Geosmart Maps Limited v Gosmart Foundations Limited HC Auckland CIV-2011-404-003119

[2011] NZHC 1054

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-003119

BETWEEN  GEOSMART MAPS LIMITED Plaintiff

ANDGOSMART FOUNDATION LIMITED First Defendant

ANDEDMOND STACK Second Defendant

Hearing:         2 September 2011

Counsel:         JE McLennan for Plaintiff

No appearance for First and Second Defendants

Judgment:      2 September 2011

ORAL JUDGMENT OF RODNEY HANSEN J

Solicitors:           Holmden Horrocks, P O Box 1108, Auckland 1140 ([email protected] )

GEOSMART MAPS LIMITED V GOSMART FOUNDATION LIMITED HC AK CIV-2011-404-003119 2

September 2011

Introduction

[1]      The plaintiff (GeoSmart) seeks an injunction to restrain the defendants from using the name “goSmart”.   GeoSmart says it is confusingly similar to the name under which it has traded for some years.  It sues for passing off and breach of the Fair Trading Act 1986.

[2]      At the first call of the proceeding, the second defendant (Mr Stack) appeared and sought leave to represent the first defendant.  I refused leave and made orders for discovery and inspection.   They were not complied with.   When the matter came before Asher J on 19 August, he declined Mr McLennan’s application for judgment under r 15.12 of the High Court Rules as a statement of defence had been filed purportedly on behalf of both defendants.   He was, however, prepared to set the proceeding down for formal proof for today at  9.00 a.m.   He made it clear to Mr Stack,  who  was  present,  that  unless  steps  were  taken  on  behalf  of the first defendant in the meantime, GeoSmart would be entitled to seek judgment.

[3]      No steps have been taken by the first defendant.  There is no appearance by Mr Stack.  Mr McLennan, for GeoSmart, seeks injunctive relief only, abandoning the claim by GeoSmart for an enquiry into damages or an account of profits.  GeoSmart discontinues its claim against the second defendant.

Evidence

[4]      An affidavit by Mr Philip Allen, the Chief Executive Officer of GeoSmart, provides background to its business and to the first defendant’s activities.  GeoSmart began business in  1978  under the name Air Logistics.   It  changed its  name to GeoSmart in 2003.  Subsequently, it was purchased by the New Zealand Automobile Association, changing its name to GeoSmart Maps Limited at the time of purchase in

2007.

[5]      GeoSmart’s business is a designer and supplier of maps, mapping services, a collector and supplier of business and locality data, supplier of driving directions and directory services.  It provides the services both in web-based formats and otherwise. Its name is well known in New Zealand and internationally.  Mr Allen refers to 600 listings for GeoSmart in Google.  It is referenced on the packaging of every Tomtom and Navman GPS car navigation device sold in New Zealand.   These total over

150,000 units.   GeoSmart has business relationships in many overseas countries, including Australia, Germany, the Netherlands and other countries in Europe, as well as in Asia and Africa.   It is the proprietor of a number of registered trademarks, among them “GeoSmart” and “Smart Map”.  Mr Allen’s assertion that GeoSmart has established a significant reputation in the fields in which it conducts business is clearly justified.

[6]      In a memorandum to the Court of 14 June 2011, Mr Stack described goSmart as a start-up company which has been operating since January 2011.   He said it operates on a shoestring budget, relying on business subscriptions from week to week and that it was then in the process of seeking investors.  It has sought to create an identical product to GeoSmart in that it displays business points of interest over the top of web maps supplied by Google.   This is exactly the same feature and service as GeoSmart has been operating since 2003.

[7]      Mr Allen refers to the obvious similarity of the two names with only one letter to distinguish them and the distinctive  use in both of the capital “S” for “Smart”.  He deposes that a Google search for GeoSmart produces an enquiry as to whether what is actually sought is GeoSmart.  There is evidence of actual confusion having occurred.  A GeoSmart employee received an enquiry for a job advertised by goSmart.

Passing off

[8]      For the purpose of establishing passing off, it must be shown:

(a)      That the plaintiff’s goods or services have acquired a goodwill or reputation  in  the  market  and  are  known  by  some  distinguishing feature;

(b)There  is  a  misrepresentation  by  the  defendant  (whether  or  not intentional) leading or likely to lead the public to believe that goods or services offered by the defendant are goods or services of the plaintiff; and

(c)      That the plaintiff has suffered or is likely to suffer damage as a result of the erroneous belief engendered by the defendants’ misrepresentation: see Rickett & Colman Products Ltd v Borden Inc.[1]

[1] Rickett & Colman Products Ltd v Borden Inc [1990] 1 All ER 873 at 880.

[9]      The  evidence  satisfies  me  that  GeoSmart  has  acquired  goodwill  and  a reputation in the market which is known through its name, GeoSmart.   I am also satisfied that by its use of a confusingly similar name in the same area of business, the first defendant has led, and is likely to continue to lead, the public to believe that the services it offers are the services of GeoSmart.

[10]     In the circumstances, it is likely that unless restrained by injunctive relief, GeoSmart is likely to suffer loss as a result of purchasers buying the first defendant’s services in place of those offered by GeoSmart.  The cause of action for passing off is accordingly established.

Fair Trading Act

[11]     Section 9 of the Fair Trading Act 1986 provides that no person shall in trade engage in conduct that is misleading or deceptive or is likely to mislead or deceive. For this purpose, there is no need to show that any person has actually been misled

or deceived.[2]    Its conduct will have been misleading or deceptive if it results in a

substantial  section  of  the  public  being  misled  or  deceived,  or  that  there  is  a likelihood that that will occur.[3]

[2] Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177; ATPR 40-277, 197-200; 43,751-43,753.

[3] Bonz Group Pty Ltd v Cooke (1996) 7 TCLR 206 (CA).

[12]     I am satisfied that the plaintiff has established a breach of the Act.  The first defendant engaged in the impugned conduct while in trade.   The use of a name confusingly similar to that of GeoSmart, by a business operating or active in the same field as that of GeoSmart, constitutes misleading and deceptive conduct for the purpose of the Fair Trading Act.  I am left in no doubt that a substantial section of the public would be misled if the first defendant were able to continue to use the name.

Result

[13]     For these reasons, the plaintiff is entitled to the injunctive relief it seeks.  I make  an  order  restraining  the  first  defendant  from  using  the  name  and  logo “goSmart” in any manner and from using and continuing to use and operate any website with reference to goSmart, in particular the website    The plaintiff is entitled to costs on a 2B basis.   I record that the plaintiff’s

claim against the second defendant is discontinued.   As the second defendant represented himself, no issue as to costs arises.