Guidance on Finding Distinctiveness and Specification Sweet Spots

In Flujo Sanguineo Holdings Pty Ltd v Merisant Australia Pty Ltd [2021] NZIPOTM 11 the Assistant Commissioner clarified when disclaimers are appropriate and also made a rare finding that the scope of the application’s specification was too broad on account of likely use.

In January 2016 Flujo applied to register the shown device mark in relation to the following broad range of goods in class 30: coffee; tea; cocoa; sugar; natural sweeteners, sweeteners, natural sweetening substances, sugar substitutes; cakes; biscuits; confectionery; chocolate; edible ices; ice cream; rice; flour and preparations made from cereals; bread; pastry; honey, treacle; yeast; baking-powder; salt; mustard; vinegar; sauces (condiments); spices; food preparations containing the aforesaid ingredients; prepared meals in this class.

The device mark corresponds to the packaging of Flujo’s NATVIA sweetener product, except with some details left blank or removed, and contains the following two phrases: ‘Natural like sugar – only better’ and ‘the 100% Natural sweetener’.

Merisant opposed the application, and by the hearing the grounds of opposition had been restricted to requiring disclaimers for each of the phrases on the basis that they are descriptive and likely to be used by other traders, and that Flujo does not intend to use the mark on all the goods in the specification.

Under the Trade Marks Act 2002 IPONZ does not routinely require the descriptive contents of trade mark applications to be disclaimed in order to achieve acceptance – in contrast to IPONZ’s practice under the Trade Marks Act 1953. Rather, provided the mark as a whole is considered sufficiently distinctive, it is largely left to third-parties to request the insertion of disclaimers, as in this case, if the applicant has not voluntarily disclaimed those elements. However, the Commissioner (or Court) retains discretion to require the insertion of disclaimers if it is considered to be in the public interest.

Flujo contended that disclaimers are not required. While the phrases are prominent, they considered the phrases are not sufficiently dominant to be essential to the mark meaning that a person seeing them would not consider that rights exist in the phrases in isolation and as such disclaimers would serve no purpose and would only add clutter to the register.

The Assistant Commissioner considered that Flujo approached the issue from the wrong direction, holding that before determining whether a phrase is an essential feature of a mark it is first necessary to determine the distinctiveness of the phrases in isolation. It is only if the phrases in isolation are considered descriptive that the issue of whether they are sufficiently essential to the mark to require a disclaimer arises. In considering each phrase separately in relation to the goods for which the mark is used the Assistant Commissioner readily found that each phrase is descriptive, and merely act as a subsidiary tagline, catchphrase or slogan. The Assistant Commissioner found the stylised phrases add some distinctiveness to the mark as a whole and that their aural and conceptual dominance and visual prominence mean that the public interest is engaged regarding whether the rights in the registration extend to the phrases, and so ordered that disclaimers be added.

Regarding the scope of the specification the Assistant Commissioner noted that section 32(2) only allows specifications for all or a large variety of the goods or services of a class to be claimed when it is justified based upon the current or intended use. However, the Assistant Commissioner also noted that in the opposition context there is a presumption that the applicant intends to use the mark on all the goods or services in the specification. Nonetheless, Merisant contended that the presumption can be displaced if it is shown on the balance of probabilities that there is no bona fide intention to use the mark across the whole specification. The mark is currently used only on stevia-based natural sweeteners. Given that each of the phrases are only apt in relation to sweetener type products, the Assistant Commissioner held that Merisant had displaced the presumption of wide intended use and ordered the specification to be limited to: natural sweeteners, sweeteners, natural sweetening substances, sugar substitutes. The Assistant Commissioner considered that the broadness of the description was likely a result of over protective drafting that went too far beyond genuinely contemplated use. While the practice of using general terms to describe the goods or services the mark is to be used on is justifiable, merely adding in other goods or services that the mark is unlikely to be used on in order to extend the scope of protection is likely to have a similar result.

Author: Quinn Miller

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