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Sexwax Incorporated v Zoggs International Limited

(2014 NZCA 311; 9 September 2014)

In Sexwax Incorporated v Zoggs International Limited the Court of Appeal quashed the prior High Court judgment and ordered that the application for ZOGGS in class 25 for “clothing, footwear, headwear, swimwear, t-shirts …” not proceed to registration. The earlier High Court judgment had overturned an Assistant Commissioner’s decision that upheld the opposition by Sexwax to Zoggs application to register ZOGGS.
Sexwax began in California in the early 1970’s and quickly specialized in surfboard wax marketed with a circular logo prominently containing the text “MR. ZOGS SEX WAX”. It also sold t-shirts with the logo or parts thereof on. While the mark is well known in the New Zealand surfing community, there has been no attempt to register the mark in New Zealand. Zoggs International was founded in Australia in 1992 and initially primarily made swimwear goggles branded ZOGGS, which have been sold in New Zealand since 1994. The company expanded into swimwear, which, following a rebranding in 2000, were also branded ZOGGS.
The High Court Judge found that there was only sufficient reputation in New Zealand for the complex logo and not for its constituent elements. While there was evidence of the constituent elements having reputation overseas, this did not justify a finding of spill-over reputation. Regarding the degree of awareness in the relevant market the Judge found the swimwear buying public to be a very large market. While the complex logo had sufficient awareness amongst the surfing community, there was insufficient evidence to conclude that that was a significant portion of the relevant market. When comparing ZOGGS with the complex logo the Judge held it was not likely to cause confusion.
In quashing the High Court decision the Court of Appeal held that the trial Judge had misapplied the test for determining the relevant market in which reputation is assessed. The trial Judge had construed the relevant market widely based upon the market targeted by the applicant. However, the Court of Appeal held that the relevant market should be determined by the market targeted by the opponent. On this basis the Court of Appeal found the evidence established that the opponent’s mark was well-known within that smaller market.
Regarding the similarity of the marks the Court of Appeal affirmed that the complex MR ZOGS SEX WAX logo needs to be compared with ZOGGS. However, the Court of Appeal also noted the prominence of MR ZOGS within that logo and the evidence of purchasers of the products referring to them as MR ZOGS. Given the similarity and that relevant purchasers could be caused to wonder if there is a connection the Court of Appeal held that ZOGGS is confusingly and deceptively similar to the MR ZOGS SEX WAX logo.
However, the Court of Appeal also noted that Zoggs may want to re-file the ZOGGS mark with a reduced specification of goods which are less likely to cause confusion with the specialist market in which the MR ZOGS SEX WAX logo has an established reputation.