Frucor Suntory New Zealand Limited v Energy Beverages LLC
[2023] NZHC 2032
•1 August 2023
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2020-485-656
[2023] NZHC 2032
UNDER the Trade Marks Act 2002 IN THE MATTER OF
an application for rectification of the Register of Trade Marks
BETWEEN
FRUCOR SUNTORY NEW ZEALAND LIMITED
Applicant
AND
ENERGY BEVERAGES LLC
Intervenor
Hearing: 28 June 2023 Appearances:
A Brown KC and S Aymeric for the Applicant
G F Arthur KC and A N Birkinshaw for the Intervenor
Judgment:
1 August 2023
JUDGMENT OF GRICE J
This judgment was delivered by me on 1 August 2023 at 5.15 pm pursuant to R 11.5 of the High Court Rules
…………………..
Registrar/Deputy Registrar
FRUCOR SUNTORY NEW ZEALAND LIMITED v ENERGY BEVERAGES LLC [2023] NZHC 2032
[1 August 2023]
Introduction
[1] The applicant (Frucor) applies under s 76 of the Trade Marks Act 2002 (the Act) to rectify an error in the trade marks register (the Register) concerning the registration of the trade mark for its energy drink product known as “V”.1 The intervenor (EBL) is a rival in the market with an energy drink branded “MOTHER”.2
[2] The error pointed to by the applicant is that the shade of the colour green which the Commissioner of Trade Marks (the Commissioner) uploaded to the Register did not match the shade of green depicted in Frucor’s trade mark application due to technical problems uploading the application to the website during the digitisation of the Register by the responsible department, the Intellectual Property Office of New Zealand (IPONZ). The Register only exists now in digital form and the website is searchable by members of the public.
[3] The green colour on the Frucor application for registration approximately matched a shade of green known as Pantone 376C. All parties agree that the scanned version which the Commissioner put on the Register does not match the colour in the application. It is not the colour closely resembling Pantone 376C which had been the colour in the original green metal swatch (the green swatch) in the trade mark representation on the application, and which is the colour which Frucor had been using on its “V” energy drink branding pursuant to its trade mark.
[4] It is also common ground that it was the Commissioner’s error that led to the wrong colour being depicted in the registered trade mark on the website.3 This occurred because of the faulty colour reproduction due to the technical process of uploading to the Register the green swatch on the application. The colour depicted on the website as the colour in the registered trade mark is dark green, compared to Pantone 376C, which is a lighter green. The dark green depiction remains on the
1 Registered as TM 795206.
2 Frucor Sentory New Zealand Ltd v Energy Beverages LLC [2020] NZIPOTM 5 [the three-year use decision] at [1].
3 At [53]. This decision is dated 11 May 2020. The hearing was held on 21 November 2019. The parties were unable to agree on when the error was first detected by Frucor. However, it would have been at the latest around June 2017, when EBL first received a letter for the lawyers acting for Frucor alleging EBL was passing off and infringing its trade mark registration for Pantone 376C. Little turns on the date.
Register to this day, despite the fact that the colour actually used on the “V” energy drink branding is the lighter shade similar to Pantone 376C.
[5] In simple terms, the trade mark registration process under the Act allows for the application for a trade mark to be made and then for a process during which the application is tested to ensure it meets the requirements of the Act, in particular as to how it is described and that there is evidence of usage by the applicant. If the requirements are met, it is then accepted for registration.4 Once an application is accepted for registration, the registration then is deemed to date back to the date of the application.5 In this case, Frucor made the application in 2008 and it was registered in 2012. By the time the application was registered, the description of the trade mark described the green in the trade mark as Pantone 376C.
[6] The error in colour on the website became apparent as a result of applications made by EBL in 2017 to have the registered trade mark declared invalid.
[7] The application for rectification was made in 2020, but was stayed by the court at the request of the parties pending the outcome of an appeal to the High Court and then the Court of Appeal against a determination by the Assistant Commissioner of Trade Marks dismissing applications by EBL for declarations of invalidity of the trade mark.6
[8] The grounds for the declarations of invalidity sought by EBL were firstly that the trade mark was contrary to law on the basis that it was not a “trade mark” within the definition of s 5 of the Act, specifically because the registration was merely for the use of a “predominant” colour known as Pantone 376C and therefore was not a sign capable of definition, as the use of the word “predominant” opened the door to a multitude of different visual forms which were not properly specified. The second ground was that the registration was contrary to the law of equity, namely that the representation of the colour that was described as Pantone 376C on the Register was
4 Trade Marks Act 2002, s 40.
5 Section 5 definition of “deemed date of registration”.
6 Frucor Suntory New Zealand Ltd v Energy Beverages LLC [2020] NZIPOTM 6 [Assistant Commissioner’s decision as to validity]; and Re Frucor Suntory New Zealand Ltd HC Te Whanganui-a-Tara | Wellington CIV-2020-485-656, 18 Pēpuere | February 2021 (minute of Cooke J).
not in fact Pantone 376C, and that the trade mark lacked “specificity, clarity and precision of visual appearance”, which was said to offend the principle of fairness by giving the owner an unfair competitive advantage and disadvantaging its competitors “who may and do legitimately desire, in the ordinary course of trade, to apply Pantone 376C not as a predominant colour to their goods their packaging or their labels.”7
[9] The Assistant Commissioner commented that EBL’s objection to the trade mark had been “dressed up” to avoid the bar contained in s 75 of the Act as to the presumption of validity of the trade mark after seven years of registration.8 The deemed date of registration was 29 August 2008, which was almost nine years prior to the invalidity application being made.9
[10] The arguments were refined as they were appealed first to the High Court and then to the Court of Appeal. Nevertheless, the essential arguments remained similar. The determinative ground in the appellate courts was the bar provided by the presumption of validity.10 I refer to those decisions and their relevance to this application in more detail below.
[11] In essence, in this application for rectification Frucor says it has been successful in the Court of Appeal and it has a valid trade mark, and given that the appeal process is exhausted, the error of the Commissioner in placing the wrong colour green on the Register must be rectified. That wrong shade of green ultimately formed part of the trade mark depiction which appeared and continues to appear on the Commissioner’s website, which is the publicly searchable register of trade marks.
[12] EBL opposes the application for rectification on the basis that s 76 of the Act does not permit the Commissioner to change the colour of the registered trade mark after the actual date of registration (2012) because to do so would be an alteration of the registered trade mark, which is prohibited under s 77 of the Act. It also says there
7 At [33] and [61].
8 At [44].
9 At [37] and [40].
10 Energy Beverages LLC v Frucor Suntory New Zealand Ltd [2020] NZHC 3296 [the High Court decision] at [33]; and Energy Beverages LLC v Frucor Suntory New Zealand Ltd [2022] NZCA 536 [the Court of Appeal decision] at [54].
was no error for the purposes of s 76 and in any event it is appropriate for the Court to exercise its discretion to decline the application, given Frucor knew of the colour that was in fact uploaded to the Register website and acquiesced or took no action in the face of its “long-standing knowledge of the alleged ‘error’”. EBL says it and other third parties would face potential prejudice if the relief sought were to be granted.
[13] EBL also submits that if the Court does allow the application for rectification of the Register, it is in the interests of justice that any order for rectification should only have effect from the date of the order and that it should be limited to allowing the image currently on the Register to be replaced only with the scan or image of the so-called “green swatch” filed with the original trade mark application, not with the Pantone 376C green.
The legislation
[14]The purposes of the Act are set out in s 3 as follows:
3 Purposes
The purposes of this Act are to—
(a)more clearly define the scope of rights protected by registered trade marks; and
(b)simplify procedures for registering a trade mark in order to reduce costs to applicants and to reduce business compliance costs generally; and
(c)address Māori concerns relating to the registration of trade marks that contain a Māori sign, including imagery and text; and
(d)deter counterfeit activity in relation to registered trade marks in New Zealand; and
(e)ensure that New Zealand’s trade mark regime takes account of international developments.
[15] The relevant provisions of the Act insofar as they relate to rectification of errors or omissions in the Register provide:
Rectification of register
(a)Rectification or correction of register
(1)A person who has an interest may apply for the rectification of an error or omission in the register.
(2)An application for rectification of the register may be made either to the Commissioner or to the court.
(3)An application for rectification of the register may not be made in respect of a matter that affects the validity of the registration of a trade mark.
(4)The effect of the rectification of the register is that the error or omission concerned is to be treated as if it had never existed unless the Commissioner or the court directs otherwise.
Subpart 7—Other matters
Alteration in relation to registered trade mark
(b)Alteration of registered trade mark not permitted
The owner of a registered trade mark may not alter the registered trade mark after its actual date of registration.
Did the Commissioner make an error?
[16] The error to which Frucor points is that of the Commissioner in failing to accurately represent the green colour on the registered trade mark due to the technical failings of the uploading which took place apparently sometime in 2009 when IPONZ digitised the original paper files to introduce its new online registry system. In the three-year use decision in 2020, the Assistant Commissioner accepted Frucor’s explanation of the difference in colour being due to the processes of copying and uploading the colour swatch by the Commissioner.11 She noted that a response by IPONZ to a 2016 request by Frucor for the original paper files for the application of the trade mark confirmed that the original paper files no longer existed following the introduction of the online system.12
[17] The difference in colour between Pantone 376C and the green colour representation on the IPONZ database is distinct. Frucor says that the Pantone 376C
11 The three-year use decision, above n 2, at [53].
12 At [53].
colour is “considered internally at Frucor to be a core element of the brand entity of the V Energy Drink”.13 The Assistant Commissioner noted that the representations of Pantone 376C supplied by the parties and the green swatch in the hard copy of the application14 appear to the naked eye “as very similar colours, notwithstanding that the swatch is of a metallic foil, and the other representations of Pantone 376C are printed onto paper.”15
[18] EBL says an “error” is caused by a mistake, not by a deliberate act by the applicant/owner. It points out that the IPONZ Trade Mark Practice Guidelines say that there is no error in the Register when the applicant filed an application for a trade mark that is the wrong trade mark and that wrong trade mark is filed, accepted and ultimately registered.16 It further says that the applicant knowingly allowed the wrong trade mark image to be the subject of the examination reports, acceptance and registration over a period of years, and by June 2012, when the trade mark was put on the Register, Frucor had received five examination reports from IPONZ all of which included the dark green image. EBL submits that while Frucor says the relevant “error” was by the Commissioner through the inaccurate scanning in 2009, that historic action cannot be an error “in the Register” when the trade mark was not put on the Register until years later, on 23 June 2012. EBL says by that time, the Commissioner had sent Frucor at least six (although EBL conceded in its oral submissions that it was only five) items that used the dark green image and that in its standard notice of acceptance of the registration of the trade mark, the Commissioner had recommended to the applicant that it check the details of the application were correct by visiting the website. EBL says nevertheless Frucor did nothing, resulting in the dark green image as the one accepted by both the Commissioner and Frucor as the correct colour to put on the Register.
13 As noted at [24].
14 Fortunately, a copy of the application and swatch had been kept by the applicant.
15 At [65].
16 “Rectification of registered trade marks” IPONZ Trade Mark Practice Guidelines at [2.2].
[19] In response, Mr Brown KC for the applicant pointed to the formal written statement of the Assistant Commissioner, dated 2 June 2021, which had been filed in the High Court. This said:17
(a)The statement was made under s 159 of the Act, which allowed the Commissioner to file a written statement which would form part of the evidence in any legal proceedings.
(b)On occasion, a visual representation of a mark “may be of a low quality owing to low resolution files or poor quality scanning.” When IPONZ receives such unclear representations, it permits applicants to replace the original representation of a trade mark with a clearer version under s 76 of the Act, on the basis that it is a correction of error in the Register in respect of a matter that does not affect the validity of the registration of a mark.
(c)The relevant trade mark had been digitised from the trade mark application and resulted in a reproduction of the metal specimen that did not accurately display online “a colour closely approximating Pantone 376C, being the colour of the metal specimen and the colour shown in evidence.”
(d)IPONZ could rectify the Register, on the basis that replacing the image of the mark on the Register was a correction of an error on the part of the Commissioner. In the Commissioner’s view, the correction did not affect the validity of the registration “as the scope of the registration is defined by the written description with reference to Pantone 376C.”
(e)The Commissioner proposed to update the Register details of the trade mark with a more accurate visual representation of the mark “at the conclusion of these proceedings and subject to any findings with regards to the scope of [the trade mark].”
17 “Written Statement of The Commissioner Of Trade Marks” (18 February 2021) filed in these proceedings.
[20] Mr Brown also pointed to the affidavit of Mr Christopher Ross, who handled Frucor’s application for registration of the trade mark. He says that in the course of the correspondence with IPONZ between the application being filed and its being accepted by registration, the Commissioner suggested designating the colour on the application as Pantone 376C. The description by reference to the Pantone colour had not been included in the application before then. However, Frucor accepted the Pantone 376C description. Mr Ross said it was common practice to leave the written description that defined a trade mark until later in the process because IPONZ required an applicant for a colour trade mark to produce evidence that the colour had acquired distinctiveness through use for the goods applied for amongst the relevant purchasing public prior to the date of application. The written description would define the scope of the trade mark and therefore needed to reflect the extent and manner in which the colour had been used by the applicant as established by the evidence of use filed with IPONZ. As it was not possible to amend an application in a way that would expand the scope of the trade mark, a written definition could create problems if it was narrower than the evidence establishing the trade mark’s use. Mr Ross said he was not concerned by the discrepancy between the green swatch attached to the application and the scanned image because he considered the Pantone colour 376C that was included in the written description was the proper legal way to identify the colour that comprised the mark.
[21] Mr Samuel Fitzgerald, a solicitor for EBL, also swore an affidavit. He said EBL received a letter on 6 June 2017 from the lawyers acting for Frucor which claimed that in selling and promoting the MOTHER Kicked Apple products in a green can, EBL was liable for infringement of the registration of the trade mark. In response, EBL filed applications respectively to invalidate and to revoke the Frucor mark, relying in part on the green colour image on the Register. Both applications were declined by the Commissioner in 2020, and appeals against this decision were dismissed in this Court and in the Court of Appeal.
[22] Mr Fitzgerald produced the letter, which said that Frucor had “the exclusive right to use that colour in relation to energy drinks”. The letter said that EBL’s use of Frucor’s colour mark and packaging “infringes Frucor’s registered trade mark.” In response, by letter dated 21 June 2017 the then lawyers for EBL, James & Wells, said
there was no infringement of registered trade mark rights because the dark green on the Register was not Pantone 376C and therefore EBL was not using the colour for which Frucor had a registration. EBL then applied for the removal of the Frucor registration from the Register for non-use. On 13 July 2017, Ms Goatley for Frucor responded to EBL’s letter, reasserting Frucor’s exclusive right to use the Pantone 376C colour or similar in relation to energy drinks in New Zealand. She said that EBL’s revocation application was:
… based on an erroneous assertion, namely that the representation attached to the registration is presumed to be the colour represented under the colour mark registration. The correct position is that where a colour mark registration contains a written description for the claimed colour by reference to a widely known or used colour standard, such as the Pantone colour matching system, that colour standard reference defines the colour mark under the registration.
[23] In my view it is clear that IPONZ made an “error” in the Register. There is no definition of “error”. The usual rules of interpretation apply here. Interpretation commences with the text informed by the purpose and the context,18 including the statutory scheme of the relevant legislation. The meaning of the legislation must be ascertained from its text and in light of its purpose and its context.19
[24] In my view the words “error or omission” bear their ordinary meaning. The New Shorter Oxford English Dictionary definition of “error” includes “[s]omething done incorrectly because of ignorance or inadvertence; a mistake”.20
[25] Mr Brown pointed to the comments in Trade Marks in Practice referring to s 76 as a “basic error correction provision”.21 The author also suggests that it is “in the public interest to have a pure register”. That comment is made in the context of the issue of standing. However it is of more general application given the consumer protection focus of the Act and consistent with its purposes to more clearly define the scope of rights protected by registered trade marks and simplify procedures for
18 Legislation Act 2019, s 10; and Commerce Commission v Fonterra Co-Operative Group Ltd
[2007] NZSC 36, [2007] 3 NZLR 767 at [24].
19 Westfield (NZ) Ltd v North Shore City Council (2005) NZSC 17, [2005] 2 NZLR at 597 at [6].
20 The New Shorter Oxford English Dictionary on Historical Principles (4th ed, Oxford University Press, Oxford, 1993).
21 Paul Sumpter Trade Marks In Practice (4th ed, LexisNexis, Wellington, 2018) at [TMA 76.3]. Sumpter notes that “[w]hat might constitute an ‘error or omission’” could include “where terms in the specification are self-evidently erroneous.”
registering a trade mark in order to reduce costs to applicants and to reduce business compliance costs generally.
[26] The public will rely on the Register for information as to the registered trade mark. The Court of Appeal said in relation to this registered trade mark that it was the colour description Pantone 376C which represented the colour in the trade mark. It said:22
… 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.
[27] The Court of Appeal in fact took the view that it was not necessary to include a colour swatch as an element of a representation in a registered trade mark if it was described by reference to a colour code.23
[28] In my view the Commissioner made an error in placing on the Register the dark green depiction of the colour described as Pantone 376C. EBL attempted to put a gloss on what was an error by submitting that it was not an error because the applicant knew it was the wrong colour. Although the exact date as to when it came to the applicant’s attention is in doubt, it would have been at the latest around the time it wrote to EBL in 2016/2017. However, it was the Commissioner’s error and whether the applicant knew about it or not does not alter the fact it was an error. This is reinforced by the Commissioner’s acknowledgement of the error and the acceptance by the Commissioner in both the High Court and Court of Appeal that it was an error. The registration was incorrect. Whether by way of ignorance or inadvertence, it was a mistake.
[29] There is no doubt that Frucor as the owner has the appropriate interest to apply for the rectification of the error. Mr Arthur KC argued that the Court of Appeal did not determine that the registered trade mark was valid, but merely upheld the appeal primarily because EBL’s application for revocation of the registration and a
22 Energy Beverages LLC v Frucor Suntory New Zealand Ltd [2022] NZCA 536 [Court of Appeal decision] at [117].
23 At [113].
declaration that the registration was not valid was time-barred, as EBL’s application was filed almost nine years after the deemed date of registration. EBL says that the Court of Appeal did not uphold the validity of the trade mark but rather that the claim not been time-barred. This was because the description of the colour trade mark by means of the phrase “the predominant colour” would “generally be an insufficient mode of identification of a trade mark” and insufficiently clear.24
[30] However, under s 75 of the Act, the registration of a trade mark after the expiration of seven years from the deemed date of registration is “deemed to be valid” unless certain provisions apply which are not applicable here. Either the registered trade mark is valid or not. In the circumstances of this case there can be no halfway house. The registration is deemed valid and that was the Court of Appeal determination. The Court of Appeal was clear that the fact that the wrong colour had been uploaded to the Register did not render the registration “ambiguous and too imprecise” and that it was “not susceptible to an invalidity challenge on that ground.”25 Therefore the rectification of the registered trade mark to correct the Commissioner’s error will not affect the validity of the trade mark.
[31] I am satisfied the requirements of s 75 have been met to allow the court to rectify the Register to correct the Commissioner’s error.
Does s 77 operate to restrict the ability to rectify under s 76?
[32] However, EBL says that s 77 prohibits the alteration of the registered trade mark after its actual date of registration and therefore the court cannot alter the registered trade mark because the actual date of registration was 2012 and that has long passed.
[33] Mr Arthur says s 77 must be read as meaning not that the owner of a registered trade mark may not alter the registered trade mark after its date of registration, but rather that the owner of a registered trade mark may not require the Commissioner to alter the registered trade mark. This is because an owner can never alter a registered
24 At [88] and [106].
25 At [117].
trade mark — once the trade mark is registered only the Commissioner can alter it. Therefore, the registered owner cannot ask the Commissioner to alter the registered trade mark, nor can the Commissioner alter the trade mark.
[34] Mr Arthur argued in support of that interpretation that the specific overrode the general as a matter of statutory interpretation. Therefore the reference to “registered trade mark” in s 77 operated to prevent the trade mark itself being altered, while permitting the Register, which had other details such as names and address of the owner, to be altered in other respects.
[35] This issue was one on which counsel were given leave to file further submissions relating to the interpretation of the provision.
[36] Mr Brown for Frucor submitted that s 77 does not apply in this case because Frucor seeks to correct an error in the Register as permitted under s 76(1) and (3). He says the correction will not change the scope of the registration nor will it affect the validity of the registration. Section 77 is not an automatic block on rectification under s 76 but rather seeks to prohibit alteration of registered trade marks (subject to certain exceptions provided for in ss 78 and 78A such as the owner’s name and address and other details) in circumstances where there has been no such error or omission.
[37] EBL submits that ss 76 and 77 have different but complementary scopes. Mr Watts submits that while s 76 permits corrections to the Register, it is clear from s 77 that the power to rectify the Register does not extend to changing the registered trade mark itself, and that there is a solid policy basis for this distinction.
[38] I am satisfied that ss 76 and 77 apply in different situations. Section 76 refers to the “rectification or correction” of an error or omission in the Register. Section 77, which appears in a separate subpart, provides that “alteration” of a registered trade mark is not permitted. Section 76 is concerned with rectifying or correcting errors or omissions in the Register (which includes in my view an erroneous representation of a trade mark due to a clerical mistake in its registration), whereas s 77 applies in respect of altering a registered trade mark on the owner’s initiative, that is where there
is no error or omission to rectify or correct. The purpose and roles of ss 76 and 77 are quite different.
[39] In Application by Hartman Pacific Pty Ltd, the Assistant Commissioner in that application cited with approval authority from the UK Intellectual Property in respect of the UK Trade Marks Act 1994 to the effect that the provision in that Act which was the predecessor to our s 76 allows for no more than simple correction of a clerical error or otherwise the Act would contain no mechanism for allowing the correction of more fundamental mistakes.26
[40] Section 77 prevents an owner from altering their registered trade mark. Section 78 then specifically allows the alteration of the Register after the actual date of registration “at the request of the owner” of the owner’s name or address, deletion of any goods or services or class of goods and services in respect of which the trade mark is registered, and entering, altering or removing memoranda that do not in any way extend the rights given by the existing registration of the trade mark. Under s 78A there are specific provisions for the Commissioner to alter the Register to ensure business data held on it in relation to the entity is consistent with business data for the relevant entity held in the New Zealand Business Number Register under the New Zealand Business Number Act 2016.
[41] The Ministry of Economic Development reported clause-by-clause on the bill that became the Trade Marks Act. The report demonstrates that with s 77, the legislature was enacting a specific policy not to allow alteration of registered trade marks in situations other than an application to rectify or correct an error or omission (which is dealt with under the separate framework in s 76). Section 77 was aimed to provide certainty in the scope of registrations and to prevent the trade mark owner from altering the registered trade mark after registration where there was no error or omission in the Register. This appears to be a clear policy decision.
[42] There are some difficulties with EBL’s interpretation. First, if s 77 were to be read as meaning the owner of a registered trade mark could not require the
26 Application by Hartman Pacific Pty Ltd [2014] NZIPOTM 35 at [65], citing Bendy Toys Ltd’s application BL O-336-01, 3 August 2001 (UK) at [21].
Commissioner to alter the trade mark, does that mean the Commissioner could do it of their own volition, or if a third party who was not the owner sought the alteration, then the Commissioner could alter the registered trade mark?
[43] In addition, s 78 refers to the Commissioner altering the Register at “the request of the owner of the trade mark” in various circumstances. It is unlikely that the ability for the owner to make such a request to alter the trade mark under s 78 (but not under s 77) was a drafting error or oversight, particularly as this immediately follows s 77.
[44] Moreover, the interpretation contended for by EBL could result in absurdity. For example, where an application for a trade mark has been accepted by IPONZ and correctly advertised, with no opposition, but was subsequently entered on the Register incorrectly, on EBL’s argument it seems this could not be corrected under s 76 because to do so would contravene s 77 as impermissibly altering the registered trade mark after its actual date of registration. If I understand EBL’s argument correctly, this is plainly contrary to the intention in enacting s 76 and cannot be correct.
[45] I also consider the absence of any reference to s 77 restricting the power under s 76 is telling. If s 77 were to operate as a block on the power of rectification under s 76, it would be expected that the legislature would have said so. The Commissioner in their written statement also made no reference to s 77 restricting the operation of s 76.
[46] Finally, at least in this case the registered trade mark is not depicted on the Register. The registered trade mark which is registered and valid incorporates the colour (or close to the colour) Pantone 376C. This is not what is currently represented on the Register.
[47] The purpose of the Act is to “more clearly define the scope of rights protected by registered trade marks”, and given the Register is the source of information on registered trade marks for the public, a matter emphasised by the Court of Appeal, as well as the importance of the “purity of the register” as Sumpter puts it, an interpretation allowing the correction of obvious errors in trade marks on the Register is supported. Section 77 also appears in a separate subpart of the Act (“Alteration in
relation to registered trade mark”) to that of s 76, which appears under its own heading of “Rectification of register”.
[48] Mr Brown argues that the alteration was not outside the “scope of the trade mark”. This is a reference taken from s 37, which allows the application to be altered at the request of the applicant by correcting any error or omission “if, in the Commissioner’s opinion, the correction of the error or omission does not materially alter the meaning or scope of the application.”
[49] However, I do not think it is necessary to add any gloss to s 76 by reference to the correction not materially altering the meaning or scope of the registered trade mark. That section merely allows the rectification of an error on the application of an interested person where the rectification is not in respect of a matter that “affects the validity of the registration” of the trade mark. In this case there was an error made by the Commissioner, it requires correction and it is in the consumer interest that the Register correctly depicts the trade mark — otherwise the Register is not accurate. Although the Court of Appeal did say there was no ambiguity such as to invalidate the trade mark because of the dark green colour being used instead of Pantone 376C, which was the written description, the Court did not comment on the clarity of the Register in relation to this case. A purposive interpretation of the provision would allow the correction of the error on the Register to ensure the Register accurately depicted the valid trade mark.
[50] In my view, s 77 is intended to prevent owners of trade marks altering the registered trade mark depicted by the owner and its branding or otherwise after the actual date of registration. This is consistent with the other sections in subpt 7 under the heading “Alteration in relation to registered trade mark”, s 78 and s 78A, which allow alteration, but only by the Commissioner at the request of the owner and only in respect of business details and similar provisions. Those provisions are not directed at error correction.
[51] Therefore, I do not consider that s 77 operates as a restriction on the ability under s 76 for the trade mark to be rectified in this case. I am satisfied that s 77 does
not apply in this case, as Frucor seeks to correct an error in the Register as permitted under s 76.
Discretion to grant relief
[52] EBL says due to the delay in seeking rectification the court should exercise its discretion against granting rectification. It says it and possibly other third parties have relied on the Register showing the dark green colour and therefore they should not be penalised for the substantial delays by Frucor in getting the error corrected.
[53] It is unclear as to when Frucor first became aware that the Register depicted a darker green colour rather than Pantone 376C. The error apparently happened sometime around 2009 when IPONZ was digitising its records. Therefore, when Frucor was doing the initial work on the application and when it first lodged it, the error had not occurred. EBL says Frucor had the opportunity to rectify the error on at least five occasions, when it received copies of the trade mark from IPONZ, and that the IPONZ letter three months before the actual registration in 2012 recommended the applicant check the Register.
[54] I am satisfied there were no active efforts by Frucor to portray the dark green as part of the registered trade mark. The correspondence in 2017 between the parties clearly shows that Frucor considered the registered trade mark was for the Pantone 376C colour. It was using that colour on its branding for the V Energy Drink. It did not try and protect the dark green shade. That is clear from the correspondence. The argument between the parties was as to whether the registration was valid. Its validity was upheld by the Commissioner, the High Court and the Court of Appeal, albeit via the deemed validity provisions of the legislation.
[55] EBL says that the court should only order the rectification effective as at the date of the order of this court. The position set out in s 76(4) is that the effect of the rectification of the Register “is that the error or omission concerned is to be treated as if it had never existed”. The court is expressly given the power to direct otherwise.27
27 Section 76(4) of the Trade Marks Act.
[56] EBL says the uncertainty of its position and possibly that of other parties means that they may have inadvertently breached Frucor’s trade mark by the use of Pantone 376C on their products. Frucor says there has been no suggestion of any proceedings issued for damages or otherwise against EBL (or anyone else for that matter) for such infringement. It is possible that could happen, although it would seem that any such claim would now be outside the limitation period, as EBL has been aware of Frucor’s position on the validity of the trade mark since at least 2017. EBL says that because of the confusion caused by the use of the dark green and reckless failure to correct the Commissioner’s error it should not face the risk of court proceedings by Frucor over breach of the registered trade mark. EBL says that if a claim was filed against it by Frucor, any court dealing with the claim would be required to determine damages, if it came to that, and if it was clear on the Register that any order for rectification was not retrospective, that court would be free to consider the appropriate adjustment to damages in those circumstances. That is, the registered trade mark would not be deemed to be valid back to 2008, or as if the error had never existed.
[57] The exercise of discretion requires a balancing act by the court. The relevant factors here are the consumer protection factors in having a clear Register indicating that the registered trade mark is valid and is deemed to be valid since registration. On the other hand, EBL says it should not be penalised for the error which has persisted to the present day because of the behaviour of Frucor.
[58] I consider consumer protection outweighs the threat of any perceived penalties to EBL. First, the Commissioner, the High Court and the Court of Appeal have determined that the registered trade mark with the colour described as Pantone 376C is valid. The rectification is to clarify the Register. The trade mark is deemed to have been valid since registration and therefore it seems appropriate that the “error” concerned, being the error “in the register”, be “treated as if it had never existed.” The provision does not say the error must be taken as if it never occurred for all purposes. Therefore it is unlikely that the actions or inactions of Frucor concerning the error could not be canvassed in any claim because of the s 76(4) provision. In any case, according to the tenor of Mr Brown’s submissions, such a claim is not in contemplation. However, that is not a matter for this court.
[59] I conclude that there is no reason to justify directing otherwise than as provided in s 76(4) that the error or omission is to be treated as if it had never existed.
What colour should the Register be corrected to?
[60] The final matter of dispute is whether or not the Register should show the colour on the application that is similar to Pantone 376C, rather than showing Pantone 376C. The application merely seeks that an order be made that the “green colour image under the registration of Trade Mark Registration 795206 as it currently appears on the IPONZ website be replaced with a colour image that is an accurate reproduction of the colour Pantone 376C”. The Commissioner took the view that Pantone 376C was the appropriate description of the colour, although it appears that it may be “similar”. I am not in a position to make a determination which is inconsistent with the Commissioner’s determination accepted by the Court of Appeal that the application colour is close enough to be described as Pantone 376C. In those circumstances I consider that the correction should be to Pantone 376C. This is consistent with the Court of Appeal determination that the description that prevails is that referring to Pantone 376C.
Conclusion
[61] The application for rectification of the Register is granted in terms of the application of the applicant.
[62] It was the Commissioner’s error that led to the wrong colour being registered as the depiction of the trade mark in the Register. That error requires correction. Section 76 is a basic error correction provision. It is in line with the consumer protection focus of the Act and the public interest that the Register correctly depicts the trade mark.
[63] While s 77 operates to prevent owners of trade marks from altering their registered trade mark after the date of registration, that provision is not directed at error correction. In this case, the application is for rectification of the error under s 76 and s 77 is not relevant.
[64] The importance of consumer protection outweighs the threat of any perceived penalties to EBL for trade mark infringement. There is no reason to justify departure from the presumption under s 76(4) that the error or omission is to be treated as if it had never existed, and I am satisfied it is appropriate that the error be treated as if it had never existed.
[65] The correction should rectify the colour on the Register to be that of Pantone 376C. This is consistent with the Commissioner’s description of the colour as well as the Court of Appeal determination that the description that prevails is that referring to Pantone 376C.
Costs
[66] The parties indicated that they sought to file memoranda on costs, however agreed that any cost calculation should be by reference to schedule 2 band B, although there may be factors which require a departure from that which will be covered in the submissions.
[67] Any application for costs together with supporting memorandum should be made within five days of the date of this judgment, with any reply within a further five days and I will determine the issue of costs on the papers. Each memorandum should not exceed five pages in length.
Grice J
Solicitors:
A Brown KC, Barrister, Auckland Bell Gully, Auckland
G F Arthur, Barrister, Wellington Simpson Grierson, Auckland
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