N v Sumatra Tobacco Trading Company v British American Tobacco (Brands) Incorporated Ca

• Jurisdiction: New Zealand
• Judge: Glazebrook J
• Judgment Date: 24 February 2010
• Neutral Citation: [2010] NZCA 24
• Docket Number: CA761/2008
• Court: Court of Appeal
• Date: 24 February 2010

BETWEEN

N V Sumatra Tobacco Trading Company

Appellant

and

British American Tobacco (Brands) Incorporated

Respondent

[2010] NZCA 24

CA761/2008

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

Appeal against decision not to allow registration of Trade Mark under s17 Trade Marks Act 1953 (TMA) — cross appeal under s16 TMA - whether the proposed Trade Mark would be likely to cause confusion or deception

counsel:

D L Marriott for Appellant

A H Brown QC and B J Stone for Respondent

• A The appeal is dismissed.

• B The cross-appeal is allowed.

• C The appellant must pay the respondent costs for a standard appeal on a Band A basis plus usual disbursements. We certify for second counsel.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Glazebrook J)

Table of Contents

	Para No
Introduction	[1]
Background	[6]
N V Sumatra's position	[6]
LUCKY STRIKE trade marks	[10]
LUCKIES trade mark	[11]
The appeal: s 17	[13]
The law	[13]
N V Sumatra's contentions	[19]
The LUCKIES mark	[21]
Look and sound	[24]
Conceptual similarity	[26]
Whole of the marks	[30]
Significance of the SFE Act	[34]
Co-existence in other countries and other classes	[40]
Luxury items	[43]
Reasonable possibility or reasonable likelihood	[45]
Comparison with other cases	[52]
The cross-appeal: s 16	[66]
The law	[66]
Clifford J's decision	[69]
BAT's submissions	[71]
N V Sumatra's submissions	[75]
Our assessment	[77]
Result and costs	[83]

Introduction

1 British American Tobacco (Brands) Incorporated (BAT) owns the word mark LUCKY STRIKE, which has been a registered mark in New Zealand since 1913. In addition, BAT is the registered proprietor of a number of logo marks incorporating the words LUCKY STRIKE and of the word mark LUCKIES.

2 N V Sumatra Tobacco Trading Company (N V Sumatra) has applied for the registration of the word marks LUCKY DRAW and LUCKY DREAM in respect of cigarettes and other cigarette related products, in Class 34. The effective date of N V Sumatra's application was 21 July 2003. This means that the Trade Marks Act 1953 ( TMA) is the applicable legislation.

3 BAT opposed N V Sumatra's application but it was granted by the Assistant Commissioner of Trade Marks. 1 BAT appealed to the High Court against that decision and it was overturned by Clifford J in a judgment of 11 November 2008. 2

4 Clifford J held that N V Sumatra had failed to discharge its onus of establishing that there was not a reasonable likelihood that the fair notional use of the marks LUCKY DREAM and LUCKY DRAW could cause deception or confusion when compared with the notional fair use of the mark LUCKY STRIKE. He therefore considered that BAT had made out its opposition under s 17(1) of the TMA. Even with the further evidence that had been called in the High Court, Clifford J held, however, that BAT's objection under s 16(1) failed because he considered that BAT had not established the required “necessary substantial reputation” in New Zealand.

5 N V Sumatra appeals against Clifford J's decision on s 17(1) and BAT cross- appeals against Clifford J's finding in respect of s 16(1). We first set out the background in more detail before moving to the appeal and then the cross-appeal.

Background

N V Sumatra's position

6 N V Sumatra is the proprietor of registrations for the trade marks LUCKY DREAM and LUCKY DRAW for its tobacco products in a number of countries throughout the world, including Belize, Burundi, Cambodia, Hong Kong, Indonesia, Japan, Lesotho, Liberia, OAPI, Nepal and Puerto Rico. In each of those countries N V Sumatra's trade marks co-exist with BAT's trade marks. The registrations are currently being opposed in Australia. Another Indonesian company associated with N V Sumatra has registrations in New Zealand for LUCKY DREAM and LUCKY DRAW in respect of food and beverage products in classes 29, 30 and 32.

LUCKY STRIKE trade marks

7 In the Interbrand publication of 1996 edited by Nicholas Kochan, The World's Greatest Brands, 3 LUCKY STRIKE is listed as the third most famous tobacco brand in the world. The brand has been (and continues to be) extensively advertised in the United States and worldwide where local legislation allows.

8 Evidence of the annual sales of LUCKY STRIKE cigarettes in New Zealand dated back to 1969 when 20 million LUCKY STRIKE cigarettes were shown as having been sold that year. The sales remained at around the 20 million mark until 1973. In the period 1973 to 1980 they dropped to about five million. From 1980 to 1996 they dropped to a low of 236,000 in 1991 before increasing again. The evidence of sales from 1997 through to 2003 shows cigarette sales of LUCKY STRIKE in New Zealand from eight million in 1997 to over three million in 2003. It is also significant that the sales of LUCKY STRIKE cigarettes were nationwide.

9 The LUCKY STRIKE trade mark is used in sponsorship of motorbike racing and also for the BAT racing team in the Formula One Grand Prix competition. Evidence showed that approximately 100,000 to 300,000 people in New Zealand viewed the Australian Grand Prix from 1999 to 2003 (when N V Sumatra filed its application) which featured BAT's STRIKE car.

10 BAT has used the trade mark LUCKY STRIKE in relation to its tobacco products since the 1850s and in relation to cigarettes since 1916. Its registered trade marks incorporating LUCKY STRIKE have been registered in New Zealand progressively since 1913. As at the date of application for registration of the word mark LUCKY STRIKE (15 March 1913), it was being used by the then applicant.

LUCKIES trade mark

11 The affidavit evidence filed on behalf of BAT confirmed that LUCKY STRIKE has commonly been abbreviated to LUCKIES by consumers worldwide.

BAT therefore, in 1964, successfully applied to register the word mark LUCKIES in New Zealand. Two of the registered logo marks at issue in this appeal also include on the label the word LUCKIES as well as LUCKY STRIKE

12 At the hearing before the Assistant Commissioner, BAT sought to rely upon its registration of the word mark LUCKIES. The Assistant Commissioner refused permission to rely upon that additional registration in relation to s 17(1) of the TMA on the basis that it did not form part of the case pleaded and amendment at that late stage would be unduly prejudicial to N V Sumatra. The Assistant Commissioner did, however, allow evidence of use of LUCKIES to be relied upon in relation to the s 16 ground of opposition.

The appeal: s 17

The law

13 Section 17(1) of the TMA provides as follows:

• Prohibition of identical and similar trade marks

• (1) Subject to subsection (5) of this section, no trade mark shall be registered in respect of any goods if it is identical with or similar to a trade mark belonging to a different proprietor and already on the register in respect of -

  • (a) the same goods; or

  • (b) similar goods; or

  • (c) services that are similar to such goods -

  • if use of the first-mentioned trade mark is likely to deceive or cause confusion.

14 Both parties agree that the onus was on N V Sumatra to satisfy the Court that there will not be a reasonable likelihood of deception or confusion amongst a substantial number of persons if N V Sumatra uses the proposed trade marks LUCKY DRAW and LUCKY DREAM normally and fairly in respect of any goods covered by the proposed registration, assuming the notional use by BAT of its registered trade marks for LUCKY STRIKE in a normal and fair manner for any ofthe goods covered by the registration of these marks: see the test in Smith Hayden & Co Ltd's Application 4 as applied by the Privy Council in Hannaford & Burton Limited v Polaroid Corporation. 5

15 Mr Marriott, for N V Sumatra, submits that there are three elements to the enquiry under s 17(1):

• (a) Are the marks that are applied for by the applicant similar to the trade mark registrations of the opponent?

• (b) Are the applicant's marks to be registered in respect of the same or similar goods or services as the goods covered by the opponent's trade mark registrations?

• (c) Is use of the applicant's mark likely to deceive or confuse?

16 In this case, N V Sumatra accepts that the second question in relation to the similarity of goods must be answered in the affirmative. Mr Marriott submits, however, that the question of degree of similarity and the likelihood of deception and confusion must be considered separately, albeit it is recognised that the questions are inter-dependent in the sense that it must be determined whether the degree of similarity is such as to give rise to the reasonable likelihood of deception or confusion. In Mr Marriott's submission, it is only if both questions are answered affirmatively that registration can be refused.

17 Mr Brown QC, for BAT, submits that it is necessary for the Court to conduct a global assessment, which would cover the distinctive nature of the already registered trade marks, the similarity of the goods and the rules of comparison contained in Re Pianotist Co's Application. 6 Pianotist was cited with approval by this Court in Jamieson & Co Limited v J and J Abel Limited 7 and also in Polaroid Corporation v Hammerford & Burton Limited. 8 We note that the Privy Council in

Polaroid, while not citing it, analysed the issue consistently with Pianotist. 9 Pianotist requires an analysis of the likelihood of confusion or deception amongst a substantial number of persons, the circumstances of purchase, the reason the applicant has chosen these marks and a comparison with other cases.

18 In our view the differences in approach between the parties really amount to semantics. There will be an overall global assessment of the inter-dependent questions set out above at [14]. However, it...