Daimler Ag v Sany Group Company Ltd

JurisdictionNew Zealand
JudgeEllen France P
Judgment Date08 September 2015
Neutral Citation[2015] NZCA 418
Docket NumberCA227/2014
CourtCourt of Appeal
Date08 September 2015
Between
Daimler Ag
Appellant
and
Sany Group Co Limited
Respondent

[2015] NZCA 418

Court:

Ellen France P, White and Winkelmann JJ

CA227/2014

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal against the High Court's (HC) decision that the respondent's mark was not identical or similar to any of the appellant's marks — both parties were motor vehicle manufacturers whose marks were a round circle with an internal design — the design inside the circle of the appellant's mark was a three point star and the respondent's was the number 1 three repeated three times but in a similar orientation to appellant's mark — the respondent's name was included in its mark — whether the Judge placed too much emphasis on the differences between the marks when these did not neutralise the similarity between their dominant concepts; whether the inclusion of the respondent's name should not have been taken into account as it conveyed not information about the origin of the goods — whether the emphasis on the discerning nature of potential purchasers limited the analysis to a small portion of the general public — what was required to show a connection in the course of trade under s25(1)(c) Trade Marks Act 2002 (indicating a connection in the course of trade).

Counsel:

P D M Johns and T A Huthwaite for Appellant

M T Lennard for Respondent

A The appeal is dismissed.

B The appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Ellen France P)

Table of Contents

Para No

Introduction

[1]

Background

[5]

Decision of the Assistant Commissioner

[8]

High Court decision

[9]

Is there a likelihood of confusion (s 17(1)(a))?

[11]

The relevant principles

[13]

Daimler's case

[18]

Our approach

[24]

Is use of the Sany mark contrary to New Zealand law (s 17(1)(b))?

[39]

Impact of consideration of fair and notional use (s 25(1)(b))

[44]

Effect of the Daimler mark being well known (s 25(1)(c))

[49]

Result

[55]

Introduction
1

Daimler AG (Daimler), 1 the appellant, began to use its three-pointed star mark on vehicles it manufactured internationally in 1909 and in New Zealand in 1911. Daimler has registered a number of trade marks reflecting that use in New Zealand (the Daimler marks), namely:

2

The respondent, Sany Group Co Ltd (Sany), applied on 31 August 2006 to register the following trade mark (the Sany mark), namely:

3

Daimler opposed registration of the Sany mark on a number of grounds including that Sany's mark was likely to deceive or cause confusion because of its similarity to the Daimler marks 2 and that Sany's mark was not registrable under s 25(1)(c) of the Trade Marks Act 2002 (the Act) dealing with the adverse effect of similarity to a well known mark. The Assistant Commissioner of Trade

Marks (Assistant Commissioner) approved Sany's application. 3 Daimler's appeal to the High Court was unsuccessful. 4 Daimler now appeals to this Court. 5
4

The issues on appeal reflect the grounds of opposition and are as follows:

  • (a) Whether use of the Sany mark would be likely to deceive or cause confusion (s 17(1)(a));

  • (b) Whether use of the Sany mark is contrary to New Zealand law (s 17(1)(b));

  • (c) Whether the Sany mark is similar to the Daimler marks, in respect of the same or similar goods and services, and its use is likely to deceive or confuse (s 25(1)(b)); and

  • (d) Whether the Sany mark, or an essential element of it, is similar to Daimler's well known marks; whether Sany's goods and services are the same as or similar to Daimler's goods and services; whether the use of the Sany mark would be taken as indicating a connection in the course of trade with Daimler; and whether use of the Sany mark would be likely to prejudice the interests of Daimler (s 25(1)(c)).

Background
5

There is no dispute over the relevant facts. Sany was incorporated in China in 1989. Its business focus is on the manufacture, leasing, importing and exporting of “building machinery … road machinery … hoist machinery … vehicle[s] … new materials … [and] network communication equipment …”. 6 Sany first applied to register its mark in China in 1989 in relation to welding materials. 7 Sany's mark has

been registered in China subsequently in relation to all classes of the Ninth Edition of the International Trademark Classification System (ITMCS) adopted as part of the Nice Agreement. 8
6

Sany's application in New Zealand is in relation to goods in class 7 and class 12 of the ITMCS. Those classes relate to the following goods:

Class 7

Road rollers; excavators; diggers (machines); hydraulic pumps; concrete pumps; trailers and truck-mounted concrete pumps; elevating apparatus; mixing machines; concrete mixers (machines); bulldozers; motor graders; asphalt pavers; horizontal directional drilling machines; cranes; asphalt mixing plants; concrete mixing plants; rotary pile drills; milling machines; mining machines; pumps (machines); extractors for mines; mine borers; drilling machines; mine-working machines; rail-laying machines; railroad constructing machines; power shovels; road making machines; pumps (parts of machines, engines or motors); belt conveyors; hydraulic controls for machines, motors and engines; hydraulic components …

Class 12

Buses; lorries; sports cars; motor cars; motor buses; locomotives; concrete mixing vehicles; aerial conveyors; lifting cars (lift cars); automobile chassis; hydraulic circuits for vehicle; asphalt material transfer vehicles; automobile bodies …

7

Daimler began as an automobile manufacturer in 1882 when the Daimler Motorengesellchaft company was established in Stuttgart. 9 As we have noted, the company began to use the three-pointed star trade mark on its vehicles internationally in 1909 and in New Zealand in 1911. Daimler today reflects a number of mergers and acquisitions of vehicle and other manufacturing companies such as Benz & Cic in 1926 and the Chrysler Corporation in 1998. It is “one of the world's leading automobile companies”. 10 Daimler manufactures a range of cars, trucks, buses, UNIMOG multipurpose heavy duty vehicles, diesel engines, turbines, rail vehicles, power generators and other industrial products. Those vehicles are produced under the name “Mercedes-Benz”. Daimler's “heavy duty vehicles are

often adapted by “partner companies” to create vehicles that have, for example, cranes, winches … [and] rescue equipment”. 11
Decision of the Assistant Commissioner
8

Daimler opposed registration on the grounds that registration of the Sany mark was contrary to ss 17(1)(a), 17(1)(b), 17(2) (bad faith), 25(1)(b) and 25(1)(c) of the Act. In relation to s 17(1)(b), Daimler said use of the Sany mark was contrary to New Zealand law because such use would breach ss 9, 10, 13 and 16 of the Fair Trading Act 1986 12 and amount to passing off. The Assistant Commissioner determined that none of Daimler's grounds of opposition had been made out. 13 Central to the Assistant Commissioner's approach was her conclusion that the marks were visually and conceptually different. 14 The Assistant Commissioner did not accept that Daimler's marks met the test for a well known mark. 15

High Court decision
9

Before the High Court Daimler abandoned the bad faith argument (s 17(2)) but pursued its other four grounds of opposition. In dismissing the appeal, Collins J agreed with the Assistant Commissioner that s 17(1)(a) was not made out. Sany had discharged its burden of proving the absence of confusion or deception. 16 It followed from this finding that the ss 17(1)(b) and 25(1)(b) grounds also failed. 17 In the High Court Daimler accepted that if Sany was to establish absence of deception or confusion for the purposes of s 17(1)(a), there was little chance of there being sufficient evidence to establish breaches of the Fair Trading Act or passing off as would be required under s 17(1)(b). 18 The s 25(1)(b) ground failed because the marks lacked sufficient similarity to deceive or confuse. 19

10

In terms of s 25(1)(c), Collins J took a different view from that of the Assistant Commissioner. On this aspect, the Judge agreed with Daimler that it met the criteria for its marks to be considered well known at the relevant date. 20 However, this ground also failed because the Sany mark, or an essential element of that mark, was not identical or similar to any of the Daimler marks. 21

Is there a likelihood of confusion (s 17(1)(a))?
11

Section 17(1)(a) provides that the Commissioner must not register as a trade mark or part of a trade mark “any matter … the use of which would be likely to deceive or cause confusion”.

12

There is general agreement as to the relevant principles applicable in considering s 17(1)(a). Daimler takes issue on one aspect relating to the nature of the relevant market and we discuss that aspect shortly.

The relevant principles
13

The starting point is that the purpose of the section is, as Collins J said, to “protect the public rather than the proprietary rights of traders”. 22

14

It is common ground that the application of s 17(1)(a) required Daimler first to establish a reputation in its mark. If so, the onus shifted to Sany to show that “any fair and proper use of its mark is not likely to cause confusion and deception among a substantial number of consumers of the goods in question”. 23 The meaning of deception and confusion is discussed in Pioneer Hi-Bred Corn Co v Hy-Line Chicks Ltd. 24

Richardson J said that where the alleged deception or confusion is as to the source of the goods, “deceived is equivalent to being misled into thinking that the goods bearing the applicant's mark come from some other source and confused to being caused to wonder whether that might not be the case”. 25
15

The assessment assumes fair use of both...

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1 cases
  • Pharmazen Ltd v Anagenix IP Ltd
    • New Zealand
    • Court of Appeal
    • 23 Julio 2020
    ...Ltd 37 in support of the proposition that actual trade mark use is relevant. Reliance was also placed on this Court's decision in Daimler AG v Sany Group Co Ltd, in particular upon the following passage: 38 The notional use of the Daimler marks does not alter the conclusion that the Sany ma......

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