Nz Fintech Ltd T/A Moola v Credit Corporation Financial Solutions Pty Ltd T/A Wallet Wizard
| Jurisdiction | New Zealand |
| Judge | GAULT J |
| Judgment Date | 30 May 2019 |
| Neutral Citation | [2019] NZHC 1210 |
| Court | High Court |
| Docket Number | CIV-2018-404-2640 |
| Date | 30 May 2019 |
the Trade Marks Act 2002 and Fair Trading Act 1986
CIV-2018-404-2640
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KOTI MATUA O AOTEAROA TAMAKI MAKAURAU ROHE
Civil Procedure, Intellectual Property — appeal — interim injunction — purchase of Google Adwords that included registered trade marks — passing off — Trade Marks Act 2002 — Fair Trading Act 1986
J N Simpson and J C Dickson for the Plaintiff
C Elliott QC, J Edwards and R Langdana for the Defendant
This judgment was delivered by me on 30 May 2019 at 4:30 p.m. pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
The plaintiff (Moola) commenced proceedings in November 2018 alleging that the purchase by the defendant (Wallet Wizard) of Google Adwords that include the word “Moola” infringes Moola's registered trade mark, amounts to passing off and breaches the Fair Trading Act 1986. Moola also alleges that Wallet Wizard has used slogans that mirror those used by Moola in its Adword advertising, and that this also amounts to passing off and breaches the Fair Trading Act.
Moola applied for an interim injunction restraining Wallet Wizard from using the word “Moola” or any close variation in its advertising or marketing material, including in Google Adwords or advertisements on Google.
On 2 April 2019 I dismissed Moola's application for an interim injunction. 1 Moola seeks leave to appeal. Wallet Wizard opposes leave.
The factual background to the proceeding is set out in my judgment of 2 April 2019. I do not repeat it here.
My reasons for refusing an interim injunction may be summarised as follows:
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(a) Moola had not established a serious question to be tried that Wallet Wizard had used the word “Moola” “in such a manner as to render the use of the sign as likely to be taken as being used as a trade mark” as required for infringement by s 89(2) of the Trade Marks Act 2002 (the Act).
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(b) Moola had not demonstrated a serious question on the passing off or Fair Trading Act causes of action as its own evidence that consumers understand the essential features of Google Adwords indicates that the purchase of a trade-marked Adword does not involve a representation which would lead or be likely to lead members of the public to believe that the services it offers are the services of Moola.
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(c) In any event, I considered the balance of convenience and overall justice weighed against interim relief. I considered the following factors in coming to this conclusion:
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(i) As to whether damages would be an adequate remedy for Moola, damages based on trading may be reasonably easily calculated but damage to goodwill and brand dilution are often difficult to measure, which weighed in favour of interim relief. Even so, here the evidence indicated Wallet Wizard is writing only a modest number of loans.
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(ii) Wallet Wizard's damages ought to be relatively easy to calculate.
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(iii) Harm to third parties did not alter the balance.
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(iv) Even if I had considered Moola established a serious question, the relative strength of the parties' cases weighed against interim relief.
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(v) I did not consider Moola had delayed.
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(vi) One of the three clean hands arguments weighed against interim relief —Moola's actions bidding on the Wallet Wizard Adword amounted to engaging in the very conduct it is complaining about in a manner that went further than a legitimate reaction.
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(vii) In relation to the respective status quo arguments, I said that allowing a competitive market place to continue may be a factor relevant to overall justice, at least in combination with the other factors weighing against interim relief (relative strength of the parties' claims and Moola's bidding on the Wallet Wizard Adword).
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Leave is required in accordance with s 56(3) of the Senior Courts Act 2016. In Finewood Upholstery Ltd v Vaughan, Fitzgerald J characterised the leave requirement as a “filtering mechanism” to ensure that unmeritorious appeals of interlocutory orders or appeals of interlocutory orders that have no great significance to either of the parties do not unnecessarily delay the proceedings. Fitzgerald J recognised the following considerations as relevant: 2
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(a) A high threshold exists. An applicant should raise an arguable error of law or fact.
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(b) The alleged error should be of general or public importance warranting determination or otherwise of sufficient importance to the applicant to outweigh the lack of general or precedential importance.
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(c) Leave should only be granted where the circumstances warrant incurring further delay.
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(d) Ultimately, the Court on an application for leave should stand back and assess, in a pragmatic and realistic way, whether the interests of justice are served by granting leave.
In Li v Chief Executive, Ministry of Business, Innovation and Employment, Palmer J indicated an application to appeal an interlocutory decision is likely to be granted where: (a) there is good reason to consider it before, or separately to, the substantive appeal; and (b) it is sufficiently meritorious in substance and relates to a sufficiently important issue as to outweigh the cost and delay of appeal. 3
The Court of Appeal referred to Finewood in Ngai Te Hapu Inc v Bay of Plenty Regional Council. 4 Like Fitzgerald J, 5 the Court of Appeal referred to the similar leave
Ms Simpson for Moola submitted that the judgment contains three core errors of fact or law:
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(a) The Court erred at paragraph [52] in its interpretation of s 89(2) of the Act regarding the interpretation of the phrase “taken as use as a trade mark”. Section 89(2) should be interpreted to allow for changing technologies, including how a trade mark can be used (invisibly). It does not require the trade mark to be seen or perceived. Consumer understanding is sufficient for use as a badge of origin. Section 89(2) is intended to prevent infringement when a sign that could be used as a trade mark is being used in a different way (generic / descriptive use). This ground also alleges that the Court erred by considering the question from the perspective of the defendant not the consumer. Moola also says that, contrary to the Court's finding at [43], there was evidence that internet users perceive the purchased Adword on their browser and take this as a manifestation of the Adword purchaser's use as a trade mark.
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(b) The Court erred at paragraph [53] in its application of American Cyanamid Co v Ethicon Ltd 8 by failing to find a serious question to be tried in circumstances where it elected to refrain from determining what it states was a difficult issue of law (the application of s 89(2) to Adword “advertising”) and had evidence before it that disclosed a real
prospect of success if the application of s 89(2) contended for by the plaintiff was correct. -
(c) The balance of convenience was incorrectly weighed on the facts before the Court.
Moola submitted the arguable errors relating to s 89(2) and American Cyanamid are of precedential importance. Moola also submitted that an appeal will not cause further delay in the proceeding before this Court.
Mr Elliott QC for Wallet Wizard submitted that Moola must show an arguable error in the sense of a tenable case and a real prospect of success on appeal. He submitted the legal position is clear, that the purchase of Adwords per se, without some other disentitling conduct, is lawful, and Moola is seeking to change the law. Mr Elliott submitted the decision is based on a correct interpretation of the Act, longstanding and conventional trade mark principles, a correct application of the principles relating to interim injunctions and was supported by the evidence.
Mr Elliott submitted the circumstances, and overall interests of justice, strongly weigh against granting leave, given the lack of general importance in terms of precedent value or significant prejudice, and the delay an appeal would cause. Wallet Wizard also points to the delay to date due to Moola's alleged failure to act expeditiously.
As I have said in another recent application for leave to appeal in an interim injunction case, I am conscious that I am being asked to review the correctness of my own decision. 9 In such circumstances, the easier course might simply be to accept the alleged errors must be arguable but that would not be the correct approach. I must assess whether there is an arguable error. In doing so, I am conscious that, if I decline leave and it is sought from the Court of Appeal, that Court may wish to have my
reasons for considering whether they should address the alleged errors in the context of interim relief in this case.Taken as use as a trade mark
In essence, this argument is that, contrary to paragraph [52] of the judgment, “taken as” should be interpreted so as to apply to Wallet Wizard's use of a Google Adword keyword if the use is understood by consumers even though it cannot be seen or accessed given the hidden nature of Google Adwords. This essentially raises the key issue that I considered in my judgment, having regard to the authorities canvassed.
I consider my...
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