High Bar Set for Proving Ownership of Conjunction of Individually Owned Marks

In Goldstone Homes Ltd v Goldstone Aluminium Ltd 2021 NZIPOTM 23 a registration was found to be invalid on account of bad faith, but the pleading of ‘not the owner’ was rejected even though the registration was merely a simple arrangement of the invalidity applicant’s unregistered marks.

In February 2018 Goldstone Homes applied to register the a device mark, consisting of a golden stylised GS device above the word GOLDSTONE all against a black background in classes 6, 19, 37, and it was registered 6-months later.

On 3rd September 2020 Goldstone Aluminium applied for registration of the word mark GOLDSTONE in classes 6, 35, 37. A week later they filed an application for a declaration of invalidity against the Goldstone Homes registration and in November 2020 they applied for registration of a device mark, consisting of a golden stylised GS device against a black background. Both marks have Goldstone Home’s registration cited against them.

Goldstone Aluminium pleaded invalidity on three grounds: (i) section 17(1)(a) Use likely to deceive or cause confusion; (ii) section 17(2) Bad faith; and (iii) section 32(1) Not the owner.

Goldstone Aluminium provided evidence of genuine use of the word mark from February 2015 and of the golden GS Device mark from February 2016. That evidence detailed separate use of each of those marks on building signage at building sites, as well as use of the golden GS Device mark on signage as a Strategic Partner at a New Zealand Chinese Building Industry Association (NZCIA) event, and on team clothing. Yet, in the absence of pleadings about how many people may have been exposed to the examples of use of each mark, the Assistant Commissioner found that the relatively low threshold of awareness of the marks had not been established. This reluctance to infer the requisite low level of reputation from the evidence seems particularly harsh. All the more so given that three paragraphs later when discussing the bad faith ground the Assistant Commissioner considered when it is acceptable to rely upon inference. At [30] the Assistant Commissioner stated:

While it may sometimes be necessary and proper to rely upon inference, this means a reasonable conclusion drawn as a matter of strict logical deduction from known or assumed facts, which can be distinguished from mere conjecture, or a guess. (footnotes omitted)

This definition of “inference” stems from the Australian case Gurnett v Macquarie Stevedoring Co Pty (1955) 55 SR (NSW) 243, and has been applied by Assistant Commissioner’s since it was applied in the UK Trade Mark Appointed Person decision Target Fixings Ltd v Brutt, 0-372-06. In the Australian decision the Judge stated:

The plaintiff … must establish that by evidence from which an inference to that effect may be drawn in his favour as distinct from a mere guess. … A guess is a mere opinion or judgment formed at random and based on slight or uncertain grounds. In contradistinction to such a conjectural opinion, an inference is a reasonable conclusion drawn as a matter of strict logical deduction from known or assumed facts. It must be something which follows from given premises as certainly or probably true, and the mere possibility of truth is not sufficient to justify an inference to that effect. 

As outlined above Goldstone Aluminium had been using their word mark and device mark for 3-years and 2-years respectively before Goldstone Homes filed their application, and the Assistant Commissioner accepted that genuine use had been made of those marks. It seems reasonable to infer that such use would have established at least a low-level of reputation. The signage at each building site would have been in place for a considerable duration. The signage at an NZCIA event was likely only seen by people in the trade rather than the general public, but at least evidences active self-promotion. The device mark on team clothing would have been seen by members of the public when team members were off-site such as when shopping. While it would have been preferable if information such as turnover figures had been submitted from which the Assistant Commissioner could ascertain the number of customers who may have purchased goods or services under the marks, it seems reasonable to infer from the evidence that there is at least a low level of reputation. Put another way, to claim that the evidence does not establish a low level of reputation seems more akin to speculating on a possibility than inferring what is probable.

In considering the bad faith ground the Assistant Commissioner noted that when Mr Jiang formed Goldstone Homes in November 2017 he was still the Marketing Manager for Goldstone Aluminium and one of its shareholders. He attended the NZCIA event as the Marketing Manager and wore a polo shirt with the golden GS Device mark. As the sole director and shareholder Mr Jiang’s knowledge of these matters could be imputed to Goldstone Homes. The Assistant Commissioner also noted as a fact that Goldstone Home’s registration combines an exact reproduction of the golden GS Logo with the word mark. Given that there was no evidence that Goldstone Aluminium had relinquished any rights in those marks the Assistant Commissioner found that Goldstone Homes had acted in bad faith when applying to register the mark.

However, when considering the ground of not the owner the Assistant Commissioner applied the Australian Federal Court case Carnival Cruise Lines Inc v Sitmar Cruises Ltd 1994 FCA 936, which held that the marks in question must be the same, or “substantially identical” for a claim to proprietorship. That case used the test for substantial identity developed by the Australian High Court in Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66. That required the Court to have regard to similarities and differences and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison. This test for substantial similarity was subsequently approved in New Zealand by the Court of Appeal in North Face Apparel Corporation v Sanyang Industry Co Ltd 2014 NZCA 398, which concerned North Face’s opposition to Sanyang’s sideways S device mark on the basis of its unregistered S device mark. At [47] the Court of Appeal noted North Face’s argument that where the marks are not completely identical, the proper inquiry is whether it is apparent or recognisable that the property has been taken. At [51] the Court of Appeal rejected that argument stating that:

In an opposition based on s 32 of the Act, the enquiry is not whether Sanyang’s mark apparently took, included, incorporated or absorbed North Face’s S device mark. It is simply whether Sanyang owns its mark, by which we mean an identical mark.

In rejecting the claim that the marks are substantially identical the Court of Appeal endorsed the trial Judge’s finding that the marks are visually and conceptually distinct and further stated:

We add on the substantially identical test that in our judgment the three dimensional and metallic features of Sanyang’s mark are reminiscent of the automobile industry. By contrast North Face’s S device mark represents a mountain peak and its two dimensional, simpler appearance is reminiscent of mountain conditions for which its products are suited.

While noting in footnote 64 that recent Australian Full Court decisions may have broadened the Shell v Esso substantially identical test, the Assistant Commissioner considered bound by the Court of Appeal’s application of that test. The Assistant Commissioner considered each of Goldstone Aluminium’s marks separately and found that each of them lacked a significant element within Goldstone Home’s mark. However, it is not apparent that the Court of Appeal would have rejected the substantially identical claim in the case at hand. In the North Face case there were distinguishing features. Yet, in the case at hand the opposed mark is composed of a simple arrangement of Goldstone Aluminium’s unregistered marks. As the owner of each of these marks Goldstone Aluminium should be free to use them in conjunction. The Assistant Commissioner appears to be remiss in finding that Goldstone Aluminium is the owner of each of its marks individually but not in the simple conjoined arrangement of the marks.

Author: Quinn Miller

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