The Co-Operative Bank Ltd v Anderson
| Jurisdiction | New Zealand |
| Judge | Asher J |
| Judgment Date | 30 October 2014 |
| Neutral Citation | [2014] NZHC 2686 |
| Docket Number | CIV-2014-404-001757 |
| Court | High Court |
| Date | 30 October 2014 |
[2014] NZHC 2686
CIV-2014-404-001757
IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
Application by The Co-Operative Bank Ltd (TCB) for an interim injunction restraining the defendants, from using or asserting a right to use certain names that included the words “co-op” — both parties, were co-operatives; TCB being a co-operative bank, and the defendant being a co-operative of 17 entities each of which was also a co-operative (but were not banks) and which offered a range of banking type services — defendant wished to rebrand using the names CO-OP SERVICES NZ, CO-OP INSURANCE NZ, and CO-OP MONEY NZ — whether it was seriously arguable that use of new names would amount to passing off, breach the Fair Trading Act 1986 (FTA) and infringe TCB's trade marks — whether the word “co-operative” was descriptive and generic — whether the word had acquired a secondary meaning so that its use by others would constitute a misrepresentation — whether granting the injunction would prevent use of a descriptive word and amount to granting a monopoly on its use in a commercial sector.
Z Kennedy and P Johns for Plaintiff
A Brown QC and AL Ringwood for Defendants
JUDGMENT OF Asher J
| Para No | |
| Introduction | [1] |
| TCB | [2] |
| The NZACU | [5] |
| The NZACU's new brands | [8] |
| The dispute | [11] |
| The allegation of passing off | [15] |
| TCB goodwill | [18] |
| Misrepresentation – cases relied on by TCB | [23] |
| Discussion of misrepresentation | [32] |
| Confusion | [42] |
| Monopolies of descriptive words | [44] |
| Conclusion on passing off | [49] |
| Fair Trading Act | [51] |
| Trade mark | [56] |
| Balance of convenience | [74] |
| Conclusion | [79] |
| Result | [86] |
The plaintiff, The Co-operative Bank Ltd (TCB), seeks an interim injunction restraining the defendants, who are the trustees of the New Zealand Association of Credit Unions (NZACU), from using or asserting a right to use certain names that include the words “co-op”. It claims that if those names are used this will constitute a breach of the Fair Trading Act 1986, amount to passing off, and be an infringement of the TCB's trade mark. The defendants assert that while they do intend to use those names, they are entitled to do so. In order to evaluate the arguments presented it is necessary to set out the background to the parties and what they do.
TCB was previously the Public Service Investment Society (PSIS Ltd). Until 1995 its membership was limited to members of the New Zealand Public Service Association, but since then its membership has been open to the New Zealand public. It is a co-operative. Its members have shares and profits are retained or distributed to members, and it is registered under the Co-operative Companies Act 1996.
In October 2011 PSIS Ltd changed its name to TCB and formally registered as a bank, and in January 2012 it joined the New Zealand Bankers Association. It has 34 branches in New Zealand and approximately 132,000 customers. It offers a full range of banking services including savings, loans and insurance. It is the only bank that is registered as a co-operative.
TCB has registered the words THE CO-OPERATIVE BANK in logo form as a trade mark. 1 Its applications to register the words as a trade mark were not accepted.
The NZACU is not a bank, but is an entity which is co-operatively owned by 17 member Credit Unions and Building Societies. It is an industry body formed to represent those Unions and Societies, and provide advisory and support services for them. The 17 members are not banks and are described as financial co-operatives, offering a range of savings, loans, and insurance products to their members. So the NZACU is a co-operative owned by its members, and its members are also co-operatives, owned by their customer members. There are also five associate members. Collectively through its 17 members the NZACU claims to represent 200,000 customers.
Credit Unions are governed by the Friendly Societies and Credit Unions Act 1982. The laws relating to Credit Unions and Building Societies have changed, and they can now offer a range of financial services including savings, loans and insurance products.
Therefore, both parties, TCB and the NZACU, are co-operatives; the TCB being a co-operative bank, and the NZACU being a co-operative of 17 entities each of which is also a co-operative and offers a range of banking type services.
The NZACU now intends to introduce new branding reflecting the co-operative nature of the operation of it and its members. For its advocacy role for its members in the financial services industry it will change its name from the NZACU to Co-op Money NZ. For its business to business trading with other operations it will change its name from FACTS Ltd to Co-op Services NZ. For its insurance service it will change its name from Credit Union Insurance Ltd to Co-op Insurance NZ.
While the NZACU is essentially a representative body, its members actively compete in the financial services sector with TCB. The recent changes to the rules relating to financial advisors and pending changes to the laws relating to credit unions will make that competition all the more keen.
The NZACU has applied to register in logo form the trade marks CO-OP SERVICES NZ, CO-OP INSURANCE NZ, and CO-OP MONEY NZ for the three newly named entities. The applications have been accepted for registration but are now being opposed by TCB in opposition proceedings.
TCB seeks in this proceeding to prevent the NZACU rebranding to names that use the word “co-op”. It claims that the new names proposed by the NZACU will be deceptively similar to its name, “The Co-operative Bank”, and will cause confusion with customers and prospective customers. TCB accepts that the NZACU is entitled to use the word “co-operative” in its marketing, and indeed as a by-line or banner in its marketing, but not as part of its new names.
The NZACU responds that there is no serious question to be tried in relation to each of the three causes of action, and that “co-operative” and “co-op” are descriptive terms describing a generic type of organisation which it is entitled to use. It claims that TCB is now wrongly seeking a monopoly over the word as part of a name in the financial services sector. It also claims that the balance of convenience is against the grant of such an injunction.
The principles to be applied to such an application were settled in Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd, itself a passing off case. 2 The applicant must show a serious question to be tried, that the balance of convenience favours the grant of the interim injunction, and that the overall justice of the case also favours the grant. The merits of the case are not just relevant to the serious question issue, but can be taken into account in assessing the balance of convenience and the overall justice of the case. 3
NZACU has postponed its launch of its Co-op re-branding pending the outcome of this interim injunction application. There is therefore no actual evidence of the effect of the rebranding on customers and on the market. I have had the benefit of extensive written and oral submissions, which have fully traversed the lengthy affidavits and numerous exhibits, and analysed in detail the relevant case law. It is unlikely that at a final hearing there will be much more material before the Court. I will consider first the question of whether there is a seriously arguable passing off claim.
TCB alleges that the NZACU's use of the proposed names will be a misrepresentation by the defendants that will lead or will be likely to lead the public to believe that there is an association between TCB's and the NZACU's businesses.
The principles to be applied in assessing passing off are the same in England and New Zealand, and were summarised in the statement of Lord Diplock in Erven Warnink BV v J Townend & Sons (Hull) Ltd 4 which has been applied in New Zealand. 5 Those principles were restated by the House of Lords as three core elements in Reckitt & Coleman Products Ltd v Borden Inc which summarised the position of a plaintiff in this way: 6
First, [the plaintiff] must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying ‘get-up’ (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Second, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely on a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Third, he must demonstrate that he suffers...
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