Freightways Express Limited v Palletline (NZ) Limited
[2015] NZHC 740
•17 April 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2014-404-2010 [2015] NZHC 740
BETWEEN FREIGHTWAYS EXPRESS LIMITED
Plaintiff
AND
PALLETLINE (NZ) LIMITED
Defendant
Hearing: 24 November 2014 (Final submission 1 December 2014) Counsel:
K Scott for Plaintiff
No appearance for DefendantJudgment:
17 April 2015
JUDGMENT OF KATZ J
This judgment was delivered by me on 17 April 2015 at 1:00pm
Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Solicitors: Buddle Findlay, Auckland
FREIGHTWAYS EXPRESS LIMITED v PALLETLINE (NZ) LIMITED [2015] NZHC 740 [17 April 2015]
Introduction
[1] The plaintiff, Freightways Express Limited (“Freightways”) seeks judgment by way of formal proof in respect of its claim against Palletline (NZ) Limited (“Palletline”) for trade mark infringement, under ss 10 and 89 of the Trade Marks Act 2002 (“Act”).
[2] Mark Trougher, a Freightways Company Manager, has sworn an affidavit in support of Freightways’ claim. He deposes that Freightways provides, amongst other things, express package services. It owns a number of registered trade marks, including in particular trademark 764991 for the word mark PARCELINE EXPRESS in classes 16, 35 and 39. It also owns trade mark 182381 for the combined mark “Parceline Express” in class 38; trade mark 182382 for the combined mark “Parceline Express” in class 39; trade mark 764993 for the combined mark “PARCELINE EXPRESS LTD” in classes 16, 35 and 39.
[3] Palletline (NZ) Limited provides, amongst other things, transport, distribution and warehousing services, and parcel delivery services. Freightways’ evidence is that since at least May 2014, Palletline and/or its associated companies have been advertising, promoting and providing to the public a parcel courier service using the sign “PARCEL LINE”. In particular, Palletline has been using the “PARCEL LINE” sign on its website.
[4] Between May and October 2014, Freightways’ solicitors and Palletline corresponded regarding Palletline’s use of the sign “PARCEL LINE”. Palletine twice advised that it would remove the words “PARCEL LINE” from its website. It did not do so. Freightways therefore commenced these proceedings against Palletline. Palletline has taken no steps to defend the proceedings and Freightways accordingly seeks judgment by way of formal proof.
Claim against Palletline: Infringement of Parceline Marks
[5] Freightways claims that Palletline’s use of the words “PARCEL LINE” on its website is an infringement of Freightways’ registered trade marks and its rights in relation to those marks. In particular, Freightways considers that Palletline’s use of
“PARCEL LINE” breaches both ss 10 and 89 of the Act. Pursuant to s 101 of the Act, Freightways seeks relief for such infringement, including permanent injunctive relief.1
Infringement of s 89 of the Act
[6] Freightways submissions focused on s 89 of the Act which provides:2
89Infringement where identical or similar sign used in course of trade
(1) A person infringes a registered trade mark if the person does not have the right to use the registered trade mark and uses in the course of trade a sign –
(a) identical with the registered trade mark in relation to any goods or services in respect of which the trade mark is registered; or
(b) identical with the registered trade mark in relation to any goods or services that are similar to any goods or services in respect of which the trade mark is registered, if that use would be likely to deceive or confuse; or
(c) similar to the registered trade mark in relation to any goods or services that are identical with or similar to any goods or services in respect of which the trade mark is [registered,] if that use would be likely to deceive or confuse
…
(2) Subsection (1) applies only if the sign is used in such a manner as to render the use of the sign as likely to be taken as being use as a trade mark.
[7] Freightways submitted that s 89 has been breached by Palletline because:
(a) Palletline used the “Parcel Line” sign in the course of trade (s 89(1));
(b) Palletine used the “Parcel Line” sign in such a manner as to render the
use of the sign as likely to be taken as being use as a trademark
(s 89(2); and
1 Section 106, Trade Marks Act 2002.
2 There is an overlap between s 10 and s 89(1) of the Act (both of which deal with use of infringing identical marks).
(c) The sign “Parcel Line” is either:
(i)similar to Freightways registered trademarks, in relation to services that are identical with or similar to services in respect of which Freightways trade marks are registered, in circumstances that would be to deceive or confuse (s 89(1)(c)); or
(ii)identical with Freightways registered trade mark in relation to goods or services in respect of which Freightways trade marks are registered (s 89(1)(a)).
[8] I will consider each issue in turn.
Has Palletline used the sign “Parcel Line” in the course of trade?
[9] “In the course of trade” is not defined in the Act, but has been said to be concerned with the purposes of trade (rather than necessarily “in trade”).3 The word “trade” historically has been said to have a wide meaning and held to cover all manner of trading in goods (or services) to which the mark applies, including: selling, hire purchase, leasing, exporting and any other commercial transaction.4
[10] Palletline has clearly used the sign PARCEL LINE in the course of trade or for the purposes of trade, as it is using it in relation to a commercial service offered to customers in exchange for payment.
Has Palletine used the “Parcel Line” sign in such a manner as to render the use
of the sign as likely to be taken as being use as a trademark?
[11] The requirement of “likely to be taken as use as a trade mark” requires that the infringing sign must be used in such a way that it will be taken by consumers as being use as a trade mark. Use as a trade mark contrasts with use in a descriptive or
non-trade mark sense, which will not constitute infringement.5
3 WD and HO Wills (Aust) Ltd v Rothmans Ltd [1956] 94 CLR 182 at 191.
4 Aristoc Ltd v Rysta Ltd [1945] AC 68 (HL) at 101.
5 Inter City Group (NZ) Ltd v Nakedbus Ltd [2014] NZHC 124, [2014] 3 NZLR 177 at [157]- [158]. See also Nature’s Blend Pty Ltd v Nestle Australia Ltd [2010] FCA 198, upheld on appeal in Nature’s Blend Pty Ltd v Nestle Australia Ltd [2010] FCAFC 117.
[12] Mr Troughear’s affidavit annexes screenshots of Palletline’s website. Based on my review of those screenshots I am satisfied that Palletline is using the sign “PARCEL LINE” in a manner that will be taken by consumers as being a trade mark and not a descriptive term. The words are presented in the manner of a trade mark, rather than as a descriptive term. Among other things, the words are in the same font and style as the main PALLET LINE mark, as well as the CONTAINER LINE and LOGISTICS LINE marks which appear alongside the PARCEL LINE mark on the website.
[13] I accept Freightways’ submission that all of these words are presented in a way that distinguishes them from the surrounding text and indicates to consumers that they have a special quality, namely, as “badges of origin”. In the case of PARCEL LINE, the words are presented as a “badge of origin” for Palletline’s parcel delivery division, in a manner that will likely be taken by consumers as being a trade mark rather than a descriptive term.
Section 89(1)(c) - Similar signs, same or similar services and likely to deceive or confuse?
[14] Freightways submitted that s 89(1)(c) applies because the sign “Parcel Line”:
(a) is similar to Freightways registered trademarks; and
(b)is used in relation to services that are identical with or similar to services in respect of which Freightways’ trade marks are registered; and
(c) is used in circumstances that would be likely to deceive or confuse. [15] I will consider each issue in turn.
Is the sign “PARCEL LINE” similar to any or all of Freightways registered
PARCELINE trade marks?
[16] Dealing with the first element, whether the PARCEL LINE sign is similar to any of the PARCELINE trade marks, there is no absolute standard for the
resemblance necessary to give rise to a finding of similarity. Whether there is the necessary resemblance is an issue of fact.
[17] The key differentiating factor is that Freightways’ trade marks each include an additional word – “EXPRESS.” Does the fact that Palletline’s sign does not include that word, and is only similar to the first word in Freightways trade marks, mean that the two marks, when considered overall, are not similar?
[18] Freightways submitted that the PARCEL LINE sign used by Palletline does not differ in material particulars from its PARCELINE trade marks, particularly registered trade mark 764991 for the word mark PARCELINE EXPRESS. It submitted that Palletline is using an almost identical word to the first, and most distinctive, word in its trade mark, “PARCELINE,” with the second word “EXPRESS” simply removed. The word “EXPRESS”, however, does not distinguish the services offered by the parties. Rather, “EXPRESS” is a common descriptive term used to describe delivery services and the like as being ‘prompt’ or
‘swift’, as compared to being by standard delivery. Counsel for Freightways illustrated this with reference to an IPONZ extract that shows that in class 39 (transport services), there are 83 trade marks currently accepted or registered which include the word EXPRESS in them.
[19] There is no doubt that the sign “PARCEL LINE” is highly similar to the word “PARCELINE.” Visually, the key difference between the two words/phrases is that Palletline’s sign breaks the word “PARCELINE” into two, to read “PARCEL LINE”. I accept, however, that this does not significantly undermine the similarity of the words, which look very similar and are aurally identical. In New Zealand Breweries Ltd v Heineke’s Bier Browerij Maatschappij NV the High Court confirmed that
confusion to the ear is as important a factor as confusion to the eye.6
[20] In Inter City Group (NZ) Ltd v Nakedbus NZ Ltd, the High Court held that
“inter city” was identical to “INTERCITY”.7 The Court reasoned that on a side-by- side visual assessment, a careful consumer would notice the presence of a gap in
6 New Zealand Breweries Ltd v Heinekin’s Bier Browerij Maatschappij NV [1964] NZLR 115 (CA) at 121-122. See also the decision of the House of Lords Aristoc Ltd v Rysta Ltd, above n 4.
7 Above n 5.
“inter city”. However, a notional consumer, relying on overall impression would not notice the difference, taking into account the imperfections of memory. Accordingly, the gap was insignificant and the marks in that case (neither of which included an additional word, as in this case) were identical.8
[21] In that case, the Court considered that “similar” must be given the meaning of “having a close resemblance”.9 The Court held that if it was wrong in finding that “inter city” and “INTERCITY” were identical, then these marks could be fairly described as “substantially identical” (and, therefore, similar) as the same letters were used, the descriptive meanings of the words were the same and the words sounded the same.10
[22] Accordingly, if Freightways had a registered word mark for the single word “PARCELINE” there could be no serious argument that Palletline’s “PARCEL LINE” sign was not similar. Indeed it would probably meet the threshold of being identical, which the case law has determined means “substantially identical”.
[23] The key issue therefore is whether exclusion of the word “EXPRESS” from the Palletline sign means that its sign is not similar to Freightways’ “PARCEL LINE EXPRESS” trade marks.
[24] In Re Kingsway (Wanganui) Ltd, the High Court refused an application by a company to change its name to “British New Zealand Motors Limited”.11 The application was opposed by a company named “British Motors Limited”. The court upheld the opposition on the basis that as the names were so similar, there was bound to be confusion where the two companies were carrying on such similar businesses. The court observed that “there is always a tendency amongst the public to shorten a long company name. This tendency is bound to increase the probability of
confusion”.12
8 At [182]-[184].
9 At [187].
10 At [185]-[189].
11 Re Kingsway (Wanganui Ltd) [1931] GLR 16.
12 Above n 11, at 16.
[25] In Re Application by Coles Myer Ltd, a decision of IP Australia (the Australian Government agency that administers intellectual property rights and legislation in that jurisdiction) the determining officer refused an application for registration of the sign “BRATS” because it was deceptively similar to the prior registered mark “BONZA BRATS”.13 The officer considered that the word “BRATS” was the more distinctive and unusual part of the mark. Further, the word “BONZA”, being a colloquialism of which most Australians would be aware, was used a qualifier of the word “brats” in a purely adjectival sense.
[26] Counsel also referred to several decisions of the European General Court in which that Court has held that a one-word sign is an infringement of a registered multi-word mark because it is either identical or similar.
[27] In Micrus Endovascular v Office for Harmonisation in the Internal Market, the Court noted that it is well-settled case law that two marks are similar when, from the point of view of the relevant public, they are at least partially identical as regards one or more relevant aspects.14
[28] In Scandic Distilleries SA v Office for Harmonisations in the Internal Market,15 the defendant’s trade mark “BÜRGER” (both a word mark and device mark) was held to be similar to, and likely to be confused with, the earlier registered mark BÜRGERBRÄU (a word mark). The court confirmed that the global assessment of the visual, phonetic or conceptual similarity of the signs “must be based on the overall impression given by the signs, account being taken in particular of their distinctive and dominant components”.16 The assessment of similarity can only be carried out solely on the basis of the dominant element if all other components are negligible and the dominant component is capable alone of
dominating the image of that mark which members of the relevant public keep in
13 Re Application by Coles Myer Ltd (1993) 26 IPR 577.
14 Case T-218/12 Micrus Endovascular v Office for Harmonisation in the Internal Market (Trade
Marks and Designs) (GCE 10 September 2014) at [72].
15 Case T 460/11 Scandic Distilleries v Office for Harmonisations in the Internal Market (GCE 18
September 2012).
their minds.17 The court also observed that consumers normally attach more importance to the first part of words.18
[29] In Argo Group International Holdings Ltd v Office for Harmonisation in the Internal Market,19 the court held that the defendant’s device trade mark “ARIS” was similar to, and likely to be confused with, the earlier device mark “ARISA ASSURANCES”. The court considered, in relation to the visual, aural or conceptual similarity of the signs at issue, its assessment must be based on:20
…the overall impression given by those signs, account being taken, in particular, of their distinctive and dominant components. The perception of the marks by the average consumer of the goods or services in question plays a decisive role in the global assessment of the likelihood of confusion. In that regard the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details.
[30] All three of these decisions relied on Article 8(1)(b) of the Council Regulation (EC) No 207/2009. They each are judgments of the General Court that have been appealed from a Board of Appeal decision. Judgments of the General Court are subject to a right to appeal to the Court of Justice of the European Union on points of law. As to the authoritativeness of European Union (“EU”) decisions in New Zealand, counsel referred to the IPONZ Practice Guidelines, which state:
There are many references in these Guidelines to UK and European Community cases that have considered questions arising from wording that is the same as, or similar to, that used in our Act.
[31] Although, obviously, I am not bound by EU decisions, I find the analysis in the cases referred to helpful by way of analogy.
[32] I am satisfied, on the basis of my review of the screenshots of Palletline’s website, that the PARCEL LINE sign is similar to Freightways’ PARCELINE trade marks, including in particular the word mark PARCELINE EXPRESS. However the
word “Parceline” is used (even if it is split into two words) the meanings of the
17 At [34].
18 At [40].
19 Case T-247/12 Argo Group International Holdings Ltd v Office for Harmonisation in the
Internal Market. Note that this case is currently under appeal.
words “PARCEL LINE and “PARCELINE” are the same and the words sound the same.
[33] The phrase “PARCEL LINE” is the dominant component of the relevant trademarks, identifying the specific nature of the services offered. The additional word “EXPRESS” is largely descriptive, suggesting that the underlying services will be provided speedily. The fact that the additional word “EXPRESS” is not used in Palletline’s sign is not sufficient, in my view, to justify a conclusion that the two marks are not similar. I am accordingly satisfied that the similarity requirement is met.
Is the sign “Parcel Line” used in relation to services that are identical with or
similar to services in respect of which Freightways operates?
[34] This requires a comparison of Palletline’s services with those registered by
Freightways.
[35] The PARCELINE trade marks (including the PARCELINE word mark) are registered in respect of the following goods and services in New Zealand, amongst others:
(a) Class 16: printed matter, publications and promotional materials;
(b)Class 35: wholesaling and retailing of goods for use in the packaging, collection, transportation, storage and delivery of letters, parcels, freight and publications and promotional materials;
(c) Class 38: communication services relating to the delivery, and arranging for the delivery, of messages and associated matters; and
(d)Class 39: packaging, collection, transportation and delivery of letters, parcels, freight and other goods, including courier services, logistics services (including track and trace services), and other related services in this class.
[36] The infringing mark need not be used in respect of all of the services in respect of which Freightways’ PARCELINE trade marks are registered; use in respect of one service is sufficient to constitute infringement.
[37] It is evident from the screenshot of the PARCEL LINE section of Palletline’s website, Palletline is using the PARCEL LINE sign in respect of parcel delivery services. These services are the same as, at least, “transportation of parcels” and “delivery of parcels”, both being services in respect of which the PARCELINE trade marks are registered.
Is the sign “Parcel Line” used in circumstances that would be likely to deceive or
confuse?
[38] The third element is whether use of the PARCEL LINE sign by Palletline is likely to deceive or confuse relative to the PARCELINE trade marks (especially the PARCELINE word mark).
[39] Not all persons in the relevant market must be likely to be deceived or confused. Rather, a significant or considerable section of the market must be confused.21 As to the confusion that is required, it has been held that test is whether there is a risk that the relevant public might believe that the services came from the same source.22 That is, in this case, whether there is a risk that the public may believe there is a business connection between the services offered under the PARCEL LINE sign and any of the PARCELINE trade marks.
[40] In Pianotist Co’s Ltd Appn the Court set out the following relevant factors:23
(a) the two words must be taken and are judged both by their look and by their sound;
(b)the goods to which the marks are applied and the nature and kind of customer who is likely to buy those services must be considered; and
21 InterCity Group (NZ) Ltd v Nakedbus Ltd, above n 5, at [191].
22 Thomson Holidays Ltd v Norwegian Cruise Lines Ltd (2003) RPC 568.
23 Pianotist Co’s Ltd Appn (1906) 23 RPC 774.
(c) all the surrounding circumstances must be considered and also what is likely to happen if each of the marks is used in a normal way as a trade mark for the goods or services of the respective owners.
[41] This approach has been applied in New Zealand in a number of cases.24 The
New Zealand Courts have developed a number of tests that may be applied:25
(a) the marks must be compared as a whole – the totality of impression of the two marks is of fundamental importance as the relevant consumer will not analyse the marks in minute detail, but will be left with a general impression;
(b) the overall “idea” of the marks must be considered;
(c) the consumer’s “imperfect recollection” is key. Side by side comparison is not appropriate. Rather, it must be remembered that consumers rarely have a chance to make a direct comparison between the marks and must place their trust in the imperfect picture of them they have kept in their mind;
(d) the look and sound of the respective marks are both important; and
(e) the type of mark must be considered.
[42] I am satisfied that Palletline’s use of the PARCEL LINE trade mark for parcel delivery services is likely to deceive or confuse, in that there is at the very least a risk that consumers of parcel delivery services might believe that Palletline’s PARCEL LINE services have a business connection with the services for which the PARCELINE trade marks (especially the PARCELINE word mark) are registered for
the reasons I outline below.
24 See for example New Zealand Breweries v Heineken, above n 6 and VB Distributors v
Matsushita Electric Industrial Co (1999) 9 TCLR 349 (HC).
25 Paul Sumpter Trade Marks in Practice (2nd ed, LexisNexis NZ, Wellington, 2011) at 80-85.
[43] The PARCEL LINE sign looks very similar and sounds identical to the distinctive portion of the PARCELINE trade marks. It differs from them only by virtue of not including the descriptive word ‘EXPRESS’. The general impression given by the marks when compared as a whole indicates a risk of confusion as to the existence of a business connection. The risk that consumers might believe there is a business connection is highest on an imperfect recollection.
[44] The general impression is of two similar marks, the first of which
(the PARCEL LINE sign) does not include the word ‘EXPRESS’. The word
‘express’ is a common descriptor in the parcel delivery market and the absence of such a word is not likely to mitigate any confusion. In the event the lack of the word
‘express’ is noted by a consumer, there is a risk that the person will believe the marks relate to the same business and that the PARCEL LINE sign refers to the standard service offered by the business as opposed to the express service.
[45] Palletline’s services are the same as and similar to the services for which the PARCELINE trade marks are registered and the category of customers who purchase Palletline’s services are the same as those who purchase Freightways’ services. Those customers include members of the public and all other people who are in the market for parcel delivery services, courier services and the like.
[46] Both Freightways and Palletline use online channels to promote and sell their services. Confusion may arise when consumers use online search engines to find out more about the ‘parcel line’ business, as they recall it. Many search engines will exacerbate the issue by imposing their own spelling on any enquiry for ‘parceline’ or
‘parcel line’.
[47] The stylisation used for the PARCEL LINE sign is conceptually similar to the stylisation used for some of the PARCELINE trade marks and may call them to mind, especially on an imperfect recollection. The PARCELINE word mark is registered in block letters and the registered right extends to stylised forms of the mark.
[48] For all of these reasons I am satisfied that the PARCEL LINE sign is being used by Palletline in circumstances that would be likely to deceive or confuse.
[49] All of the constituent elements of trade mark infringement under s 89(1)(c) have accordingly been made out. It is therefore unnecessary for me to consider Freightways’ alternative argument, which is that s 89(1)(a) has been breached. I note for completeness, however, that I although I have found the “PARCEL LINE” sign to be similar to Freightways’ “PARCELINE EXPRESS” word mark (a requirement of s
89(1)(c)), I have serious reservations as to whether it could properly be described as identical (a requirement of 89(1)(a)).
Result
[50] Freightways is granted a permanent injunction restraining Palletline from using the trade mark PARCEL LINE in relation to the goods and services specified in Freightways’ registered trade mark 764991 and similar goods and services. I also order the deletion, removal or obliteration of the trade mark PARCEL LINE from all advertising, promotional material and Palletline’s website in respect of the goods and services specified in Freightways’ registered trade mark 764991 and similar goods and services.
[51] Freightways is entitled to costs on a 2B scale basis, with disbursements to be fixed by the Registrar (if necessary).
Katz J
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