Omega SA (Omega AG) (Omega Limited) v Guru Denim Inc
[2017] NZCA 81
•27 March 2017 at 10.30 am
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA218/2015 [2017] NZCA 81 |
| BETWEEN | OMEGA SA (OMEGA AG) (OMEGA LIMITED) |
| AND | GURU DENIM INC |
| Hearing: | 20 February 2017 |
Court: | Asher, Simon France and Peters JJ |
Counsel: | P M D Johns and T A Huthwaite for Appellant |
Judgment: | 27 March 2017 at 10.30 am |
JUDGMENT OF THE COURT
AThe appeal is dismissed.
BCosts must follow the event on a standard appeal on a band A basis, and we certify for two counsel.
____________________________________________________________________
REASONS OF THE COURT
(Given by Asher J)
Introduction
The Omega brand has a distinguished history for watchmaking going back to the nineteenth century, and has an international reputation. The appellant Omega SA (Omega) is a Swiss corporation that owns the Omega intellectual property and has a longstanding trade mark, first registered in New Zealand in 1905. It consists of the Omega symbol with the word “OMEGA” in this format: . We will refer to this as the word and symbol mark.
The respondent Guru Denim Inc (Guru) is a United States corporation which specialises in the supply and sale of clothing and lifestyle products. It has applied in New Zealand for registration of a trade mark in this design: in classes 3, 9, 14, 18 and 25, with a wide description of goods specified in each class. We will refer to this mark as the Guru mark.
Omega opposes the proposed Guru registration in class 14, which is the class that includes watches and jewellery. Its opposition failed before the Assistant Commissioner of Trade Marks[1] and on appeal to the High Court before MacKenzie J.[2] It now appeals that decision to this Court.
History of the Omega trade marks and Guru application
[1]Guru Denim Inc v Omega SA (Omega AG) (Omega Ltd) [2014] NZIPOTM 30 [Assistant Commissioner decision].
[2]Omega SA v Guru Denim Inc [2015] NZHC 559 [High Court decision].
Omega branded products have been available in New Zealand since at least 1945. They have been promoted in New Zealand for some time, and there are a number of retailers of the brand.
Guru applied for registration of its trade mark on 24 March 2011 (the relevant date). Omega’s opposition was pursued under ss 17(1)(a), 17(1)(b), 25(1)(b) and 25(1)(c) of the Trade Marks Act 2002 (the Act). Those sections were the same sections relied on in the appeal in the High Court, and Omega continues to rely on them in this appeal.
On 27 June 2014 the Assistant Commissioner held that the trade mark application in relation to class 14 should proceed to registration in full, subject to any appeal.[3] She held that the Omega word and symbol mark was likely to have been well known in the relevant market in relation to luxury watches.[4] Describing the relevant market, she stated:[5]
Having regard to the opposed goods on a notional fair use basis, I consider that the relevant market in New Zealand will mainly consist of the general purchasing public, and wholesalers and retailers, including jewellery and watch stores, fashion stores, large departments stores, and online sites that sell the opposed goods. I consider that the relevant market for the opposed goods is a mass market. I consider that the relevant market is likely to be discerning because the opposed goods are likely to involve high involvement purchasing decisions due to their cost and/or fashion considerations.
[3]Assistant Commissioner decision, above n 1, at [76]–[77].
[4]At [40].
[5]At [17].
However, she decided there was insufficient detail in the evidence provided for her to assess whether, and the extent to which, the relevant market in New Zealand would have been exposed to the Omega symbol on its own, before the relevant date.[6] She went on to compare the appearances of the opposed Guru mark and the Omega word and symbol mark. Her impression was that, having regard to all their essential features, the totalities of the Guru mark and the Omega word and symbol mark were dissimilar.[7] Therefore, she did not consider that registration of the Guru mark was likely to deceive or confuse.[8] In relation to s 25(1)(b) she found that a number of the opposed Guru goods were the same as or similar to goods covered by the Omega word and symbol mark.[9] But, in keeping with her conclusion under s 17(1)(a), she concluded that Guru’s mark was “visually, aurally and conceptually dissimilar” to the Omega mark and that Omega consequently failed under s 25(1)(b).[10] For the same reason, Omega also did not succeed under ss 17(1)(b) or 25(1)(c).[11]
[6]At [41].
[7]At [46].
[8]At [53].
[9]At [65].
[10]At [68]. We note that we have difficulty identifying the “aural” aspect of the comparison conducted by the Assistant Commissioner, given that the Guru mark has no word element.
[11]At [57] and [74].
Omega appealed to the High Court and filed a further declaration of a Mr Strähl, setting out more history of Omega’s trade marks. In this declaration Mr Strähl asserted generally that the Omega symbol often appears alone and not in combination with the word “OMEGA”. He attached exhibits, some of which showed cufflinks and other items in which the symbol appeared without the word “OMEGA”.
MacKenzie J, in dismissing the appeal against the Assistant Commissioner’s decision, rejected the argument that the Omega and Guru marks were sufficiently similar to be likely to deceive or confuse. He did so on the basis that the Omega symbol “must be considered as a symbol for the Greek letter”.[12] He held that since the Omega symbol would be recognised as the Greek character, there was little possibility of confusion. In contrast, he did not consider there was a risk of an observer of the Guru mark thinking that the Guru mark was intended to represent the Greek letter.[13] He went on to note the different orientation of the Omega and Guru marks, with one opening to the bottom and the other opening to the top, and given those differences he thought the similarities relied on by Omega were unlikely to deceive or cause confusion.[14] Even if the Guru mark and Omega symbol were regarded as abstract figures with no particular meaning, he considered that although there would be a slightly higher risk of confusion or deception, the dissimilarities outweighed the similarities and therefore registration of Guru’s mark would not be likely to deceive or cause confusion.[15]
[12]High Court decision, above n 2, at [17].
[13]At [17].
[14]At [22].
[15]At [23].
Since the Guru application, Omega has applied for, and been granted, registration of the Omega symbol alone in this form: . We will refer to this as the symbol mark.
This appeal
In Crocodile International Pte Ltd v Lacoste the Supreme Court stated that in New Zealand an appellate court is obliged to consider the Commissioner’s view, but must then decide what weight is to be given to it.[16] If it considers that the Commissioner’s view is wrong, the Court must act on its own view. The Court is not obliged to defer to the assessment of the Commissioner. However, the Supreme Court noted that, in respect of issues concerning the comparison of the aural, visual and conceptual qualities of a trade mark:[17]
Given the wide range of trade mark decisions that Commissioners are called upon to make, they may be expected to have a broader and more nuanced appreciation of the trade mark Register than judges, whose experience will generally be limited to the particular contested applications that come before them. This may mean that, where an appeal raises this type of issue, the appellate court should hesitate to depart from the Commissioner’s qualitative assessment (although being prepared to do so if ultimately satisfied that the Commissioner’s view is erroneous).
[16]Crocodile International Pte Ltd v Lacoste [2017] NZSC 14 at [65].
[17]At [66].
The Supreme Court also cited the following passage from Austin, Nichols & Co Inc:[18]
The tribunal may have had a particular advantage (such as technical expertise or the opportunity to assess the credibility of witnesses, where such assessment is important). In such a case the appeal court may rightly hesitate to conclude that findings of fact or fact and degree are wrong. …
[18]Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [5] (footnotes omitted).
The present appeal involves a qualitative assessment by the Assistant Commissioner, but there were no findings on credibility or indeed reliability.
Omega accepts the view of MacKenzie J that if this Court finds Omega does not succeed under s 17(1)(a) of the Act, then it cannot succeed under ss 17(1)(b) or 25(1)(c). As to s 25(1)(b), Omega submits that in principle a failure under s 17(1)(a) does not necessarily imply failure under s 25(1)(b). However, it accepts that for the purposes of this appeal there is no material difference between the approaches under the provisions. Therefore, if Omega’s objection under s 17(1)(a) fails, that is also fatal to the objection under s 25(1)(b).
Analysis
Section 17(1)(a)
As it did in the earlier hearings, Omega submits that s 17(1)(a) of the Act is a bar to the registration of Guru’s mark. Section 17(1)(a) provides:
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;
(a) Timing of registration
For the purposes of s 17(1)(a), nothing turns on the fact that the Omega symbol mark was registered after the relevant date. Section 17(1)(a) is concerned with the protection of the public rather than the proprietary interests of traders.[19] A likelihood of deception or confusion can arise in respect of an unregistered trade mark.
(b) Reputation
[19]Pioneer Hi-Bred Corn Company v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 (CA) at 54.
The starting point of the enquiry under s 17(1)(a) is to assess whether, at the relevant date, Omega’s marks had a sufficient reputation in New Zealand. That exercise establishes the public awareness against which the alleged likelihood of deception and confusion is to be assessed. It is a relatively low threshold.[20] If a mark is not known in the New Zealand market, the use by a different person of a similar mark cannot lead to actual deception or confusion.[21] The onus is on an opponent (here Omega) to establish a sufficiently substantial reputation in the Omega mark in New Zealand. The requirement is not awareness amongst all of the New Zealand public, but awareness among a significant number of persons within the relevant market.[22]
[20]N V Sumatra Tobacco Trading Company v British American Tobacco (Brands) Incorporated [2010] NZCA 24, (2010) 86 IPR 206 at [77].
[21]Pioneer Hi-Bred Corn Company v Hy-Line Chicks Pty Ltd, above n 19, at 63.
[22]Sexwax Incorporated v Zoggs International Ltd [2014] NZCA 311, [2015] 2 NZLR 1, (2014) at [65].
The relevant market is those members of the New Zealand public who buy watches, in particular high quality watches. No other significant market is established on the evidence. The risk of confusion is properly measured by reference to this group. The risk of confusion may be higher where the goods of Guru and Omega are the same or similar. However, we recognise that s 17(1)(a) is not confined to such cases.[23] It is concerned with public deception or confusion resulting from the use of Guru’s mark for the specified items in class 14, and this does not turn on the exact use and nature of the items. There could be confusion even if the products were different, and a different Guru product was thought to be an Omega product. There is in fact no detail before the Court of any existing use or proposed future use by Guru.
[23]Sexwax Incorporated v Zoggs International Ltd, above n 22, at [60].
From the outset we record that, as found by the Assistant Commissioner, there is no doubt that the Omega word and symbol mark was well known in the New Zealand market for watches on the relevant date. This mark features on most Omega products, which have been sold in New Zealand since 1945. Omega’s marketing in New Zealand and worldwide is significant. Of note are Omega’s official timekeeping of the Olympics and sponsorship of the America’s Cup, both events being of interest to New Zealanders. The promotional material for these events prominently features the word and symbol mark. It is clear that, at the relevant date, a significant portion of New Zealand watch purchasers would have been exposed to the Omega word and symbol mark. Guru has not contested this conclusion.
Omega seeks to go further than this in its submission on reputation. It argues that it has a reputation in New Zealand for the symbol alone, without the word “OMEGA”. The Assistant Commissioner did not accept this submission.[24] She found under s 17(1)(a) that it was not proven that there was sufficient awareness in the symbol alone in New Zealand. Mr Johns for Omega submits that this was an error, and he relied in the High Court and before us on all the evidence including the further evidence filed.
[24]Assistant Commissioner decision, above n 1, at [41].
It is difficult to discern MacKenzie J’s position on the reputation of the Omega symbol alone. He considered that the additional evidence from Omega did not take the position much further than the evidence before the Assistant Commissioner, stating, “I do not find in the further evidence any significant use which might create some reputation in the Omega device mark, considered in isolation”.[25] Yet, unlike the Assistant Commissioner, he went on to compare the appearances of the marks without directly addressing the distinction between the Omega word and symbol mark and the symbol mark alone.
[25]High Court decision, above n 2, at [15]. MacKenzie J used the term “device mark” for what we have called the “symbol mark”.
Mr Gray for Guru submitted that the Assistant Commissioner’s approach on the facts before her was correct, and that there was insufficient evidence of reputation in New Zealand in the symbol mark alone. He submitted that the further declaration filed for the High Court by Omega added little.
As we have set out, Omega has clearly established a reputation in its word and symbol mark. The position in respect of Omega’s symbol mark is more complex. Omega has not adduced evidence of sales and marketing of products in New Zealand bearing the symbol mark alone. The evidence that was provided demonstrates that when the symbol appears, it is almost always accompanied by the word “OMEGA”. However, we disagree with the Assistant Commissioner’s conclusion that this is fatal to Omega’s ability to establish the potential for deception or confusion.
Even in the absence of evidence of use of the symbol mark alone, it could still be shown that there is sufficient familiarity with the word and symbol mark as a whole that the use of a component of that mark by a competitor could cause deception or confusion. This was the case in Sexwax Incorporated v Zoggs International Ltd in which it was held, in relation to swim wear, clothing and other aquatic products, that the use of the word “Zoggs” in the proposed mark could cause confusion with a trade mark comprising a complex logo which included the words “MR ZOGS SEX WAX” in the context of surfboard wax.[26] That finding was made despite there being no evidence of an independent reputation in the words “MR ZOGS” alone. Indeed, Sexwax Incorporated did not seek to establish an independent reputation in those words, focussing their evidence on the reputation of the complex mark, of which “MR ZOGS” was just one element.[27] The Court of Appeal recognised that “[d]eception or confusion may arise by the use, not just of the whole of a mark or logo, but by using one or more of its essential features”.[28] It is clear to us that the Omega symbol is an essential feature of the Omega word and symbol mark. It is, in the words of the Court of Appeal in Sexwax Incorporated, “a significant part of the reputation generated from the mark itself”.[29]
[26]Sexwax Incorporated v Zoggs International Ltd, above n 22.
[27]At [35].
[28]At [38].
[29]At [36].
Therefore, we must consider whether the use of the Guru mark could lead to confusion with the Omega word and symbol, an essential feature of which is the symbol.
(c) Deception or confusion
We accept Mr Johns’ submission that it was erroneous for the High Court to focus on the fact that the symbol is the Greek letter. MacKenzie J assumed that the relevant public would know that was a Greek letter and would recognise it as such, and that the risk of an observer of the Guru mark thinking that the Guru mark represented the Greek letter was small.[30] This may be so if such a member of the public was conversant with the Greek alphabet. There was unsurprisingly no evidence of this. The assumption is entirely unsupported. Whilst it has been recognised that “…the fact-finder is entitled to take into account his or her own experience and reaction as a member of the public”, we do not consider that the Judge’s own knowledge and experience was an adequate basis for the far-reaching conclusion that there is any significant number of New Zealanders who know or assume that that the symbol is a Greek letter.[31] To this extent we respectfully disagree with McKenzie J. We proceed on the basis that the fact that the symbol represents a Greek letter is irrelevant.
[30]High Court decision, above n 2, at [16]–[17].
[31]Sexwax Incorporated v Zoggs International Ltd, above n 22, at [28]. See also GE Trade Mark [1973] RPC 297 at 322.
A test for considering deception or confusion often referred to, which we adopt, is that set out by Evershed LJ in Smith Hayden v Co Ltd’s Application:[32]
Assuming use by [Omega] of its trade mark in a normal and fair manner for [the specified class 14 goods] is the [Court] satisfied that there will be no reasonable likelihood of deception or confusion among a substantial number of persons if [Guru] used its mark in a normal and fair manner also for [the specified class 14 goods].
[32]Smith Hayden v Co Ltd’s Application (1945) 63 RPC 97 at 101 (adapted to this appeal).
As observed by Richardson J in Pioneer Hi-Bred Corn Company v Hy‑Line Chicks Pty Ltd, the onus is on the applicant for registration to establish that the registration of the proposed mark is not likely to deceive or confuse.[33] The consideration is as at the relevant date, and the concern is with the possible future use of the mark sought to be registered. The potential users whose states of mind are most relevant, are the potential users or purchasers of the goods of the kind applied for. Detriment or actual loss need not be proven. Confusion in the sense of perplexing or mixing up the minds of the purchasing public is sufficient.
[33]Pioneer Hi-Bred Corn Company v Hy-Line Chicks Pty Ltd, above n 19, at 61–62.
The decision is one for the Judge, taking into account any relevant evidence. Turner J in New Ltd Zealand Breweries v Heineken's Bier Browerij Maatschappij NV (Heineken) stated:[34]
It is for the Court to decide the question of fact as a matter of impression, having due regard, of course, to any relevant evidence which has been produced. But the question is not one to be decided on the opinion of the witnesses. It is a matter for the Judge. He looks at the exhibits before him, and, while he must pay due regard to any relevant evidence produced, the matter remains one of personal impression, visual or phonetic.
[34]New Ltd Zealand Breweries v Heineken's Bier Browerij Maatschappij NV [1964] NZLR 115 (CA) at 139.
The relevant part of the Guru application relates to a range of items in class 14. Of these, watches are the most important. This is the product with which the Omega marks are particularly associated. As we have stated, the relevant section of the public is purchasers of quality watches. In this case, given the lack of use of the Guru mark in this country, the Court must compare the actual use of Omega’s marks with the notional use of Guru’s mark, notional being use in a normal and fair manner. The comparison is between the marks as a whole, having regard to their essential features.[35] It is a not a side-by-side comparison, and allowance must be made for imperfect recollection.[36]
[35]N V Sumatra Tobacco Trading Company v British American Tobacco (Brands) Incorporated, above n 20, at [31].
[36]De Cordova v Vick Chemical Coy (1951) 63 RPC 103 (PC) at 106.
Mr Johns submitted that the Omega symbol and the Guru mark had a similar shape overall, and shared the same combination of features:
(a)a single, continuous line of varying thickness;
(b)a curved, nearly oval body;
(c)an opening at the more curved end of the body;
(d)the opening being narrower than the width of the oval;
(e)relatively short arms protruding outwards from the opening and angling back towards the body; and
(f)overall bilateral symmetry.
We do not agree that the symbols share a similar shape overall. While there are the broad similarities of curved lines that have an open end, with short protuberances at those ends, there are marked differences:
(a)The opening of the lines is on the bottom of the Omega symbol. The opening of the Guru mark is on the top.
(b)The shape of the lines is different, the Omega lines creating a distinctively oval shape, while the Guru lines are straighter, creating a ‘U’ shape.
(c)The Omega protrusions are flat, with abrupt turn-ups at the end. The Guru protrusions curve upwards with no turn-ups at the end.
(d)The Guru lines are considerably thicker than those of the Omega symbol.
The overall impression of the Omega mark is of a bottom opening oval, the Guru mark of a stylised ‘U’ shape. The difference in the thickness of the lines gives the Guru mark a bulky and substantial appearance, whereas the thin-lined Omega symbol is more delicate. In short, the marks are visually different.
We do not accept the submission for Omega that if the marks are rotated to have the same orientation, they become similar. This is for two reasons.
First, Omega’s marks appear predominantly on watches. Watch faces have a fixed orientation that is signalled by the location of the 12 or XII. That eliminates the possibility of confusion as to the original orientation of a mark applied to a watch face. We note also that when applied to watch faces the Omega symbol is overwhelmingly accompanied by the word “OMEGA” underneath, which clearly signals the intended orientation of the symbol. Any confusion as to the orientation of the symbol when applied to a different part of the watch, such as the crown, would be cured by reference to the orientation of the symbol on the watch face. The watch face, where the orientation of the symbol is clear, will dominate the impression of the mark. Therefore, there is little danger of confusion arising from different orientations of the marks in relation to watches. We accept that Omega also sells other products, such as cufflinks, which have no natural orientation. However, we regard these products as minor and ancillary to Omega’s primary business as a watchmaker. Therefore we do not place weight on them.
Second, even when the orientations of the symbols are aligned, we are satisfied that the differences in their appearances are such that there would still be no danger of deception or confusion. In the unlikely event of any confusion, for example if the goods were viewed from a distance, that uncertainty would be momentary, as any close-up view would reveal the major differences we have listed, and cure any false impression of similarity.[37] It is relevant that watches and jewellery are items of the type that are likely to be closely examined by any interested purchaser, because of the cost and fashion considerations associated with such purchases.
[37]We regard the risk of this momentary uncertainty as insufficient to meet the test of confusion as being “caused to wonder” in Pioneer Hi-Bred Corn Company v Hy-Line Chicks Pty Ltd, above n 19, at 63. The risk of uncertainty is low and is not likely to affect any significant number of persons, and any uncertainty would be from a distance and fleeting.
In their written submissions, Omega relied on a number of decisions in which it was found, despite differences in orientation, that the marks in question were sufficiently similar.[38] However, those cases are distinguishable on the basis that the marks in question bore significant similarities independent of their orientation. In contrast, in the present case the orientation constitutes a major difference in appearance, and is one of a number of significant differences between the marks. Therefore, confusion or deception is highly unlikely.
Section 17(1)(b)
[38]New Yorker Kereskedelmi KFT v Corporacion Habanos SA [2003] NZIPOTM 34; Crocodile International Pte Ltd v Lacoste HC Wellington CIV 2009-485-2534, 1 March 2011; and Instinct Clothing Ltd v Puma AG Rudolf Dassler Sport [2011] NZIPOTM 28.
Omega also relies on s 17(1)(b), arguing that the use of the Guru mark would be contrary to New Zealand law. The relevant unlawfulness would be committing the tort of passing off and breach of the Fair Trading Act 1986. These involve a higher threshold for proof of confusion than under s 17(1)(a). Therefore, failure under s 17(1)(a) must mean failure under s 17(1)(b).
Section 25(1)(b) and (c)
Section 25(1) of the Act provides:
25 Registrability of identical or similar trade mark
(1)The Commissioner must not register a trade mark (trade mark A) in respect of any goods or services if—
(a)it is identical to a trade mark (trade mark B) belonging to a different owner and that is registered, or has priority under section 34 or section 36,—
(i)in respect of the same goods or services; or
(ii)(ii) in respect of goods or services that are similar to those goods and services, and its use is likely to deceive or confuse; or
(b) it is similar to a trade mark (trade mark C) that belongs to a different owner and that is registered, or has priority under section 34 or section 36, in respect of the same goods or services or goods or services that are similar to those goods or services, and its use is likely to deceive or confuse; or
(c)it is, or an essential element of it is, identical or similar to, or a translation of, a trade mark that is well known in New Zealand (trade mark D), whether through advertising or otherwise, in respect of those goods or services or similar goods or services or any other goods or services if the use of trade mark A would be taken as indicating a connection in the course of trade between those other goods or services and the owner of trade mark D, and would be likely to prejudice the interests of the owner.
We note that, unlike s 17, s 25 only applies to registered marks.
There is a difference between the approach taken in s 25(1)(b) and s 17(1)(a) despite the reference in both to the likelihood of deception or confusion. Under s 17(1)(a) the assessment of deception and confusion is of the actual use of the opponent’s mark versus the notional use of the proposed mark. Under s 25(1)(b), however, it was observed in Anheuser Busch Incorporated v Budweiser Budvar National Corporation that the assessment is “an entirely notional exercise”.[39] It contemplates any fair use of the marks in relation to any of the goods covered by the registration.[40] The onus is on Guru as applicant to show that its mark is not similar to the Omega mark so as to infringe s 25(1)(b).
[39]Anheuser Busch Incorporated v Budweiser Budvar National Corporation [2003] 1 NZLR 472 (CA) at [66]. See also N V Sumatra Tobacco Trading Company v British American Tobacco (Brands) Incorporated, above n 20, at [45]. .
[40]Anheuser Busch Incorporated v Budweiser Budvar National Corporation, above n 39 at [66].
Mr Johns submitted that the Guru and Omega class 14 goods were the same, or at least similar, and that the Omega and Guru symbols are identical or similar. The use of the Guru symbol would blur the distinctiveness of the two marks, and the strength of the Omega symbol and mark would be diluted. Omega’s reputation would suffer, as any Guru product was unlikely to reach Omega’s high standards.
Omega accepted that if the marks were not sufficiently similar for the purposes of s 17(1)(a), it could not succeed under s 25. We have carried out a detailed analysis of the similarities between the marks in our consideration of s 17(1)(a). As we have stated, the symbols are not similar, and no likelihood of customer confusion has been shown. Therefore, we can see no prejudice to Omega if the registration proceeds.
Conclusion
Although our reasoning is different, we agree with the conclusion of MacKenzie J in the High Court that Omega does not succeed on any of its grounds of opposition to registration of the Guru mark.
Result
The appeal is dismissed.
Costs must follow the event on a standard appeal on a band A basis, and we certify for two counsel.
Solicitors:
Baldwins Law Ltd, Wellington for Appellant
Simpson Grierson, Auckland for Respondent
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