The New Zealand Rugby Football Union (Incorporated) v Canterbury International Limited HC Wellington CP 167/01

[2001] NZHC 627

IN THE HIGH COURT OF NEW ZEALAND
WELLINGTON REGISTRY CP 167/01

UNDER the Trade Marks Act 1953, the Fair Trading Act 1986 and the Copyright Act 1994

BETWEEN THE NEW ZEALAND RUGBY FOOTBALL UNION (INCORPORATED)
Plaintiff

AND CANTERBURY INTERNATIONAL LIMITED
Defendant

Hearing: 10 July 2001

Appearances: T Sissons with E C Gray for plaintiff
R Asher, QC, with P R Jagose for defendant

Judgment: 10 July 2001

JUDGMENT OF DOOGUE J

Solicitors:
Simpson Grierson, Wellington, for plaintiff
Chapman Tripp Sheffield Young, Wellington, for defendant

[1] The New Zealand Rugby Football Union Incorporated (“NZRFU”) seeks interlocutory injunctions to prevent Canterbury International Limited (“Canterbury”) selling three items of clothing apparel and using certain forms of marketing of merchandise. It claims Canterbury’s products and forms of merchandising breach various of its trade marks, its copyright in a particular design and certain of the provisions of the Fair Trading Act 1986 (“the Fair Trading Act”). In addition, the NZRFU alleges Canterbury is passing off its merchandise as being licensed or associated with the NZRFU.

[2] The principal dispute relates to a black jersey with a logo on the left breast consisting of half a stylised fern leaf with the words “The Invincibles New Zealand” in the shape of the bottom half of the fern leaf (“the Invincibles jersey”).

[3] The second dispute relates to a black jersey with a fern motif on the left breast and the words “New Zealand” below it (“the black jersey”).

[4] The third dispute as pleaded related to a black cap, but that claim has not been pursued in respect of the present application and there will be no further reference to the black cap in the course of this judgment.

[5] I return to the second dispute identified relating to the black jersey. I intend to deal with that aspect of the dispute immediately and briefly.

[6] The dispute relates to a product of Canterbury sold by it to a store in Queenstown which is franchised to sell Canterbury’s products. The store owner has modified the particular black jersey supplied to the store by having a silver fern and the words “New Zealand” added to the jersey. Argument has arisen as to whether or not Canterbury have a right to control the product sold by the particular store owner. That in itself is questionable. In any event, I am not prepared to contemplate granting a mandatory interlocutory injunction which would affect the store owner and what he does to the products supplied to the store without the store owner being heard and being a party to the present proceeding. The application by the NZRFU to the extent that it relates to the black jersey is dismissed without prejudice to the NZRFU’s rights to amend its pleadings and re-apply with the particular store owner a party to the proceeding.

[7] The real dispute before the Court is that relating to the Invincibles jersey. It is accepted that the application must be dealt with in accordance with the usual principles applicable to interlocutory injunctions. I see no reason to do other than refer to the decision of the Court of Appeal in Klissers Farmhouse Bakeries v Harvest Bakeries Ltd [1985] 2 NZLR 129, 142. The Court has to determine overall justice having considered first of all whether the plaintiff has established the threshold test of a serious question to be tried and then satisfied the Court that the balance of convenience supports the issue of the injunction sought.

[8] The essential feature of the present case as argued for the NZRFU and disputed by Canterbury is that the method by which the Invincibles jersey has been marketed and promoted by Canterbury gives the impression that there is some association between Canterbury and the NZRFU, whether generally or as a sponsor. Because of this, it is submitted for NZRFU that the Invincibles jersey misleads and deceives for the purposes of both the Fair Trading Act and the passing off cause of action relied upon by the NZRFU. I will return to that argument shortly.

[9] Canterbury opposes the injunction upon all grounds open to it, namely that the NZRFU cannot satisfy the threshold test that there is a serious issue to be tried, that it cannot satisfy the Court that the balance of convenience favours the NZRFU, and that it cannot establish that overall justice requires the Court to issue an injunction.

[10] The essence of the case for Canterbury is that the Invincibles jersey is manufactured by it in accordance with a licence from the person who holds the trade mark for the logo appearing on the left breast of the jersey. Thus it is said that the jersey is able to be made by Canterbury in accordance with law and that, as long as Canterbury does not breach some definable intellectual property of NZRFU, NZRFU cannot have a case. In addition, there are the other aspects relating to the balance of convenience and overall justice to which I will return later.

[11] I do not intend to traverse the essential elements of the causes of action in passing off, breach of the provisions of the Fair Trading Act and infringement of registered trade marks under the Trade Marks Act 1953. Those issues have recently been addressed by me in a judgment, Anheuser-Busch, Incorporated v Budweiser Budvar National Corporation & Anor (CP 361/97, High Court, Wellington, 1 June 2001). For the purposes of the present application it is unnecessary to enter into detail under these heads. It should be noted that in respect of the claim by NZRFU in reliance upon breach of copyright that relates to the black jersey and, because of what has already been said, there is no need to refer further to that cause of action.

[12] The NZRFU in support of its application relies substantially on a particular form of advertisement adopted by Canterbury and the language used within it. It is said that that advertisement, by depicting three All Blacks in All Black jerseys of the 1924 period, necessarily associates the Invincibles jersey with the All Blacks and accordingly with the NZRFU. Accordingly, it is submitted that there is a misrepresentation by Canterbury which attracts the tort of passing off, the remedy under s 41 of the Fair Trading Act, and, to a point, the alleged infringement of the NZRFU marks. The NZRFU holds marks primarily relating to a stylised fern, with the words “New Zealand All Blacks” below the fern.

[13] It is unnecessary for the purposes of this judgment to refer in any particular detail to the descriptions of the jersey used by the NZRFU for the All Blacks and the Invincibles Jersey. Apart from the fact that they are both black and that they both have devices incorporating part or all of a stylised fern leaf and words on the left breast and the logo of the manufacturer on the right breast or elsewhere, there is no similarity between them. This is not a case where the NZRFU could possibly rely upon confusion between the different products involved. Nor is it a case where the NZRFU could possibly rely upon confusion between the competing marks, although I understand that steps have been taken by the NZRFU to seek revocation of the mark which Canterbury is at present entitled to use. For present purposes that mark stands, and on my view of it confusion would be impossible except from a distance when confusion between any marks of the particular size would be inevitable.

[14] The essential feature of this case is whether or not the method in which the Invincibles jersey has been promoted leads in one way or another to the necessary linkage between the NZRFU and Canterbury that NZRFU alleges. I was invited by the NZRFU to look at this issue in the light of the question posed in another case in another context: does the advertisement, taken as a whole, read in the way a typical newspaper reader normally would, convey an impression that there is some association or connection between Canterbury and the NZRFU or the All Blacks, whether generally or as a sponsor? If it does, it is said, it misleads and deceives for the purposes of the Fair Trading Act and it passes off. If it does not, of course, the position differs. It is submitted that it is not a question of intention on the part of Canterbury. It is a question of the effects of its advertising and promotional campaign on the readers.

[15] With all respect to the submissions for the NZRFU, I am not at all satisfied that the evidence establishes misrepresentation by associating the Invincibles jersey with the All Blacks and the NZRFU. The photograph used by Canterbury is one which it has been using since 1985, prior to its association with the NZRFU as a licensee from 1990 to 1999. The NZRFU case is dependent on it being the only body entitled to use images relating to the All Blacks. In support of that position it has to rely upon the law relating to character merchandising and dicta relating to particular forms of advertised descriptions of a product. As was noted by the Privy Council in Cadbury Schweppes Pty Ltd & Ors v Pub Squash Co Pty Ltd [1981] 1 All ER 213, 218:

“The width of the principle now authoritatively recognised by the High Court of Australia and the House of Lords is, therefore, such that the tort is no longer anchored, as in its early nineteenth century formulation, to the name or trade mark of a product or business. It is wide enough to encompass other descriptive material, such as slogans or visual images, which radio, television or newspaper advertising campaigns can lead the market to associate with a plaintiff’s product, provided always that such descriptive material has become part of the goodwill of the product. And the test is whether the product has derived from the advertising a distinctive character which the market recognises.

But competition must remain free; and competition is safeguarded by the necessity for the plaintiff to prove that he has built up an ‘intangible property right’ in the advertised descriptions of his product, or, in other words, that he has succeeded by such methods in giving his product a distinctive character accepted by the market. A defendant, however, does no wrong by entering a market created by another and there competing with its creator. The line may be difficult to draw; but, unless it is drawn, competition will be stifled.”

[16] It is unnecessary for present purposes to enter upon any traversal of cases in this and other jurisdictions on this topic. There is simply not enough before the Court to satisfy me that the NZRFU is the only body that has a right to use visual images of the All Blacks or language which associates Canterbury’s product with rugby generally. The material put before the Court goes no further than associating Canterbury with rugby generally in respect of the particular Invincibles jersey with the fact which was at first asserted and subsequently denied by the NZRFU that Canterbury was responsible for the production of the original jersey worn by the 1924 All Blacks who were known as the Invincibles. In the context of the evidence before the Court there is sufficient to establish that Canterbury must have an equal right to the images of players wearing their apparel as the NZRFU might have to images of persons who have been All Blacks.

[17] Indeed, NZRFU’s claim is more important than that. If the NZRFU were correct, those with copyright in images of All Blacks would not be able to use them without the consent of the NZRFU. There is nothing referred to before me which could support such a wide proposition.

[18] There is also nothing before me which clearly associates the NZRFU with particular slogans or visual images which Canterbury have adopted or copied or otherwise associated themselves with in such a way that the NZRFU could satisfy me that there is a serious question to be tried in this case.

[19] In any event, I would not have been satisfied that this was an appropriate case where an injunction should issue, both in terms of balance of convenience and overall justice. The Invincibles jersey adopts a logo which is the subject-matter of a trade mark. The NZRFU did not oppose that application for a trade mark, although it was not only known to it but it obtained an extension of time for objecting to it in 1997 and yet took no steps to oppose the registration.

[20] It is undoubtedly the case that the NZRFU has substantial property interests in its registered trade marks and other intellectual property relating to the All Blacks. It has licensing and sponsorship arrangements in place in respect of such intellectual property. It may well be the case that if it succeeds at the substantive hearing it may be entitled to relief against Canterbury. However, at the present time there is nothing before the Court to establish that the NZRFU is immediately damaged by the Invincibles jersey. The NZRFU has immediately taken action against Canterbury in respect of it. It would be inappropriate that the Court should grant interlocutory relief when the substantive hearing could take place within a reasonable period of time without any shown detriment to the NZRFU.

[21] On the other hand, if relief were granted at the present time, there would inevitably be an impact not only on Canterbury, which may have gone into this matter with its eyes open, but on those responsible for the making and selling of the Invincibles Jersey. It is true that at the present time it appears that, within New Zealand at least, most sales are through franchised retailers, of whom there are approximately 20 in the country. Those retailers are not parties to the present proceeding. The registered proprietor of the Invincibles trade mark is not a party to the present proceeding. There is no reason for this Court at this time to contemplate the relief sought which impacts upon those persons without their being parties to this proceeding. In any event, the proceeding, insofar as it relates to the Invincibles jersey, can readily give rise to an assessment of sales and a calculation of damages should the NZRFU ultimately be successful in its proceeding. On the other hand, if an injunction was granted at the present time, it would be almost impossible in the future to appropriately quantify the damages which might be incurred by Canterbury or others involved with the Invincibles jersey. There is no suggestion that the Invincibles jersey is of poor quality or would otherwise affect the image that the NZRFU seeks to achieve in respect of merchandise associated with it. There is no suggestion that either party is not in a good position to meet any award of damages.

[22] Overall justice leads to the same conclusions as those already expressed. Canterbury is exercising a licence in respect of a registered trade mark. It is not clearly holding out the Invincibles jersey as a product of or associated with the NZRFU or the jersey presently used by the All Blacks. There is no other form of passing off put before the Court to show that Canterbury is trying to associate itself with the NZRFU in some other way that would lead the Court to consider intervention was necessary and essential to protect the NZRFU. The balance of convenience, as already indicated, favours Canterbury, particularly when the circumstances relating to the Invincibles trade mark are taken into account. The status quo also favours Canterbury.

[23] The application by NZRFU for an interlocutory injunction is dismissed.

[24] There will be an order that the affidavits of Messrs Garbett, Noone, Cross and Mr Charles Fox be placed in a sealed envelope upon the file and not be available for public inspection without the order of a Judge as such affidavits contain confidential financial information. In respect of the affidavit of Mr Garbett, only paragraph 7 requires protection. Canterbury have agreed to provide a copy of that affidavit without paragraph 7 which will be available upon the court file for search in the ordinary way.

[25] Canterbury is entitled to its costs, which will be fixed in accordance with Category 3 in the Second Schedule and Column C in the Third Schedule of the High Court Rules. Canterbury is also entitled to its reasonable disbursements. In the event of there being any dispute as to such costs and disbursements, they are to be fixed by the Registrar in accordance with the Schedules.