mark (“Perfection”) (1909) 26 RPC 837 (CA) at 854.
[85]Philmac Pty Ltd v Registrar of Trade Marks [2002] FCA 1551, (2002) 126 FCR 525 at 544–545.
[86]In Case C-104/01 Libertel Groep BV v Benelux-Merkenbureau [2003] ECR I-3793 at [54] the Court of Justice of the European Communities made the point that as regards the registration of colours as trade marks per se, not spatially delimited, the fact that the number of colours actually available is limited means that a small number of trade mark registrations for certain services or goods could exhaust the entire range of the colours available.
[87]James Mellor and others Kerly’s Law of Trade Marks and Trade Names (16th ed, Sweet & Maxwell, 2018) at [2-082].
Single colours are not, to employ the taxonomy of the 1953 Act, inherently distinctive. As the registration history for TM 795206 demonstrates, registration was only obtained by evidence of use.[88] Similarly, most of the other “predominant colour” trade mark registrations under the 2002 Act to which we were referred record the notation “section 18(2) of the Trade Marks Act 2002 applies”. It would be our expectation that the requisite distinctiveness would correspond to and reflect the actual use demonstrated and relied upon. If Mr Brown’s proposition was sound for TM 795206, then it would follow that all the other predominant colour trade mark registrations which were in the material before us would be similarly extensive in scope.
[88]Trade Marks Act 2002, s 18(2).
Traders wishing to monopolise colours should take pains to be clear and not be vague as to the boundaries of the registrations which they intend should preclude use by others of the full spectrum of colours. An obvious way to do so is to include in the application a representation of the spatial application of the claimed colour, a number of examples of which were in the materials placed before us.[89] While visual spatial representations have obvious advantages, it is possible to provide sufficient clarity with a verbal description, as demonstrated by TM 644331 in which a rectangle of two colours is accompanied by this description:
The mark consists of the colours blue (Pantone Reflex Blue C) and silver (Pantone 877C), as shown in the representation attached to the application, and as applied in combination and in relative proportions of 50% blue and 50% silver in diagonally or transversally extending stripes or lines, applied to the external surface of a drink container.
(Emphasis in original).
In consequence persons inspecting the register can readily appreciate the umbra of the trade mark and make informed decisions as to the likely penumbra.
[89]For example, TM 127422 comprised images of an inflatable boat with the description: “The trade mark consists of the predominantly yellow colour of the inflatable structure with trim in a contrasting darker colour as shown in the representation attached to the application”; TM 300376 included an illustration of a uniform with the description: “The mark consists of the colour medium brown as shown in the representation attached to the application, being the predominant colour applied to the visible surface of uniforms worn by staff in the performance of the services”; and TM 00375 comprised illustrations of vans with the description: “The mark consists of the colour brown (Pantone 462c) as shown in the representation attached to the application, being the predominant colour applied to the visible surface of vehicles used in the performance of the services”.
For these reasons, had we reached a different conclusion on Issue 1, we would have ruled that the Registration was invalid both because in its use of “predominant” it is insufficiently clear and because in its terms it extends to cover multiple signs.
Issue 3: Did the Judge err in holding that the Registration should be interpreted as being defined by the written description of the colour on the register, namely Pantone 376C?
Before considering the second attack on the validity of the trade mark we consider it is first logical to determine the true construction of the trade mark. In practical terms that is what occurred in the decisions below. Although the Assistant Commissioner’s decisions were issued on the same day, the revocation decision[90] bears the earlier number and is referred to in the invalidity decision.[91] Likewise the Judge deferred the second invalidity ground until his consideration of the revocation appeal.[92]
[90]Revocation decision, above n 4.
[91]Invalidity decision, above n 4, at [58].
[92]High Court judgment, above n 5, at [74].
Mr Arthur emphasised that the register is a public register of registered trade marks searchable by any person[93] and that its interpretation should be from the perspective of a member of the public, including trade competitors. He framed the question: how would the public interpret the Registration, which comprises a representation of a dark green colour with a written description that “[t]he mark consists of the colour green (Pantone 376c) as shown in the representation attached to the application”?
[93]Trade Marks Act 2002, ss 181–184; and Trade Marks Regulations 2003, reg 129.
Mr Arthur submitted that contrary to both the UK and Australian approaches the Judge interpreted the trade mark registration solely by reference to the written description,[94] adopting what he considered was the approach in Levi Strauss. Mr Arthur noted however that Levi Strauss held that, because the written description commenced with the words “the mark consists of” and the visual representation was wholly inadequate on its own to define precisely what the Commissioner had agreed to as the scope of the trade mark, the words governed the delineation of the trade mark.[95] He observed that Williams J did not say that the visual representation was irrelevant in defining the trade mark, just that it did not alone delineate the boundaries of the trade mark.
[94]High Court judgment, above n 5, at [91].
[95]Levi Strauss & Co v Kimbyr Investments Ltd, above n 26, at 352.
Mr Arthur submitted that if Levi Strauss was to be interpreted as authority for the proposition that when a written description uses the words “the mark consists of” then the visual representation becomes irrelevant, it should not be followed. There is nothing in the Act to give primacy to the written description. As he said:
It would be surprising if the law did not accord significant status to the visual representation. The [2003] Regulations require a representation. The trade mark owner having chosen to file a visual representation, and the Commissioner having included a visual representation on the register, it would be unlikely that the visual representation would be irrelevant in interpreting the [R]egistration. That is especially so when the mark is for a colour and there is no statutory requirement for the description even to appear on the register.
Mr Arthur submitted it is difficult to perceive why the public would explore beyond the representation on the register and there is nothing on the register to suggest any inconsistency which would lead them to do so. The public has no reason to check whether the colour of the representation is in fact Pantone 376C. Even if they did check they would then be left with the uncertainty of whether the registration is for the colour shown or for Pantone 376C. There would be no reason for them to elevate Pantone 376C above the representation.
In the present case two sources were provided as a means of identification of the colour the subject of the application, namely the colour swatch physically attached to the paper application form and the Pantone code. We recognise the force of Mr Arthur’s point that it would not be possible now for a member of the public to seek out the colour swatch because, as the Assistant Commissioner recorded,[96] the original paper files were not retained following the introduction of IPONZ’s online system and the digitisation of its records. That is certainly unfortunate, and in our view inappropriate, given the number of accepted applications which, with IPONZ sponsorship or endorsement, refer to a representation “attached to an application”.
[96]Revocation decision, above n 4, at [53].
If there was no entry on the register of a verbal colour description by reference to a code, then Mr Arthur’s argument might gain traction. However reg 44(g) of the 2003 Regulations ensures that if the trade mark is a colour or colours the applicant is to provide a description acceptable to the Commissioner. The reason for that requirement is to ensure certainty and consistency in the identification of the relevant colour. Such a description is not susceptible to deterioration, fading or erroneous transposition. In our view it is the form of identification of the relevant colour which should prevail in the event that there is any inconsistency on the face of the register. Indeed given the requirement in reg 44(g) we incline to the view that it is not now necessary to include a colour swatch as an element of the representation.
In response to EBL’s submission that there is no statutory requirement for the description to actually appear in the register, Mr Brown argued that s 182(g) of the Act requires inclusion on the register of “any other prescribed matters relating to registered trade marks”. He contended that reg 129 of the 2003 Regulations is not exhaustive as to “other prescribed matters”. Because reg 44(g) specifically requires that the applicant must supply the description of the colour in the trade mark before the application can be “accepted”, it is a prescribed matter. We agree with that submission. It would make no sense for a description of the colour to be specifically required by regulation as a fixed point of reference and then not to be treated as a prescribed matter for the register.
Mr Arthur submitted that EBL’s approach was consistent with that followed in the Australian case of Frucor Beverages Ltd v Coca-Cola Company,[97] citing the following passage of Yates J:[98]
A person inspecting the Register is entitled to act on the assumption that the trade mark applicant’s own depiction of colour in the representation accompanying the applications is accurate.
However, as that passage indicates, the difficulty in the Australian case was that the wrong colour was shown on the swatch accompanying the application and hence the applicant’s description of the trade mark was inherently inconsistent. That decision does not assist in relation to the proper construction of the trade mark in the present case, where the colour swatch accompanying Frucor’s application in fact depicted Pantone 376C.
[97]Frucor Beverages Ltd v Coca-Cola Company, above n 21.
[98]At [122].
For these reasons, the attack on the conclusions of the Assistant Commissioner and the Judge concerning the interpretation of the Registration fails. It follows that EBL’s non-use challenge cannot succeed.
Issue 4: Does the difference between the darker shade of green in the image on the register and the written description Pantone 376C mean the Registration is ambiguous and too imprecise?
The determination on this question is provided by our answer to Issue 3. Undoubtedly the colour image for TM 795206 on the register is different from the nominated Pantone code. However that ambiguity is resolved in favour of the Pantone code because the description of the colour required by reg 44(g) must prevail. Hence properly understood the Registration would not be ambiguous and not susceptible to an invalidity challenge on that ground.
Result
The appeal is dismissed.
The appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements. We certify for second counsel.
Solicitors:
Simpson Grierson, Auckland for Appellant
Bell Gully, Auckland for Respondent
2
2
0