Specialist Market Evidence Principle Not Applicable Under Section 25(1)(b) for Dissimilar Goods

In Guangzhou Baiyunshan Pharmaceutical Holdings Co Ltd v Multi Access Limited 2021 NZIPOTM 8 the Assistant Commissioner confirmed that where goods in a specialist market are found to be dissimilar there is no residual onus on the applicant to establish that deception or confusion is not likely under section 25(1)(b).

Guangzhou’s application for a minimally stylised version of WONGLO – as shown – in classes 5, 30, 32 entered New Zealand via designation from a Madrid Protocol application. Despite Multi Access’s prior registration for WONG LO KAT in classes 5, 30, 32, 33 the application was accepted less than a month after being submitted to IPONZ by WIPO in May 2016. Multi Access then opposed registration of the stylised WONGLO mark on the basis of its ownership of the WONG LO KAT mark as well as registrations for the Chinese character equivalent and a transliteration thereof, which also cover goods in classes 5, 30, 32.

Generally in oppositions the applicant for registration has the initial onus of establishing that none of the grounds prohibiting registration apply. However, an exception to this is the section 17(1)(a) absolute ground for not registering a trade mark, which prohibits registration for a trade mark the use of which would be likely to deceive or confuse. If an opponent raises section 17(1)(a) there is an initial onus on them to establish that they have a reputation in their mark, as without such a reputation there would be no prospect that consumers would be deceived or confused. As recently confirmed by the Court of Appeal in Pharmazen Limited v Anagenix IP Limited 2020 NZCA 306 the purpose underlying section 17(1)(a) is to protect the public from deception or confusion and is determined in relation to actual use rather than the notional use that applies under the section 25(1)(b) relative ground. Consequently, where a business has a New Zealand trade mark registration, but is not currently using the mark or does not provide evidence of use, they cannot rely upon expected future use to argue under section 17(1)(a) that use of the applicant’s mark will be likely to deceive or confuse.

In the case at hand Multi Access had pleaded the absolute ground – 17(1)(a) – and the relative grounds – 25(1)(b) and 25(1)(c). However, while there was a long history of its marks being used in New Zealand, at the Hearing Multi Access withdrew evidence of use as it could not reach a satisfactory agreement on the use of its confidential evidence. Consequently, the Assistant Commissioner was left to establish reputation on the basis of assertions in declarations, which were considered to carry little weight as evidence, and so held that Multi Access had not met the low threshold of establishing reputation for section 17(1)(a) purposes.

In regards to section 25(1)(b) the Assistant Commissioner found that the applicant’s goods in classes 30 and 32 comprised goods that are either the same or similar to the opponents. This was similarly the case for the applicant’s class 5 goods except for some goods which were found to be dissimilar. Given the similarity of the marks, the Assistant Commissioner held the section 25(1)(b) opposition to be successful in relation to the goods that are the same as or similar to those covered by the opponent’s WONG LO KAT registration. Interestingly, if the opponent did not have the WONG LO KAT registration and could only rely upon its Chinese character and transliteration marks, the Assistant Commissioner cast doubt upon section 25(1)(b) being established in respect of those marks. They were considered to be visually different and in respect of the relatively low number of consumers in New Zealand who understand Chinese characters and transliterations they were held to be only phonetically and conceptually similar to a low degree. Given the fair and notional use test under section 25(1)(b) the Assistant Commissioner held it was not appropriate to consider that the opposed mark would be used on goods directed at Chinese consumers in New Zealand.

The Assistant Commissioner then considered whether registration should be allowed in respect of the goods that were found to be dissimilar. All but one of those dissimilar goods were considered to be goods that would be sold in a specialist market. It was noted that various New Zealand Court and Assistant Commissioner decisions have applied a principle established in the UK House of Lords decision GE Trade Mark 1973 RPC 273 regarding goods sold in a specialist market. Namely, for goods sold in a specialist market evidence of persons accustomed to dealing in those goods is essential for establishing the likelihood of deception or confusion. If the applicant does not provide such evidence, then they have been found to not discharge their onus for establishing that none of the grounds prohibiting registration apply. However, the Assistant Commissioner noted that those New Zealand decisions were under section 17(1)(a) of the current Act or the equivalent section of the prior Act. Given that dissimilar goods do not fall within the ambit of section 25(1)(b) the absence of evidence from persons accustomed to dealing in specialist goods does not result in the applicant being found to have not discharged their onus in respect of that provision. Given that the opponent had failed to discharge their onus for meeting the low threshold for establishing reputation for section 17(1)(a) purposes, the applicant was not required to provide evidence from people accustomed to dealing in specialist goods. Similarly, the higher reputation threshold under section 25(1)(c) could not be met. Consequently, the dissimilar goods could proceed to registration.

Author: Quinn Miller

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