Platinum Homes (NZ) Ltd v Golden Homes (1998) Ltd HC Wellington CIV 2005-485-1870

[2006] NZHC 1670

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2005-485-1870

AND UNDER                  The Trade Marks Act 2002

IN THE MATTER OF     An appeal from the Decision of the Assistant Commissioner of Trade Marks dated 22 August 2005

AND IN THE MATTER OF  New Zealand Trade Mark Application

No 702447 PLATINUM HOMES

BETWEEN  PLATINUM HOMES (NZ) LIMITED Appellant

ANDGOLDEN HOMES (1998) LIMITED Respondent

Hearing:         19 July 2006

Appearances: G Arthur and N J Robb for the Appellant

I Finch for the Respondent

Judgment:      11 August 2006

JUDGMENT OF MILLER J

[1]      The Assistant Commissioner of Trade Marks directed that the mark PLATINUM HOMES  not  proceed  to  registration.    She  found  it was  likely to  deceive  or  cause confusion, so accepting the principal argument for Golden Homes (1988) Limited, proprietor of the established mark GOLDEN HOMES in three of the same classes.

[2]      Platinum Homes (NZ) Limited appeals, saying its mark is not confusingly or deceptively similar to the GOLDEN HOMES mark.   Golden Homes (1988) Limited cross-appeals, saying the Assistant Commissioner erred by holding that she could not

HC WN CIV 2005-485-1870 [11 August 2006]

consider a third party mark, PLATINUM CONSTRUCTION, the existence of which was likely to compound public confusion and deception.

[3]      The appeal is allowed, and the cross-appeal dismissed.

Factual background

[4]      Platinum Homes (NZ) Limited applied on 1 October 2003 to register the PLATINUM HOMES mark in classes 19, 37, and 42, which relate to building materials, building and construction, and planning and design services.

[5]      Golden Homes (1988) Limited has operated under the GOLDEN HOMES mark since 1990.  It operates franchises in 21 areas throughout New Zealand, and claims to be the largest builder of homes in the country.

[6]      Platinum Homes (NZ) Limited was established in 2003.   A company called Westbury Construction was Golden Homes’ licensee for a number of areas in the Auckland region between 1998 and May 2003.   It then moved to Platinum Homes. Some of the evidence before the Assistant Commissioner related to confusion that arose during the period of transition due to activities of Westbury and another firm called Blue Chip Construction.   There is a dispute about the termination of the Golden Homes franchise.

[7]      Platinum Homes provides similar, if not completely identical, goods and services to those of Golden Homes.  Both firms supply a complete home building service that is intended to be worry-free for the buyer and includes no hidden costs.

The decision of the Assistant Commissioner

[8]      In her decision of 22 August 2005, Assistant Commissioner Hastie summarised the evidence of the opponent, which explained that the GOLDEN HOMES mark was chosen because it was suggestive of a precious metal and excellence.  The firm operates throughout New Zealand, providing a complete home building package with no hidden or unforeseen costs.  Since 1990 it has built and designed over 5,000 homes.  Reputation in  the  mark  is  said  to  be  substantial;    it  has  been  established  nationwide  through

extensive advertising.   The evidence for the opponent included evidence that in November 2003 visitors to the Golden Homes showroom at Botany Downs, Auckland, were being diverted to Platinum Homes, and that the latter was continuing to use the GOLDEN HOMES mark even as it established its own brand.

[9]      The Assistant Commissioner next recorded the evidence for the applicant, which explained that it chose the mark PLATINUM HOMES in 2003 because of its connotations of excellence, performance and “the pinnacle of desire”, synonymous to the idea behind the American Express Platinum Credit Card.  The applicant accepts that it has taken over some Golden Homes franchises.  It says it has made it clear the Golden Homes projects it was completing were quite separate from those of Platinum Homes. There are a number of home building companies that feature the names of precious metals or stones, such as Silver Construction Limited, Jade Homes Limited, Emerald Homes Limited, and Sapphire Homes Limited.  However, the Assistant Commissioner held that she could attach only limited weight to this evidence, because  there  was nothing to show whether those companies use their registered names as trade names and, if so, the level of awareness and the trade channels and geographical areas in which they operate.  When Blue Chip entered into a franchise agreement with Platinum Homes it was (by agreement) to complete outstanding Golden Homes projects.  Other witnesses deposed that companies with similar names are common in the building industry and they can be readily distinguished.  The proprietor of Platinum Construction, Mr Thomas, gave evidence for Platinum Homes.   His firm has operated since January 2003 in the Bay of Plenty.  There has been confusion between Platinum Construction and Platinum Homes, but by the time he gave evidence Mr Thomas was no longer concerned about the possibility of confusion.  Platinum Construction had moved out of the contract housing industry and was more interested in insurance repair work, property maintenance, and building “spec” homes.

[10]     The principal ground of opposition was that the use of the PLATINUM HOMES

mark would be likely to deceive or cause confusion:  Section 17(1)(a) Trade Marks Act

2002.   Section 17 replaced s16 of the 1953 Act, which contained the same test. Accordingly, the Assistant Commissioner followed Pioneer Hi-Bred Corn Company v Hy-Line Chicks Pty Limited [1978] 2 NZLR 50, the leading case under the former Act. She also held that the date for determining the parties’ rights was that of the application,

1 October 2003.  Platinum Homes had the overall onus of establishing that its mark was

eligible for registration, but before it was called upon to show that its mark was not likely to deceive or cause confusion there was an initial onus on the opponent to show that, at the relevant date, there was sufficient reputation in its own mark to lead to the likelihood that the use by the applicant of its mark would deceive or confuse persons in the  relevant  market  (the  home  building  industry).     The  applicant  conceded  the opponent’s reputation.

[11]     The  Assistant  Commissioner  declined  to  compare  the  marks  PLATINUM HOMES and PLATINUM CONSTRUCTION.   Golden Homes had argued that she should do so because the two marks were confusingly similar and were likely to compound confusion in the market.   The Assistant Commissioner held that such comparison was irrelevant because Platinum Construction was not a party to the proceeding;  in terms of the Act, the only comparison she could make was between the applicant’s and the opponent’s marks.

[12]     When comparing the marks, the Assistant Commissioner applied re Pianotist Company’s  Application  (1906) RPC 774, 777. The Assistant Commissioner first recorded that the mark GOLDEN HOMES is well known in New Zealand; it has been used successfully since 1990 and it dominates the market. The mark PLATINUM HOMES is used for the same goods and services and in the same geographical areas of the upper and middle North Island. She recorded that the two marks are not identical; there is no visual or oral similarity between the first words and neither firm could claim a monopoly in the word homes. But each mark comprised the name of a precious metal combined with the word homes and to that extent there is a degree of similarity. It is the idea of the marks or the conceptual similarities (having regard to the marks as a whole, the type of goods involved, the circumstances of the use, and imperfect recollection) that matters. These considerations persuaded the Assistant Commissioner that registration would be likely to deceive or cause confusion. The essential characteristic of each mark was a precious metal juxtaposed with the word homes. Consumers are used to seeing platinum and gold together to signify differing levels of service from the same source. Examples included financial institutions operating credit cards and Air New Zealand’s Bronze, Silver, and Gold Memberships. Coupled with the strong similarity of the goods and services and the strength of Golden Homes’ reputation, deception or confusion was likely. While not decisive, the evidence showed that there had in fact been some

confusion as to source.   The potential for confusion was exacerbated by the fact that some individuals who were linked with Golden Homes were now with Platinum Homes.

[13]     The Assistant Commissioner concluded that Platinum Homes had not discharged the onus of establishing on the balance of probabilities that its mark would not lead to deception or confusion when used in relation to the relevant goods or services.

[14]     The Assistant Commissioner examined and dismissed a number of alternative grounds of opposition under s17 and 18 of the Trade Marks Act.  The cross-appeal does not extend to these matters.

Description of the marks

[15]     The  PLATINUM  HOMES  mark  uses  the  words  on  advertising  material, brochures, and signs, with a smiling house logo and sun in shades of yellow.  The mark is also used in newspaper advertising (in which colour is not shown), and the words are used without the logo in radio advertising.

[16]     The PLATINUM HOMES mark is used on its brochures, signs, and advertising material by depicting the  words Platinum  Homes New  Zealand in  three concentric circles coloured blue, white, and purple.   Counsel accepted, however, that the Court must consider any normal use of the word mark.

The law

[17]     There was little dispute on the applicable law.  Counsel agreed that the appeal is by way of rehearing:  Section 173 Trade Marks Act 2002, Rule 718 of the High Court Rules.  There was no oral evidence before the Assistant Commissioner and the Court is in as good a position as she was to come to a conclusion on the likelihood of confusion: VB Distributors v Matsushita Electrical Industrial Co (1999) 9 TCLR 349.   Section

17(1)(a) is in similar terms to s16 of the Trade Marks Act 1953, and it was appropriate to follow the leading case under that provision, Pioneer Hi-Bred Corn Company v Hy- Line Chicks Pty Limited (above).   The appropriate question is whether the Court is satisfied, having regard to the actual use of the GOLDEN HOMES mark in October

2003, that PLATINUM HOMES, if used in a normal and fair manner in connection with

its goods and services, would be reasonably likely to deceive or cause confusion among a substantial number of persons.  The test for comparing Trade Marks is to be found in NZ Breweries Limited v Heineken’s Beier Browerij Maatschappij [1964] NZLR 115, following re Pianotists Co’s Application (above):

You must take the two words and judge of them both by their look and by their sound.

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.

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.

[18]     Counsel  further  agreed  that  the  relevant  date  for  assessing  likelihood  of confusion and deception is the date of application.  When comparing the marks, the idea of the mark has to be considered, and imperfect recollection has to be taken into account. Deception and confusion may go no further than perplexing or mixing up the minds of the purchasing public.   Whether deception or confusion alleged as to the source of goods, “deceived” is equivalent to being misled into thinking that the goods bearing the applicant’s mark comes from some other source, and “confused” is equivalent to being caused to wonder whether that might not be the case.   It is neither necessary that all persons in the market are likely to be deceived or confused nor sufficient that one person is;  a balance has to be struck.  Where goods may be sold to the general public, the Judge or officer making a decision is entitled to take into account his own experience or reactions as a member of the public, but with appropriate caution and application of the long-established tests for assessing likely reaction.

[19]     Section 17(1)(a) was amended with effect from 15 December 2005.  There is no transitional provision, and counsel agreed that I should apply the new provision on appeal;  Pratt v Wanganui Education Board [1977] 1 NZLR 476 at 490. Nothing turns on the amendment, however.

Submissions for Platinum Homes

[20]    Mr Arthur submitted that the Assistant Commissioner made a number of fundamental errors because she moved too quickly from the basic question – whether the marks are confusingly similar – and became perplexed by the aids used to answer that

question.  She searched for a common idea and then gave undue weight to it;  she failed to address the descriptive nature of the word “homes”;   she failed to give sufficient weight to the clear differences and look and sound of the marks;   she failed to give proper weight to the nature of the goods;  and she incorrectly assumed the evidence of trading confusion was evidence of confusing similarity.  He accepted, however, that the Assistant  Commissioner  properly  recognised  that  only  some  of  the  evidence  was relevant to the question she had to determine.  He emphasised that the mark GOLDEN HOMES is not simply the words;  the mark includes the smiling house logo to which she did not refer.   She recorded that there is no visual or oral similarity between the first words, but failed to stop there;   there is no prospect of mispronouncing PLATINUM HOMES so that it is confused with GOLDEN HOMES and the respective signs, seen on a section of land or before a house, could not be confused with one another.  The word “HOMES” in each mark is to be taken into account but it is merely a descriptive word and so is insignificant;  where a mark includes a descriptive, generic, or common word then it is thought that the other parts of the mark take on more significance for consumers:   Goldpack Products Ltd v Citrus Products Ltd [1956] NZLR 661, Coca- Cola Co (Canada) Limited v Pepsi-Cola Co (Canada) Limited (1942) 59 RPC 127. It is true that the respective marks both convey the idea of a home, but that is insignificant when considering the idea of the marks as a whole. The GOLDEN HOMES mark is not inherently strong but rather is “laudatory” in nature. Purchase of a home is not like a purchase of soap powder in a supermarket or beer in a hotel; it is a thoroughly considered purchase: Lancer Trade Mark [1987] RPC 303. The analogy with credit cards and airline membership schemes is supported by scant evidence, and the Assistant Commissioner was wrong to rely upon it. By contrast, she gave too little weight to evidence that there are other construction companies that use precious metals or stones as part of their names. The evidence of actual confusion is nothing to do with the marks but arises from commercial matters, including the activities of Westbury Construction on the termination of the Golden Homes franchise.

Submissions for Golden Homes

[21]     Mr Finch invited me to defer to the decision of the Assistant Commissioner.  He emphasised the global nature of The Pianotist test, and emphasised the principle of imperfect recollection.  Golden Homes’ market reputation is very substantial.  The idea of the two marks is the same;  the leading characteristic is a precious metal which has

been juxtaposed with the word homes.  Each metal is indicative of excellence, quality, and value.   He emphasised the idea of the marks, and argued that too much weight should not be attached to differences in look and sound.  He referred to the decision of Gendall J in Austin, Nichols and Co Inc. v Stichting Lodestar HC WN CIV 2004-485-

1281 5 May 2005, in which the question was whether registration of the mark WILD GEESE would be likely to deceive or cause confusion with the trade mark WILD TURKEY.  Gendall J there relied on the idea, which was that of a wild large bird that is the subject of a hunt.

Discussion

[22]     I have reached the clear  view  that the appeal must  be allowed,  for  several reasons.

[23]     First, the Assistant Commissioner paid too much attention to the idea of the mark, and too little to the distinct differences in look and sound.  I adopt the reasoning of the High Court of Australia in Cooper Engineering Company Pty Ltd v Sigmund Pumps Limited (1952) 86 CLR 536, a case in which the applicant sought registration of a mark consisting of the word RAINMASTER, and met opposition from the proprietor of the mark RAIN KING. The Court held at 538:

In the present case the prefix of the two words is the same word “Rain”, but the suffix “master” differs from the suffix “King” in appearance and in sound.  This makes the two marks as a whole quite distinct and the marks must be judged as a whole.  “Rainmaster” does not look like “Rain King” and it does not sound like it.  There is no a single common letter in master and in King.  The two words are so unlike to the eye and to the ear that counsel for the appellant was forced to rely on the likelihood of deception arising from the two words conveying the same idea of the superiority or supremacy of the article as a mechanism for making a spray similar to falling rain or artificial rain as it was called during the argument.  But it is obvious that trademarks, especially word marks, could be quite unlike and yet convey the same idea of the superiority or some particular suitability of  an  article  for  the  work  it  was  intended  to  do.    To  refuse  an application for registration on this ground would be to give the proprietor of a registered trademark a complete monopoly of all words conveying the same idea as his trademark.  The fact that two marks convey the same idea is not sufficient in itself to create a deceptive resemblance between them, although this fact could be taken into account in deciding whether two marks which really look alike or sounded alike were likely to deceive.

[24]     The Federal Court took a similar approach in Sports Café Ltd v Registrar of

Trade Marks (1998) 42 IPR 552, which concerned competing marks called the Sports

Café and the Circuit Sports Café.  Each was a device mark and a word mark.  The Court held that the fact that two marks convey a common idea becomes relevant only if the marks themselves look or sound alike;  commonality of idea might then tip the balance in favour of finding of deception.  It accepted (at 559) that the marks both convey an idea of a café with a sporting ambience.  But to hold that the appellant’s device mark would thereby become deceptively similar to the cited mark would have the practical effect of giving the proprietor of the latter a monopoly over any mark that conveyed such an idea.  The Court concluded, however, that different considerations applied to the word mark.   On the facts, confusion was likely because the mark consisted of three words that were identical to three of the four words used in the cited mark.

[25]     As Mr  Finch  accepted,  the  practical effect  of the  Assistant  Commissioner’s decision  was  to  give  Golden  Homes  a  monopoly  over  any  mark  taking  the  form [precious metal] homes.  That must be so, for any such mark would convey the same idea.

[26]     I do not think that Austin, Nichols and Co Inc. v Stichting Lodestar assists Golden Homes.  As the Court held in Cooper Engineering, it is necessary to consider the nature and kind of customer who would be likely to buy the goods.  Austin, Nichols and Co  concerned  alcohol,  which  would  be  bought  by  knowledgeable  or  uninformed drinkers  in conditions  varying widely from  noisy bars  and  clubs  to  a  sedate  quiet restaurant.   By contrast, few decisions are more considered than the construction and purchase of a new home.  In those circumstances, I am unable to accept that there is a reasonable likelihood of deception or confusion in the use of the two marks, the look and sound of which are quite different.

[27]     I consider the Assistant Commissioner also erred by drawing an analogy with credit cards or airline frequent flyer memberships.  It is true that Platinum, Gold, Silver, and Bronze are used to denote varying service levels and degrees of exclusivity, but in each case there is no doubt about the identity of the provider, which will always be identified as American Express, Visa, and so on.

[28]     Nor was the evidence of confusion probative, as the Assistant Commissioner recognised.  It took the form of allegations that Platinum Homes had passed itself off as the inheritor of a Golden Homes franchise, but the confusion was a function of the

location of show homes and signs of misrepresentations.  Confusion  is  not  relevant unless the offending mark is an operative cause of it:  Neutrogena Corporation v Golden Limited [1996] RPC 473, 494. There was no evidence that the marks themselves caused confusion.

The Cross-Appeal

[29]     Mr Finch argued that the Assistant Commissioner wrongly ignored confusion between the mark PLATINUM HOMES and the mark PLATINUM CONSTRUCTION, which had been used by Platinum Construction Limited in relation to similar goods and services since at least February 2003.  There was evidence in the first declaration of Mr Thomas of Platinum Construction to the effect that members of the public had been confused.

[30]     Mr Arthur was unable to support the Assistant Commissioner’s decision in this respect.  I accept that she erred by rejecting evidence about Platinum Construction on the ground that that company was not a party.  The question was simply whether use of the applicant’s PLATINUM HOMES mark was likely to deceive or cause confusion in the relevant market.  Such confusion need not be confined to the opponent’s mark.

[31]     The short answer to the cross-appeal, however, is that Golden Homes failed to establish that Platinum Construction had the requisite reputation at the relevant date, 1

October 2003.  It is necessary to show a “quite substantial awareness or knowledge” of the relevant mark:  Riviera Leisurewear Pty Ltd v J Hepworth and Son plc (1987) 9 IPR

305,  312.    Platinum  Construction  was  incorporated  in  February  2003.    It  did  not establish a logo and print business cards until June 2003, and there was no evidence that it was in business on any scale.   A Mr Francis, the President of Tauranga Registered Master Builder Limited, did not learn of Platinum Construction until March 2005.  And the instances of confusion were all after the relevant date.

[32]     I do not need to deal with Mr Arthur’s alternative submissions that by analogy to s26(a), Platinum Construction consented to the use of Platinum Homes’ mark, and that there was in any event honest concurrent use.

Decision

[33]     The appeal is allowed and the cross-appeal dismissed.   Platinum Homes will have costs on a category 2B basis.   Counsel may file memoranda if costs cannot be agreed.

In accordance with r540(4) I direct the Registrar to endorse this judgment with the delivery time of 10am on the

11th day of August 2006.

F Miller J

Solicitors:

A J Park, Wellington for the Appellant

James & Wells, Auckland for the Respondent