James & Wells' Ben Cain shares why it's important to plead based on the most appropriate grounds
Raising alternative grounds of objection under s 17(1)(a) and (b) is of limited utility when the alleged unlawfulness is breach of the Fair Trading Act or passing off. If the opponent establishes s 17(1)(a) as a ground of objection, registration will be prohibited. If the opponent does not establish that s 17(1)(a) applies, then it is well established that the higher threshold for establishing a breach of the Fair Trading Act or the tort of passing off in s 17(1)(b) will not be met.[1]
Never were truer words written in an IPONZ trade mark decision. And yet, despite Assistant Commissioner Casey KC’s clear warning in 2016, and numerous decisions since then which have repeated the warning,[2] parties have, over the last eight years, continued to needlessly plead breach of the Fair Trading Act 1986 (FTA) and passing off as grounds of opposition or invalidity alongside section 17(1)(a).
But this article is not about why pleading breach of FTA and passing off as grounds of opposition and invalidity alongside section 17(1)(a) is the very definition of an exercise in futility (as well as a magnet for increased or decreased costs awards); not exclusively anyway. Rather, this article looks more broadly at the merits (or otherwise) of all grounds of opposition and invalidity considered in IPONZ decisions published on NZLII in 2022-2023 to see what, if any, insights might be gleaned.
The insights obtained are ultimately relevant to all lawyers, trade mark attorneys and counsel who participate in trade mark opposition and invalidity proceedings in New Zealand for two reasons: first, the insights encourage opponents/applicants to focus their pleadings on the most appropriate grounds at the outset rather than adopt a ‘kitchen sink’ approach; and, second, the insights encourage opponents/applicants to use hearing time efficiently by focussing their arguments on those grounds most likely to succeed. The insights are also relevant to parties themselves because in being more focussed and efficient, parties’ legal representatives are less likely to cause Assistant Commissioners to award an uplift or reduction in costs.
At this point, I must admit that that I was inspired to write this review by the recent article penned by Jenny Mackie of Michael Buck IP, which, as well remarking on IP Australia’s fee review, analysed the success and failure rates of grounds in IP Australia trade mark opposition proceedings in 2023. Jenny’s article caused me to wonder what the success and failure rates of grounds of opposition and invalidity might be in New Zealand, and whether the rates in New Zealand would mirror those in Australia identified by Jenny.
As this article shows, while there are some similarities in rates (for example, the success rate of the ‘bad faith’ ground and the failure rate of the ‘contrary to law’ ground based on breach of the Fair Trading Act/Australia Consumer Law and passing off), there are also stark differences (most notably the success rate of the ‘use is likely to deceive or confuse’ and ‘not the owner’ grounds in New Zealand versus those in Australia). With Jenny’s consent, there are obvious similarities between her review and mine, including methodology and colours used for the charts. Hopefully these similarities will not only make it straightforward to read the articles side by side but also to discern the similarities and differences between jurisdictions. My sincere thanks to Jenny.
Grounds of opposition and invalidity - methodology
I looked at every opposition and invalidity proceeding that resulted in an Assistant Commissioner’s decision published on NZLII in 2022 and 2023. I noted the grounds pleaded as recorded in the published decisions, the grounds that were successful (wholly or partially), the grounds that were not successful at all, and the grounds that were not decided at the Assistant Commissioners’ discretion. To the extent any grounds were pleaded in a notice of opposition or application for declaration of invalidity but not recorded in the published decisions, they are not reflected in the analysis.
I reviewed two years’ worth of decisions as the volume of decisions issued in New Zealand per year is not as high as in Australia. To put this into actual numbers, I reviewed 61 decisions (2022 – 25 decisions; 2023 – 36 decisions), while Jenny reviewed 129 from 2023 alone. While I could have analysed 2021 and 2022 decisions to bolster my sample size, I considered two years’ worth of data should be sufficient to yield potentially meaningful insights.
The analysis does not take into account any appeals of Assistant Commissioner’s decisions to the New Zealand High Court or above.
Of the 61 decisions reviewed, 44 were decided oppositions and 17 were decided invalidity applications. Although the bulk of the decisions were decided ‘on the papers’ at the election of both parties, or ‘on the papers’ at the election of one party and by written submissions at the election of the other party, the decisions did not reveal any data that might suggest one hearing option was more likely to be successful than another hearing option.
In the next part of this article series, Cain breaks down most popular grounds pleaded.
[1] Shenzen Motoma Power Co Ltd v Motorola Trademark Holdings LLC [2016] NZIPOTM 25 at [78] per Assistant Commissioner Casey KC, citing Daimler AG (formerly Daimlercrysler AG) v Sany Group Ltd [2014] NZHC 532 at [49] – [51], approach generally accepted in the Court of Appeal, see Daimler AG v Sany Group Co Ltd [2015] NZCA 418 at [39] – [43].
[2] For example: Tyremax LP v Bridgestone Licensing Services, Inc [2017] NZIPOTM 13 at [157]-[158]; Pakton Developments Pty Ltd v Energizer Brands, LLC [2018] NZIPOTM 32 at [100]; Brandt's Fruit Trees I, Inc. v Apple and Pear Australia Limited [2021] NZIPOTM 4 at [109]-[111]; The Premium Liquor Co. Limited v Hint, Inc. [2021] NZIPOTM 24 at [85]-[88] and recently Misipope Soliai v Hugo Boss Trade Mark Management GmbH & Co. KG [2024] NZIPOTM 9 at [18] and [75].
