Intercity Group (NZ) Limited v NakedBus NZ Limited

[2014] NZHC 410

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-007532 [2014] NZHC 410

BETWEEN  INTERCITY GROUP (NZ) LIMITED Plaintiff

ANDNAKEDBUS NZ LIMITED Defendant

Hearing:                   On the papers

Counsel:                  JD McBride and PT Hall for Plaintiff

MC Harris and BA Tompkins for Defendant

Judgment:                7 March 2014

JUDGMENT OF ASHER J (Injunctive relief)

This judgment was delivered by me on Friday, 7 March 2014 at 4.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Simpson Western Lawyers, Auckland.

Gilbert Walker, Auckland. JD McBride, Auckland.

INTERCITY GROUP (NZ) LTD v NAKEDBUS NZ LTD [2014] NZHC 410 [7 March 2014]

[1]      In a decision issued on 12 February 2014, I held that the defendant Nakedbus infringed the plaintiff ICG’s trade mark under s 89(1)(a) and (c) of the Trade Marks Act 2002, conducted the tort of passing off, and engaged in misleading and deceptive conduct in terms of the third, fourth and fifth causes of action.  I held that ICG was entitled to declaratory and injunctive relief under those causes of action on which it had succeeded, and sought submissions as to the form of that declaratory and injunctive relief.  I have now received those submissions.

[2]      ICG seeks an injunction in the following terms:

A permanent injunction restraining Nakedbus NZ Limited, its servants and agents from using the signs INTERCITY, INTER CITY, or INTER-CITY (however capitalised), or any sign so nearly resembling those signs as to be likely to deceive or cause confusion, or any advertising, marketing or promotional material relating to Nakedbus NZ Limited’s road transportation services.

[3]      Nakedbus on the other hand seeks a more precisely worded injunction in the following terms:

(a)   NakedBus NZ Limited (by itself or by its servants or agents) shall not use the signs INTERCITY, INTER CITY, or INTER-CITY (however spelled or capitalised), or any sign so nearly resembling those signs as to be likely to deceive or confuse (the “Signs”):

(i)   in the text of any advertisement displayed in response to an internet search [That includes the Signs] unless the ad is coupled with another sign or signs sufficient to distinguish the services of NakedBus from those of ICG;

(ii)  on any web page to which an internet user is taken by clicking on any advertisement displayed in response to an internet search that includes the Signs unless the ad is coupled with another sign or signs sufficient to distinguish the services of NakedBus from those of ICG;

(b)   NakedBus NZ Limited shall have leave to apply to vary or discharge the injunction should future circumstances warrant it.

[4]      Both forms of injunction have advantages and disadvantages.   The generic type of injunctive relief proposed by ICG is very general in its wording and while it covers in theory the offending behaviour does not contain within itself any direction as to what will constitute an infringement.   Rather, it says the sign INTERCITY cannot be used if it is likely to deceive or cause confusion.  It requires any person

making a decision as to whether conduct will be in breach to make a value judgment as to whether the use will be likely to deceive or cause confusion.  It is not restricted to any particular conduct, and could be called in aid in relation to actions by Nakedbus that were not considered in the judgment.

[5]      The Nakedbus draft on the other hand is more specific.  It prohibits the use of the word INTERCITY in either the text of an advertisement displayed in response to an internet search, or in any webpage reached through an internet search on the terms set out.  It is limited to conduct that was considered in the judgment.  However, this form of injunction also contains within it a value judgment in the phrase “sufficient to distinguish”.

[6]      I am not critical of either side for proposing a form of wording that involves a value judgment.  This is because there can be no absolute prohibition on the word INTERCITY by Nakedbus.  As I said in the substantive judgment, “intercity” is a descriptive word, and if it is clearly only being used in a descriptive manner there can be no objection to its use.  It is also a trade mark and business name, but if it is used obviously and clearly for comparative reasons, and there is no risk of confusion and of it being seen as used as a trade mark, there can be no objection to that.

[7]      On balance I prefer the Nakedbus wording in that it is specific to the conduct considered and ruled on in the judgment.  It cannot be applied to conduct that has not been so considered.  The narrower ambit means that it is less likely that there will be argument as to its ambit.

[8]      If ICG considers that Nakedbus is carrying out an infringement that goes beyond  the  words  of  the  specific  injunction,  but  which  can  be  seen  as  an infringement in terms of the judgment, ICG can always apply for further relief.  The evidence, and my findings on that evidence at this point, only justify injunctions relating to the reference in internet advertisements and the reference in the website.

[9]      The Nakedbus form of wording will stop Nakedbus from carrying out the actions which I have found infringe ICG’s trade mark and constitute passing off and breach of the Fair Trading Act.  I make it clear that the result of the judgment must

be that a different form of wording is used by Nakedbus in that advertisement and website.

[10]     I therefore make the orders in the broad form proposed by Nakedbus.  I have made  some  minor  changes  and  give  both  sides  the  ability to  apply to  vary or discharge the injunction.  Given the very specific wording I give ICG leave to apply further should there be any other breaches that fall within the ambit of the judgment. I emphasise that this is not an invitation to seek relief that does not arise from the findings in the judgment. The orders are:

(a)      Nakedbus NZ Limited (by itself or by its servants or agents) shall not use the signs INTERCITY, INTER CITY, or INTER-CITY (however spelled or capitalised), or any sign so nearly resembling those signs as to be likely to deceive or confuse:

(i)in the text of any advertisement displayed in response to an internet search unless the advertisement is coupled with words or another sign or signs sufficient to distinguish the services of Nakedbus from those of ICG;

(ii)on any web page to which an internet user is taken by clicking on  any  advertisement  displayed  in  response  to  an  internet search that includes the signs unless the advertisement is coupled with words or another sign or signs sufficient to distinguish the services of Nakedbus from those of ICG;

(b)Both  parties  shall  have  leave  to  apply  to  vary  or  discharge  the injunction and ICG has leave to apply for any further specific injunctive relief that it claims arises from the judgment.

……………………………..

Asher J