Man Truck & Bus AG v Shaanxi Heavy-Duty Automobile Co. Limited
[2017] NZHC 2821
•20 November 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2016-485-614 [2017] NZHC 2821
UNDER the Trade Marks Act 2002 IN THE MATTER OF
Trade Mark Application No. 983340 (SHACMAN)
BETWEEN
MAN TRUCK & BUS AG Appellant
AND
SHAANXI HEAVY-DUTY AUTOMOBILE CO. LIMITED Respondent
Hearing: 30 and 31 August 2017 Appearances:
K T Glover for the Appellant
No appearance for the RespondentJudgment:
20 November 2017
JUDGMENT OF WOODHOUSE J
This judgment was delivered by me on 20 November 2017 at 11:30 a.m. pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………………
Solicitors:
Mr K T Glover, Barrister, Auckland
Mr J Burton (appellant’s instructing solicitor), Izard Weston, Solicitors, Wellington
MAN TRUCK & BUS AG v SHAANXI HEAVY-DUTY AUTOMOBILE CO. LTD [2017] NZHC 2821 [20
November 2017]
[1] The appellant, MAN Truck & Bus AG (Man), appeals against a decision of the Assistant Commissioner of Trade Marks. The Assistant Commissioner dismissed Man’s opposition to a trade mark application by the respondent, Shaanxi Heavy-Duty Automobile Co. Ltd (Shaanxi), and directed that Shaanxi’s mark proceed to registration (the decision).1
The relevant trade marks
[2] Shaanxi’s application was for the combination mark
. This was for goods and services in classes 12, 35 and
37. In broad terms: class 12 covers all types of motor vehicle and some parts of motor vehicles; class 35 relates to business services ranging from advertising through business management to organising technical exhibitions; and class 37 covers motor vehicle maintenance and repair and broadly related or similar services.
[3] Man has a number of registered marks in relation to commercial vehicles and related goods and services. Those marks are for the word “MAN” in stylised form, in some cases with additional elements. Man relied on three marks. One of those, for classes 12 and 37, is the mark . The two other marks include the stylised word “MAN” with additional elements, as follows:
Man’s opposition and Shaanxi’s response
[4] Man opposed Shaanxi’s application in reliance on ss 17(1)(a) and (b) of the
Trade Marks Act 2002 (the Act) and two other grounds.
[5] Section 17(1)(a) prohibits registration of the mark if its use would be likely to deceive or cause confusion. Section 17(1)(b) prohibits registration if use of the mark
is contrary to New Zealand law. Man contended that use of the Shaanxi mark would
1 Shaanxi Heavy-Duty Automobile Co. Ltd v MAN Truck & Bus AG [2016] NZIPOTM 14.
constitute a breach of ss 9 and 10 of the Fair Trading Act 1986, which proscribe misleading and deceptive conduct generally and in relation to goods.
[6] The two other grounds in Man’s notice of opposition were not pursued at the hearing before the Assistant Commissioner. Man sought to raise a fifth ground of opposition that was not in the notice of opposition, but was set out in Man’s written submissions to the Assistant Commissioner. She did not allow this ground of opposition to be advanced because it had not been pleaded.2 Man has not appealed against that ruling.
[7] Shaanxi, in a counter-statement, denied all grounds of opposition, and an affidavit was filed. However, no submissions for Shaanxi were filed and there was no appearance by or on behalf of Shaanxi at the hearing before the Assistant Commissioner.
[8] After this appeal was filed and served, Mr Pietras, solicitor for Shaanxi, filed a brief memorandum. This records that Shaanxi believes that the decision is correct in both fact and law, but there is no elaboration. It then concludes:
Therefore, we hereby inform the Court that the respondent has decided not to participate in the appeal. Please would the Court note this in its records.
[9] Notice of this fixture was given to Mr Pietras. Mr Glover, for Man, also advised that a copy of his written submissions to the Court was sent to Mr Pietras. There was no appearance for Shaanxi at the hearing before me.
The businesses of Man and Shaanxi
[10] This outline of the businesses of the two companies is directed to the evidence in that regard relevant to the issues on appeal. The relevant evidence for Man is in an affidavit from Tobias Prunhuber, the head of the intellectual property department of Man, based in Munich, Germany. The evidence for Shaanxi, which is evidence in an affidavit in response, is from Tan Xuguang, the President of Shaanxi,
based in Xi’an, China.
2 The decision at [10]–[14]. The Assistant Commissioner applied the decision of this Court in
Chettleburgh v Seduce Group Australia Pty Ltd [2012] NZHC 2563, (2012) 98 IPR 306.
[11] Neither party challenged, in any material way, the evidence of the other party in respect of business activities. There was some further evidence from both parties, which I consider is not relevant or is otherwise inadmissible. This evidence is noted below after outlining the relevant evidence about the two businesses.
Man’s business
[12] Man’s business is long established. It has been at the forefront of diesel engine innovation for more than 100 years. It is a leading international supplier of efficient commercial vehicles and “innovative transport solutions”. In 2011 Man had worldwide sales of more than 77,600 trucks and over 5,700 bus chassis, to a value of
$9 billion Euros. These were sold under the “MAN” or “Neoplan” brands. Since about 1950, Man has continuously used the MAN marks in relation to motor vehicles and related goods, particularly trucks, bus chassis and parts, and marine engines.
[13] Man’s products, including buses and trucks, have been distributed in New Zealand since about 1970. Man’s current New Zealand agent has held exclusive distribution rights for New Zealand since 2000. Mr Prunhuber’s evidence establishes that Man has reasonably substantial business in New Zealand for vehicles, related goods, and services, sold under the MAN marks. He produced documentary evidence of the extent of Man’s business activities in New Zealand, some of it on a confidential basis, including the value of annual sales of Man products in New Zealand for the years ending June 2009 to 2013, examples of promotional material, and details of the annual amount spent on promotional activities in New Zealand.
Shaanxi’s business
[14] Shaanxi was established in 1968. It is a large Chinese manufacturer and distributor of automobiles with around 35,000 employees. Mr Tan said that his company “primarily manufactures heavy trucks under our brand name SHACMAN, and has done so in China since about 1970”. He also said that Shaanxi has been manufacturing and selling products bearing “the SHACMAN brand” in more than 80
countries in Asia, Africa, the Middle East, Central America and South America. No particulars of sales, in China or elsewhere, were provided.
[15] Mr Tan said that “while we are not yet trading in New Zealand using the SHACMAN trade mark, my company has plans to enter the New Zealand market in the near future”. No further particulars are provided in that regard other than reference to the trade mark application in issue on this appeal.
Irrelevant evidence
[16] Mr Prunhuber said that Man has registered the MAN marks, in various forms, in a number of jurisdictions outside New Zealand and produced a table with the details. He also referred to a decision of the Metropolitan Tribunal in Hungary upholding opposition by Man to an application by Shaanxi to register the SHACMAN mark.
[17] Mr Tan said that he is not aware of any decision in any jurisdiction, other than Hungary, in which an application to register the SHACMAN mark has been successfully opposed by Man, and he provided details in that regard. This included copies of a substantial number of decisions in other jurisdictions, almost all of which are in the language of the particular jurisdiction without any translation.
[18] There was an affidavit in reply from Francesca Colubriale, for Man, producing copies of nine decisions in various overseas jurisdictions. These are favourable to Man, in respect of the MAN marks in contests with other marks containing the word “MAN” in conjunction with other words or syllables.
[19] The Assistant Commissioner did not refer to any of this evidence. And on the appeal Mr Glover, for Man, did not seek to rely on any of it. I am satisfied that the Assistant Commissioner’s approach was the correct one. At least in the circumstances of this case, none of the evidence is relevant. In addition, the copies of decisions in other jurisdiction, had they been relevant, should not have been produced by Shaanxi as evidence without a certified translation.
Section 17(1)(a): application and principles
[20] The focus on this appeal is on s 17(1)(a).
[21] Section 17(1)(a) is as follows:
17 Absolute grounds for not registering trade mark: general
(1) The Commissioner must not register as a trade mark or part of a trade mark any matter—
(a) the use of which would be likely to deceive or cause
confusion; or …
[22] In a case such as the present, there is a threshold onus on the opponent to establish that its mark has a reputation in New Zealand at the relevant date. In this case, therefore, this threshold onus was on Man. The threshold onus was explained by the Court of Appeal in Sexwax Inc v Zoggs International Ltd as follows:3
To shed light on how this section should be approached, we make the following comments. When applying this section, the Commissioner begins by inquiring whether the opponent's mark has a reputation in New Zealand at the relevant date. Such reputation need not be widespread; it all depends on the nature of the marks and the goods to which it is applied. Where marks are used in respect of goods with only a very narrow or specialised use or purpose, the mark may be known only to a small number of people. … In other cases, a mark may be applied to goods sold very broadly or applied to numerous different goods under a brand's penumbra. This is the initial inquiry into the “circumstances of trade”, against the background of which the marks are regarded as notionally in use.
[23] If the opponent sufficiently establishes its reputation, the applicant has the onus of establishing, on the balance of probabilities, that its opposed mark will not breach s 17(1)(a).4
[24] The leading case on s 17(1)(a) remains the decision of the Court of Appeal in
Pioneer Hi-Bred Corn Company v Hy-line Chicks Pty Ltd. This includes ten propositions articulated by Richardson J, the first of which is recorded in the
3 Sexwax Inc v Zoggs International Ltd [2014] NZCA 311, [2015] 2 NZLR 1 at [48] (footnotes omitted).
4 Pioneer Hi-Bred Corn Company v Hy-line Chicks Pty Ltd [1978] 2 NZLR 50 (CA) (Pioneer Hi- Bred) at 61 (proposition (1)) per Richardson J. The statutory provision considered in Pioneer Hi-Bred was that part of s 16(1) of the Trade Marks Act 1953 which is now contained, in substance, in s 17(1)(a).
preceding paragraph. Because of the Assistant Commissioner’s approach to the main
enquiry it will assist to record some further propositions:5
…
(5) In considering the likelihood of deception or confusion all the surrounding circumstances have to be taken into consideration, including the circumstances in which the applicant's mark may be used, the market in which his goods may be bought and sold and the character of those involved in that market.
…
(7) It is in relation to commercial dealings with goods that the question of deception or confusion has to be considered, and the persons whose states of mind are material are the prospective or potential purchasers of goods of the kind to which the applicant may apply his mark and others involved in the purchase transactions.
(8) For a mark to offend against s 16 it is not necessary to prove that there is a commercial probability of deception leading to a passing off or infringement action. Detriment or financial loss to an opponent need not be established. It is sufficient if the result of the registration of the mark will be that persons to whom the mark is addressed are likely to be deceived or confused. "Deceived" implies the creation of an incorrect belief or mental impression and causing "confusion" may go no further than perplexing or mixing up the minds of the purchasing public (New Zealand Breweries Ltd v Heineken's Bier Browerij Maatschappij NV [1964] NZLR 115, 141). Where the deception or confusion alleged is as to the source of the goods, deceived is equivalent to being misled into thinking that the goods bearing the applicant's mark come from some other source and confused to being caused to wonder whether that might not be the case.
(9) The test of likelihood of deception or confusion does not require that all persons in the market are likely to be deceived or confused. But it is not sufficient that someone in the market is likely to be deceived or confused. ... As Cooke J put it in his judgment in this case:
“The varying terminology in the judgments is a reminder that it is not always necessary that large numbers of people should be, or should probably be, of the state of mind in question: rather it is a question of the significance of the numbers in relation to the market for the particular goods” ([1975] 2 NZLR 422, 429).
(10) Where goods are sold or may be sold to the general public for consumption or domestic use, the judge or officer making the decision is entitled to take into account his own experience and his own reactions as a member of the public, as well as evidence from other members of the public, when considering whether buyers
5 Pioneer Hi-Bred, above n 4, at 61–62.
would be likely to be deceived or confused by use of a trade mark. But where the goods are of a kind not normally sold to the public at large, but are ordinarily sold and expected to be sold in a specialist market consisting of persons engaged in a particular trade, evidence of persons accustomed to dealing in that market as to the likelihood of deception or confusion is essential (GE Trade Mark [1973] RPC
297, 321; [1972] 2 All ER 507, 515).
The decision
[25] On the threshold enquiry, the Assistant Commissioner held that Man had met the onus to establish the reputation of its mark in the relevant New Zealand market. This was a conclusion in respect of the mark.
[26] In respect of Man’s other marks, the Assistant Commissioner held that Man had not established sufficient reputation. Mr Glover, on this appeal, submitted that there were grounds for challenging this, but was content to rest the appeal on issues relating to the mark. That aspect of the decision does not require further consideration.
[27] Having found for Man on the threshold test, the Assistant Commissioner then turned to consider whether Shaanxi had met the onus on it to show that use of the Shaanxi mark would not be likely to deceive or cause confusion. She approached this question under two main headings: “Overall comparison test” and “Is use of the opposed mark likely to deceive or confuse?” Most of her analysis was directed to the first topic – the overall comparison test – rather than to the question whether use of Shaanxi’s mark would be likely to deceive or cause confusion, the critical enquiry
under s 17(1)(a).6
“Overall comparison test”
[28] Under the first heading the Assistant Commissioner considered three main topics. These are taken from a summary in New Zealand Breweries Ltd v Heineken’s
Bier Browerij Maastschappij NV,7 following In re Pianotist Co.’s Application.8 The
6 The discussion in the decision of the overall comparison test is at [42]–[70]. The discussion of the likelihood of deception or confusion is at [71]–[78].
7 New Zealand Breweries Ltd v Heineken’s Bier Browerij Maastschappij NV [1964] NZLR 115 (CA).
8 In re Pianotist Co.’s Application (1906) 23 RPC 774 (Ch) at 777.
summary in New Zealand Breweries was not concerned with s 16 of the Trade Marks Act 1953 (now found in s 17 of the Act), but with s 17 of the Trade Marks Act 1953, the substance of which is now in s 25 of the Act. This is a point discussed further below. The Assistant Commissioner’s conclusions are summarised under the following three subheadings.
The look, sound and ideas of the marks9
[29] The Assistant Commissioner compared the marks visually, aurally, on the question whether the word “MAN” is descriptive or common, the idea conveyed by the marks, and whether SHACMAN might be considered a sub-brand of MAN. On some of these matters the Assistant Commissioner made findings as to the likely or possible reaction of consumers although there was no evidence in that regard at all, a point discussed more fully in my evaluation. The overall conclusion was that Man’s opposition was not supported on consideration of the look, sound and ideas of the marks.
A comparison of the parties’ goods and services
[30] The Assistant Commissioner concluded that the goods and services in respect of which Man appeared to have used its mark were, for the most part, the same as, or similar to, the goods and services covered by Shaanxi’s application for classes 12 and 37, but there were fewer similarities for class 35. She nevertheless concluded, applying Daimler AG v Sany Group Limited, that the relevant goods and services are highly specialised and that the purchasers of such goods and services, and those
involved in their trade, would be likely to be informed and observant.10
The surrounding circumstances
[31] The Assistant Commissioner simply noted this aspect and concluded that she was not aware of any relevant surrounding circumstances that had not been discussed when considering the look, sound and ideas of the two marks and the
extent of similarities between the respective goods and services.
9 The decision at [50]–[59].
10 Daimler AG v Sany Group Ltd [2015] NZCA 418, (2015) 14 TCLR 191.
[32] The conclusion under the first main heading was:11
[W]hile there are some similarities between the respective marks, overall the mark is dissimilar to the mark. In reaching this assessment I have been careful to take into account imperfect recollection, and to consider each mark as a whole.
“The likelihood of deception or confusion”
[33] Under this heading the Assistant Commissioner concluded that use of the mark, if used in a normal and fair manner in connection with its goods and services, would not be likely to cause confusion or
deception amongst a substantial number of consumers of those goods and services.12
Her principal reasons were:
·The preceding conclusion that a low degree of similarity between the marks offset the high degree of similarity between many of the goods and services.
·The mark at the relevant date (23 August 2013) did not have “a particularly strong reputation in New Zealand based on the specific evidence filed. … [the] particular evidence before me only establishes awareness of that mark at that time in New Zealand”.13
· The previous point was to be compared with the fact that the
relevant date.
mark had no reputation in New Zealand at the
·Consumers and those in the relevant trade were likely to pay close attention to their brand selection when purchasing the goods and services in issue.
[34] The Assistant Commissioner’s conclusion under this heading was:14
For the reasons given above, and taking into account imperfect recollection, I am satisfied that the mark will not be reasonably
11 The decision at [70].
12 Applying the test in Smith Hayden & Co Ltd’s application (1945) 63 RPC 97 (HC), at 101.
13 The decision at [76].
14 The decision at [78].
likely to cause deception or confusion amongst a substantial number of persons.
The overall conclusion on s 17(1)(a)
[35] The Assistant Commissioner recorded her overall finding on s 17(1)(a) as follows:15
MAN Truck & Bus has established awareness of its mark. However, when assessed against the reputation of that mark, I find that the mark, if used in a normal and fair manner in connection with the opposed goods and services, is not likely to cause confusion or deception amongst a substantial number of consumers of those goods and services.
Evaluation
[36] On an appeal of this nature I am bound to come to my own conclusion on the merits. It is a matter for judgment as to how much weight, if any, should be given to the decision of the Assistant Commissioner.16
[37] In my opinion the Assistant Commissioner erred in her conclusion that use of the mark would not be likely to deceive or cause confusion. I agree with Mr Glover’s submissions for Man that the Assistant
Commissioner erred in three respects:
(a) The approach to an assessment of similarity was wrong. (b) The conclusion on similarity was wrong.
(c) There was a failure to give proper weight to the onus on Shaanxi to positively establish that use of the mark
would not be likely to deceive or cause confusion.
15 The decision at [79].
16 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141, at [3].
Incorrect approach to similarity
[38] In my judgment the Assistant Commissioner inappropriately elevated assessment of the similarity and dissimilarity of the marks to the level of a requirement. Consideration of similarities is relevant to an assessment of the likelihood of confusion or deception. This is because proposed use of a mark which is wholly dissimilar from that of the opponent is unlikely to trigger s 17(1)(a). But an assessment that there is substantial dissimilarity cannot be determinative, or largely determinative, when the ultimate test is whether a likelihood of confusion or deception has been disproved. The Assistant Commissioner placed comparison of the marks at the forefront of her analysis and it was the primary basis for her determination on s 17(1)(a).
[39] This appears to have arisen, in part, from misapplication of authorities cited by the Assistant Commissioner in introducing her consideration of the “overall comparison test”. Numbers of the cases referred to do emphasise the importance of comparing the marks, but that is because those were cases considering s 17 of the Trademarks Act 1953, the relevant part of which is now found in s 25 of the Act.17
Section 25(1)(b) prohibits registration of a mark that is similar to another mark, and
when its use is likely to deceive or confuse. Comparison of the marks – similarity – is an integral part of the statutory test in s 25(1)(b), but that is not the case under s 17(1)(a).
[40] On the question whether the marks are similar, I agree with Mr Glover’s submission that there is similarity, relevant to the ultimate question of deception or confusion, having regard to the following:
(a) Both marks include the word “MAN”.
(b) The same capitalisation and font style have been used.
(c) Man’s marks are wholly contained within Shaanxi’s mark.
17 New Zealand Breweries v Heineken’s Bier Browerij Maastschappij NV, above n 7; Anheuser Busch Inc v Budweiser Budva National Corporation [2003] 1 NZLR 472 (CA); VB Distributors v Matsushita Electric Industrial Co Limited (1999) 9 TCLR 349 (HC).
(d) The word “MAN” is not descriptive or common in the trade.
(e) The Assistant Commissioner, as recorded earlier, took account of the possibility of imperfect recollection on the part of buyers in coming to her ultimate conclusion that Shaanxi’s mark would not be reasonably likely to cause deception or confusion. There was no evidential foundation for the weight given to imperfect recollection. The absence of evidence, bearing in mind the onus on Shaanxi, is a prominent feature of this case, which I consider next. The Assistant Commissioner’s assessment of the impact of recollection was, with respect, simply speculative. Customers for the goods and services in question might simply recall that they want to deal with the truck supplier which has the word “MAN” in its name.
[41] A side by side comparison of marks is not determinative under s 25, let alone under s 17(1)(a). But if the two marks are compared in this way, there is considerable similarity because of the fonts used and the size, and with the significant part of Shaanxi’s mark, the end syllable, being identical to Man’s mark. This is apparent from the following juxtaposition of the two marks:
The onus of proof
[42] As I have sought to emphasise, the critical enquiry under s 17(1)(a) is whether use of the Shaanxi mark would be likely to deceive or cause confusion, with the onus on Shaanxi to establish, on the balance of probabilities, that it would not.
[43] In respect of this onus, the Assistant Commissioner has, in my opinion, failed to apply some of the clear law from propositions of Richardson J in Pioneer Hi-Bred. In particular, in the tenth proposition, there is effectively a direction from the Court of Appeal that in cases involving goods and services in a specialist market, “evidence of persons accustomed to dealing in that market as to the likelihood of
deception or confusion is essential.” This is given some emphasis in the seventh proposition which directs the enquiry to the “states of mind” of the prospective or potential purchasers of the goods in question.
[44] In this case there was no evidence at all from Shaanxi on this critical question. The only evidence for Shaanxi which mentions the possibility of confusion was a statement from Mr Tan that his “Company believes the trademarks are very different” and he was “not aware of any instances of confusion between the SHACMAN and the MAN trademarks anywhere in the world”. That is not relevant or probative evidence. This is because it is not even Mr Tan’s personal opinion, because it is directed to the possibility of confusion simply from a comparison of the marks and because it is not evidence in respect of the New Zealand market. It has nothing to do with the New Zealand market.
[45] There was a brief statement from Mr Prunhuber which was on point. He said:
If the Opposed Mark were to be used in New Zealand in relation to the above mentioned goods, I consider that the consumers of such goods would be misled into thinking that those goods had emanated from or were sold by or with the authorisation of the Opponent and / or its parent company MAN SE.
That evidence might, in some circumstances, be given little weight because it is not an opinion from an independent party. But it is the only evidence. It is an opinion directed to the New Zealand market. And the onus was not on Man.
[46] Given the statements of the Court of Appeal in Pioneer Hi-Bred, the matters I have discussed to this point in relation to the question of onus should have resulted in the opposition being upheld.
Was the onus on Shaanxi otherwise met?
[47] Leaving aside the fact that Shaanxi did not adduce any relevant and probative evidence on the likelihood of confusion or deception, in my judgment, on the evidence that is available, the onus on Shaanxi was not met.
[48] The meanings of “to deceive” and “to cause confusion”, as used in s 17(1)(a) are recorded in proposition eight of Pioneer Hi-Bred. It may not take much for confusion to arise. It may simply arise from “being caused to wonder” about the source of the goods. As Mr Goodwin submitted, this could be met, for example, by customers choosing to get information from Shaanxi about its vehicles because they thought there might be an association with Man’s business.
[49] The analysis to this point, on the question of onus, has been directed only to the absence of any evidence from Shaanxi as the party bearing the onus. This conclusion, standing alone, is sufficient to allow the appeal. However, should there be any reservation about the conclusion in that regard, the preceding conclusion that there is a reasonable level of similarity adds substantial weight to my conclusion that Shaanxi failed to establish that use of its mark would not be likely to deceive or cause confusion.
Result
[50] The appeal is allowed. [51] The decision is quashed.
[52] There is judgment for the appellant in terms of its notice of opposition by refusing the trademark application No. 983340 made by Shaanxi Heavy-Duty Automobile Co. Ltd.
[53] On this appeal the appellant is entitled to costs on a 2B basis together with reasonable disbursements.
[54] In respect of the opposition in the Intellectual Property Office the appellant is entitled to costs on the standard scale allowed in the Intellectual Property Office
together with reasonable disbursements.
Woodhouse J
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