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High Court of New Zealand Decisions |
IN THE HIGH COURT OF NEW ZEALAND
HAMILTON REGISTRY
CIV 2008-419-1495
BETWEEN
WATSON & SON LIMITED
Plaintiff
AND ACTIVE MANUKA HONEY
ASSOCIATION INC.
First Defendant
AND GOLDEN HILLS NEW ZEALAND
LIMITED
Second
Defendant
AND COMVITA NEW ZEALAND LIMITED
Third Defendant
AND
HONEY NEW ZEALAND
(INTERNATIONAL) LIMITED
Fourth Defendant
Hearing: 27-28 July
2009
Counsel: S S Cook and B N White for the First Defendant in support
S Wheeldon and
N J King for the Plaintiff to oppose
K S McLeish for Third Defendant (appearing to observe only)
Judgment:
30 July 2009
JUDGMENT OF WILD J
Introduction........................................................................................................................................
[1]
Background ........................................................................................................................................
[9]
Interim injunction..................................................................................................................................
Principles...........................................................................................................................................
[44]
Serious case for trial ...............................................................................................................................
Infringement ...........................................................................................................................................
Introduction .......................................................................................................................................
[48]
Evidence of infringement ...................................................................................................................
[50]
WATSON & SON LIMITED V ACTIVE MANUKA HONEY ASSOCIATION INC. AND ORS HC HAM CIV
2008-419-1495 30 July 2009
Watson's position...............................................................................................................................[51]
Conclusion .........................................................................................................................................
[52]
Passing off and breach of the Fair Trading Act ..............................................................................
[56]
The law ..............................................................................................................................................
[57]
Watson's case ....................................................................................................................................
[61]
AMHA's case ..................................................................................................................................... [87]
Conclusions .....................................................................................................................................
[101]
The balance of convenience ...........................................................................................................
[112]
Overall justice .................................................................................................................................
[118]
Result ..............................................................................................................................................
[119]
Costs ................................................................................................................................................
[120]
Introduction
[1] For decision are two interlocutory applications by the first defendant, the
Active Manuka Honey
Association Inc. (AMHA) in this unfortunate dispute between
participants in the New Zealand active Manuka honey industry.
[2]
The first is an application dated 17 April, filed on 20 April, for orders striking
out the first and second causes of action
pleaded in the first amended statement of
claim dated 25 March 2009 filed by the plaintiff, Watson & Son Limited (Watson).
In respect
of the second cause of action, the order sought is that the claim be struck
out against AMHA. It was also pleaded against the second
defendant, Golden Hills
New Zealand Limited (Golden), but discontinued against Golden by Notice of
Discontinuance dated 21 July.
[3] The second is an application, also filed on 20 April, for an interlocutory
injunction restraining Watson from labelling
its honey in a manner which indicates
to buyers that it is being sold under licence from AMHA, and in conformity with the
Association's
quality standards. AMHA seeks orders restraining Watson, in
labelling, selling or marketing its
honey products, from:
a) Using the Association's UMF® trade mark.
b) Using the words UNIQUE
MANUKA FACTOR or any confusingly
similar words.
For reasons which will become apparent, the Association asserts
that UNIQUE
MANUKA FACTOR is also its intellectual property.
[4] Both applications are opposed by Watson. It filed a notice
of opposition to
each on 15 May.
[5] Each party has filed a number of affidavits specifically in relation to
AMHA's application
for an interim injunction, but each party also relies on
affidavits filed earlier, in relation to an application Watson made for
an interim
injunction. I refer to this application in [25] and following. In total, Watson has
filed 18 affidavits in this proceeding,
four of them substantial ones. AMHA has filed
nine affidavits, four of them bulky.
[6] The Court Register records 86 documents
filed in this proceeding since
Watson commenced it on 22 October 2008.
[7] On 23 April, in conjunction with counsel, Associate
Judge Faire set the two
applications down for hearing for a day and a half on 27 and 28 July. I am unsure
whether counsel at the
time anticipated the parties filing the amount of evidence they
subsequently filed, or anticipated the length and complexity of the
submissions they
have made. If they did, then 1½ days was not a realistic time estimate, and so it
transpired. Argument on the injunction
application was completed at 1.20pm on 28
July. Counsel indicated they would each need approximately one hour to argue the
strike
out application. That time was not available. I accordingly, though
reluctantly, adjourned the strike out application to
a date, and to a Registry (both
counsel sought a transfer of the hearing to an Associate Judge in Auckland), to be
arranged by them
with the Registrar at Hamilton.
[8] This is not the first time a Judge has urged counsel to inform the Court if a
time estimate
they have given becomes unrealistic. I am unsure of the practice in
Hamilton, but in setting aside time for the hearing of applications such as these,
consideration must be given to judgment
time. Here, none was.
Background
[9] In or about 1991 (I may have that date incorrect) researchers at the Honey
Research
Unit of the University of Waikato discovered, at least scientifically, that
New Zealand Manuka honey contained an active ingredient
with antibacterial
properties. This antibacterial property is known as non-peroxide antibacterial
activity, because it is an additional
property to the hydrogen peroxide activity also
present in Manuka honey. The additional property is unaffected in ways that affect
the hydrogen peroxide activity, for example by dilution by body fluids such as serum
in a wound. Heat and light also destroys the
enzyme which produces hydrogen
peroxide in honey. The non-peroxide antibacterial activity is not so affected. The
Waikato research
team was led by Professor Molan, who was/is co-director of the
Honey Research Unit. I describe the discovery as a scientific one,
because well
before that many New Zealanders were aware of the healing properties of Manuka
honey. History records that the healing
properties of honey generally were
recognised over 4,000 years.
[10] The Waikato research team developed a test for assaying
the quantity, or
potency, of this non-peroxide antibacterial activity in Manuka honey, and a system
for expressing the level of that
ingredient. The test is a fairly standard laboratory test
for anti-bacterial activity. The level of that activity is expressed as
a UMF (Unique
Manuka Factor) number. So, for example, a UMF rating of 10 is equivalent to an
antiseptic potency of a 4% solution
of phenol (a carbolic disinfectant). An issue in
these proceedings is the accuracy of that test. No intellectual property rights
in that
test methodology are asserted by AMHA.
[11] Early in 1997 TradeNZ invited those producing, or interested in producing,
active Manuka honey to attend a meeting in Hamilton with Professor Molan and Mr
Floyd. Mr Floyd was the marketing consultant for
the National Beekeepers'
Association Inc. (NBA). The aim of the meeting was to form an industry group with
a view to establishing
enforceable production standards, a name for the product,
unified marketing, funding for further research, and a legal framework
to protect any
brand name. Meetings were held in Hamilton on 13 March and 8 May 1997. At the
second of these meetings an Active Manuka
Honey Industry Group (AMHIG) was
formed for the purposes outlined above.
[12] Early in 1998 the NBA sought Professor Molan's
help, because the Ministry
of Health had ordered producers of active Manuka honey to remove, from their
product labelling, any claim
that the honey had antibacterial activity. With Mr
Floyd, Professor Molan met with Ministry of Health officials in Wellington. Over
lunch, following that meeting, the two men had something of a "brain storming"
session about a suitable name for the product AMHIG
had been formed to promote.
The result was `UMF'. It seems that Mr Floyd suggested that as an acronym from
`Unknown Molan Factor',
although the Professor, out of modesty, said he preferred
`Unknown Manuka Factor'. The analogy Mr Floyd drew was with the `SPF' on
sunscreens.
[13] It is common ground that the acronym UMF was given by the Professor and
Mr Floyd to AMHIG with the suggestion
that they protect it as the name for Manuka
honey with non-peroxide activity.
[14] AMHIG registered UMF as a trade mark in April
and May 1998 in classes 30
(honey) and 5 (honey products). When I say `AMHIG registered', the registration
was in fact in the name
of Waitomo Honey Limited, the company owned by
AMHIG's Chairman, Mr Bassett. Waitomo effectively held the registration in trust
for
AMHIG. The reason for this was that AMHIG was not a legal entity and
therefore could not become the registered proprietor of a trade
mark.
[15] AMHA was incorporated in September 2002, and in 2004 took over the
registrations of the UMF® mark. Registration of the UMF® mark in New Zealand
was extended to classes
9 and 42 (scientific use and assay testing) in July 2006.
[16] Subsequently, AMHA has registered its UMF trade mark in the following
overseas jurisdictions, and has also had an application for a class 5 registration
accepted in China and Malaysia:
Australia
Hong Kong
Great Britain
Germany
Singapore
Korea
Taiwan
Canada
Japan
China
United States
Malaysia
Europe
[17] Since incorporating, AMHA has entered into licence agreements
with
members. The licence permits the licensee to use the UMF® trade mark on their
products covered by the licence. These products
are detailed in Schedule 2 of the
licence. The licence agreement spells out how the mark is to be used:
3 UMF® NUMBER
3.1 A number (rating) must follow "UMF®"
3.2 The number used must indicate the minimum level of non-peroxide
antibacterial activity of the Tested Honey used in the Batch of the
Product.
3.3
The number used can be any number, so long as the number is not
below the number 10.
Appendix 2 of the licence
agreement details the quality standard for UMF® honey.
[18] A point made by Watson is that the licence agreement makes no reference
to
"Unique Manuka Factor". If the point is that the licence does not expressly authorise
use of the term "Unique Manuka Factor",
that is correct. But the licence agreement
does use the term. The agreement defines UMF® thus:
The registered trade mark
of AMHA, used in conjunction with a number
indicating the antibacterial strength of the "Unique Manuka Factor", as
determined by the test described in Appendix 2.
Further, in defining the products licensed, Schedule A of the licence agreement
includes this:
For manufactured products, the product must state the proportion of Tested
Honey together with the
Trade mark including the number indicating the
antibacterial strength of the "Unique Manuka Factor" (eg. "contains 25%
honey of UMF®10").
Had Watson directed submissions to these parts of the agreement, I anticipate it
might have contended that
those are uses of the term as a description. I am sure that
the Association would counter that these parts of the agreement demonstrate
the
Association's point that UMF® and "Unique Manuka Factor" are interchangeable;
one and the same.
[19] Watson was formed in
late 2004. It joined AMHA in May 2006 and became
a licensee of AMHA. The way in which Watson used the UMF® on the label of its
honey
products is shown in [34] the label on a jar of Watson's Spirits Bay Manuka
honey i.e. UMF 25+ within a white coloured circle.
[20] On 3 July 2006 AMHA applied to register the words UNIQUE MANUKA
FACTOR as a trade mark. Its application has not yet been
decided by the Examiner
of Trade Marks. I revert in [68] to the detail of what has happened to this
application.
[21] As
part of its aim of maintaining standards for, and by, its member licensees,
AMHA periodically tested/tests its licensees' honey to
ensure it is true to label. In
other words, if the honey is labelled UMF 10+, it is tested to ensure that the level of
non-peroxide
bacterial activity is indeed equivalent to an antiseptic potency of a 4%
solution of phenol.
[22] In November 2007 AMHA carried
out a routine audit of Watson's honey
products in the United Kingdom. As a result, the Association advised Watson of
concern that
the product was not true to label, and requested test reports.
[23] Further testing in March 2008 gave rise to similar concern.
The Association
requested a "soft" recall i.e. from distributors, but not retailers.
[24] In mid-August 2008 the Association
reached the view that the agreed recall
had not occurred and issued a formal recall notice to Watson. Not satisfied that this
was acted upon, the Association issued a notice of termination
of licence on 12
September. This notice was retracted on the basis that further testing would be
undertaken. On the basis of that
further testing AMHA considered about 65% of
Watson's product was not true to label, and issued a further recall notice to Watson
on 10 October. This required recall within 10 working days, failing which the
licence would be terminated.
[25] Watson's response
was to commence this proceeding on 22 October 2008,
only against AMHA (the other three defendants were added later). With
its
statement of claim, Watson filed an application for an interim injunction to restrain
AMHA from terminating its licence and from
advising Watson's distributors that
Watson was in breach of the licence, or taking any steps to implement a recall of
Watson's honey.
[26] The application was immediately placed before Gendall J, who was sitting in
Hamilton. Gendall J granted, ex parte, an interim
injunction, but directed that the
proceeding be served on the Association within 24 hours, and that the interim orders
he had made
be reviewed by the Duty Judge on 29 October.
[27] AMHA filed a notice of opposition to Watson's interim injunction
application
on 30 October. Affidavits in support and in opposition were filed. The
application was argued before Panckhurst J in Hamilton on
18 November. In a
judgment he delivered on 5 December, the Judge refused to extend the interim
injunction until trial. I consider
the following points emerge from Panckhurst J's
judgment:
a) Serious question for trial? At [48] the Judge found Watson
had an
arguable case for trial, "but hardly a strong one". The statement of
claim Panckhurst J was dealing
with contained two causes of action.
The first was anticipated breach of contract, the allegation being that
it would be a breach of contract for the Association to terminate
Watson's licence. The second was interference
with contractual
relations. That cause was based on the Association contacting
Watson's distributors
in the United Kingdom. Watson's allegation
was that the Association had no lawful justification for doing that.
Panckhurst J's holding that Watson had made out an arguable case
rested on the anticipated breach of contract cause of action.
The
argument before the Judge centred on the reliability of the
Association's test methodology which had produced the results
showing that a significant part of Watson's honey was not true to
label.
b) Balance of convenience.
i)
Damages. The Judge considered damages would not be an
adequate remedy for either party if ultimately successful. In
the case of Watson, that was largely because of his concern
about the Association's ability to pay any
damages awarded.
He considered damages would be a particularly inadequate
remedy for AMHA, because damage
to the reputation of and
trust in active money marketed under licence from the
Association as a result
of mislabelling by Watson would be "a
most difficult exercise".
ii) Inconsistency in Watson's stance:
the Judge considered
Watson's position was inconsistent. On the one hand, its
evidence was
critical of the Association in several respects,
particularly a concerted attack on the accuracy of its method of
assaying active honey. On the other hand, Watson was
seeking an order preventing the Association
terminating its
licence, so that it could continue marketing its active honey
under licence from the
Association with its associated benefits
for Watson, but also obligations in terms of testing its honey
by the very method it sharply criticised.
Reading the
judgment, I sense that this was an important consideration for
the Judge.
Panckhurst J considered the grant of an interim injunction would
incur greater risk of injustice than its denial.
c)
Overall justice. Panckhurst J found this lay with the Association,
particularly (I think) because of the potential
for incalculable, and
really irreversible, damage to the reputation of and trust in active
honey marketed
by licensees of the Association.
[28] Watson promptly appealed, successfully seeking a stay from Panckhurst J
until the Court
of Appeal could hear its appeal, which it did with alacrity on 15
December. In a judgment delivered on 19 December the Court of Appeal
dismissed
Watson's appeal. The Court could "see no error in any aspect of the Judge's
approach".
[29] On 19 December, the day
the Court of Appeal delivered its judgment,
Watson resigned its membership of the Association. It did that in an e-mail to the
Association
stating:
You may be aware that the Court of Appeal has not granted Watson & Son's
injunction application against AMHA.
We are obviously disappointed but
we will continue with our proceeding against AMHA and the case will go to
a substantive
hearing as soon as possible.
We resign from the AMHA membership, effective immediately. We should
also notify you
that we have completed development of, and will be taking
to market shortly, a new certified standard fully supported and
backed by
Professor Molan.
The new standard will utilise the assay test with improvements as
recommended by
Professor Molan, and further measures he has
implemented to remove the variability of the old test. Watson & Son will be
continuing to service its markets supported by good science and strict quality
controls under the new standard.
[30]
The rules of AMHA require all licence holders to be members of the
Association. Accordingly, the Association treated Watson's
resignation as a
repudiation of its licence agreement and wrote to Watson on 21 December advising:
... your resignation from
AMHA is a repudiation of your Licence
Agreement. AMHA accepts that repudiation and accordingly it terminates
the Licence
Agreement, effective immediately.
[31] In the same letter, in terms of clause 18.2 of the licence agreement (set out in
[49]),
AMHA requested Watson to ensure that no product still within its control
labelled with the Association's trade mark was sold.
[32]
Watson accepts that it has not attempted to recall honey it manufactured and
labelled while a licensee of the Association and sold
to its distributors before its
licence was terminated. It maintains it has no obligation to do that. It relies on
clause 18.2 of
the licence agreement. It also asserts it has no ability to recall that
honey. It takes the position that s 97 Trade Marks Act 2002
applies, with the result
that its sale of "licensed" honey did and does not infringe AMHA's trade mark.
[33] In January 2009,
Watson sent a circular letter to its customers advising them:
The world expert on Manuka honey Professor Peter Molan (MBE)
has
recently made available an improved Unique Manuka Factor test method to
ascertain the antibacterial potency of
Manuka honey. This new method is far
more accurate and reproducible than the original test used by many honey
producers.
The old test method, adopted by the Active Manuka Honey
Association to determine batches of Manuka honey to which they assign
their UMF® trade mark, exhibited significant variation on repeat testing.
Watson & Son are committed to using the
most accurate measure of the
Unique Manuka Factor and are excited to be at the forefront of this new
development. All Spirits Bay Manuka honey will continue
to be tested and
certified by a laboratory approved by Peter Molan but to the new and better
standard. The adoption
of the new test method will ensure the customer is
guaranteed the stated level of activity as stated on the label. This new
standard will help to build long term consumer confidence in the brand and
industry.
Over the next four months,
Watson & Son will be enhancing the Spirits Bay
label by reflecting the adoption of the new unique Manuka honey test
method that has been used to accurately determine the antibacterial potency.
There will also be a slight change to the wording
on the labels to reflect the
improved test and at this stage we expect to have the new label and product
on shelf by
the end of March 2009.
The letter then displayed the new label:
It may not be clear from this copy, but, around the inside of
the circumference of the
white coloured circle with the 20+, are the words UNIQUE MANUKA FACTOR.
[34] This new labelling compared
with this label Watson had used while a
licensee of the Association:
[35] As soon as it became aware of this new labelling, AMHA
instructed its
solicitors to write to Watson's solicitors objecting. This letter is a detailed one, but
the essence was:
a) An assertion that the new labelling was confusingly similar to the old:
The near identity of the
New Logo (UNIQUE MANUKA
FACTOR in combination with a rating number e.g. 20+)
with Watson
& Son's Old Logo indicates that Watson & Son
has deliberately adopted a logo that is almost
indistinguishable from its Old Logo in order to take
advantage of the established goodwill and reputation
in the
UMF® rating system.
b) An assertion that UNIQUE MANUKA FACTOR was AMHA's
unregistered trade mark and distinctive of its UMF® rating system.
c) A requirement that Watson immediately cease
using the new logo, as
well as Unique Manuka Factor and the UMF® rating system numbers.
[36] On 21 January (the
letter is incorrectly dated 21 December) the Association
also wrote to Watson's distributors advising them that Watson's licence
from the
Association had been terminated so that it was no longer authorised to use the
UMF® trade mark, and that the Association
objected to Watson's use of the new
logo and its mark UNIQUE MANUKA FACTOR, which it claimed was distinctive
of honey sold by the
Association's licensees.
[37] On 27 January Watson's solicitors sent two letters to the Association's
solicitors. The first letter
responded to the Association's solicitors' letter of 19
January. It was quite detailed, but essentially maintained that Watson was
entitled to
use the term UNIQUE MANUKA FACTOR in labelling its honey. It rejected the
Association's assertion that Watson's new labelling
would mislead or deceive the
consumers, and was an attempt to benefit from the Association's goodwill. The
letter accepted that UMF
is an abbreviation of UNIQUE MANUKA FACTOR and
that the terms are used interchangeably. The second letter was a response to the
Association's
letter to Watson's distributors. It advised that Watson took strong
exception to that letter and set out remedial steps Watson required
the Association to
take. It intimated that it may require the Association to write to all recipients of its
letter, correcting the
position and apologising for the damage the letter had caused.
[38] The Association's solicitors responded on 5 February to the
27 January letter
Watson's solicitors had sent about the Association's letter to Watson's distributors.
That reply rejected the assertion
that the Association's letter was unjustified. It
advised that the Association would not be giving any undertakings and would not be
writing any `correcting'
letter to Watson's distributors.
[39] Some seven weeks went by before, on 17 March, the Association's solicitors
responded to
the letter Watson's solicitors had sent on 27 January about Watson's
new labelling. This is the period of delay I refer to later
in this judgment, at [118]e).
The explanation the Association gave for this delay was the need to consult its
licensees about the
position, and obtain their views as to whether the Association
should seek interim injunctive relief. Obviously, that would involve
significant cost.
The 17 March letter essentially reiterated the Association's objections, responded to
Watson's view of the genesis
of Unique Manuka Factor, and repeated the
Association's requirement for undertakings by Watson to cease using Unique
Manuka Factor.
The letter concluded:
... Please provide the undertakings by 5.00pm on Friday, 20 March. Failing
that, we have been
instructed by AMHA to issue injunction proceedings
against Watson & Son preventing it from using the New Logo and the term
UNIQUE MANUKA FACTOR.
[40] Watson, through its solicitors, wrote on 20 and again on 31 March refusing
any undertakings
or remedial steps.
[41] On 17 April, the Association filed a counterclaim containing five causes of
action. In very brief summary
these were:
a) Infringement of its UMF trade mark, in breach of s 89(1)(a), (b) and
(c) Trade Marks
Act.
b) Passing off by its new labelling Watson passed off its honey
products as endorsed by the Association.
c) Breach of s 9 Fair Trading Act, for the same reasons as in b).
d) Passing off, in that Watson's use
of Unique Manuka Factor in
conjunction with the rating was indistinguishable from the
Association's
UMF trade mark.
e) Breach of s 9 Fair Trading Act, for the same reasons as in d).
The gist of all these causes of
action is that Watson's new labelling, primarily its use
of the words Unique Manuka Factor, particularly in conjunction with the
rating
number, breached the Association's legal rights.
[42] With that counterclaim the Association filed its application for
an interim
injunction.
[43] On 14 May Watson filed a statement of defence to AMHA's counterclaim,
and a counterclaim of its own
against the Association. In that counterclaim it
applied, under s 66(1) Trade Marks Act, for revocation of the Association's
UMF
trade mark. Briefly, it alleged UMF had become a common name in general public
use or, alternatively, that use of the mark was
likely to deceive or confuse the public
into believing that UMF is synonymous with "Unique Manuka Factor" or with a
specific quality
of honey, and hence is not a trade mark at all.
Interim injunction
Principles
[44] Save for one aspect, I need not refer
to these. They are thoroughly well
established, and there was no dispute about them. However, for Watson, Ms
Wheeldon
submitted that my decision on the Association's interim injunction
application was likely to be permanent in respect of Watson's
ability to use the
words UNIQUE MANUKA FACTOR on the labels of its honey products. That was
because, if Watson was required to re-label
its honey for a second time, omitting the
words UNIQUE MANUKA FACTOR, then it would not ever revert to using those
words. She did
not go so far as submitting that today's decision will be finally
determinative of this whole proceeding.
[45] In those circumstances,
Ms Wheeldon contended I should insist that the
Association surmount a demanding threshold before granting it an interim
injunction.
She supported that submission with reliance on three authorities. The
first is Harrison J's judgment in DB Breweries Ltd v Lion Nathan
Ltd (2007) 12
TCLR 25 (the "Summer Ale" case), particularly these passages:
[16] ... In a claim for passing off, where the consequences of granting an
interim
injunction may be permanent and extreme, the strength of the
applicant's case must weigh heavily. Experience shows that the
interim
result in this area is often the end result. It has the effect of forcing the
injuncted party to withdraw
its product from the market and cease trading.
For commercial reasons that party often focuses its attentions elsewhere
rather than pursuing the battle. Consequently, the underlying merits are
relegated to academic importance.
[17]
In my judgment, in a case like this, it is not enough simply to satisfy
the requirements of bare arguability. To the extent
that this observation
reflects a departure from the American Cyanamid test (American Cyanamid
Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396; [1975] 1 All ER 504 (HL)), recent
authorities in this area have signalled a tendency back towards evaluating the
merits, whether that factor
is taken into account at the threshold stage of
identifying a serious question or subsequently in evaluating the balance of
convenience ...
(I have cited slighly more than Ms Wheeldon referred to.)
[46] Secondly, Ms Wheeldon referred to Eichelbaum
J's judgment in Meat
Services Ltd v Moses (1983) 1 TCLR 94. His Honour was dealing with an
application for an interim
injunction in a passing off case involving allegedly
identical packaging of dog sausage. The matter had come on at short notice only
a
matter of days after the proceeding was filed. In those circumstances, Eichelbaum J
expressed unease at the prospect that a plaintiff
should be able to obtain what may
well be a decisive remedy simply on the basis that it had a case to be tried. Although
he was careful
not to express any concluded view on the legal test, Eichelbaum J
referred (at 99) to English authority suggesting that the proper
legal test in such a
situation was that of a strong prima facie case.
[47] Thirdly, Ms Wheeldon mentioned Gold Real Estate Group
Ltd v Gold Leaf
Real Estate Ltd (2006) 11 TCLR 530 where Fogarty J commented:
[53] It is important that the remedy of
interim injunction should not
thwart the policy of common law and of statute, which is designed to protect
distinctive
names or marks and is cautious about allowing anyone to
monopolise ordinary words in common use unless they have acquired
a
secondary meaning. ...
The case concerned an attempt by one real estate company to restrain another from
using the word
"Gold" in its trade name.
Serious case for trial
Infringement
Introduction
[48] UMF® is a registered trade mark of AMHA.
Certainly, Watson has applied
in this proceeding to revoke that registration, but that claim is not for decision now
and I must proceed
on the basis that the Association owns that trade mark. And it
has, now, for some 11 years.
[49] As I have mentioned, Watson's
licence was terminated effective 21
December 2008. Clauses in the Licence relevant to that termination are:
3. INTELLECTUAL
PROPERTY
...
3.2 The Licensee acknowledges that ownership of the trade mark and
any rights thereto
including goodwill arising from use of the trade
mark by the Licensee shall remain vested in AMHA.
...
18. TERMINATION
18.1 AMHA may terminate this Agreement if, after 10 working days
notice to the
Licensee of a breach of the Agreement, the breach has
not been rectified by the Licensee to the satisfaction of AMHA.
18.2 On termination, the Licensee must:
a) Stop all use of the trade mark and return all materials
and all
intellectual property relating to the trade mark to AMHA.
b) Remove the trade
mark, from, or irremovably cover the
trade mark on, all Products and related promotional
materials under the Licensee's control on which the trade
mark appears.
Evidence of infringement
[50] There is the following evidence that Watson has infringed, and continues to
infringe, the Association's UMF trade mark:
a) Watson's honey labelled with the UMF trade mark continues to be
sold. For example, a jar of Watson's
Manuka Gold Manuka Honey
labelled with the UMF trade mark was purchased in a New World
Supermarket in
Wellington on or about 30 March 2009 by a
consumer. The batch number on this jar was 13/08; Watson maintains
it labelled and packaged this particular jar before its licence was
terminated on 21 December.
b)
At the Natural Organic Expo trade show at Olympia in London on 5-6
April this year, Mr Denis Watson, Watson's Managing Director, was
handing out Watson's price lists for its Spirits Bay Manuka Honey.
The list contained UMF ratings for the honeys.
c) At the same show a Mr Chris Hill, General Manager of Manuka
Medical Limited, a Watson's subsidiary,
told a member of the public
that the Unique Manuka Factor with the rating number on Watson's
new labelling
was no different from the UMF rating on the Manuka
honey that person had seen on other stands at the show. I elaborate
on
this in [92]e).
d) Watson's honey labelled with the UMF® trade mark continues to be
offered
for sale by Holland & Barrett in the United Kingdom, via its
online catalogue. On 16 May 2009 an English consumer,
Ms Wright,
e-mailed AMHA inquiring whether Watson was still entitled to be
selling its honey marked with
the UMF trade mark. She had
purchased a jar of it from Holland & Barrett in Warwickshire in April
2009. She was particularly concerned about the quality of what she
purchased, as it was for her three year
old son who has leukaemia.
e) Another customer (one associated with one of Watson's competitors)
bought
another jar of Watson's Spirits Bay honey labelled with the
UMF trade mark from Holland & Barrett in Warwickshire on 21 May
2009.
f) Honey manufactured and labelled by Watson under its Pure Gold
label is being sold in the United Kingdom with
the following
labelling:
Although it may not be entirely apparent from this replication, the
first letter of each
of the words Unique, Manuka and Factor is in
bolder print, and the words are arranged so that the UMF aligns
vertically.
This particular pot of honey was purchased from a Holland
& Barrett retail outlet in the United Kingdom on 16 July 2009.
g)
A New Zealand distributor, EverWell Living Limited, as recently as
late May 2009, was offering for sale Watson's Manuka honey
labelled
with the UMF trade mark.
Watson's position
[51] Watson's position on infringement is this:
a) It
asserts that it has not sold any honey labelled with the UMF trade
mark since its licence from the Association was
terminated. As to
each instance of subsequent sale given in evidence by the Association,
Watson submits
it packed and sold the honey while licensed, or that
the Association has not established the contrary, or that its
UK
distributor was not acting in accordance with Watson's advice, and
Watson is not responsible for that.
This last point is a reference to
what occurred at the Olympia Trade Show.
b) Honey Watson sold before
its licence was terminated is no longer
within its control, and thus is covered either by clause 18.2 of the
Licence Agreement or by s 97 Trade Marks Act, or by both.
c) In the case of the Pure Gold Honey referred to
in [50]f), it packed and
labelled that honey under contract for a UK principal, and it is not
responsible
at law for that labelling.
Conclusion
[52] Upon the unexamined evidence I have referred to, it is not possible to
determine
with certainty what the factual position is. However, Watson's licence
was terminated over seven months ago. Although I have no evidence
as to the
rapidity of the supply chain of Watson's honey products, I find it surprising that
honey it packed and sold over seven
months ago is still coming to market,
particularly in a New Zealand supermarket. I am suspicious as to whether Watson
has been infringing
AMHA's trade mark.
[53] The evidence concerning the Pure Gold honey referred to in [50]f) I find
particularly concerning. Watson accepts it manufactured, packed and labelled
that
honey. It could hardly do otherwise, since it is Watson's New Zealand Food Safety
Authority RMP code WASE1 which is on the
label. Watson asserts it has no legal
liability for this situation.
[54] Again, I have no evidence as to Watson's involvement
in the obviously
careful and deliberate design of this label to give prominence to a vertically arranged
"UMF". But given the background
of this dispute, I am unable to accept Watson's
assertion that it merely was/is a contractor following instructions.
[55] I
conclude that the Association has made out a seriously arguable case that
Watson has been infringing its UMF trade mark. That is
my conclusion, even
applying the stringent threshold contended for by Ms Wheeldon. It is, perhaps, not
without significance that
Watson has applied to revoke the Association's UMF trade
mark.
Passing off and breach of the Fair Trading Act
[56] Although
AMHA asserts claims under the Fair Trading Act, I intend focusing
solely on its claims of passing off. This is where counsel both
for the Association
and Watson put the focus in their respective submissions.
The law
[57] I am content to accept Ms Wheeldon's
submission that the essential elements
of passing off are:
a) Reputation or goodwill attaching to a name (or mark
or getup, not the
case here).
b) Use of that name, or a confusingly similar one, by the defendant,
in a
way likely to cause confusion.
c) Actual damage or likelihood of damage to the plaintiff's business.
[58] She drew those from the judgment of Lord Oliver in the House of Lords in
Reckitt & Coleman Products Ltd v Borden Inc [1990] UKHL 12; [1990] 1 All ER 873 at 880.
[59] In his judgment in the House of Lords in Erven Warnick BV v J Townend &
Sons (Hull) Ltd [1979] AC 731 at 742, Lord Diplock identified five characteristics of
passing off. They have since been oft cited, including by the Court of Appeal
in
Wineworths Group Ltd v Comité Interprofessionel du Vin de Champagne [1992] 2
NZLR 327 at 330 (Cooke P) and 336 (Gault J). They are essentially the same as the
three I have set out, save that Lord Diplock expressed the
gist of passing off as
involving a misrepresentation by a trader in the course of trade.
[60] The Association's case depends
here on establishing that UNIQUE
MANUKA FACTOR is distinctive of honey marketed by its licensees, and that
Watson's use of UNIQUE
MANUKA FACTOR on its labelling and in its marketing
is an attempt to pass its honey off as licensed by the Association, and thus
to
misappropriate its goodwill. There is the potential for damage to the Association's
licensees because Watson no longer a licensee
is not subject to the Association's
licensing standards, in particular its testing requirements and audit procedures.
Watson's
case
[61] Challenging this, Watson made these submissions. First, there is no evidence
that either AMHA or its licensees has
any reputation or goodwill in the term
UNIQUE MANUKA FACTOR, whether in New Zealand or in any other specific
jurisdiction. In particular
there is no evidence of sales or advertising of honey
products labelled UNIQUE MANUKA FACTOR. There is not even any evidence to
suggest
that consumers seek out honey labelled UMF® and are influenced by that
mark being on the label.
[62] Secondly, there is no evidence
that anyone has been misled by Watson's use
of UNIQUE MANUKA FACTOR in labelling its honey products. The
Association's case is not confined with regard to jurisdiction. Where does the
Association say any confusion is occurring?
[63]
Thirdly, the evidence is that UNIQUE MANUKA FACTOR is a purely
descriptive phrase, descriptive of the "(still unknown) substance
that gives Manuka
honey its special antibacterial activity". On balance, Watson's evidence establishes
the phrase UNIQUE MANUKA FACTOR
is associated either:
a) With Professor Molan; or
b) With the activity in the honey.
The words are
only significant in describing what the rating is of.
[64] Fourthly, the acronym UMF is similarly descriptive, but "in parallel
with
AMHA's activities in licensing its members to use UMF® as a `trade mark'".
[65] Fifthly, there is no element of misrepresentation;
Watson is labelling its
honey as tested.
[66] Sixth, AMHA's use of UMF as a description, and as a trade mark, are
mutually exclusive.
[67] Seventh, the AMHA has registered UMF as an ordinary trade mark i.e. as a
"badge of origin", but it would have been more
appropriate for it to register it as a
certification trade mark (under s 14 of the Trade Marks Act).
[68] Eighth, the AMHA's
application in 2006 to register UNIQUE MANUKA
FACTOR as a trade mark has so far been unsuccessful, the Examiner expressing the
view
that the words lack the distinctiveness required by s 18 of the Act, in particular
because they are descriptive, and lack the capacity
to indicate that the honey is
distinctive of the Association's licensees. Further, the Examiner considers
registration of UMF
as a trade mark is of no consequence to the Association's
application also to register UNIQUE MANUKA FACTOR as a mark. The current
position is that the Examiner is considering a report prepared by Staples Rodway on
the value of UMF and UNIQUE MANUKA FACTOR. (I
refer to that further at
[100].) That report was lodged by the Association's trade mark attorneys with the
Commissioner of Trade
marks under cover of a letter dated 30 January 2009.
[69] In supporting these submissions, Watson relied on the large amount
of
evidence it filed in opposition to AMHA's application. First, it relied particularly on
the evidence of Professor Molan.
He had sworn two affidavits in support of
Watson's earlier, unsuccessful, application for an injunction restraining AMHA from
terminating
its licence agreement. Professor Molan swore a third affidavit on 13
May. He detailed the `brain storming' session I have described
in [12]. He said he
had confirmed with Mr Floyd that his recollection was correct. He deposed that the
first time he had used the term `unique manuka factor' was
in an e-mail headed
"Promotion of UMF Manuka Honey" he sent to Comvita on 8 July 1998. In this e-
mail Professor Molan uses the generic
description active manuka honey several
times, but then refers to this "Unique Manuka Factor" ("UMF"). He certainly does
that as
a description of the "additional antibacterial component unique to honey from
leptospermum plants", but the quotes could be viewed
as acknowledging or
reflecting the UMF trade mark the Professor had proposed earlier that year.
Likewise, articles the Professor
wrote around that time refer to "Unique Manuka
Factor" and "UMF". In the absence of cross-examination, I cannot get to the bottom
of this. It points up the perennial difficulty for a Judge dealing with an application
for an interim injunction where as in this
case the analysis required is
substantially a factual one.
[70] Professor Molan believed AMHA had never used the term `unique
manuka
factor' as a trade mark. He accepted that UMF® was AMHA's property, but stated
that it was not correct to equate that mark
with the `unique manuka factor'
component of Manuka honey so as to suggest that only honey labelled UMF® had
that property. Professor
Molan stated that he had always used the term `unique
manuka factor' to refer to the unique non-peroxide bacterial activity in Manuka
honey. He referred to 9,720 hits on a Google search of Unique Manuka Factor. Just
one example the Professor referred to was an article
by Crop & Food Research
headed "Our Partnerships", referring to a partnership CFR had entered into with
Horouta Manuka Company. The
article states:
The partnership is also seeking to identify what gives some manuka honey a
high Unique Manuka Factor
(UMF) level. UMF is the rating used to
indicate the level of antibacterial property in active manuka honey. Honey
with
a UMF higher than 15 has excellent antibacterial activity.
[71] Watson also relies on AMHA's own use of the term UNIQUE MANUKA
FACTOR as a description, for example by Mr Rawcliffe in his third affidavit sworn
on 29 May. Mr Rawcliffe is the General Manager
of AMHA. In his third affidavit,
sworn on 29 May, Mr Rawcliffe deposed:
4. UNIQUE MANUKA FACTOR and UMF® are used by
AMHA
(and its licence-holders) to refer to the antibacterial property
naturally present in Manuka honey
(Mr Rawcliffe then referred to a
printout from AMHA's website which Professor Molan had
exhibited to
his third affidavit) ...
[72] I interpolate here that Professor Molan's evidence as to his first use of the
term `unique manuka
factor' and his assertion that it is not the Association's
property are contested by the Association's deponents, Mr Bassett, Ms
Haddrell and
Ms Bennett. I refer to their evidence in more detail in [95] and following. However,
Mr Bassett deposed that he distinctly
recalled Mr Floyd giving the terms UMF and
UNIQUE MANUKA FACTOR to AMHIG at its first meeting. He cannot recall if
Professor Molan
was at that meeting.
[73] Ms Haddrell deposed that Professor Molan must be mistaken as to his timing
(i.e. July 1998), because
the June 1998 edition of The New Zealand Beekeeper
contained an article announcing that AMHIG was registering a trade mark:
This trade mark is the letters "UMF" which stands for Unique Manuka
Factor.
[74] Ms Bennett referred to the same article
in The Beekeeper magazine. She
produced minutes of a meeting on 13 March 1997 of the Active Manuka Honey
Industry Discussion Forum
recording Professor Molan (then Dr Molan) and Mr
Floyd attending. She recalled Professor Molan attending a Bay of Plenty
beekeepers'
field day at Paengaroa on 23 May 1998, at which he announced that
AMHIG had registered the term UMF® which he stated stood for UNIQUE
MANUKA FACTOR. She said he told those present that this would be the term by
which Manuka honey would be marketed by AMHIG's members.
[75] To an affidavit he swore on 14
May, Watson's CEO Mr Denis Watson
annexed several examples showing use of the term Unique Manuka Factor. One of
these was an information
sheet about Manuka honey, which Mr Watson downloaded
from the website of Api Health. It stated that Dr Molan had scientifically proved:
· Active manuka honey contains an additional antibacterial component
found only in honey produced from Leptospermum
plants, which has got
name Unique Manuka Factor (UMF). There is evidence that the 2
antibacterial components
may have a synergistic action. Unique manuka
factor is not affected by the catalase enzyme present in body tissue and
serum.
[76] Another was a press release by Comvita on 21 March 2005 which includes
these statements:
...
Comvita ApiNateTM honey based wound dressings are now available in
New Zealand. ...
...
The new dressings
contain active Manuka honey which research has
demonstrated is a more effective honey for assisting wound management
because of its Unique Manuka Factor (UMF®). ...
...
Comvita ApiNate contains UMF Active Manuka Honey and Alginate
Fibre.
... UMF is a measurement of phyto-chemical (non-hydrogen peroxide
based) antibacterial activity that is present
within certain Manuka honey.
[77] Both Api Health and Comvita were/are members and licensees of the
AMHA, so the material set
out in [75] and [76] demonstrates each of them making
licensed use of UMF® and UNIQUE MANUKA FACTOR in trade.
[78] Ms Wheeldon
submitted that the greatest number of examples demonstrating
use of the term Unique Manuka Factor as a descriptive term is in the
material
annexed to Mr Rawcliffe's affidavits, in particular the second affidavit he swore on
15 April. Amongst the examples Ms Wheeldon
selected at random was an article
entitled "Harnessing Honey's Healing Power" downloaded from the BBC News.
The article is stated
to have been last up-dated on 8 June 2004. Ms Wheeldon
pointed out that the article refers to Professor Molan's discovery, stating:
But he has given it a name: Unique Manuka Factor, or UMF.
[79] That same article includes the following:
Worldwide
export
That's a view shared by beekeeper Bill Bennett a few kilometres up the road
from the hospital.
He and
his wife Margaret run the Summerglow Apiaries, one of just a
handful of registered suppliers of UMF manuka honey in New Zealand.
They produce between eight and twelve metric tonnes of manuka honey
every year, and sell it across the world.
The honey is rigorously tested three times during production for that elusive
unique manuka factor; only then can it carry
the label "UMF manuka
honey".
"It just seems that manuka from a few areas within New Zealand produces a
nectar
that has this special property," said Bill Bennett.
"There is a lot of manuka honey out there that doesn't have this special
property. That's why it's so important to look for the name UMF."
Now, a New Zealand natural health products company
Comvita is taking
UMF manuka honey one step further.
I have already mentioned that Comvita is a licensee. So as the article
states is
SummerGlow Apiaries Ltd.
[80] Ms Wheeldon also referred to seven affidavits Watson filed, as to what
`Unique Manuka
Factor' means in relevant markets. This summary will need to be
brief. First, Mr Christopher Hill. He is General Manager of Manuka
Medical
Limited, a UK registered company majority owned by Watson. From his experience
in the medical products markets in the United
Kingdom and Europe, his
understanding is that "Unique Manuka Factor' is a term associated with Peter
Molan's research. He has no
knowledge of the term being associated with AMHA.
Mr Hill previously worked for another UK company called Brightwake Limited,
selling medical applications.
He deposed that Brightwake had probably used UMF®
promotional materials incorrectly. He believed the UMF® mark was associated with
Waikato University's activity test as developed by Professor Molan. He stated:
I assumed anyone buying the honey tested for
its unique manuka factor and
supplied as such had the right to use UMF®. At no time during my time at
Brightwake was
the company approached by AMHA in respect of the
application of the trade mark.
Mr Hill explained that he had done business
with Apimed and subsequently
Comvita. He stated that neither of those suppliers had associated their use of UMF®
with AMHA. He summarised
by saying that he did not believe customers and other
users of Manuka honey in the United Kingdom saw `unique manuka factor' as a
brand or as being linked to AMHA. If any, the association was with Peter Molan.
[81] Mr Jones owns a company called Australian
By Nature Pty Limited which
distributes specialised honey products in Australia. He also deposed that he
associated `Unique Manuka
Factor' with Peter Molan, who also referred to UMF.
He first became aware of the term "Unique Manuka Factor" when he began
importing
New Zealand Manuka honey five years ago, and did not associate it with
AMHA. He does not state which products he imports from New
Zealand, but
expresses his belief that UMF now relates to a group of honey producers including
Comvita and Honey New Zealand (International)
Limited.
[82] Mr Neil Boyd is Managing Director of G & S Foods Limited, a New Zealand
company which processes honey by drying
it into powder suitable for use in capsules
and lozenges. Watson is one of the Company's customers. G & S has an association
with
Pacific Laboratories Limited, which is a member of AMHA. While Mr Boyd
knows UMF is a registered trade mark of AMHA, restricted to
its licensees, he does
not see the words "Unique Manuka Factor" as meaning the product has been
licensed by AMHA.
[83] Mr Philip
Cropp is Managing Director of Nelson Honey & Marketing (NZ)
Limited, which processes, sells and exports honey. His company is a licensee
of the
Association, but chooses not to use the UMF trade mark on its products. Instead, his
Company labels its honey "Active Honey"
with a number. Based on his experience
with customers in the United Kingdom and Hong Kong, Mr Cropp deposed that they
do not see
"Unique Manuka Factor" as a brand or as being linked to AMHA or
anyone else.
[84] Mr Jeremy Harris is General Manager of Pacific
Laboratories Limited, the
company associated with Mr Boyd's company, G & S Foods Limited. He also views
UMF as a brand linked with
AMHA, and regards that as "honey ... of a certain
standard and quality that I can rely upon". He does not view the words "Unique
Manuka Factor" in the same way; he would not regard honey with those words on its
label as having been measured in a manner described
by AMHA rules.
[85] Mr John Whitehead is an apiarist at Kerikeri. He does not package the honey
he produces, but sells it to
honey packers. He is not a member of the Association.
He deposes that he is familiar with the phrase "Unique Manuka Factor", believing
it
means the component present in Manuka honey that has special antibacterial and
healing qualities. He understands "UMF" to mean
the same thing as "Unique
Manuka Factor". His understanding is that UMF is the particular test for
antibacterial properties
in Manuka honey used by New Zealand Laboratories
Limited.
[86] Finally, there is an affidavit from Ms Ailsa Sharp. She is a Scottish
nurse and
lecturer in nursing and has a special interest in the use of honey in dressings. She
deposed:
12. I equate `UMF'
with `level of activity', but in my mind the phrase
`unique manuka factor' is linked with Professor Molan. I see both
`UMF' and `unique manuka factor' as being related to a
measurement of the honey's antibacterial strength, and I recognise
the rating scale.
...
14. Before I became aware of this case I had never heard of AMHA and
nor did I know that `UMF' was a registered trade mark.
Earlier in her affidavit, Ms Sharp deposed that she had used a dressing
called
"ApiNate" which she found very effective on wounds. She recalled that it had the
letters "UMF" on the labels and the rating
numbers. She used 12+ and (mostly) 14+.
AMHA's case
[87] In summarising the Association's case in his reply, Mr Cook emphasised
two
things. Firstly, that the concept of goodwill, fundamental to passing off, was a broad
one. In Warnick at 741, Lord Diplock considered
it was best expressed in the words
of Lord Macnaghten in IRC v Muller & Co.'s Margarine Ltd [1901] AC 217 at 223-
224:
It is the benefit and advantage of the good name, reputation, and connection
of a business. It is the
attractive force which brings in custom.
[88] Secondly, Mr Cook posed the question: of whom is the mark distinctive? In
answering
this he referred to the following passages in the judgment of Gault J in
Wineworths (the `Champagne' case). These are at 336-337,
in that section of the
judgment headed `Distinctiveness and goodwill':
... The name, therefore, will not have precisely the
same significance to
everyone who knows it but if it serves to distinguish the product or products
they associate with
the name from other competitive products it has an
identifying function in the course of trade. To those who seek the
characteristics they know, or have heard of, the name will serve as an
attracting force. For suppliers the attracting force
in the name constitutes a
part of the goodwill of their business. ...
...
... It is the point at which goods
or services are bought and sold, where
business dealings are transacted that the elements of the tort are to be
investigated.
It is concerned with trade or business goodwill and with
conduct in trade or commerce establishing or injuring that goodwill.
The
manner in which a name is presented in trade will dictate the goodwill that is
generated. It is the understanding
of those engaged in trade that will dictate
whether or not they are, or will be, misled.
...
It is necessary
then to focus upon the significance of the name "Champagne"
in the market place, how it is used and how it is understood in
the course of
trade. ...
Mr Cook also referred to Gault J's reference to the often careless and ignorant use of
brand names
by people, and his riposte:
However, that does not mean that the brand names no longer serve their
proper purpose
in trade.
[89] Referring to DB Breweries v Lion Nathan, Mr Cook drew attention to [33] of
the judgment where Harrison J pointed
out that the phrase "Summer Ale" did not
originate with DB or Monteiths. Mr Cook submitted that the phrase "Unique
Manuka
Factor" had been coined for and given to AMHA to exploit commercially,
and it had invested considerable expense and effort in exploiting
it. This submission,
of course, depends on the phrase "Unique Manuka Factor" and the mark "UMF"
being interchangeable, the goodwill
in one being the goodwill in the other.
[90] When a consumer buys a Manuka honey product bearing the UMF® mark
and/or the words
UNIQUE MANUKA FACTOR, Mr Cook submitted that they were
buying a product that:
a) Was produced by a honey producer required
to adhere to defined
production standards throughout, and subject to regular audit by
AMHA.
b) Had been tested using the UMF® assay test by and only by NZ
Laboratories Ltd.
c) Had its
quality assured by the enforcement mechanisms that AMHA
conducted.
d) Was backed in terms of any consumer
complaint by AMHA.
e) In those ways, was endorsed by AMHA and carried the "UMF®
Guarantee" of quality.
[91] Mr Cook submitted that both UNIQUE MANUKA FACTOR or UMF® are
distinctive of this "bundle of benefits" to consumers (and
corresponding "bundle of
obligations" to licence holders). In that sense they denote a "badge of origin" of
products originating
from AMHA's licensees, and are more than simply a quality
standard. He contended that Watson's submission that trade marks and quality
standards are mutually exclusive is incorrect, and that often they are inextricably
bound up. He suggested that the ability to register
certification trade marks bore that
out.
[92] In terms of evidence establishing that AMHA and its licensees had goodwill
in the
term Unique Manuka Factor, Mr Cook referred both to the evidence of
AMHA's own deponents, and to the evidence Watson had called. As to the latter,
Mr
Cook emphasised the following:
a) Mr Harris' evidence that he looks to the UMF mark as an assurance of
quality he can rely
on.
b) A report Mr Cropp annexed to his affidavit. This was a marketing
report Mr Floyd prepared for the NBA in October
2000 (i.e. during
the AMHIG phase, before AMHA was incorporated). The report is
entitled "Active Manuka Honey" and includes
the following general
comment:
The overriding comment about the AMHIG and UMFTM
concept however, has
to be that a small group of beekeepers
have been astoundingly successful in creating what is fast
becoming
an internationally recognised Brand in the world
marketplace with virtually no resources.
c) Mr Boyd's evidence that
he knows UMF is the Association's trade
mark, available for use only by its licensees.
d) Mr Whitehead's evidence that he
regards UMF as meaning the same
thing as "Unique Manuka Factor". Mr Cook contends that that
associates both with
AMHA (although I do not think that association
emerges clearly from Mr Whitehead's affidavit).
e) The same interchangeability
and association emerging from Mr Hill's
affidavit. In relation to Mr Hill, this point requires explanation. An
affidavit
was sworn for the Association by Ms Williams. She is a
partner in an English company which imports and distributes health
products from New Zealand, trading with two licensees of the
Association. At Mr Rawcliffe's request, she visited Watson's
stand at
the Natural Organic Show at Olympia on 5 April and spoke there to
Mr Hill, who introduced himself as General Manager
of Manuka
Med, a Watson subsidiary. She asked Mr Hill to explain the
difference between the labelling on Watson's
Spirits Bay and
Riversdale honey (this was the new labelling using UNIQUE
MANUKA FACTOR with a number in a small white
coloured circle),
and the UMF number that she had seen on jars at another stand. She
deposed:
6. ... Mr Hill said that there was no difference
between UMF and UNIQUE MANUKA
FACTOR,
and that the two terms meant the same thing. He
then went on
to describe that the only difference was
that Watson & Son's Spirits Bay and Riversdale
products were tested by "different people" than the
Manuka honey labelled as "UMF".
I specifically
recall Mr Hill's emphasis that UNIQUE MANUKA
FACTOR was
the same as, and just as good as,
UMF Manuka honey. He said that their product was
genuine UNIQUE MANUKA FACTOR honey, and
he told me that they had taken some "very good
orders" that day.
In his affidavit Mr Hill accepted this. He said this was correct.
He
deposed:
15. ... The testing protocol for Watson & Son's `unique
manuka factor' honey is exactly the same as that for
UMF®. There is no technical difference
at all.
[93] In terms of the Association's own evidence, Mr Cook relied particularly on
evidence given by Messrs Rawcliffe and
Bassett, and by Ms Haddrell and by Ms
Bennett. In his second affidavit, sworn on 15 April, Mr Rawcliffe deposed that
UMF® stands
for UNIQUE MANUKA FACTOR, the terms being interchangeable
and so inextricably linked that it is impossible to separate them. He deposed:
39. In my experience, UMF® and UNIQUE MANUKA FACTOR are
known both locally and internationally as being synonymous with
AMHA. They have been used exclusively
by AMHA licence
holders since they were coined. Licence-holders use the terms to
distinguish the high
quality of their products from other active
Manuka honey brands. AMHA works hard to maintain that quality
guarantee through (its) audits and testing ...
[94] In a third affidavit in reply he swore on 29 May, Mr Rawcliffe added:
10. In my dealings with retailers and distributors of Manuka
honey in the UK, they demonstrate
a good knowledge of
UMF® and UNIQUE MANUKA FACTOR, and what they
stand for. They regard
UMF® and UNIQUE MANUKA
FACTOR as being synonymous with AMHA. In addition to
this, retailers
and distributors in the UK market have told me
that they regard Watson & Son's current use of UNIQUE
MANUKA FACTOR as passing-off, as it is exactly the
same as UMF®. Julian Aitken, Sales Director
of Ransoms,
is one example of a retailer who told me this during my last
visit to the
UK in April 2009.
...
17. AMHA is concerned to have products that it regulates
clearly delineated from those that are not. Based on my
dealings with consumers who contact AMHA, I
believe that
they see AMHA as a regulatory body and UMF®/UNIQUE
MANUKA FACTOR as a quality
standard backed by
AMHA's auditing and testing procedures. Consumers are
more inclined
to seek out quality when the product has
therapeutic and medicinal benefits than to settle for a
cheaper alternative.
[95] Mr Bassett swore two affidavits, on 17 April and 28 May. He is the owner of
Waitomo Honey
Limited in Te Kuiti and was foundation chairman of AMHIG,
continuing as Chairman of the AMHA following its incorporation. Mr Bassett's
company is a licensee. In his first affidavit Mr Bassett deposed:
16. I am informed that Watson & Son has started using
UNIQUE
MANUKA FACTOR on its products since its licence was
terminated by AMHA. It alleges that the
term is merely descriptive
of the active properties in Manuka honey. I disagree. "Active
Manuka honey"
and "non-peroxide activity" are the descriptive
terms. UNIQUE MANUKA FACTOR is part and parcel of the
UMF® trade mark and brand. The terms are used interchangeably,
one being the explanation of the other. They were
devised together,
were both given to AMHA to use, and have been used by it (and its
licence-holders)
in that fashion exclusively ever since.
[96] In his second affidavit, Mr Bassett deposed that the Association's licence
agreement
permits the licensee to use both the UMF® trade mark and the term
UNIQUE MANUKA FACTOR. He expressed the belief that this has been
clearly
understood by those involved in the Manuka honey industry. Responding to Mr
Watson's evidence, Mr Bassett stated:
7. I do not agree with Mr Watson's assertions that consumers, retailers
and distributors would not associate
UNIQUE MANUKA FACTOR
as used by Watson & Son with AMHA .... Given the considerable
equity in UMF® and
UNIQUE MANUKA FACTOR that AMHA
has built up over the years, I would be very surprised if consumers,
retailers or distributors did not associate Watson & Son's use of
UNIQUE MANUKA FACTOR with AMHA and conclude that
Watson & Son's products were endorsed by AMHA or at least met
the quality standard that is embodied by those brands. By creating
this misunderstanding
or confusion, the position of AMHA's trade
marks is jeopardised.
Mr Bassett also responded in some detail to Mr Cropp's
evidence as to AMHIG's
registration of the UMF® mark. There is clearly a disagreement between the two
men as to this, but that detail
is of peripheral relevance only to this application.
[97] Mr Haddrell gave very similar evidence in the first affidavit she swore,
on 28
May. She is the current Chair of the Executive Committee of the AMHA, and, with
her husband, owns and operates Cambridge Bee
Products. Her company exports
honey to 12 countries. It is a licensee of the Association. Ms Haddrell deposes to a
close and good
working relationship with Professor Molan in the years following
Cambridge Bee products becoming a member of the Association in 1998.
Responding to Professor Molan's evidence, she deposed:
12. Throughout this time I have never heard Professor Molan to
suggest
that the acronym "UMF" stood for anything else but UNIQUE
MANUKA FACTOR. I also never heard
Professor Molan refer to
UNIQUE MANUKA FACTOR as a purely descriptive name as he
now suggests ... and
that it is not a trade mark used by AMHA. To
the contrary, for many years Professor Molan supported AMHA's
use of both UMF® and UNIQUE MANUKA FACTOR, not only as
trade marks to be used by AMHA and its members, but
primarily as
a quality standard set and enforced by AMHA using the test that he
devised. ...
Ms Haddrell
confirmed Mr Bassett's understanding that the Association's licence
agreement was/is intended to licence use both of UMF® and UNIQUE
MANUKA
FACTOR, and that this is understood by licence holders and the wider Manuka
honey industry alike. She deposed that that understanding
is best illustrated by the
fact that Watson is the first non-licensed honey producer to attempt to market
Manuka honey products using
UNIQUE MANUKA FACTOR on its labelling.
[98] Evidence was also given for the Association by Ms Margaret Bennett in an
affidavit
she swore on 29 May, replying to affidavits filed for Watson, in particular
by Professor Molan and Mr Watson. Ms Bennett is a member
of the Executive
Committee of AMHA, and a Director of the family business SummerGlow Apiaries
Ltd in the Waikato. It is clear from
Ms Bennett's affidavit that she has an intimate
knowledge of AMHIG, since its beginnings at meetings on 13 March and 8 May
1997,
and of the subsequent creation of UNIQUE MANUKA FACTOR and the
acronym UMF, and subsequent registration of the UMF® mark.
I think the
following summary captures the essence of Ms Bennett's evidence:
a) UMF® and UNIQUE MANUKA FACTOR
are used interchangeably,
and have been controlled exclusively by AMHIG/AMHA since 23
May 1998.
b) The terms are considered in the Manuka honey industry to be one and
the same, reference to one including
the other.
c) The description of the non-peroxide antibacterial property of Manuka
honey has generally
been "non-peroxide activity", and not UNIQUE
MANUKA FACTOR.
d) Equating UMF® with UNIQUE MANUKA FACTOR
does not mean
that only honey labelled UMF® has the non-peroxide bacterial
activity. AMHA has always
recognised that different types of
manuka honey may contain the non-peroxide antibacterial property
present
in UMF® honey, and it is variously described as "non-
peroxide activity", "active Manuka honey", and labelled as "Active"
or "Bio Active" or with similar descriptions. Although UMF® and
UNIQUE MANUKA FACTOR are used without
authority by the
media, researchers and in marketing, since 2005 AMHA has increased
its enforcement activities. Her Company
is one of the licensees that
assists to this end. She expressly disagrees with Mr Watson's
assertion
that AMHA has never claimed rights in UNIQUE
MANUKA FACTOR.
[99] A copy of the 2009 Annual Report of Comvita was
also put in evidence. Mr
Cook drew my attention to this part of the report:
UMFTM Manuka honey has now gained a worldwide
reputation for its value
in digestive health, skincare and wound care. Comvita is committed to the
UMFTM trade mark
as the global standard representing highly effective,
therapeutic level Manuka honey of the highest quality. This trade mark
is a
clear indicator to the consumer that the honey they are buying contains the
special high-potency health properties
found only in certain varieties of
Manuka honey and not present in standard table honey.
This strategy of quality
has resulted in solid sales growth of Comvita brand
UMFTM honey in global markets where our consumers are amongst the most
discerning. As well as a commitment to producing the world's best Manuka
honey ...
I note this refers exclusively
to UMFTM.
[100] Lastly, Mr Cook referred to the valuation report prepared for the AMHA by
the national accounting firm Staples
Rodway. This was exhibited by Ms Young to
the affidavit she swore on 29 May. Ms Young is a business consultant with Staples
Rodway
in Tauranga. She deposed that she had assisted Messrs Rogers and Donald
(they are the two signatories to the report) to prepare and
draft the report. She
explained that her firm had been asked by the Association to value the UMF® and
UNIQUE MANUKA FACTOR brands,
to support the Association's application to
register UNIQUE MANUKA FACTOR as a trade mark. The summary section of
the report states
that the firm was not able to use the market or economic use
methods of valuation due to lack of available data. They therefore used
the income
approach to valuation:
In applying the income approach to surplus cashflows of the Association,
with a
low discount rate of 18.25% and high discount rate of 23.25% we
estimate the present value of the UMF cashflows to be between
$458,771
and $314,604 with a mid point value of $374,667.
Conclusions
[101] Upon the evidence I have summarised, I find
that the Association has
established a strongly arguable case that it and/or its licensees have built up a
reputation for, or goodwill
in, UNIQUE MANUKA FACTOR, as well as its mark
UMF®. First, that emerges from the evidence, particularly of Mr Rawcliffe, Ms
Haddrell
and Ms Bennett. Certainly, I accept that the goodwill appears to attach
more to the mark than to the full term UNIQUE MANUKA FACTOR.
That is clear
from the evidence adduced by Watson, particularly by deponents involved in the
active honey trade in Australia, Hong
Kong and Britain. However, there is a strong
consensus among the deponents, including Watson's own deponents, that the terms
UMF
and UNIQUE MANUKA FACTOR are used interchangeably.
[102] Secondly, although this aspect is disputed, there is credible evidence
that
UNIQUE MANUKA FACTOR as well as UMF were given to AMHIG back in 1998
by Mr Floyd and Professor Molan, as AMHIG's intellectual
property for use as
brands, and to assist it generally in developing a market for honey with that "unique
Manuka factor". A point
here is that I do not have the benefit of an affidavit from
Mr Floyd, who was obviously a key participant in all of that.
[103]
Thirdly, and an associated point, there is a credible explanation as to why
only UMF was registered as a mark in 1998.
It was a combination of cost
constraints (each trade mark registration was a costly process and the Association
could afford only
one at the time), a preference to proceed with the acronym,
because of its more `catchy' nature in terms of marketing, and advice from the trade
mark attorneys acting for AMHA at the time that
registration of UMF would also
protect UNIQUE MANUKA FACTOR. There is evidence that the Association
again gave consideration to registering
UNIQUE MANUKA FACTOR as a trade
mark in October 2002. However, it was not until July 2006 that AMHA, by then
somewhat better resourced,
did apply to register UNIQUE MANUKA FACTOR as a
trade mark. I regard it as very significant that this was long before the current
dispute between Watson and the Association emerged, indeed it was only two
months after Watson joined the Association. My point is
that that application to
register was not in any way a response by the Association to Watson's claim in this
proceeding to be entitled
to use UNIQUE MANUKA FACTOR in labelling its
honey products.
[104] Fourthly, Watson is the first honey producer not licensed by
the Association
to attempt to use UNIQUE MANUKA FACTOR in selling its honey. Given that the
term was coined 11 years ago, that is
significant. It provides strong support for the
Association's evidence that it is well known in the industry that UNIQUE
MANUKA FACTOR
is distinctive of the honey products of the Association's
licensees. Further, Watson's use of UNIQUE MANUKA FACTOR is consistent
only with an attempt to enjoy (I think the modern cliché is "leverage off") the
Association's goodwill and reputation. Why else
would Watson use that description,
as opposed to one of the others used by active Manuka honey producers who are not
licensees of
the Association (and at least one which is a licensee, namely Mr Cropp's
Company)?
[105] Fifthly, although there is not comprehensive
evidence of sales by licensees,
there is some evidence. Comvita's 2009 financial statements are in evidence. The
Income Statement
show Group revenue for the 12 months ended 31 March 2009 at
$71.4 million. I am unsure how much of this comes from sales UMF® honey.
As I
have already mentioned, there is also Staples Rodway's valuation of the
Association's UMF® and UNIQUE MANUKA FACTOR brands.
At around
$375,000, it cannot be gainsaid that goodwill and value attaches to the brands.
[106] Sixthly,
the Association's application for registration of UNIQUE MANUKA
FACTOR as a trade mark has yet to be determined. The Examiner has
expressed a
tentative view that the words are descriptive and not distinctive of the honey
products of the Association's licensees,
and therefore not registrable as a mark. The
Association clearly, and understandably, faces difficulties with its application to
register. There is plenty of law about this. For example, "healthy choice" was held
not to be registrable as a trade mark for frozen
prepared dinners: McCain Foods
(Aust) Pty Ltd v Conagra Inc. [2002] 3 NZLR 40 (CA). "Blackwater Rafting" was
expunged from the Register of Trade marks as merely descriptive of rafting through
caves: Waitomo
Adventures Ltd v BWR Resources Ltd HC HAM CP72/00, 26 April
2002, Randerson J. "Purple" was not registrable as a trade mark for chocolates:
Cadbury Ltd v Effem Foods Ltd (2007) 11 TCLR 966; (2007) 78 IPR 672. But
"Vintage" survived as a trade mark for cheese: Mainland Products Ltd v Bonlac
Foods (NZ) Ltd [1998] 3 NZLR 341 (CA). This type of analysis of past cases can be
extended almost indefinitely, and not helpfully. As the Court of Appeal emphasised
in Mainland at 347:
Each case must be determined on its own facts ... (past decisions) cannot
determine the outcome
of the case for us.
I have no desire to pre-empt in any way the Association's application. For present
purposes, it is sufficient
that I note that, though problematic, it remains live.
[107] Seventh, rejection of the Association's application to register UNIQUE
MANUKA FACTOR as a trade mark would not be fatal to the Association's passing
off case. I am mindful of the test for distinctiveness
famously laid down by Lord
Parker in W & G du Cros Ltd's Application (1913) 30 RPC 660 at 672:
The applicant's chance of success in this respect must, I think largely depend
upon whether other traders
are likely, in the ordinary course of their business
and without any improper motive, to desire to use the same mark, or some
mark nearly resembling it, upon or in connection with their own goods.
(my emphasis)
The evidence I have heard provides
a factual basis for the Association to argue, with
force, that the words I have emphasised apply to Watson in this case.
[108]
Eighth, there is evidence that the way in which Watson is using UNIQUE
MANUKA FACTOR in its new labelling on its honey products misrepresents
them
as honey licensed by the Association, or at least is likely to cause confusion as to
whether that is or is not the position.
First, there are the old and the new labels
that have been put in evidence. Additionally, sample jars were handed up to me on
the
Bench. It is evident to me that Watson's new labelling deliberately and carefully
attempts to emulate the labelling it used when
a licensee as closely as possible. A
Judge is entitled to form his own impression. When I compare the labelling on a jar
of Watson's
"licensed" honey with the new labelling, my impression is that there is a
likelihood of confusion on the part of consumers. Second,
there is the evidence of
the New Zealand and English consumers who sought clarification from the
Association as to the position.
Only two consumers but, as Gault J pointed out at
342 in Wineworths:
Evidence of actual deception is not essential. It is,
of course, the best
evidence of likely future deception. It is notoriously difficult to obtain. It
has been said "the
more complete the deception, the less likely its detection";
per Lloyd-Jacob J in Electrolux Ltd v Electrix Ltd (1953) 70 RPC 127, 132.
Thirdly, there is the evidence of what Mr Hill of Watson's said to Ms Williams at the
Olympia Trade Show. Effectively, Mr
Hill told Ms Williams "Watson's honey is no
different than the UMF® honey you saw on the other trade stand". That could be
viewed
as a blatant act of passing off.
[109] I consider the potential for damage to the businesses of the Association's
licensees is
beyond sensible argument. There is the history of past problems with the
quality of Watson's honey as revealed by the successive
test results I referred to
that in [22]-[23]. There has also been a recent incident suggesting that Watson had
heated its honey.
I have not yet referred to this. Briefly, on 3 April an AMHA agent
bought a jar of Watson's Manuka Gold Bioactive 16+ honey from
a Wellington
supermarket. The 22 April test result from NZ Laboratories showed a result of
16.0mg/kg of hydroxymethyl furfural (HMF).
In his 29 May affidavit Mr Rawcliffe
deposed, of this result:
24. ... Under the Honey (England) Regulations 2003 honey
must not
contain more than 4.0mg/g or 40mg/kg of HMF, except what is
known as "Baker's Honey" (which
is only suitable for industrial
uses or as an ingredient in other processed foodstuffs). ...
25. Heating
honey artificially raises its antibacterial activity level. It is
severely frowned upon in the Manuka honey industry.
The product
is "de-natured" and its sterilisation effect is de-activated. This has
significant consequences
for honey that is used in wound dressings
and for other medicinal purposes.
26. Accordingly, AMHA is very
concerned that if Watson & Son's
product labelled UNIQUE MANUKA FACTOR is tested in the UK
market and
found to be heated or not true to label, then this will
cause irreparable damage to the UMF® and UNIQUE MANUKA
FACTOR brands.
That evidence was responded to by Mr Scarlet, in an affidavit he swore on 14 July.
Mr Scarlet is a Director
of Watson. He points out that the test result does not state
that the honey has been heated. He adds:
4. ...However
I would be very concerned if even one sample of
Watson & Son's honey had a level of HMF as high as Mr Rawcliffe
claims. Neither Mr Rawcliffe nor AMHA brought this result to the
attention of Watson & Son other than
through his affidavit. Further
to this Mr Rawcliffe has not specified the batch number for the
sample
that would allow us to trace the production records for it.
[110] Lastly, but perhaps most importantly on this aspect, there is
the fact that
Watson is no longer a licensee, and is thus not subject to the testing requirements
and audit checks that apply to
licensees. I have not overlooked Ms Wheeldon's
point that, while this proceeding is afoot, Watson's honey is probably being more
regularly and rigorously tested than that of any other producer. Although that may
well be true, it is more an advocacy point than
one of substance, because Watson is
simply no longer subject to the Association's licensing regime.
[111] To summarise, AMHA has
persuaded me that it has a strongly arguable case
on its passing off causes of action against Watson. Assuming the stringent threshold
contended for by Ms Wheeldon applies, I hold that the Association has achieved that
threshold.
The balance of convenience
[112]
The task here is to balance, against the injustice that will result to AMHA if
an interim injunction is refused but a permanent one
ultimately granted, the injustice
that will result to Watson if an interim injunction is made, but discharged in the
substantive
judgment.
[113] I consider damages would not be an adequate remedy for the Association.
My reasons are largely those given by Panckhurst
J. Essentially, I regard the damage
that may result to the Association's brands and the businesses of its licensees from
Watson's alleged infringement and passing off as incalculable.
[114] Although assessing damages for Watson would not be straightforward, I do
not consider assessment would present insuperable
difficulties. Nor did
Panckhurst J. His concern about the adequacy of damages for Watson stemmed
largely from his concerns
about the adequacy of the Association's undertaking as to
damages. That undertaking now also carries the names of Cambridge Bee Products
Limited, SummerGlow Apiaries Limited, Comvita NZ Limited and Honey New
Zealand Limited. Ms Wheeldon very properly accepted that the
undertaking is now
good.
[115] I am influenced by the fact that there are 32 licensees on the one hand, but
only Watson on the
other hand. Counsel explained to me that the Association's
licence period runs from 31 July. As of the hearing of this application,
24 of the
current 32 licensees have applied to renew their licences. The Association expects
the usual last minute batch of renewal
applications. There are also applications for
three new licences. I may have this wrong, but I understood that these came from
overseas companies, but the Association's rules currently restrict membership (and
therefore licensees) to New Zealanders or New
Zealand companies. The Association
has approximately 50 members. No members other than Watson have resigned
during the last year.
[116] A further factor influencing me in assessing where lies the balance, is that
Watson's actions were deliberate and knowing.
In answer to a question I put to her,
Ms Wheeldon confirmed that Watson knew when it used UNIQUE MANUKA
FACTOR in its new labelling,
that the Association had applied in 2006 to register
that term as a trade mark. Watson had itself already put this dispute into Court,
and
must have known that its new labelling was buying it an extended fight with the
Association. Watson announced its new labelling
without any resort to the
Association. I view that as countering the sort of concerns that Fogarty J expressed
in the Gold Real Estate
case, and which Harrison J echoed in Summer Ale. In
making that point, I do acknowledge that Watson regards the Association as run
by
its trade competitors, and I accept that Watson may have been reluctant to ascertain
in advance whether the Association had any
objection to its proposed new labelling.
[117] It is said that prudence at an interim stage such as this often dictates
preserving
the status quo i.e. the established pattern of conduct. But this is one of
those cases where it is not easy to determine what that
status quo is. In R & M
Wright Ltd v Ellerslie Gateway Motels Ltd HC AK CP188/90, 11 July1990, Jeffries J
defined it I think helpfully
as "the last peaceable state between the parties".
Although it does not quite fit Jeffries J's definition, I regard the status
quo here as
the position that inured following the Association's acceptance of Watson's
repudation of its licence agreement i.e.
the point immediately following termination
of that agreement. However, I do not see preservation of the status quo as an
important
factor here.
Overall justice
[118] I consider the overall justice of the situation requires the Court to enjoin
Watson. I see
the main considerations as these:
a) The Association has established a strongly arguable case of
infringement
and passing off.
b) Damages would not be an adequate remedy for the Association, but
would be for Watson.
c) Watson took the contentious steps "eyes open" as to the likely
consequences. Effectively, it must have
known it was buying the
interim `fight' in which it is now embroiled. Other labelling options,
some of
them used by other honey producers (one at least of them
licensed) were open to Watson.
d) Watson's deponents
accept that the UMF brand was given to the
Association in 1998 as its intellectual property, by those who
`invented' it. The Association
claims UNIQUE MANUKA FACTOR
was similarly given to it, although that is disputed. Since then the
Association
has spent time and money developing those brands,
particularly its UMF mark. Watson only joined the Association in
2006 and resigned at the end of last year. It subsequently commenced
this proceeding and now challenges
the Association's ownership of
both UMF® and UNIQUE MANUKA FACTOR, and is using the
latter.
e) Although there was some delay on the Association's part in seeking
interim injunctive relief, Watson accepts
no prejudice resulted to it.
f) The Association comes to Court with the "clean hands" that equity
requires
of an applicant for interim injunctive relief.
Result
[119] I make the following orders:
a) Pending determination
of this proceeding or earlier order of the Court:
i) Watson is restrained from using the Association's UMF®
trade mark in labelling or marketing its honey products.
ii) Watson is to remove
or irremovably cover the UMF® trade
mark from all honey products or related promotional material
under its control.
iii) Watson is restrained from using the words UNIQUE
MANUKA FACTOR in labelling or marketing its honey
products or in related promotional materials.
iv) Watson is to remove or irremovably cover the words UNIQUE
MANUKA FACTOR on the
labelling of all honey products or
in related promotional materials under its control on which
those words appear.
Costs
[120] Watson is to pay the Association's costs of this application on (the agreed)
3C basis. In making that order, I reject the Association's submission that clause 16.2
of the licence agreement it had with Watson
entitles it to indemnity costs.
Solicitors:
Buddle Findlay, Auckland for the First Defendant in support
Kensington Swan, Auckland
for the Plaintiff to oppose
Sharp Tudhope Lawyers, Tauranga for the Third Defendant
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