Monster Energy Company v Ox Group Global Pty Ltd
[2016] NZHC 2124
•7 September 2016
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2016-485-190 [2016] NZHC 2124
UNDER the Trade Marks Act 2002 IN THE MATTER OF
an appeal of the decision [2016] NZIPOTM 3 of the Assistant Commissioner of Trade Marks dated
29 February 2016
BETWEEN
MONSTER ENERGY COMPANY Appellant
AND
OX GROUP GLOBAL PTY LIMITED Respondent
Hearing: 25 August 2016 Counsel:
B P Cain for appellant
G F Arthur for respondentJudgment:
7 September 2016
RESERVED JUDGMENT OF CULL J
Contents
Introduction .....................................................................................................................................2
Original grounds of opposition .........................................................................................................2
The additional evidence ...................................................................................................................4
Ox Group’s objections ......................................................................................................................7Application for leave ........................................................................................................................8
Discussion ......................................................................................................................................14
Jurisdiction ....................................................................................................................................... 14
The reason for the application......................................................................................................... 16Justice between the parties ...........................................................................................................17
Result .............................................................................................................................................18
Costs ..............................................................................................................................................19
MONSTER ENERGY COMPANY v OX GROUP GLOBAL PTY LIMITED [2016] NZHC 2124 [7 September
2016]
Introduction
[1] The appellant, Monster Energy, has filed an appeal from a decision of the
Assistant Commissioner of Trade Marks (the Assistant Commissioner) dated
29 February 2016 in relation to an application for registration of the respondent’s
(Ox Group’s) New Zealand trade mark number 998778 in class 32:1
(the Ox trade mark).
[2] The Assistant Commissioner upheld Ox Group’s application to register the Ox trade mark after the expiry of the appeal period. Monster Energy has filed an appeal challenging the Assistant Commissioner’s findings in the application of ss 17(1)(a) and 25(1)(b) of the Trade Marks Act 2002 (the Act).
[3] The matter before the Court for a pre-hearing decision is an interlocutory application by Monster Energy to add a further ground of objection to its opposition to the registration of the Ox trade mark, namely that Ox Group had “no intention to use the mark applied for” under s 32(2) of the Act. Ox Group opposes the application.
[4] I consider that allowing the amendment, with the evidence in support, is in the interests of Justice and will not significantly prejudice Ox Group, as the real issues between the parties should be properly heard to secure the just and expeditious determination of the substantive appeal.
Original grounds of opposition
[5] Monster Energy opposed Ox Group’s application to register the Ox trade
mark on the following grounds:
1 Re Ox Group Global Pty Ltd [2016] NZIPOTM 3.
(a) the use of the Ox trade mark was likely to cause deception or confusion (s 17(1)(a) of the Act); and
(b)the registration of the Ox trade mark should be prohibited because it is confusingly similar to a mark already on the register (s 25(1)(b) of the Act).
[6] Monster Energy did not object to the registration of the Ox trade mark under s 32(2) of the Act in its notice of opposition dated 23 September 2014. However, it did advance a submission during the hearing before the Assistant Commissioner that Ox Group did not intend to use the opposed mark. Monster Energy’s submission was based on the declaration filed by Mr Hales, the managing director and chief executive officer of Ox Group, when he said that Ox Group intends to use only a
portion of the Ox trade mark on its energy drink products.2 Mr Hales said
specifically:
A strategic decision was made prior to the launch of the OX energy drinks in Australasia to alter their design to feature the words “UNLEASH THE POWER” alone and without the “OX” prefix. This was done for all countries where the stylised OX trade mark had not yet been registered. The phrase “UNLEASH THE POWER” is synonymous with the OX brand, particularly when coupled with the distinctive cyan colour scheme and sold alongside other OX products and merchandising and therefore did not require the word “OX” to provide distinctiveness or distinguish it from other traders.
[7] The Assistant Commissioner recorded Monster Energy’s submission, but observed that this evidence from Ox Group did not alter the test that she was required to apply, as she must consider the trade mark in the form as it appears in the trade mark application.3 The Assistant Commissioner added that she understood counsel for Monster Energy to concede as much at the hearing.
[8] In its interlocutory application to add a further ground of objection, Monster Energy acknowledges that having not pleaded s 32(2) of the Act in opposition to the Ox trade mark at the outset, it was not open to Monster Energy to argue and succeed
on that ground before the Assistant Commissioner.
2 Affidavit of Dean Hales sworn 6 May 2016 at [20].
3 Re Ox Group Global Pty Ltd, above n 1, at [46].
[9] However, one month after the Assistant Commissioner had issued her decision, Monster Energy, through its attorneys in Australia, received correspondence from Ox Group’s attorneys in Australia. Monster Energy says that this correspondence confirms that Ox Group has no intention to use the trade mark as applied for and relies on the correspondence as evidence to support the additional ground of objection. It is relevant therefore, to consider the detail of the correspondence, upon which Monster Energy relies.
The additional evidence
[10] The chronology of relevant events is not in dispute. Counsel for Monster Energy provided a chronology which is set out in the attached schedule. Monster Energy submits that the most significant sequence of events in the chronology is between 29 February 2016, when the Assistant Commissioner issued her decision, and 16 March 2016, before Monster Energy filed its notice of appeal.
[11] There are four items of correspondence which Monster Energy submits are material and relevant to its present application. The first is a letter dated 1 February
2016 from their solicitors to the solicitors acting for Ox Group, in which Monster Energy alleges that Ox Group is using the trade mark UNLEASH THE POWER in relation to energy drinks in Australia in breach of Monster Energy’s registered “UNLEASH THE BEAST!” trade marks. Monster Energy’s solicitors note that the trade mark UNLEASH THE POWER, which is being applied to the drink cans is not the trade mark which is the subject of Ox Group’s trade mark applications (in Australia and New Zealand) and does not incorporate the OX element of the trade mark, the subject of its applications.
[12] Monster Energy’s solicitors then alleged that Ox Group had engaged in trade mark infringement, misleading and deceptive conduct and passing off, and threatened that if Ox Group did not cease all use of the trade mark UNLEASH THE POWER and withdraw its Australian trade mark application for OX UNLEASH THE POWER, Monster Energy reserved the right to commence legal proceedings against Ox Group without further notice.
[13] Ox Group replied on 7 March 2016, through its solicitors, denying the allegations and confirming that the branding of their energy drink had changed and it was no longer in possession of or selling any energy drinks featuring the old branding. By old branding, I understand this refers to “UNLEASH THE POWER” without the OX element.
[14] On 10 March 2016, Monster Energy sought confirmation that Ox Group had ceased “all” use of “UNLEASH THE POWER” and “OX UNLEASH THE POWER” in relation to beverage products in Australia.
[15] Ox Group responded on 16 March 2016, stating:
We confirm our client is no longer in possession of or selling energy drinks which feature the branding shown in the annexure to your letter dated
1 February 2016. The branding of its energy drinks has since changed.
[16] For completeness, the branding shown in the annexure to Monster Energy’s
letter of 1 February 2016 was “UNLEASH THE POWER”.
[17] Although the first item of correspondence is dated 1 February 2016, New Zealand counsel for Monster Energy was unaware of the Australian correspondence between the respective parties’ solicitors until some period of time after the Assistant Commissioner’s decision. The date of the Assistant Commissioner’s decision was 11 February 2016 and the first affidavit of Mr Mitchell, filed in support of Monster Energy’s current application, confirms that Monster Energy’s New Zealand solicitors did not receive the 1 February correspondence until 15 March 2016. The response of 7 March was received on
16 March and the remaining correspondence was received on 16 May 2016. None of the four items of correspondence were available to Mr Cain, and New Zealand counsel for Monster Energy, at the time of the hearing before the Assistant Commissioner.
[18] Monster Energy submits that the Ox Group correspondence indicated its intention to use the Ox trade mark, but subsequently qualified its intention when it filed the affidavit of Mr Hales, sworn in opposition to Monster Energy’s application.
On the basis of the affidavit from Mr Hales, Monster Energy submits that Ox Group has no intention to use the trade mark in New Zealand.
[19] Mr Hales for Ox Group deposed that Ox Group intended, and still intends, to use the Ox trade mark.4 He explained that a strategic decision was made in January
2014 to distribute OX energy drinks featuring the words “UNLEASH THE POWER” alone and without the “OX” prefix, until the New Zealand trade mark application number 998778 was registered. It was intended to be a temporary measure to avoid any opposition from energy drink manufacturer, Red Bull. He challenged Monster Energy’s ground of objection, where reliance was placed on Mr Hales’ declaration of 5 March 2015, that Ox Group did not intend to use the trade mark as applied for. He emphasised that was incorrect, as the decision was made prior to the launch of the OX energy drinks in Australasia to alter their design to feature the words “UNLEASH THE POWER” alone and without the OX prefix, and this was done from all countries where the stylised OX trade mark had not yet been registered. He said further:
18. I did not say that we did not intend to use the trade mark. As explained above, we decided to temporarily not use the trade mark. But once the trade mark is registered we will use the trade mark.
19. The affidavit of Cameron Edward Mitchell exhibits correspondence between Monster Energy’s lawyers in Australia … and Ox Group’s lawyers in Australia … the notice of opposition at paragraph 7 says that this correspondence confirms that Ox Group has no intention to use the mark as applied for. That is incorrect.
20. The correspondence is in relation to the use of the slogan “UNLEASH THE POWER” on energy drinks in Australia and not in relation to the trade mark [or] trade mark application number 998778 or in respect of any energy drinks in New Zealand. This correspondence is irrelevant to this matter.
[20] On the basis of the four items of correspondence and Mr Hales’ evidence filed in support of Ox Group’s opposition, Monster Energy seeks leave from this Court to add “no intention to use” as a ground of objection to registration of the Ox trade mark for the purposes of the substantive appeal from the Assistant
Commissioner’s decision. The reason advanced for the application was the statutory
4 Affidavit of Dean Hales sworn 6 May 2016 at [5], [12], [17]–[20].
intention behind s 32(2) of the Act and the public policy need for the Trade Marks
Register to remain free of unused trade marks.
[21] Monster Energy also seeks leave to adduce the evidence filed in support of its application in support of the new ground of objection, pursuant to r 20.16(3) of the High Court Rules. Monster Energy submits that the evidence relates to a matter that has arisen after the date of the Assistant Commissioner’s decision under appeal, and is relevant to the determination of the substantive appeal.
Ox Group’s objections
[22] Ox Group’s objections to Monster Energy’s application can be summarised as follows:
(a) Section 172(3)(a) of the Act allows the Court to grant leave to raise further grounds of objection, but does not allow an entirely new basis for objecting to a trade mark application. Ox Group specifically submits that there is no jurisdiction of the High Court to entertain the new objection.
(b) The granting of leave is not necessary to do justice to Monster Energy. (c) Leave is significantly prejudicial to Ox Group.
(d) Granting leave will convert the hearing before the Assistant
Commissioner into a “dry run”.
(e) Monster Energy elected not to seek to amend its opposition before the Assistant Commissioner. It should not be allowed to go back on that election.
(f) The Assistant Commissioner’s decision is not conclusive, as Monster Energy could seek to invalidate a granted trade mark on the basis of no intention to use, or non-use of, the trade mark, by seeking leave to be heard on this issue before the Assistant Commissioner.
(g)There is no merit to Monster Energy’s substantive allegation that Ox Group had no intention to use the trade mark, because the evidence clearly establishes that Ox Group intends to so use it.
Application for leave
[23] Section 172 of the Act governs the hearing of an appeal and the permission to add further grounds of objection:
172 Hearing of appeal
(1) On an appeal, the court must hear the parties and the Commissioner. (2) Appeals must be heard only on the materials stated by the
Commissioner unless a party, either in the manner prescribed or by
special leave of the court, brings forward further material for the consideration of the court.
(3) In the case of an appeal against the acceptance of an application or the registration of a trade mark,—
(a) no further grounds of objection are permitted by the opponent or the Commissioner, other than those stated by the opponent, except by leave of the court; and
(b) if further grounds of objection are permitted, the applicant’s application may be withdrawn without payment of the costs of the opponent on giving notice as prescribed.
[24] Although there appears to be no authority on the factors to be considered in the application of s 172(3)(a), some guidance can be taken from the cases applying s 172 of the Act, the High Court Rules and the Court of Appeal (Civil) Rules on amendment of pleadings.
[25] In Hansens Beverage Company v Bickford’s Australia Pty Ltd, in an appeal from a decision of the Trademark Commissioner, Ronald Young J admitted fresh evidence and, in doing so, summarised that new evidence should be admissible, reliable, cogent, relevant and sufficiently specific, subject to prejudice and public
interest factors.5
5 Hansens Beverage Company v Bickford’s Australia Pty Ltd HC Wellington CIV-2008-485-1264,
15 October 2008 at [15]–[21].
[26] Both counsel for the parties referred to the High Court Rules and the Court of Appeal (Civil) Rules 2005, as being the best source of guidance. Rule 34 provides that the grounds of appeal may be amended without leave where the appeal is as of right, or if the other parties consent to the amendments.6 Relevantly, r 48(2) gives the Court of Appeal all the powers and duties of the court of first instance concerning procedure, including the amendment of pleadings. The applicable High Court rule is
7.77(4), which provides:
7.77 Filing of amended pleading
(4) If a cause of action has arisen since the filing of the statement of claim, it may be added only by leave of the court. If leave is granted, the amended pleading must be treated, for the purposes of the law of limitation defences, as having been filed on the date of the filing of the application for leave to introduce that cause of action.
[27] My attention was drawn to the commentary in McGechan on Procedure, in which the authors note that leave is likely to be granted readily, where a cause of action has arisen since the filing of the statement of claim, in the absence of unusual prejudice to the defendant.7 I note that the commentary refers to Commodore Pty Ltd v Perpetual Trustees Estate and Agency Company of New Zealand Ltd, where Cooke J said that:8
The modern practice of the Court should be sufficiently adaptable to accommodate the present type of claim without requiring the ritual of another action.
[28] The principles applying to amendment of pleadings have been canvassed in a number of authorities where the relevant considerations identified are as follows.9
(a) the merits of the proposed amended pleading;
(b) whether irreparable damage would be suffered by the applicant;
6 Rule 34(1) and (3): grounds of appeal may be amended only by leave of the Court if the
Registrar has allocated a hearing date or the appeal to the Court has been brought by leave.
7 Andrew Beck and others McGechan on Procedure (online looseleaf ed, Brookers) at
[HR 7.77.04].
8 Commodore Pty Ltd v Perpetual Trustees Estate and Agency Company of New Zealand Ltd
[1984] 1 NZLR 324 (CA) at 335.
9 Elders Pastoral v Marr (1987) 2 PRNZ 383 (CA) at 385; Fordham v Xcentrix Communications Ltd (1996) 9 PRNZ 682 (HC); Tewsley Street Properties Ltd v Wright Stephenson Properties Ltd (1993) 7 PRNZ 58 (HC); Body Corporate 325261 v McDonough [2014] NZHC 1821 at [12]; Clode v Sullivan [2016] NZHC 529 at [15].
(c) the timing of the application and magnitude of, and reasons for, delay; (d) the risk of significant prejudice to other parties;
(e) the effect on public resources reflected in the impact on case management and the timetable to trial;
(f) the importance of the principle that the parties should have every opportunity to ensure that the real controversy goes to trial so as to secure the just determination of the proceeding;10 and
(g)the overarching requirement is to exercise the discretion in the interests of justice.11
[29] Of particular relevance to this application is the oral judgment of Stevens J in Heinz Wattie’s Ltd v Goodman Fielder Consumer Foods Pty Ltd, where an application to amend pleadings in a trade mark revocation action was allowed.12
Stevens J said:13
[40] … The appropriate statutory bases for revocation, if available, would only finally be known once all of the evidence was in and once it had been subject to testing at the hearing before the Assistant Commissioner. I am satisfied that any failure to particularise the precise statutory basis for seeking revocation would not mean that the application for revocation was invalid or ineffective. Further, it would still qualify as “the application for revocation” which was the trigger point for the restriction in s 66(3) of the Act. There is no good reason why it should not be open for an applicant who advanced only one ground in the application to include a further ground at a later point in the proceeding if evidence emerged to support it. The date of “the application for revocation” as a basis for reliance on s
66(3) would still be the date of the original application.
[41] Here, that point was reached after the application for leave to adduce further evidence, namely, in December 2007. Thereafter, the respondent in January 2008 made the application for leave to add the further ground. Even if an applicant were required to specify both the factual basis and the statutory ground(s) relied upon, nevertheless this ought not to preclude
10 Thornton Hall Manufacturing Ltd v Shanton Apparel Ltd [1989] 3 NZLR 304 (CA) at 309;
Clode v Sullivan, above n 9, at [16].
11 Chilcott v Goss [1995] 1 NZLR 263 (CA); Clode v Sullivan, above n 9, at [16].
12 Heinz Wattie’s Ltd v Goodman Fielder Consumer Foods Pty Ltd HC Auckland
CIV-2007-404-6946, 10 December 2008.
13 Emphasis added.
the possibility of later amendment by addition (once new factual material emerged) to the original application for revocation.
[30] In this case, the parties have acknowledged that the new ground of objection is a fresh cause of action. Monster Energy specifically accepts that the legal basis for the new ground arises under s 32 of the Act and this is different from the legal basis of its original grounds of opposition. In Heinz Wattie’s Ltd, Stevens J had regard to the Court of Appeal’s decision in Chilcott v Goss, in determining whether the amendment would be adding or introducing a fresh cause of action or permitting a respondent to raise, as a further basis for seeking revocation, the basis identified in
the specific statutory provision of the Act:14
In essence, “cause of action” means the act on the part of the defendant which gives the plaintiff the cause of complaint (Smith v Wilkins and Davies Construction Co Ltd [1958] NZLR 958, 961). The test of whether an amended pleading raises a “fresh” cause of action for the purposes of the rules as to amendment is well settled. In Smith v Wilkins and Davies Construction Co Ltd at p 961 McCarthy J put the matter in this way:
The issue is, I think, put as clearly as anywhere in the words of Lord Wright MR in Marshall v London Passenger Transport Board [1936] 3 All ER 83, as being whether the new pleading involves “a new departure, a new head of claim, or a new cause of action” (ibid, 87). In other words, is it something essentially different from that which was pleaded earlier? Such a change in character may be brought about, in my view, by alterations in matters in law or of fact, or both. Alterations of fact could possibly be so vital and important as by themselves to set up a new head of claim. On the other hand, more often alterations of fact do not affect the essence of the case brought against the defendant ... In each case it must, I consider, be a question of degree.
That test was adopted by this Court in Gabites v Australasian T & G Mutual Life Assurance Society Ltd [1968] NZLR 1145, 1151 where North P also cited with approval the following passage from the judgment of Sholl J in Harris v Raggatt [1965] VR 779, 785:
If we say that the law is that the plaintiff cannot be allowed, after the period of limitations has run, to set up a new cause of action, we use the term in a special sense as meaning a “new case” varying so substantially from what has previously been set up that it would involve investigation of matters of fact or questions of law, or both, different from what have already been raised and of which no fair warning has been given, so that it would be unfair and unjust to the defendant to put him in peril of a judgment founded on the new matter. Certainly, if there is
14 Chilcott v Goss, above n 11, at 273.
set up a “new case” on the facts, upon which is based a new claim upon a new and different legal basis — a new cause of action in that sense — leave will ordinarily be refused.
It is then a matter of comparing the allegations in the new pleadings with what has previously been alleged, recognising that questions of degree are involved.
[31] Stevens J also had regard to Attorney-General v Carter, where the focus was on the legal characterisation of the claim.15 There, the consequences of amendment would have been to introduce statute-barred causes of action.
[32] After considering the differences in approach in Chilcott and Carter, Stevens J described the approach in Chilcott as focusing on the essence of the claim, where the Court considered the substance rather than the form. Following this analysis, Stevens J considered that it was in the interests of justice that the amendment was allowed, to allow the respondent to raise s 66(1)(b) as a further basis for seeking revocation, in addition to the relief sought under s 66(1)(a) of the Act. Stevens J noted that the fact that the application to amend was made after the hearing of the initial application and during the appeal process was not determinative. The important factor is that when the High Court comes to address the appeal by way of re-hearing, it is in a position to deal with the real controversy between the parties.
[33] Stevens J also had regard to the consequence of allowing the application for amendment. All aspects of the interpretation of s 66(1) of the Act in that case would be able to be thoroughly addressed at the hearing. In addition, all relevant factual questions pertaining to both potential relief under s 66(1)(a) or (b) will be able to be considered by the High Court. Importantly, he observed that this could be significant
if the case should proceed to further appeal.16
[34] For completeness, I was referred to two further authorities by Ox Group. The first was Blueskin Bay Forest Heights Ltd v Paterson Pitts Partners Ltd, where the Court declined to allow an amendment to the pleadings which alleged a duty of care
which was owed at a different and later time than the duty previously pleaded, and
15 Attorney-General v Carter [2003] 2 NZLR 160 (CA).
16 Heinz Wattie’s Ltd v Goodman Fielder Consumer Foods Pty Ltd, above n 12, at [51].
was a pleading of a new cause of action.17 Rule 48(2) of the Court of Appeal (Civil) Rules 2005 provides that the threshold test for leave is where an amended pleading is necessary to do justice to the appellant and respondent alike on the appeal. The Court declined the amendment because the “different claim now sought to be pleaded and argued on appeal” could have been put at trial; it was not put because it was essentially inconsistent with the case the appellant advanced at trial; the appellant was seeking to argue on appeal a case different from the one it pleaded and took to trial in the High Court; and the proposed amendment advanced a new cause of action, now statute-barred. Further, the necessity for further evidence in support of the proposed amended claim would also prejudice the respondent. The Court concluded that permitting the amended pleading would necessitate a fresh trial and that was not appropriate on an appeal to the Court of Appeal.
[35] The second authority was Timtech Chemicals Ltd v Osmose New Zealand Ltd, where leave was declined to file further evidence in support of an appeal from an Assistant Commissioner of Patent’s rejection of the appellant’s challenge to the respondent’s patent application.18 The appellant sought to file affidavits from eight deponents, with “new” material that had not been seen by the Assistant Commissioner. Most of the material related to a prior use claim including prior
publication, and “obviousness about the allegation of prior use” was not a ground of opposition before the Assistant Commissioner, nor was there any prior use ruling. Ronald Young J declined the application, concluding that for the most part the evidence was not “new”, but was in existence as at the date of the hearing of the patent opposition and most, if not all, could, with reasonable diligence, have been discovered. Further, if the evidence were allowed, it would be a substantially new case; the Court would not have the benefit of a first instance decision by a specialist tribunal; and the statutory appellate process would be compromised, because the respondent would not have a merit-based right of appeal if the evidence was permitted. There would also be inevitably months of delay for evidence to be filed in reply and for a substantive hearing on the merits in the High Court. This would
have rendered the first hearing as a “dry run” before the Assistant Commissioner.
17 Blueskin Bay Forest Heights Ltd v Paterson Pitts Partners Ltd [2014] NZCA 268.
18 Timtech Chemicals Ltd v Osmose New Zealand Ltd HC Wellington CIV-2010-485-2487, 16 May
2011.
Discussion
Jurisdiction
[36] The starting point in a consideration of leave to add a further ground of objection on appeal must be s 172(3)(a) of the Act and the jurisdiction of the High Court to grant leave. Mr Arthur for Ox Group submits that there is no jurisdiction to grant leave for a “whole new basis for opposing the application”. He submits that “grounds” in s 172(3)(a) means the facts that give rise to the statutory basis for opposing the trade mark application. Thus, “no further grounds of objection” are akin to the facts pleaded in a statement of claim.
[37] The basis for Mr Arthurs submission arises from the wording of both s 47(2) of the Act and reg 74(f) of the Trade Marks Regulations 2003. Mr Arthur submits that there is a distinction in both provisions between the grounds of opposition and the provisions of the Act (or any prescribed matters). Those provisions are set out as follows:19
47 Opposition to accepted application
…
(2) The notice of opposition must include a statement of the grounds of opposition and any prescribed matters.
74 Information required in notice of opposition
A notice of opposition to an application for registration of a trade mark must contain the following information:
...
(f) the ground or grounds of opposition and the provisions of the Act to which those grounds relate:
[38] Mr Arthur submits that similarly s 48(1) provides the trade mark applicant must file a counter-statement of “the grounds” on which the applicant relies and reg 80(d) provides that the counter-statement must contain a brief statement of “the grounds” on which the trade mark applicant relies in support of the application for
registration.
19 Emphasis added.
[39] In this statutory and regulatory framework, Ox Group submits that “grounds” means the facts that give rise to the statutory basis for opposition, not the “provision of the Act”. Thus, “the grounds” are akin to the facts pleaded in the statement of claim but “the provision of the Act” is akin to the cause of action. Mr Arthur drew an analogy to the way in which “grounds” is used in relation to an interlocutory application in the High Court under r 7.19. High Court Rule 7.19(1) provides:
7.19 Contents, form, and filing of interlocutory application
(1) An interlocutory application must—
(a) state the relief sought and the grounds justifying that relief;
and
(b) refer to any particular enactments or principles of law or judicial decisions on which the applicant relies.
[40] Ox Group placed reliance on VB Distributors Ltd v Matsushita Electric Industrial Co Ltd, where Hammond J said that the notice of opposition and counter- statement had the same purpose as the pleadings in a regular civil proceeding, namely that what is pleaded are the facts, and the issues for determination which
arise are identified.20
[41] Thus, in the present case, Ox Group contends that Monster Energy does not seek to introduce new grounds of opposition, because new grounds would be “facts” relevant to the already pleaded causes of action under ss 17(1) and 25(1). Instead, because Monster Energy now seeks to add a whole new basis of objection, namely a new cause of action, the application must be declined because s 172(3)(a) only authorises new grounds, or facts, on existing bases for opposing the application. For that reason, Ox Group submits the High Court has no jurisdiction to grant leave.
[42] I am unable to accept Ox Group’s submission. To equate “grounds of objection” under s 172(3) with facts only, reads down the ambit of s 172 of the Act to the regulatory requirement in reg 74(f) of the Trade Marks Regulations specifying the content of the notice of opposition. The fact that reg 74(f) requires the grounds
of opposition and “the provisions of the Act” to which those grounds relate does not
20 VB Distributors Ltd v Matsushita Electric Industrial Co Ltd HC Wellington AP119/99,
19 October 1999 at [43].
restrict the use of “grounds of opposition” in the Act, nor does it mean, in my view, that grounds of opposition must be read exclusively from “the provisions of the Act”.
[43] I view the regulation as specifying that the grounds of opposition must be set out in the notice of opposition, together with the provisions of the Act to which those grounds relate. I am unable to find any authority to support the limited or restricted definition of “grounds” as submitted by Mr Arthur and nor am I persuaded that such a limited definition of “grounds” should restrict the High Court in its discretion to grant leave to add further grounds of objection under s 172(3) of the Act.
The reason for the application
[44] The reason for Monster Energy’s application was the receipt of the four items
of correspondence after the hearing before the Assistant Commissioner.
[45] The first item of correspondence of 1 February 2016 was not received by Mr Cain until well after the Assistant Commissioner’s decision, as discussed above.21 I am satisfied that the reason for advancing a further ground of objection on appeal has arisen because evidence emerged subsequent to the first hearing to support it. I concur with Stevens J’s observation that:22
… There is no good reason why it should not be open for an applicant who advanced only one ground in the application to include a further ground at a later point in the proceeding if evidence emerged to support it. …
[46] Unlike the additional affidavits from eight deponents in Timtech Chemicals, the evidence here is “new” and I am not persuaded that permitting additional evidence with the further ground of objection will make this a substantially new case. By allowing the application, I am satisfied that all aspects of the issues between the parties will be able to be thoroughly addressed at the hearing, given that the additional documentation, being the four letters and the affidavit appending examples of Ox Group’s products and marks from Ox Group’s websites, will be able
to be considered by the High Court appropriately on appeal.
21 At [17].
22 Heinz Wattie’s Ltd v Goodman Fielder Consumer Foods Pty Ltd, above n 12, at [40].
[47] In this way, I endorse the importance of the principle that the parties should have every opportunity to ensure that the real controversy should be heard so as to secure the just determination of the proceeding.23
Justice between the parties
[48] Mr Arthur urged the Court to dismiss Monster Energy’s application on the basis that the ground and the accompanying evidence had no merit. The additional ground sought by Monster Energy requires it to satisfy the Court that Ox Group does not intend to use the trade mark. The evidence filed by Monster Energy, which it states is the evidence upon which it relies for the new objection, must be assessed in light of the responses by Ox Group.
[49] I was not persuaded by the submission from Mr Arthur that Monster Energy can exercise its alternative remedy, namely an application to the Assistant Commissioner to hear the new ground of objection. This would engage both parties in “the ritual of another action”.24 I was also not persuaded that the High Court needed the benefit of a first instance decision by a specialist tribunal on this additional issue. Unlike Timtech Chemicals, the new ground and the evidence will not make this a substantially new case. Just as Hammond J considered the appellate court was in as good a position as the “trial tribunal” to determine the likelihood of confusion upon a comparison of trade marks, I consider that the High Court can
reach a conclusion on the issue of intended use by Ox Group of the trade mark, by reference to the evidence permitted on this application and any responses.
[50] Although I have some sympathy for Ox Group, that the present application was not of its making, I do not accept that Monster Energy “knew about the issue for
11 months before the first hearing but did nothing to amend the opposition before the Commissioner”. There was insufficient evidence for the ground of objection under s 32 to be advanced at the hearing, but subsequently matters have arisen, which
appears to lend further support for the ground being advanced.
23 Heinz Wattie’s Ltd v Goodman Fielder Consumer Foods Pty Ltd, above n 12, at [46]; Thornton
Hall Manufacturing Ltd v Shanton Apparel Ltd, above n 10; Clode v Sullivan, above n 9.
24 Commodore Pty Ltd v Perpetual Trustees Estate and Agency Company of New Zealand Ltd,
above n 8, at 335.
[51] Although Monster Energy has a considerable onus to demonstrate that Ox Group does not intend to use the trade mark applied for, I consider it is in the interests of justice that the real issues between the parties are properly heard to secure the just and expeditious determination of the appeal proceeding. For that reason, I do not consider Ox Group is significantly prejudiced.
[52] There is one more matter that does need clarification. In advancing his submissions for Ox Group, Mr Arthur submits that the relevant test in granting leave to amend a pleading is that it is necessary to do justice to appellant and respondent alike on the appeal. He refers to r 48(2) of the Court of Appeal (Civil) Rules 2005. However, the rule provides that the Court has all the powers and duties of the court of first instance concerning procedure, including the amendment of pleadings. It is the decision of Blueskin Bay Forest Heights Ltd that refers to leave being granted “if the amended pleading is necessary to do justice to appellant and respondent alike on
the appeal”. 25 Blueskin Bay Forest Heights Ltd is distinguishable from this case.26
[53] I am satisfied that it is in the interests of justice that the full extent of the controversy between the parties is heard as part of the substantive appeal hearing, to secure the just determination of the proceeding. Any question of delay or prejudice can be met by timetabling Ox Group’s evidence in response and any reply from Monster Energy. The matter can then be set down for a substantive appeal hearing. It cannot be overlooked that if this matter proceeded to hearing on the original two grounds of objection only, the parties would then be involved in a new proceeding before the Assistant Commissioner on this application for a trade mark and the related evidence adduced on appeal, resulting in further cost and delay.
Result
[54] Leave is granted to Monster Energy to add a further ground of objection to its
opposition to registration of the Ox trade mark, that ground being “no intention to use the mark applied for” under s 32(2) of the Act.
25 Blueskin Bay Forest Heights Ltd v Paterson Pitts Partners Ltd, above n 17, at [18].
26 See above at [34].
[55] Special leave is granted to adduce the evidence filed by Monster Energy in support of the application to add the ground of objection.
[56] Ox Group is granted leave to file any evidence in reply on or before four weeks from the date of this judgment.
[57] Monster Energy is granted leave to file any further evidence, if any, within two weeks of receipt of the evidence from Ox Group.
Costs
[58] Monster Energy has been granted an indulgence. I leave costs on the present application to be determined in the award of costs for the substantive proceeding.
Cull J
Solicitors:
James & Wells, Hamilton for appellant
Gibson Sheat, Wellington for respondent
Schedule
Chonology
Index
Document name
Document date
1.
Trade Mark Application No. 998778 filed with IPONZ
29 May 2014
2.
Notice of Opposition filed by Monster Energy
23-Sept-2014
3.
Counterstatement filed by Ox Group Global
30-Oct-2014
4.
Statutory Declaration of Rodney Cyril Sacks (in support of opposition) filed
5-Jan-2015
5.
Statutory Declaration of Dean Athol Hales (in support of application) filed
5-Mar-2015
6.
Letter from King&Wood Mallesons (acting for Monster Energy Company) to DC Strategy Pty Ltd (acting for OX Group Global Pty Limited)
1-Feb-2016
7.
Hearing before Assistant Commissioner Glover
11-Feb-2016
8.
Decision of Assistant Commissioner issued
29-Feb-2016
9.
Letter from DC Strategy Pty Ltd to King&Wood Mallesons (stating “the branding of [Ox Group’s] energy drink has now changed” and Ox Group was “no longer selling any energy drinks featuring the old branding”)
7-Mar-2016
10.
Letter from King&Wood Mallesons to DC Strategy Pty Ltd
10-Mar-2016
Index Document name
Document date
11.
Letter from DC Strategy Pty Ltd to King&Wood Mallesons (stating “the branding of [Ox Group’s] energy drinks has….changed”)
16-Mar-2016
12.
Notice of Appeal filed
24-Mar-2016
13.
Notice of Interlocutory Application to Add Ground of
Objective filed
24-Mar-2016
14.
Respondent’s Notice of Opposition to Application to Add
Ground of Objection filed
28-Apr-2016
13
3
0