Pharmazen Limited v Anagenix IP Limited
[2019] NZHC 1520
•1 July 2019
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2018-485-741
[2019] NZHC 1520
BETWEEN PHARMAZEN LIMITED
Appellant
AND
ANAGENIX IP LIMITED
Respondent
Hearing: 25 March 2019 Appearances:
J V Ormsby and T M Ritchie for the Appellant S Wheeldon for the Respondent
Judgment:
1 July 2019
JUDGMENT OF CULL J
TABLE OF CONTENTS
Background 7
The Commissioner’s decision 9
Approach to appeal 12
Preliminary issue of evidence 18
Legal framework 22
Issues 27
Issue One: whether the goods are similar 28
Issue Two: whether the trade marks are similar 40
Visual comparison 43
Aural Comparison 49
Conceptual/descriptive comparison 54
Discussion 58
Issue Three: whether the trade mark would be likely to deceive or confuse 64
Result 80
[1] Pharmazen Limited’s (Pharmazen) application to register its trademark, ActiPhen, was declined by the Assistant Commissioner of Trade Marks (the Commissioner).1 Pharmazen appeals the Commissioner’s decision (the Decision).
1 Pharmazen Limited v Anagenix IP Limited [2018] NZIPOTM 27.
PHARMAZEN LIMITED v ANAGENIX IP LIMITED [2019] NZHC 1520 [1 July 2019]
[2] The Commissioner found that the ActiPhen trademark is similar to Anagenix IP Limited’s (Anagenix) mark, ACTAZIN,2 is in respect of similar goods,3 and that it is likely a significant number of persons in the relevant market would be deceived or confused by Pharmazen’s use of the mark under s 25(1)(b) of the Trade Marks Act 2002 (the Act).4
[3] Although Anagenix was successful under s 25(1)(b) of the Act, the Commissioner went on to find Anagenix failed in its other grounds of opposition under s 17(1) of the Act. Section 17(1)(a) requires that the use of the applied-for trade mark must not be likely to deceive or confuse, and s 17(1)(b) requires that the use of the applied-for trade mark must not be contrary to the Fair Trading Act 1986 or other New Zealand law for being misleading or deceptive.
[4] Pharmazen appeals the Decision under s 170 of the Act. Pharmazen submits that the Commissioner’s Decision relating to s 25(1)(b) is wrong and inconsistent with other findings made by the Commissioner: the same conclusions which led Anagenix to fail in respect of s 17(1)(a) must necessarily mean that Anagenix fails under s 25(1)(b).
[5]Accordingly, Pharmazen submits:
(a)the Commissioner erred in fact and law in finding that the goods are similar;
(b)the Commissioner erred in fact and law in finding that the trade marks are similar; and
(c)the Commissioner erred in fact and law in finding that a significant number of persons in New Zealand would be deceived or confused by Pharmazen’s use of the ActiPhen mark.
2 At [65].
3 At [53].
4 At [69].
[6] Anagenix submits the Commissioner made no error in fact or in law: the goods are similar and the marks are similar, such that Pharmazen’s use of the ActiPhen mark would be likely to deceive or confuse a significant number of people.
Background
[7] On 4 May 2016, Pharmazen lodged an application to register the “ActiPhen” trade mark in relation to class 5 goods for food preparations adapted for medicinal purposes, pharmaceutical preparations, dietary supplements for humans and animals, antioxidants and kiwifruit powder, and class 16 goods such as printed material relating to the class 5 goods.5 Anagenix filed a notice of opposition to prevent the registration of the mark, pleading the following grounds in its amended notice of opposition on 5 May 2017:
(a)the opposed mark is similar to Anagenix’s registered mark that is registered in respect of goods that are the same or similar to Pharmazen’s goods, and use of the opposed mark by Pharmazen is likely to deceive or confuse (s 25(1)(b));
(b)use of the opposed mark would be likely to deceive or cause confusion (s 17(1)(a)); and
(c)use of the opposed mark is contrary to law because it would amount to a breach of the section 9, 10 and 13 of the Fair Trading Act 1986 (s17(1)(b)).
[8] Anagenix relied upon its common law rights in the word mark ACTAZIN and its registered mark. ACTAZIN is a trade mark of class 5 goods and services for kiwifruit extract powder as a dietetic substance or ingredient adapted for human health and medical use, and of class 29 goods and services for kiwifruit extract powder as a dried fruit ingredient in the manufacture of food and chilled dairy products.
5 See Pharmazen, above n 1, at [1] for further description.
The Commissioner’s decision
[9] On 9 August 2018, the Commissioner determined that Pharmazen’s ActiPhen and Anagenix’s ACTAZIN produce similar goods and services; the ActiPhen mark is similar to the ACTAZIN mark as they both begin with the prefix ACT which is not commonplace, they have three syllables, and they end with the letter “N”; and the similarity is likely to deceive or confuse a significant number of persons in the relevant market, for the purposes of s 25(1)(b).6
[10] While noted as unnecessary, the Commissioner went on to consider the remaining grounds of opposition, under s 17(1)(a) and s 17(1)(b), and determined that there was “insufficient evidence of awareness of the ACTAZIN mark in the relevant New Zealand market to satisfy the reputational threshold under s 17(1)(a)” because Anagenix had not sold or marketed ACTAZIN in New Zealand since 2012.7 The Commissioner explained that the threshold for establishing grounds for opposition under s 17(1)(b) is higher than that for s 17(1)(a), so where an opponent has not succeeded under s 17(1)(a), it is unlikely they will succeed under s 17(1)(b).8 As the Commissioner found that Anagenix failed to establish sufficient awareness of its mark in the relevant marketplace to support its s 17(1)(a) ground of opposition, “[t]his point is relevant to, and dispositive of, all Fair Trading Act grounds advanced” by Anagenix.9
[11] The Commissioner accordingly directed that the trade mark application for ActiPhen not proceed to registration, and awarded Anagenix scale costs.
Approach to appeal
[12] Section 170 of the Act allows for any “person who is aggrieved by a decision of the Commissioner” under the Act the right to appeal to the High Court.10 Notice of
6 At [49]-[74].
7 At [75]-[76].
8 At [80], citing New Zealand Milk Brands Limited v N V Sumatra Tobacco Trading Company HC Wellington CIV-2007-485-2485, 28 November 2008 at [59]-[60].
9 At [82].
10 Trade Marks Act 2002, s 5 defines the “Commissioner” as including the Assistant Commissioner of Trade Marks and also defines “court” as the High Court for the purpose of the appeal provisions.
an appeal must be filed in the Court and served on the Commissioner within 20 working days after the Decision was given.11
[13]In hearing an appeal, s 172 provides:
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.
[14]In determining an appeal, s 173 provides that the Court may:
(a)confirm, modify, or reverse the Commissioner's decision or any part of it:
(b)exercise any of the powers that could have been exercised by the Commissioner in relation to the matter to which the appeal relates:
(c)in the case of an appeal against the registration of a trade mark, permit the trade mark proposed to be registered to be modified in any manner that does not substantially affect its identity. However, in any such case, the trade mark as so modified must be advertised in the prescribed manner before being registered.
[15] There is no presumptive level of respect or deference to the original decision- maker.12 As the Supreme Court noted in Austin, Nichols & Co v Stichting Lodestar:13
11 Section 171.
12 New Zealand Milk Brands, above n 8, at [6], citing Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141; and Crocodile International Pte Ltd v Lacoste [2017] NZSC 14 at [64]-[65].
13 Austin, Nichols, above n 12, at [5].
An appeal court makes no error in approach simply because it pays little explicit attention to the reasons of the court or tribunal appealed from, if it comes to a different reasoned result. On general appeal, the appeal court has the responsibility of arriving at its own assessment of the merits of the case.
[16] This means that the weight afforded to factual findings or technical attributes of the decision appealed from is “an entirely context-specific assessment for the Judge on appeal.”14
[17] Once an application for trade mark registration is challenged under s 25(1)(b), the onus is on the applicant, that is, Pharmazen, to establish that the likelihood of deception or confusion does not arise.15 Whether the use of the proposed mark is likely to deceive or confuse is a question of fact to be decided on the circumstances in a particular case by the Court.16
Preliminary issue of evidence
[18] Pharmazen filed an interlocutory application on notice for leave to adduce further evidence. The evidence consists of an affidavit sworn by Mr Craig McIntosh, the Chief Executive of Pharmazen, on 23 November 2018. Anagenix has not opposed the application to file further evidence, and I have granted the application.
[19]Mr McIntosh’s affidavit introduces further evidence including:
(a)A recent Australian decision between Anagenix and Pharmazen concerning the registration of the mark ActiPhen in Australia (the Australian Decision).17 The Australian Decision was released after the New Zealand hearing and about one month after the Decision was released.
(b)The author of email correspondence exhibited to Mr McIntosh’s original Statutory Declaration dated 6 October 2017, Mr Mark Thurston. Mr Thurston is the President of AIPD Incorporated who
14 New Zealand Milk Brands, above n 8, at [6].
15 New Zealand Milk Brands, above n 8, at [7], citing New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV [1964] NZLR 115 (CA).
16 New Zealand Milk Brands, above n 8, at [8], citing New Zealand Breweries, above n 15, at 139.
17 Anagenix IP Limited v Pharmazen Limited 2018 ATMO 142 (the Australian Decision).
acquired the licensing rights for ACTAZIN from Anagenix for the USA, Canada, Mexico and Brazil.
(c)Mr McIntosh’s extensive experience in the nutraceutical market, in New Zealand and internationally, including his attendance at trade shows around the world. Pharmazen submits this is relevant because counsel for Anagenix inferred at the hearing before the Commissioner that Mr McIntosh did not have significant experience in the industry.
[20] In the Australian Decision, the Australian Hearings Officer found that Anagenix had not established any grounds of opposition to the registration of the mark ActiPhen in Australia. The Hearings Officer made the following factual findings:
(a)There are such differences in spelling between the marks ActiPhen and ACTAZIN that there is a clear picture of dissimilarity and they are not substantially identical.
(b)There are very different aural and visual structures between the marks, being “iPhe” in comparison to “AZI” which is different in both look and sound.
(c)ActiPhen has eight letters compared to ACTAZIN’s seven letters.
(d)Pronunciation of the different marks is likely to vary, particularly when the suffixes between the two marks are so different. The differences in spelling is too great to conclude that the two marks would be pronounced in a similar fashion.
[21] The Hearings Officer concluded there was no tangible danger of the marks being confused, especially as Anagenix’s goods are being sold to manufacturers rather than end consumers.18
18 The Australian Decision, above n 17, at [24].
Legal framework
[22]The relevant part of s 25 of the Act is as follows:
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 –
…
(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
…
[23] It is common ground for both parties that s 25(1)(b) has three requirements, to be addressed in the following order:19
a)is Pharmazen’s proposed mark in respect of the same or similar goods or services covered by any of Anagenix’s trade mark registrations?
b)if so, is Pharmazen’s proposed mark similar to any of Anagenix’s trade mark registrations for the same or similar goods identified in the first inquiry?
c)if so, is the use Pharmazen’s proposed mark likely to deceive or confuse?
[24] In Intellectual Reserve Inc v Sintes, Winkelmann J outlined the relevant principles in making assessments under this section:20
(a)the applicant has the onus of establishing that its mark does not breach s 25(1)(b) of the Act;
19 NV Sumatra Tobacco Trading Company v New Zealand Milk Brands Limited [2011] NZCA 264, [2011] 3 NZLR 206 at [32].
20 Intellectual Reserve Inc v Sintes HC Auckland CIV-2007-404-2610, 13 December 2007 at [16] [Intellectual Reserve High Court]. This decision was upheld on appeal in Intellectual Reserve Inc v Sintes [2009] NZCA 305, [2014] NZAR 556 [Intellectual Reserve Court of Appeal].
(b)the Court should consider the marks in their entirety; the overall or net impression of the marks should be considered;
(c)while differences between two marks may be significant, it is the similarities which are most significant, whether visual, audible, distinctive, or conceptual;
(d)the impression or idea conveyed by the marks is important in assessing how they will be recalled; the idea of a mark is more likely to be recalled than its precise details;
(e)comparison is not of the opponent’s mark with the mark of the applicant when taken side by side, but taking into account imperfect recollection in all the circumstances in which the products might be sold; the question is whether the person who sees the proposed trade mark in the absence of the other trade mark, and in view only of her general recollection of what the nature of the other trade mark was, would be liable to be deceived and to think that the trade mark before her is the same as the other; and
(f)the marks are to be compared as they would be encountered in the usual circumstances of trade.
[25]Also of relevance is s 17:
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
(b)the use of which is contrary to New Zealand law or would otherwise be disentitled to protection in any court; or
…
[26] There is substantial overlap between s 17(1)(a) and s 25(1)(b).21 The Court of Appeal in NV Sumatra Tobacco Trading Co v New Zealand Milk Brands Ltd has noted that the purpose of s 17(1)(a) is the protection of the public from deception or confusion.22 The comparison under s 17(1)(a) is between the actual use of Anagenix’s registered mark and the fair and notional use of Pharmazen’s mark.23 This is in contrast to s 25(1)(b) where the comparison is the fair and notional use of both marks.24
Issues
[27]There are therefore three key issues:
(a)whether the goods are similar, for the purposes of s 25(1)(b);
(b)whether the trade marks are similar, for the purposes of s 25(1)(b); and
(c)whether the use of the trade mark would be likely to deceive or confuse, for the purposes of s 25(1)(b) or s 17(1)(a).
Issue One: whether the goods are similar
[28] In British Sugar plc v James Robertson & Sons Ltd, a number of factors were identified to assist in determining whether there is similarity between goods:25
(a)the respective uses of the goods or services;
(b)the respective users of the goods or services;
(c)the physical nature of the goods or acts of service;
(d)the respective trade channels through which the goods or services reach the market;
21 New Zealand Milk Brands, above n 8, at [56].
22 NV Sumatra Tobacco Trading, above n 19, at [78].
23 Anheuser-Busch Inc v Budweiser Budvar National Corporation [2002] 1 NZLR 472 (CA) at [74].
24 Anheuser-Busch, above n 23, at [30].
25 British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281 (Ch) at 296-297.
(e)in the case of self-service consumer items, where in practice they are respectively found or likely to be found in supermarkets and in particular whether they are, or are likely to be, found on the same or different shelves; and
(f)the extent to which the respective goods or services are competitive. This inquiry may take into account how those in trade classify goods, for instance whether market research companies, who act for industry, put the goods or services in the same or different sectors.
[29] The question of similarity in goods or services is one of fact to be determined on a case-by-case basis, and the approach taken is a practical one, looking at the goods from a business and commercial point of view.26
[30] Pharmazen submits that the Commissioner erred in fact and law in finding that the goods are similar. Pharmazen submits there is evidence that, in locations where ACTAZIN has a market (which is not in New Zealand), the products are considered different due to their variances, which include their different manufacture process, additives, water activity, and enzyme activity. In particular, Pharmazen submits the ActiPhen goods have no artificial additives while ACTAZIN’s do, the ActiPhen goods are low in water activity and therefore suitable to formulate with probiotics while ACTAZIN’s are high in water activity and are unsuitable for formulating with probiotics, and the ActiPhen goods are high in enzyme activity (a key aspect for digestive health benefits) while ACTAZIN’s are low in enzyme activity.
[31] Anagenix submits there is considerable overlap between the goods of Pharmazen’s application and those of Anagenix’s registration: the ACTAZIN registration covers kiwifruit extract powder as a dietic substance, or as an ingredient for use in dietary supplements and in food products; and the ActiPhen specification includes kiwifruit powder for use as an ingredient in dietary supplements. For the purposes of s 25(1)(b), Anagenix submits these goods are the same.
26 New Zealand Milk Brands, above n 8, at [33], citing J Lyons and Co Ltd’s Application [1959] RPC 120 at 128 and Gutta-Percha & Rubber Manufacturing Co (Toronto) Limited’s Application (1909) 26 RPC 84.
[32] Anagenix further submits that many goods of the application are also similar to “kiwifruit extract powder as a dietic substance or ingredient adapted for human health and medical use”. For example, the broad descriptions in the class 5 specification such as “food preparations adapted for medicinal purposes” and “dietary supplements for humans and animals (for medicinal purposes)” encompass numerous products similar to Anagenix’s goods.
[33] Finally, Anagenix submits that while Pharmazen has compared the attributes of the ActiPhen and ACTAZIN products on the market, the parties’ actual products are irrelevant to the inquiry under this section as to the similarity of goods. Instead, it is the goods of Anagenix’s registration and those of Pharmazen’s application that must be compared.
[34]ActiPhen is specified as applying to the following goods:
(a)Class 5: Food preparations adapted for medicinal purposes; pharmaceutical preparations; pharmaceutical preparations containing enzymes; pharmaceutical preparations to support gut health and digestion; dietary supplements for humans and animals (for medicinal purposes); antioxidants (dietary supplements); kiwifruit powder for use as an ingredient in dietary supplements (medicinal purposes); kiwifruit powder (not for medicinal purposes) for use as an ingredient in dietary supplements; kiwifruit powder (not for medicinal purposes) for use as an ingredient in animal feed supplements.
(b)Class 16: Printed material relating to food preparations for medicinal purposes, pharmaceutical preparations, pharmaceutical preparations containing enzymes; pharmaceutical preparations to support gut health and digestion; dietary supplements for humans and animals (for medicinal purposes); antioxidants (dietary supplements); kiwifruit powder for use as an ingredient in dietary supplements (medicinal purposes); kiwifruit powder (not for medicinal purposes) for use as an ingredient in dietary supplements; kiwifruit powder (not for medicinal purposes) for use as an ingredient in animal feed supplements.
[35] The question is whether Anagenix’s registered mark applies to goods that are similar to these specified goods.
[36]The details of Anagenix’s registered mark are as follows:
(a)Class 5: kiwifruit extract powder as a dietic substance or ingredient adapted for human health and medical use including dietary, health and nutritional supplements, medical food and functional foods and beverages.
(b)Class 29: kiwifruit extract powder as a dried fruit ingredient in the manufacture of food and chilled dairy products, including drinking yoghurts.
[37] The differences outlined by Pharmazen at [30] are not only disputed, but address the third point only in the British Sugar formulation. As Dobson J noted in New Zealand Milk Brands, “[t]he physical composition of the goods is one factor in the British Sugar calculus, but it is not determinative. Another factor is that they are competitive.”27 He went on to find that the application for non-dairy creamer exists to compete with the opponent’s dairy products, and as such the goods were found to be similar.28
[38] Both goods have not identical but similar composition. The respective uses and users of the goods and the respective trade channels through which the goods reach the market, through wholesale consumers to manufacturers and manufacturers, are the same or similar. The goods appear to be in competition with each other, despite some of their different physical components.
[39] I concur with the Commissioner’s finding that there cannot be any real doubt as to the similarity of the parties’ respective goods.29
27 New Zealand Milk Brands, above n 8, at [36].
28 New Zealand Milk Brands, above n 8, at [35]-[37].
29 Pharmazen, above n 1, at [53].
Issue Two: whether the trade marks are similar
[40] The test for whether the trade marks are similar was outlined in New Zealand Breweries:30
The rules for comparison of word marks have been summarised as follow [sic]: 1. You must take the two words and judge of them both by their look and by their sound; 2. You must consider the goods to which they are to be applied and the nature and kind of customer who is likely to buy these goods; and 3. You must consider all the surrounding circumstances and what is likely to happen if each of the marks is used in a normal way as a trade mark for the goods of the respective owners of the marks: …
[41] Often, this comes down to a consideration of the visual, aural, and conceptual similarities of the marks. It is the similarities that are important, not the differences.31
[42] Pharmazen submits that the Commissioner erred in fact and law in finding that Anagenix has a ground of opposition under s 25(1)(b) of the Act because the marks, ActiPhen and ACTAZIN, are visually and aurally different. Pharmazen relies on both its own analysis of the marks and the analysis in the recent Australian Decision, in which the Australian Delegate held the marks to be dissimilar.
Visual comparison
[43] Anagenix’s mark ACTAZIN is registered in plain block capitals, with no additional distinctive material or distinctive font. Pharmazen’s mark is ActiPhen. It is a combination of upper and lower case letters, with no additional distinctive material or distinctive font.
[44] Pharmazen provides the following table to submit that the marks are visually distinct. In doing so it used lower case lettering for ActiPhen. As the parties concede and as the Commissioner noted, fair notional use of the mark will include its use in upper case letters. I therefore set it out as follows:
ACTIPHEN
ACTAZIN
30 New Zealand Breweries, above n 15, at 139.
31 Intellectual Reserve High Court, above n 20, at [16(ii)].
Two halves ACTI and PHEN
ACTA and ZIN
Last Syllable
Four letters
Three letters
Length of Mark
Eight letters
Seven letters
Capitals
One capital in the middle (if lower case is used)
Full mark is in capital letters
[45] The Australian Decision, on which Pharmazen relies, finds that the marks are not “deceptively similar”, this being the statutory standard under the Australian Trade Marks Act 1995, s 44. It should be noted that this standard therefore puts together what in New Zealand law is separated out into “similarity between marks”, and their likelihood to “deceive or confuse”. The Australian Decision notes:32
… Visually, all the trade marks begin with the same three letter prefix ACT- and end with the letter “N”. However, it is also clear that all the trade marks contain very different aural and visual structures within the trade mark being “-iPhe-” in comparison to “-azi-” which are very different in look and sound. The Trade Mark is also eight letters long compared to the opponent’s trade mark which consists of seven letters.
…
… I am not satisfied that the Trade Mark is deceptively similar to the opponent’s trade mark, particularly when the trade marks are considered, as they must be, as wholes. The spelling differences between the ‘coined’ terms is significant…
The Trade Mark is broken into two distinct parts via the capitalisation of the “A-” and then the “-P-” within the Trade Mark.
[46] Anagenix submits that a comparison of the respective marks side by side and their constituent parts in isolation has been criticised by this Court in New Zealand Milk Brands,33 where Dobson J stated:
[30] This approach involves dissecting the constituent parts of the marks at issue, rather than viewing them as a whole. The question is not whether GK is different to CH. It is whether ANGKOR is similar to ANCHOR.
32 The Australian Decision, above n 17, at [18], [21] and [22].
33 New Zealand Milk Brands, above n 8, at [29].
[47] In that case, Dobson J reached the opposite conclusion from the Commissioner, finding that the marks as a whole were similar. This was despite the fact ANCHOR was found to be an iconic mark, and the word “anchor” has a clear meaning while “ANGKOR” had none in New Zealand.34
[48] Anagenix submit that the “fair and notional” use of the marks would include ACTAZIN and ACTIPHEN, and Actazin and Actiphen. Visually, then, both marks are dominated by the first syllable ACT-, they both comprise three syllables, and they share a similar structure and rhythm. They also share the final letter “N”.
Aural Comparison
[49] Pharmazen submits that the natural pronunciation of ActiPhen and ACTAZIN is not phonetically identical, with which the Commissioner agreed.35 Pharmazen submits that the likely natural pronunciation of the marks would be:
(a)ACT – Te – Fen; and
(b)ACT– a – Zin.
[50] Pharmazen submits the sound “Te-Fen” is very different from the sound “a- Zin”.
[51] Anagenix submits phonetically, the “A” and “I” as the middle syllable of the words will be pronounced the same, the “Z” and “PH” (pronounced “F”) are very similar sounds, and the “IN” and “EN ”, coming at the end of the word, sound identical or very similar. Mr Johnson for Anagenix has given evidence that:
ACTAZIN is pronounced with the emphasis on the first syllable, that is as ‘ACT-uh-zin’. ActiPhen is pronounced with the same emphasis – that is, as ‘ACT-uh-fin’.
[52] The differences in the pronunciation of ActiPhen and ACTAZIN will, of course, depend on the way in which they are pronounced. The Commissioner did not
34 At [22].
35 Pharmazen, above n 1, at [60].
accept the evidence that the words are phonetically identical. She did, however, consider that there was a substantial degree of similarity.36
[53] While the first syllable of each is phonetically identical, the second and third have a difference, namely the “A” and “I”. Mr Johnson gave evidence that “ActiPhen” would be pronounced similarly to “hyphen” and “pathogen”. Pharmazen, on the other hand, points to the capital P in the middle of “ActiPhen” as placing a different emphasis on the last syllable and making it more pronounced than in the examples of “hyphen” and “pathogen”. This would give it more of a “fen” (as opposed to a “fin”) sound.
Conceptual/descriptive comparison
[54] Pharmazen submits that the prefix ACT is a descriptive component, as it refers to actinidia delciosa, the botanical name for kiwifruit, and is also an abbreviation for the word ACTIVE. Pharmazen submits ACT is used as a descriptive syllable in the relevant market, for example the mark “Zyactinase” (a freeze-dried extract from kiwifruit) incorporates “acti” into its name, at a North American tradeshow for nutraceutical products 49 brands had “Act” in the brand name and, in Australia, there are a number of health supplement products or brand names with “act” or “acti” in the name, the majority of which are available for purchase in New Zealand too.
[55] Pharmazen relies on Platinum Homes Ltd v Golden Homes for the authority that if a mark includes a descriptive, generic, or common word, then the other parts of the mark that are different take on more significance for consumers.37 Further, the courts have accepted that some similarities are simply the result of common industry practices, and one trader cannot claim exclusivity to matters common to the trade.38 Pharmazen therefore submits that as “ACT” is commonly used in the health supplement industry to describe kiwifruit products, the remainder of the marks to be compared is “iPhen” and “AZIN”, which are dissimilar both phonetically and visually.
36 At [60].
37 Platinum Homes (NZ) Limited v Golden Homes (1998) Limited HC Wellington CIV-2005-485- 1870, 11 August 2006 at [20].
38 New Zealand Breweries, above n 15, at 140.
[56] Anagenix submits that neither mark has any conceptual or descriptive meaning or difference. Anagenix disputes the evidence of Pharmazen and submits that of all of the other products on the New Zealand and Australian markets made from dried New Zealand kiwifruit powder and sold as aids to digestion, ACTAZIN is the only one whose name begins with Act. Mr Johnson for Anagenix submits that the products listed by Mr McIntosh for Pharmazen either do not relate to products which consist of or contain kiwifruit, or are references to the enzyme “Actinidin”.
[57] Anagenix submits that though ACT- originates from the botanical name for kiwifruit and its active enzyme Actinidin, not everyone is aware of this fact. In any case, there is no practice in the industry of giving kiwifruit powder products names referring to Actinidin. This was unique to Anagenix.
Discussion
[58] I find there are both visual and aural similarities of the marks. Accepting the fair and notional use of the marks as they might be represented (as ACTAZIN and ACTIPHEN), I find the marks look similar, and I consider most New Zealanders would be likely to pronounce the words as “ACT-i-fen” and “ACT-i-zin”, which would make them phonetically extremely similar, with the only difference being “f” as opposed to “z”.
[59] It is also relevant, in my view, that the first syllable of a mark is usually the most important for comparison. This was the observation of the Court of Appeal in NV Sumatra Tobacco Trading Co v British American Tobacco (Brands) Inc, where the Court of Appeal referred to Sargant LJ’s observation in London Lubricants (1920) Ltd’s Application that:39
The tendency of persons using the English language to slur the termination of words also has the effect necessarily that the beginning of words is accentuated in comparison and, in my judgment, the first syllable of a word is, as a rule, far the most important for the purpose of distinction.
39 NV Sumatra Tobacco Trading Co v British American Tobacco (Brands) Inc [2010] NZCA 24, (2010) 86 IPR 206 at [32], citing London Lubricants (1920) Ltd’s Application (1925) 42 RPC 264 at 279.
[60] I consider the placement of “Act” at the beginning of each of the marks is the focus of a person’s recollection of a product and, with the monophthong vowel following the word “Act”, makes the final syllable of lesser importance.
[61] Further, I consider the descriptive nature of the prefix “ACT-”, as being the botanical name of kiwifruit, is not commonplace or common knowledge. There is no conceptual meaning to either mark, making it more difficult to distinguish the marks as they do not imply any specific meaning.
[62]I therefore find that the trade marks are similar.
[63] I turn, then, to the third issue and that is whether the use of the trade mark would be likely to deceive or confuse.
Issue Three: whether the trade mark would be likely to deceive or confuse
[64] The law on this aspect of s 25(1)(b) is well-settled and agreed between the parties. The deception or confusion is as to the origin of the goods or services in question. The question of how many people must be confused does not require that all persons in the market are likely to be deceived or confused, but rather a significant or considerable section of the public be confused.40
[65] 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.”41 The relevant perspective is of the average consumer in the relevant market.42 The onus is on Pharmazen to disprove the likelihood of deception or confusion, not on Anagenix to establish that deception or confusion is likely.43
40 Paul Sumpter Trade Marks in Practice (4th ed, LexisNexis, Wellington, 2018) at 99.
41 Pioneer Hi-Bred Corn Company v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 (CA) at 62, though it should be noted that this case was concerned with the old s 17(1)(a) equivalent.
42 Intellectual Reserve Court of Appeal, above n 20, at [48].
43 At [69].
[66] How this law is to be interpreted is however a source of disagreement between the parties. Pharmazen submits that the first question must be to identify the relevant market and Anagenix’s use of its trademark ACTAZIN in that relevant market. As Anagenix is not in the New Zealand market, Pharmazen submits there is no possibility that the registration of Pharmazen’s trade mark in the New Zealand market could be confused with Anagenix’s mark, and the s 25(1)(b) test cannot be satisfied. This is consistent with the Commissioner’s finding under s 17(1)(a) that there is no likelihood of confusion or deception because Anagenix does not have a reputation in the New Zealand market.
[67] However, Anagenix submits that, unlike s 17(1)(a), the test under s 25(1)(b) does not require an assessment of the current trade mark’s actual use or reputation in that relevant market. Rather, it requires an assessment of a notional use of the two marks in the relevant market. The assessment should therefore be undertaken without reference to the actual marks and in this case it does not require an assessment of the New Zealand market. The market referred to in the authorities is an assessment of the persons to be considered in estimating whether the resemblance between the marks is likely to deceive and those persons who are likely to become purchasers of the goods upon which the marks are used.44
[68] Both parties agree that under s 17(1)(a), the assessment of “likely to deceive or confuse” does require an assessment of the current trade mark’s use and reputation in the relevant market.
[69] The Commissioner appears to have taken the approach that Anagenix contend for on appeal. She noted (footnote omitted):
71. In summary [on s 25(1)(b)], I consider on the evidence available that a significant number of persons in the relevant market looking at the opposed ACTIPHEN mark in the absence of the ACTAZIN mark would be likely to be caused to wonder whether the ACTIPHEN mark was the same as, or related to, the ACTAZIN mark.
72. In reaching this conclusion, I have been persuaded by the fact that the goods of the opposed mark are very similar to the goods of the opponent’s mark, and by my conclusion as to the overall similarity of the marks, as discussed above.
44 New Zealand Breweries Ltd, above n 15, at 120.
…
75. As the opponent has succeeded on its first ground of opposition, it is unnecessary for me to go on to consider the remaining grounds. Had I been required to determine whether registration of the opposed mark would contravene s 17(1)(a), I would have concluded that there was insufficient evidence of awareness of the ACTAZIN mark in the relevant New Zealand market to satisfy the reputational threshold under s 17(1)(a).
76. The reason for this is that, as the applicant submits, the evidence demonstrates that the opponent has not sold or marketed its product in New Zealand since 2012.
[70] The real issue of contention is whether the Commissioner’s findings under s 25(1)(b) and s 17(1)(a) are so inconsistent as to be wrong. Pharmazen submits this is the case as, while the placement of the onus may be distinct in relation to sections 17 and 25, “the principles involved are not distinct and must be approached in an internally consistent manner.” The Commissioner, Pharmazen submits, failed to do this.
[71] Although many of the authorities dealing with these two sections apply the tests interchangeably and rarely conclude differently on the two sections,45 there is in fact a difference between the approach to each of the assessments under ss 17(1)(a) and 25(1)(b). As Anagenix have submitted, the context of the s 25(1)(b) inquiry is broad. It requires any fair and notional use of the trade marks to be considered.46 This is in contrast to s 17(1)(a), where the comparison is between the actual use of the current trade mark and a notional use of the applicant’s mark.47
[72] In Anheuser Busch Inc v Budweiser Budvar National Corporation, the Court of Appeal stated the position as follows:
[30] On his comparison of the trade marks themselves Doogue J correctly recognised that he was required to consider not the actual use of the BB marks but a notional use. The test of likely deception or confusion under [the 1953 Act equivalent of s 25(1)(b)] is applied to any fair use of each mark in relation to any of the goods covered by the registration. Under [the 1953 equivalent of ss 17(1)(a) and 25(1)(c)] the comparison is between the actual use of the
45 See for example Intellectual Reserve High Court, above n 20 at [53]; New Zealand Milk Brands, above n 8, at [56]-[57]; and NV Nutricia v Cambricare New Zealand Ltd [2012] NZHC 1344 at [55].
46 Anheuser-Busch Inc, above n 23, at [30], although discussing the old sections in the Trade Marks Act 1953, this analysis has been applied to the new equivalent sections in the Trade Marks Act 2002 in Cadbury UK Ltd v J H Whittaker & Sons Ltd [2014] NZHC 816 at [56].
47 Anheuser-Busch Inc, above n 23, at [30]; and Cadbury UK Ltd, above n 46, at [56].
AB mark (which is encompassed by the notional fair use) and any fair use of the BB marks.
…
[66] The comparison of trade marks to ascertain whether there is deceptive or confusing similarity contrary to [s 25(1)(b)] so as to establish a ground for removal of registrations is an entirely notional exercise. It contemplates any fair use of the marks in relation to any of the goods covered by the registrations. Opinion evidence that the marks are or are not confusingly similar is of limited value. That is for the Court. Evidence of what actually is occurring in the marketplace reflects particular forms of use and cannot fully answer the question.
[73] This has since been applied by this Court, in British American Tobacco (Brands) Inc v NV Sumatra Tobacco Trading Co.48 In discussing the differences between the approach called for under s 17 and s 25, Clifford J found:49
[41] First, and as acknowledged in Pioneer Hi-Bred, it is necessary under s [17(1)(a)] but not under s [25(1)(b)] for the opponent to registration to establish what is described as a “sufficiently substantial reputation in the New Zealand market to lead to the possibility that goods covered by the proposed trade mark would be identified with the opponent” (at 62).
…
[44] Conversely, under s [25(1)(b)] the comparison is between the registered mark(s) and the mark sought to be registered, and no reputation need be established.
[45] Secondly, the comparison to be made under s [25(1)(b)] differs from that under s [17(1)(a)] in that the enquiry under s [25(1)(b)] is an entirely notional exercise. The Court must consider whether the use of each of the respective trademarks in a normal and fair manner would be likely to cause deception and confusion. By comparison, where the similarity with the opponent’s mark is the basis on which the opponent submits the applicant’s mark will be likely to “deceive or confused” under s [17(1)(a)], the comparison which must be made is between the actual use of the opponent’s mark with the notional use of the applicant’s mark (with that notional use being in a “normal and fair manner”).
48 British American Tobacco (Brands) Inc v NV Sumatra Tobacco Trading Co HC Wellington CIV- 2007 485-2814, 11 November 2008.
49 See also N V Sumatra Tobacco Trading Co v British American Tobacco (Brands) Inc [2012] NZCA 24 at [77] where the Court of Appeal upheld the difference between the approaches to the two sections, though in relation to the s 17(1)(a) assessment held that Clifford J set the evidential onus too high; all that the opponent needs to show is “awareness”, “cognisance”, or “knowledge” of the mark in the relevant market.
[74] The key principle is that when a trade mark holder is relying on s 25(1)(b), its own actual use and reputation are not relevant. The Court is therefore not required to consider the actual use of Anagenix’s trade mark.
[75] ACTAZIN is a registered trade mark in New Zealand. Anagenix has paid for the rights to any fair and notional use of that mark in the New Zealand market. That Anagenix currently have no product on the New Zealand market is irrelevant to the fair and notional assessment of their mark under s 25(1)(b). It has a registration and an export market, and under s 25(1)(b) it is able to stop a conflicting mark being registered without having a reputation in the New Zealand market. This is in contrast to the s 17(1)(a) assessment where Anagenix’s actual use of the mark ACTAZIN becomes relevant.
[76] On this assessment, I find that the use of each of the respective trademarks in a normal and fair manner would be likely to cause deception and confusion. Both companies’ products are dried kiwifruit powder made from New Zealand green kiwifruit, sold for use as an ingredient in dietary supplements. Promotional material for both products emphasises the products as sourced from New Zealand and made from New Zealand kiwifruit. The hypothetical context in which the s 25(1)(b) assessment is undertaken includes the New Zealand retail market where consumers may be aware of ACTAZIN as a dietic kiwifruit substance or ingredient in the wholesale market, and where manufacturers of dietary supplements may be aware of ACTAZIN as the dried kiwifruit powder product of Anagenix. Both consumers and manufacturers who come across another dried kiwifruit powder product under the name ActiPhen are likely to at least be caused to wonder whether ActiPhen is ACTAZIN, particularly because of the visual and aural similarities of the marks. That Anagenix are not currently selling ACTAZIN products in New Zealand is of no relevance to the fair and notional use of the mark that they are entitled to under their trade mark registration.
[77] I find that Pharmazen has not satisfied their onus of proving, on the balance of probabilities, that the use of ActiPhen would not be likely to deceive or cause confusion under s 25(1)(b). I find that the Commissioner was correct when she upheld Anagenix’s opposition that a significant number of persons in the relevant market
looking at the opposed ActiPhen mark would be likely to be caused to wonder whether the ActiPhen mark was the same as or related to the ACTAZIN mark.
[78] I also find that the absence of any evidence as to the size and nature of Anagenix’s reputation in the New Zealand market is an irrelevant consideration in the s 25(1)(b) assessment. Such a factor is relevant to a s 17(1)(a) assessment, which on the evidence the Commissioner found was not met. This does not detract from the analysis under s 25(1)(b). The focus of s 17(1)(a) is on actual use of the registered mark in the New Zealand market, while the focus in s 25(1)(b) is on any fair and notional use of both marks in the New Zealand market.
[79] I uphold the Commissioner’s finding that Anagenix succeeds on its ground of opposition under s 25(1)(b). The Commissioner’s finding that Anagenix was unsuccessful under s 17(1)(a) of the Act is not inconsistent with her s 25(1)(b) findings.
Result
[80]The appeal is dismissed.
[81] Costs are awarded to the respondent on a 2B basis, with reasonable disbursements to be approved by the Registrar.
Cull J
Solicitors:
Wynn Williams, Christchurch for the Appellant
2
7
0