Fredco Trading Ltd v Miller - [2006] NZCA 151

IN THE COURT OF APPEAL OF NEW ZEALAND
CA20/05
BETWEENFREDCO TRADING LIMITED

Appellant

ANDROBERT PETER MILLER

Respondent

Hearing:14 February 2006

Court:Glazebrook, Robertson and Ellen France JJ
Counsel:A E McDonald for Appellant

I Finch and M C Hayes for Respondent

Judgment:3 July 2006

JUDGMENT OF THE COURT

A THE APPEAL IS DISMISSED.
B Costs of $6,000 plus usual disbursements are awarded to the respondent.
REASONS OF THE COURT
(Given by Ellen France J)
Table of Contents

Para No
Introduction  [1]
The factual background  [3]
Statutory scheme  [10]
The High Court judgment  [23]
The issues  [32]
Can a functional mark be a trade mark?  [33]
Can the goods be the mark?  [39]
Distinctive character acquired by use?  [43]

(i)    The arguments  [43]
(ii)   Onus of proof  [45]
         (iii) Evidence on use  [48]
         (iv) Analysis of the evidence  [55]
Consideration of irrelevant factors?  [66]
(i)    Scale of use  [67]
(ii)   Availability of alternative shapes  [76]

Was the Klipon a “limping mark”?  [79]
Result and costs  [83]
Introduction
[1] By judgment of 16 December 2004, now reported at (2004) 65 IPR 653, Venning J dismissed an application made under s 73 of the Trade Marks Act 2002 to have registration of the appellant’s “Klipon” plastic vine tie declared invalid. Fredco Trading Limited (Fredco) appeals against that decision.
[2]       The appeal raises issues about the application of s 18 of the Trade Marks Act. Section 18 provides that non-distinctive trade marks are not registrable but recognises that trade marks may acquire a distinctive character through use. In particular, the focus is on whether the vine tie could and has acquired a distinctive character by use.
The factual background
[3]       The respondent (or its business predecessors) began selling the Klipon vine tie, a plastic tie used for tying kiwifruit vines to support wires, in early 1980. Over one billion units have been sold since then. The tie is shown in the representation below.
[4]       Until the appellant’s vine tie came on the market, the only other product on the New Zealand market performing a similar function was a vine tie manufactured by Illinois Tool Works Incorporated (ITW). The ITW vine tie looks different from the Klipon but the appellant’s vine tie is virtually identical in shape and configuration.
[5]       When the appellant started selling its ties in June 2002, the respondent filed an application for trade mark registration for the Klipon vine tie.
[6]       The Intellectual Property Office of New Zealand (IPONZ) initially queried whether the mark was distinctive. The respondent provided further evidence on that and, on 7 August 2003, the application was accepted. The trade mark was registered with effect from 25 July 2002.
[7]
     The trade mark was registered as:
[8]       Apart from the registered trade mark, all other registered intellectual property rights relating to the Klipon vine tie have expired. A registered design expired in 1995 and a registered patent in 1999.
[9]       The respondent commenced proceedings against the appellant in August 2002 for passing off, breach of the Fair Trading…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2006] NZCA 151
Decision Date: 3 July 2006

CaseChat Overview and Summary

Fredco Trading Limited (Fredco) appealed against a decision of Venning J, reported at [2004] 65 IPR 653, which dismissed an application made under s 73 of the Trade Marks Act 2002 to have registration of the appellant’s “Klipon” plastic vine tie declared invalid. The appeal raised issues about the application of s 18 of the Trade Marks Act. Section 18 provides that non-distinctive trade marks are not registrable but recognises that trade marks may acquire a distinctive character through use. In particular, the focus was on whether the vine tie could and has acquired a distinctive character by use. The Court found that the Klipon vine tie had acquired a distinctive character by use sufficient to support its registration under s 18(2). The Court found that the mark was being used as a “badge of origin” and there was no error in considering the scale of use as a factor. The Court also found that the Klipon was not a “limping mark” because the market used the shape of the vine ties to relate the ties back to the Klipon brand, rather than the reverse. The Court dismissed the appeal and awarded costs of $6,000 to the respondent together with usual disbursements.

Orders