Unilever Plc v McPherson's Consumer Products Pty Limited
[2013] NZHC 1458
•12 June 2013
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2013-404-000707 [2013] NZHC 1458
UNDER the Trade Marks Act 2002
IN THE MATTER of a decision of the Assistant
Commissioner of Trade Marks of 14
January 2013 in respect of trade mark application number 827316 for CATWALK in classes 8, 21 and 26.
BETWEEN UNILEVER PLC Appellant
ANDMcPHERSON'S CONSUMER PRODUCTS PTY LIMITED Respondent
Hearing: 12 June 2013
Appearances: G C Williams for the Appellant
S Wheeldon for the Respondent
Judgment: 12 June 2013
[ORAL] JUDGMENT OF WYLIE J
Counsel:
G C Williams, Auckland
S Wheeldon, Auckland
UNILEVER PLC v McPHERSON'S CONSUMER PRODUCTS PTY LIMITED [2013] NZHC 1458 [12 June
2013]
Introduction
[1] This is an appeal from a decision of Assistant Commissioner Walden dated
14 January 2013. In her decision, the Assistant Commissioner found that the appellant, Unilever Plc (“Unilever”), had not succeeded on any of its grounds of opposition against a trademark application number 827316 CATWALK.
[2] In brief, Assistant Commissioner Walden found that Unilever had not established that, at the relevant date of 15 July 2010, there was a sufficient awareness, in the relevant market, of its mark CATWALK to meet the threshold required under s 17(1)(a) of the Trade Marks Act 2002. Given that Unilever failed to meet the relatively low threshold of awareness of its mark required by s 17(1)(a), she held that it could not succeed on its s 17(1)(b) ground of opposition, or on its ground of opposition relying on s 25(1)(c) of the Act.
[3] Unilever now seeks to overturn these findings. The grounds of appeal are that the Assistant Commissioner erred in concluding:
(a) that Unilever had failed to establish an awareness of its trademark in the New Zealand market, and
(b)that it was therefore unnecessary to consider the grounds of opposition to registration raised by Unilever under ss 17(1)(b) and 25 of the Act.
[4] The respondent, McPherson’s Consumer Products Pty Limited (“McPherson’s”), supports the Assistant Commissioner’s decision. In particular, it argued that the Assistant Commissioner was correct in finding that Unilever had not established awareness of its mark in New Zealand, even to a level sufficient to meet the threshold required by s 17(1)(a). It submitted that Unilever’s evidence fell short of establishing such awareness, and that it was unclear in relation to many key issues.
Background
[5] McPherson’s filed its New Zealand trademark application number 827316
CATWALK on 15 July 2010 in respect of the following goods: (a) Class 8
Hand operated instruments and tools for beauty and personal care; nail care products included in this class; nail files; clippers; tweezers; scissors; corn planes; pliers; blackhead removers; eyelash curlers; polishing products and implements included in this class; nail care kits included in this class including at least some of the aforesaid goods appropriate to nail care.
(b) Class 21
Household utensils and containers for beauty and personal care; cosmetic applicators; brushes for beauty and personal care including cosmetic brushes included in this class, hair brushes, nail brushes, eyebrow brushes, shaving brushes and bath brushes; sponges for household purposes; powder puffs; and shaving mugs (not of precious metal).
(c) Class 26
Hair and beauty products in this class namely barrettes, hair clips, elastic for tying hair, hair bands and decorative hair bands; hair accessories included in this class; hair ornaments; hair grips, slides, bands and pins; hair curlers (non electric) and curling pins; hair net.
[6] Unilever distributes a range of hair care products marketed under the name CATWALK. The products include hair sprays, hair finishing products, styling creams, shampoos, conditioners, waxes and the like. It filed a New Zealand trademark application number 837664 CATWALK on 24 February 2011 in respect of goods:
(a) Class 3
Soaps; perfumery; essential oils; deodorants and antiperspirants; hair care products; hair colorants, hair dyes, hair lotions, hair waving preparations, shampoos, conditioners, hair sprays, hair powder, hair dressings, hair lacquers, hair mousses, hair glazes, hair gels, hair moisturisers, hair liquid, hair preservation treatments, hair desiccating treatments, hair oils, hair tonic, hair creams, preparations for the bath and/or shower; non-medicated toilet preparations; skin care preparations; cosmetics.
[7] On 27 April 2011, Unilever filed its notice of opposition in respect of the McPherson’s application. It opposed registration by McPherson’s on the following grounds:
(a) That use of the opposed mark by McPherson’s would be likely to
deceive or cause confusion;
(b) That use of the opposed mark would amount to passing off;
(c) That use of the opposed mark would be contrary to ss 9, 10, 13 and 16 of the Fair Trading Act 1986;
(d) That the opposed mark is disentitled to protection because of (b) and
(c) above;
(e) That the opposed mark is identical to its mark, which is well-known in New Zealand, and use of the opposed mark would be taken as indicating a connection in the course of trade between McPherson’s goods and its goods and would be likely to prejudice its interests; and
(f) That the opposed mark is not, and cannot be, distinctive of, or capable of, distinguishing McPherson’s goods in New Zealand as it is identical to its mark which has been used in New Zealand since before the filing of the opposed mark.
Unilever asserted that it had been using the name CATWALK in New Zealand for a number of years. It said that it had an unregistered mark and interest in the mark CATWALK.
[8] Evidence was filed by the parties. First, Unilever filed a statutory declaration from a Mr John Brailey. McPherson’s replied with statutory declarations from a Mr Paul Mitchell and a Mr Michael Squires. Unilever then filed a statutory declaration from a Ms Jeanette Singh. The submissions which I heard were directed principally to the evidence of Mr Brailey and Ms Singh.
Relevant Legal Tests
[9] There was little or no disagreement between counsel in relation to the applicable legal tests.
[10] Section 17(1) of the Act provides as follows:
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
(c) the use or registration of which would, in the opinion of the Commissioner, be likely to offend a significant section of the community, including Māori.
[11] It was common ground that the purpose of the section is not to protect competitors, but rather to protect the public interest by refusing to accord monopoly rights to a mark, the use of which is likely to deceive or confuse those in the markets
for the goods or services.[1]
[1] Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 (CA); NV Sumatra
[12] The leading decision in this area is the judgment of the Court of Appeal in the
Pioneer Hi-Bred case.[2] That case was dealing with s 16 of the Trade Marks Act
1953. For present purposes, that section was in substantially similar terms to s 17 contained in the present legislation.
[2] Above n 1.
[13] In Hi-Bred, it was accepted by both counsel that, while the onus of establishing absence of a likelihood to deceive or cause confusion was on the applicant for registration, it was first necessary for the opponent to establish a sufficiently substantial reputation in the New Zealand market to lead to the possibility that goods covered by the proposed trademark would be identified with
the opponent.[3]
[3] Hi-Bred, above n 1, at 62-63.
[14] The section does not say this in as many words, but Richardson J considered the relevant authorities, and explained why it is necessary to consider the opponent’s reputation before turning to assess the likelihood of deception or confusion.[4] He also set out 10 propositions which he considered were clearly settled and which are applicable to what is now s 17.[5]
[4] Hi-Bred, above n 1, at 62–63.
[5] Hi-Bred, above n 1, at 61-62
[15] The issue was also considered by the Court of Appeal in NV Sumatra Tobacco Trading Company.[6] In that case, Glazebrook J, delivering the judgment of the Court, noted that the threshold required of an opponent to registration is relatively low. She considered that all that an opponent needs to show is awareness, cognisance or knowledge of the mark. The Court considered that an opponent will first have to identify the relevant market, and then point to evidence showing that a substantial number of persons in that market have awareness, cognisance or knowledge of its mark. What is a substantial number of persons depends on the
nature and size of the market, and is relative both to the number of persons involved
in, and their impact on, that market.[7]
[6] Above n 1.
[7] NV Sumatra Tobacco Trading Co v British American Tobacco (Brands) Inc, above n 1 at [77];
Hi-Bred, above n 1, at 74–75.
[16] In my view, Mr Williams, appearing for Unilever, accurately summarised the relevant law when he asserted that an opponent in an opposition must establish that the awareness of its mark is sufficiently substantial to lead to the possibility that the goods covered by the opposed mark would be identified with the opponent. This is a relatively low threshold.
[17] It follows that there are two issues to be addressed in determining whether a trademark should be registered when it is opposed under s 17(1)(a). First, is there an awareness of the opponent’s mark in the New Zealand market? In relation to this issue, the onus is on the opponent. Secondly, is the use of the mark the applicant seeks to register likely to deceive or cause confusion amongst a substantial number of persons? In relation to this issue, the onus is on the applicant. Both assessments have to be made on the balance of probabilities. Moreover, they are required to be made as at the date the trademark application was filed. In the present case, it is common ground that the relevant date was 15 July 2010.
Assistant Commissioner’s Decision
[18] In her decision, the Assistant Commissioner set out the background to the application and opposition filed by Unilever. Notwithstanding that there was little or no evidence in relation to the relevant market before her, she considered that the relevant market in New Zealand for the opposed goods consists mainly of the general purchasing public and retailers, for example, pharmacies, supermarkets, and department stores, and businesses that use the goods in the provision of services, for example, beauty salons. She considered that the relevant market will be large in size, and that it is largely non-specialist, although noting that the providers of services, which use the items in question, will be specialists.
[19] There has been no challenge to this part of the Assistant Commissioner’s
decision.
[20] The Assistant Commissioner then briefly summarised the relevant law. Again, there is no challenge to her summary in this regard. She then went on to consider whether there was an awareness of Unilever’s mark in this country. On the evidence before her, she found that Unilever had not established that there was an
awareness of its mark in the relevant market at the relevant date. In [24] through to [31], she set out detailed reasons for that finding. I summarise those reasons later in this judgment.
Submissions
[21] Mr Williams argued that the Assistant Commissioner erred in reaching the conclusion that Unilever had not established that there was sufficient awareness of its CATWALK trademark at the relevant date in New Zealand in the relevant market. He submitted that the evidence which was filed by Unilever in support of its opposition demonstrated the required degree of recognition because it demonstrated that its mark was, or would be, known by a significant number of people, both in general, and who were retailers or the operators of businesses that use the goods in question in the course of providing their services. He argued that the totality of the evidence filed demonstrated that a not insubstantial number of persons in the relevant market in New Zealand would have been aware, cognisant of, or have had knowledge of Unilever’s CATWALK mark at the relevant date.
[22] Ms Wheeldon, appearing for McPherson’s, submitted that the Assistant Commissioner was correct in finding that Unilever had not established an awareness of its CATWALK trademark in the relevant market at the relevant date. She took me through the evidence relied on by Unilever in some detail. She argued that based on that finding alone, all of the appellant’s grounds of opposition must fail.
Nature of the Appeal
[23] Under s 173 of the Trade Marks Act, on an appeal, the High Court may confirm, modify or reverse the Assistant Commissioner’s decision or any part thereof. The Court may exercise any powers that could have been exercised by the Assistant Commissioner in relation to the matter to which the appeal relates.
[24] Given this provision, it was common ground that the appeal proceeds by way of a de novo hearing.
[25] Unless an application for leave to adduce further evidence is granted by this Court, such appeals are required to be heard on the basis of the material that was before the Assistant Commissioner. The correct approach has been established by the Supreme Court in Austin, Nichols & Co Inc v Stichting Lodestar.[8] That case involved a general appeal under s 27(6) of the Trade Marks Act 1953. The Court held that the appellant bears the onus of satisfying the appellate court that it should
[8] Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
differ from the decision under appeal, that the extent of consideration the appeal court should give to the decision appealed from is a matter for its judgment, but that no deference is required beyond the customary caution appropriate when the Tribunal had a particular advantage, such as technical expertise, or the opportunity to assess the credibility of witnesses. The law was summed up in the judgment of the Chief Justice at [16]. She there said as follows:
Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ. In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion (footnotes omitted).
I have considered the appeal by reference to those principles.
Analysis
[26] Counsel agreed that in relation to s 17(1)(a), the key question is whether there was enough evidence adduced by Unilever to get over the initial evidential onus imposed on it at which I have referred to above.
[27] The principal deponent for Unilever was Mr Brailey. His evidence was subject to considerable scrutiny by both counsel. I make the following observations.
[28] Mr Brailey is based in the United Kingdom. He is Unilever’s trademark
manager for the hair care category of products made by that company. He has been working for Unilever for 20 years and has been in his current role for three years. In
that role, he has overall responsibility for Unilever’s global hair care trademark portfolio. He gave evidence that he was authorised to make the statement on behalf of Unilever, and that he was fully aware of the facts set out in his declaration.
[29] There is no reason to question any of these assertions by Mr Brailey, and indeed, he was not cross-examined by McPherson’s. Indeed, McPherson’s did not appear before the Assistant Commissioner.
[30] It is, however, clear from Mr Brailey’s declaration that he has limited knowledge of the market in New Zealand for Unilever’s CATWALK hair care products. Prior to March 2009, CATWALK branded hair care products made by Unilever were sold in New Zealand through a distributor called Hair FX. Mr Brailey had but limited knowledge of the sales carried out by Hair FX prior to March 2009. Hair FX has since ceased business. It is noteworthy that no evidence was filed by anybody on behalf of Hair FX.
[31] Mr Brailey said in his declaration at [2] that Unilever markets a range of goods, including personal care products. This extends to hair care products. He deposed that one of the main hair care product brands of Unilever is the CATWALK brand which he says is used on a full range of hair care products. This includes hair sprays, hair finishing products, hair styling creams, hair shampoos, hair conditioners, hair waxes and the like. He asserted that the CATWALK products are marketed around the world, including in New Zealand. He went on to assert that CATWALK branded hair care products have acquired a huge reputation in the hair care industry. He stated that he believes it is very well known to professional hair stylists and consumers around the world, including in New Zealand.
[32] As the Assistant Commissioner observed, the difficulty with this evidence is that Mr Brailey provides little by way of factual basis against which his beliefs can be tested and assessed. The Commissioner commented in this regard at [24] of her decision. I agree with her criticism.
[33] Mr Brailey annexed photos showing the CATWALK brand used on a range of hair care products produced by Unilever. He stated that those photographs showed
the brand both as it was at the date his declaration was sworn, which was
21 December 2011, and also how it has been used in the past.
[34] The difficulty with the photographs is that it is not clear which photographs show the brand as at December 2011, and which photographs show the market as it was used in the past. The relevant date was 15 July 2010. Quite how the mark was used by Unilever at that time is unclear.
[35] At [3] of his declaration, Mr Brailey asserted that CATWALK branded hair products have been sold in New Zealand since at least 2004 by Unilever and its predecessors. The products were sold direct to hair salons. Certainly, that has been Unilever’s practice since it acquired the business from Hair FX in March 2009. There is no suggestion in Mr Brailey’s affidavit that Unilever has sold the CATWALK branded product direct to the public. Rather, Mr Brailey provides what he describes as a list of some of the New Zealand stockists who were supplied with CATWALK branded products in 2009.
[36] The list of stockists contains additional information, much of which postdates the relevant date.
[37] As the Commissioner observed in [25] of her decision, the list shows total sales covering the period 15 April 2009 to 31 October 2011. While the Assistant Commissioner found that it is unclear which New Zealand stockists were supplied with Unilever’s goods at or before the relevant date, I am not persuaded that that finding is necessarily correct. Looking at the matter broadly, it seems to me that Mr Brailey produced a list of stockists, who he asserted were supplied with CATWALK branded products in 2009. While the list contains additional information, there is no reason to suspect that it is not an accurate list of stockists as at the date stated by Mr Brailey. I also accept the point made by Mr Williams that the stockists cover a wide geographical area encompassing large parts of the country.
[38] The difficulty with the list however is that, of itself, it proves little. There is no evidence of the total number of potential stockists in New Zealand. Nor is there any evidence relating to the percentage of the market of available hair salons, or
stockists, that Unilever sells to. Further, it is clear from the information contained in the exhibit to Mr Brailey’s declaration that sales to some stockists are very low. Indeed, sales to some appear to be nil. Finally, it is not clear how much of the product supplied was used by the stockist and how much was on-sold to the general public. In itself, the exhibit is not helpful.
[39] Mr Brailey goes on to give approximate sales value and volume figures for CATWALK branded products in New Zealand for the years 2004 through to the date of his declaration. The figures given by him are as follows:
Year Value Unit Quantity
2004 $145,249.07 7,411
2005 $167,321.38 8,537
2006 $131,674.30 6,718
2007 $156,168.52 7,968
2008 $128,855.07 14,556
2009 $198,432.36 12,798
2010 $315,985.56 20,271
Year to date $125,715.15 11,616
Some approximation is necessary, given that the relevant date is 15 July 2010.
[40] Counsel accepted that approximately 68,000 units were sold over the relevant period, with a total sales volume of approximately $1,085,000. These units and sales were generated over a period of some six and a half years. Average sales were approximately $167,000 per annum.
[41] Given the potential market for hair care products as found by the Assistant Commissioner, I agree with and accept Ms Wheeldon’s submission that Mr Brailey’s evidence shows that Unilever’s sales were minimal. Even if expenditure on hair care products comprises only $10 per person per year, given that New Zealand’s population is approximately four million people, the total market value would be approximately $40 million annually. Against this, average sales of $167,000 per annum are infinitesimal. Similarly, the average number of units sold is 10,480 units per year. Even if only one unit per person were purchased annually, the total market would be approximately four million units, so again, sales of 10,480 units is negligible.
[42] The Assistant Commissioner concluded that, in light of the large size of the relevant market, Unilever have failed to establish an awareness, on the basis of sales of its goods. She considered that the number of units was quite low in relation to the large size of the relevant market. Further, she thought it was unclear how many members of the relevant market purchased Unilever’s goods and whether or not they bought more than one unit over the year, which she thought would be expected for this kind of product.
[43] I agree with these comments. It seems to me that the sales generated by Unilever, both on value, and by reference to the units sold, are infinitesimal given the size of the market.
[44] Mr Brailey, in his declaration, stated that CATWALK products, were promoted mainly through the sale of promotional packs of products, all of which were branded with the CATWALK brand.
[45] As the Assistant Commissioner observed, the difficulty with Mr Brailey’s assertion was that no information was given as to when the promotions occurred, or how many promotional packs were sold to the relevant market, before the relevant date. It was therefore unclear how, and the extent to which, if at all, the sale of promotional packs had resulted in raising awareness of Unilever’s products before the relevant date.
[46] It is not irrelevant that photographs of the promotional packets attached to Mr Brailey’s affidavit do not appear to show conspicuous use of the CATWALK mark.
[47] Mr Brailey asserted that a number of retailers offered CATWALK branded hair care products, distributed by Unilever, for sale over the internet. Examples were given of organisations such as StrawberryNet and Hair Products Online.
[48] Once again, as the Assistant Commissioner observed, the difficulty with this evidence is that Unilever did not provide information concerning how many
individuals from the relevant market in New Zealand purchased its goods in this way, or accessed the internet sites to acquire its goods, before the relevant date.
[49] Mr Brailey asserted that the CATWALK branded products were promoted by way of advertising in publications which were distributed through the hair care industry in New Zealand and elsewhere. He annexed copies of advertisements which appeared in hairdressing magazines circulated in New Zealand including publications such as Headway and Images.
[50] Once again, this evidence does not significantly assist. The readership, circulation, and dates of the publications were not provided. I agree with the Assistant Commissioner that it was difficult to assess the extent to which members of the relevant market would have seen the advertisements before the relevant date.
[51] Finally, Mr Brailey asserted that since 2004, the cost of print media advertising for the CATWALK branded hair care products in New Zealand by Unilever was approximately $6,500 per annum, or a total of approximately $52,000 over the period 2004 to July 2010.
[52] As Mr Williams responsibly acknowledged, an advertising spend of this amount is, to say the least, modest. I agree with the Assistant Commissioner’s observation that the annual expenditure on promoting the product in New Zealand by Unilever has been very small.
[53] In summary, it is my conclusion that Mr Brailey’s evidence is long on assertion and generalisation, but short on specific evidence and detail. In my judgment, Unilever did not establish before the Assistant Commissioner, that, at the relevant date, there was an awareness of its CATWALK trademark in the relevant market. Unilever has failed to persuade me that the Assistant Commissioner’s decision was wrong. Indeed, had I been dealing with the matter at the outset, I would have reached the same conclusion. In my view, the Assistant Commissioner’s conclusions in this regard were correct.
[54] I now turn to Ms Singh’s evidence.
[55] Ms Singh is an employee in the law firm in New Zealand retained by Unilever. Her evidence is not directed at establishing an awareness of the CATWALK trademark in New Zealand. Rather it comprises comments on the content and relevance of search results on CATWALK at the Australian Trademarks Office, and results of a search on CATWALK at the New Zealand Intellectual Property Office in March 2012. Ms Singh then goes on to annex copies of internet pages located by her in March 2012 which she says show that a number of trademarks that are used on hair care products are also used on accessories such as hair brushes, hair dryers, hair straighteners and the like. Based on these internet searches, Ms Singh asserts that “it is commonplace for manufacturers of hair care products such as shampoos, conditioners, hair sprays and the like, to also manufacture and sell hair care accessories”. Based in turn on this evidence, Mr Williams made the submission that it followed that consumers “are conditioned to believe that” manufacturers of hair care products also manufacture and sell hair care accessories.
[56] With respect to Mr Williams, there is simply no reliable evidence for that assertion.
[57] It is noteworthy that Ms Singh does not give any explanation as to how she selected the brands the subject of the internet searches carried out by her. She does not state whether other brands were searched by her, but discarded because she found that marks were not used on both types of product. The search results themselves are something of a mishmash of images, put together using the Google search engine. There is no information on where any of the images came from, how old they are, in what country or countries the respective products are or were available, or any other contextual information which can be relied on. Further, the material annexed to Ms Singh’s declaration is not at the relevant date.
[58] Ms Singh refers to extracts from the website Again, she gave no explanation as to how the particular extracts referred to by her in her declaration were selected as evidence, and no information on the business that runs the website, what sales may have been made through it, or which otherwise seek to put the evidence in context.
[59] Further, it is clear that Ms Singh is not an expert. She is not qualified to make the assertion that it is commonplace for manufacturers of hair care products, such as shampoos, conditioners, hair sprays, and the like, to also manufacture and sell hair care products.
[60] In summary, I do not consider that Ms Singh’s evidence was of any significant assistance. It is noteworthy that little or no reference was made to it by the Assistant Commissioner.
Conclusion
[61] In summary, in my view, the Assistant Commissioner was correct in finding that Unilever had not established an awareness of its CATWALK trademark in the relevant market at the relevant date.
[62] Given that Unilever could not meet the relatively low threshold of awareness of its mark under s 17(1)(a), it must, in my judgment, also follow that Unilever could not succeed on its ground of opposition which referred to s 17(1)(b). Nor could it establish that its mark was well known in the relevant market at the relevant date, and therefore succeed on its ground of opposition relying on s 25(1)(c).
[63] In the circumstances, it is not necessary for me to go on and address those matters in any further detail.
Costs
[64] I have heard from counsel in relation to costs. Both accept that costs should be fixed on a 2B basis. Accordingly, I direct that McPherson’s is entitled to its costs on a 2B basis, together with its reasonable disbursements. I anticipate that counsel will be able to agree on the quantum of costs. If there is any dispute the same is to
be referred to me within 10 working days of the date of this judgment.
Wylie J
Tobacco Trading Co v British American Tobacco (Brands) Inc [2010] NZCA 24, (2010) 86 IPR
206 (CA).
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