TomTom Communications Limited v TomTom International B.V. [2015] NZHC 3333 (18 December 2015)

	Home \| Databases \| WorldLII \| Search \| Feedback High Court of New Zealand Decisions

This judgment was delivered by me on 18 December 2015 at 5:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Mr M A Lowndes (respondent’s instructing solicitor), Lowndes, Solicitors, Auckland

[2] The application was opposed by the appellants. The appellant Gaylene Ruth Hosking is the owner of the registered trade mark “TOM TOM”. Full particulars of the registrations, in three classes, are contained in appendix 2. The appellant company, TomTom Communications Ltd, uses the marks under licence from Ms Hosking.

[3] The respondent’s applications were granted.¹The opponents have appealed against that decision.

[4] In their opposition the opponents relied on five provisions of the Trade Marks

Ground no.	Summary of the allegations	Act reference
1	Use of the opposed marks would be likely to deceive or cause confusion.	Section 17(1)(a)
2	Use of the opposed marks is contrary to New Zealand law because it would amount to passing off and breach of the Fair Trading Act 1986.	Section 17(1)(b)
3	The applications were made in bad faith.	Section 17(2)
4	The opposed marks are similar to the opponents’ trade marks, which are registered in respect of the same or similar goods, and use of the opposed marks is likely to deceive or confuse.	Section 25(1)(b)

¹TomTom International BV v TomTom Communications Ltd [2015] NZIPOTM 2 [IPO decision].

[6] The relevant date for determining whether the opposed marks should be registered is 23 August 2011.

[7] This is a general appeal by way of rehearing.²I am bound to come to my own conclusion, and the weight to be given to the Assistant Commissioner’s decision, and her reasons for particular decisions, are matters for my judgment.³

[8] On the appeal the onus is on the appellants to satisfy this Court that it should differ from the Assistant Commissioner’s decision. But the general onus, on the merits, was and is on the respondent to establish that its applications are eligible for registration.

[9] Ms Hosking started trading under the name TomTom in 1998. She made the three applications to register the trade mark Tom Tom on 12 May 1998. The marks were registered on 9 March 2000.

[10] TomTom Communications was incorporated in September 2001. It has used the mark since then. Ms Hosking is its sole director. TomTom Communications is a

³Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [3] and

including public relations, communications, marketing, promotion, brand development, website development and critique, media strategies, training, advertising, research and analysis, lobbying and reputation management services.

[11] Further particulars are outlined later when discussing the application of s 17(1)(a).

17. The applicant is a multinational company, with its head office in the Netherlands. It has over 3600 employees in 35 countries, and it is the global leader in navigation and mapping products and services.

18. The applicant was founded in 1991 as Palmtop Software, and changed its name to TomTom International B.V. in 2001. It first applied to register TOMTOM as a trade mark in Benelux Registry on

19. Since 2004, the applicant has sold over 70 million portable navigation devices (PNDs), and it provides a real-time traffic information service in 36 countries. Its maps cover 114 countries.

20. The applicant officially launched its PNDs in New Zealand in September 2007. The New Zealand launch comprised the TOMTOM ONE (third edition), which at the time was the applicant’s entry-level PND and the world’s top-selling PND, and also the applicant’s larger PND, the TOMTOM ONE XL. In addition, the purchasers of these products were given access to TOMTOM HOME, a software application for managing content on any TOMTOM PND.

21. Since 2007, the range of goods and services sold in New Zealand has expanded beyond PNDs and now includes GPS-enabled sports watches, real-time traffic information services, and fleet management products and services.

[13] Further evidence concerning the respondent’s products, activities and reputation in New Zealand, which does not appear to have been contested in any material respect, and taken from submissions for the respondent, are as follows:

[The respondent] has received significant recognition for its products and services in the New Zealand media and publications that are available in New Zealand. Its range of TOMTOM trade mark goods and services sold in New Zealand has expanded beyond the core PNDs and now includes GPS-

enabled sports watches, real-time traffic information services, and fleet management products and services. Its products are distributed in New Zealand by Ingram Micro New Zealand, which company supplies them to Noel Leeming, Harvey Norman, Dick Smith, The Warehouse, and JB Hi-Fi. Its products are also advertised for sale and sold from websites of independent retailers such as Mighty Ape, Fishpond and PriceMe. It is one of the largest suppliers of PNDs in the New Zealand market with a 39.3% market share. It has sold over 155,834 PNDs in New Zealand having a value of over NZ$38.7M. It spent over NZ$5.97m on marketing its products and services in New Zealand in the period 2007 to 2013. “Very significant” numbers of people with New Zealand IP addresses have visited the respondent’s website.⁴The website has a “Contact us” page with contact information for the applicant.

The Commissioner must not register as a trade mark or part of a trade mark any matter ... the use of which would be likely to deceive or cause confusion.

[15] In New Zealand for many years the assessment under s 17(1)(a), where an application has been opposed by the owner of another mark (in contrast to issues of deception or confusion arising from something intrinsic in the mark) has involved a two-stage process. The first stage – often referred to as the threshold test – places an evidential burden on the opponent to establish some reputation for, or awareness of, the opponent’s mark. If such is established the second stage arises. This involves the main enquiry as to whether, having regard to the reputation acquired by the opponent, use of the mark sought to be registered would be likely to deceive or cause confusion, with the onus on the applicant to establish the negative. The appellant contended on this appeal that the full scope of this two-stage approach is not required on the facts of this case; in essence because there is actual evidence of deception or at least confusion. Given this argument it will assist to set out statements of principle of the Court of Appeal on the approach to s 17(1)(a).

⁵Sexwax Inc v Zoggs International Ltd [2014] NZCA 311, [2015] 2 NZLR 1 [Sexwax].

[48] To shed light on how this section should be approached, we make the following comments. When applying this section, the Commissioner begins by inquiring whether the opponent’s mark has a reputation in New Zealand at the relevant date. Such reputation need not be widespread; it all depends on the nature of the marks and the goods to which it is applied. Where marks are used in respect of goods with only a very narrow or specialised use or purpose, the mark may be known only to a small number of people.⁶Pioneer Hi-Bred is a good example: the opponent to registration sold hatching eggs and breeding poultry, goods purchased only by those in the poultry breeding industry. It was only those in that industry who were aware of its existence, and therefore only among persons in that class that a reputation needed to be established.⁷In other cases, a mark may be applied to goods sold very broadly or applied to numerous different goods under a brand's penumbra.⁸This is the initial inquiry into the “circumstances of trade”, against the background of which the marks are regarded as notionally in use.⁹

[49] Next, the Commissioner assesses the likelihood of deception and confusion. This is a fact-specific inquiry. It is a matter of assessing “practical business probabilities”, having regard to all the surrounding circumstances and the degree of similarity of the marks.¹⁰Judicial decisions have established a materiality threshold for confusion or deception, requiring the applicant to prove that registration will not cause deception or confusion amongst a “substantial number of persons”.¹¹As courts in subsequent cases have noted, however, the terminology used in the judgments varies with the setting, and is ultimately a question of significance of the numbers in relation to the awareness of the marks in question.¹²

[17] Sexwax was an application to register a mark which was opposed by a company which had a distinctive mark which was unregistered. Virbac SA v Merial is another recent Court of Appeal decision with parties in the same position as the parties to this appeal – the opponent’s mark was registered.¹³There was no

_{suggestion that the principles were any different. The Court said that
the question}

⁷Pioneer Hi-Bred Corn Company v Hy-line Chicks Pty Ltd [1978] 2 NZLR 50 (CA) [Pioneer

concerned had broad recognition due to the widespread basis on which the products were sold: at

131. Products featuring the brand name “MERCEDES” are an example of the latter category mentioned above — the mark is applied to a wide variety of very diverse products and therefore brand recognition is extensive.

⁹Pioneer CA, above n 7, at 63 per Richardson J, citing Re Gaines Animal Foods Ltd’s Application

¹¹_{Re Smith Hayden & Co Ltd’s Application
(1946) 63 RPC 97 (EWHC) at 101 [Smith Hayden].}

posed by s 17(1)(a) was the question as earlier articulated by the Court of Appeal in Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd¹⁴which in turn applied Re Smith Hayden & Co Ltd’s Application.¹⁵Both had been followed in Sexwax.

[18] One of the appellants’ grounds of appeal is that the Assistant Commissioner was in error in applying what was referred to as “the Smith Hayden test”. That test, expressed in general terms, rather than by reference to one of the parties in the case, is as follows:¹⁶

Having regard to the reputation acquired by the opponent’s mark, is the Court satisfied that the mark applied for, if used in a normal and fair manner in connection with any goods covered by the registration proposed, will not be reasonably likely to cause deception and confusion amongst a substantial number of persons?

[19] In Virbac the Court, following Pioneer’s application of Smith Hayden, said that the question was that contained in the Smith Hayden test. It then said:

[13] This is ultimately a question of fact which is treated as a practical business matter and answered by reference to all the circumstances.¹⁷In a case such as this one, where an opponent alleges that the new mark will cause confusion or deception affecting its own existing mark, the Assistant Commissioner takes the following approach:

(a) The opponent must first establish awareness of its mark in New Zealand at the application date. Such awareness or reputation must be sufficiently substantial to make confusion a reasonable possibility.¹⁸

(b) The opponent’s reputation having been established, the applicant must show that its mark does not offend against s 17(1)(a).

(c) The Assistant Commissioner decides what is likely to happen if each mark is used in New Zealand in a normal way as a trade mark for the respective owners' goods.¹⁹Evidence about use overseas is relevant only insofar as it informs the assessment of what will happen here.²⁰

¹⁷Pioneer CA, above n 7, at 76 per Richardson J; Anheuser-Busch Inc v Budweiser Budvar

_{National Corp [2002] NZCA 264; [2003] 1 NZLR 472 (CA) [Anheuser-Busch Inc]
at [74].}

¹⁹Anheuser-Busch Inc, above n 17, at [30]; cited in TKS SA v Swatch AG (Swatch SA) (Swatch Ltd) [2012] NZHC 2642 at [37]. See also, New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV, above n 8, at 139 and Re Pianotist Co Ltd's Application (1906) 23 RPC 774 (Ch) at 777.

(d) The Assistant Commissioner compares the impression conveyed by the marks, taking into account the idea of each mark and how it looks and sounds.²¹Recognising that goods bearing the marks need not be sold side by side, allowance is made for imperfect recollection.²²

(e) The Assistant Commissioner also considers the goods to which the marks are or – in the applicant’s case – will be applied, the market or markets²³in which those goods are or will be sold, and the characteristics of market participants.²⁴

(f) A person is “deceived” when misled by the applicant’s mark into thinking that the goods bearing the mark come from some other source, and “confused” when caused to wonder whether that might be so.²⁵

(g) The number of persons at risk of deception or confusion must be substantial or significant. That assessment being hypothetical, the Assistant Commissioner treats it as a matter of judgement, not calculation. The decision is made having regard to the class of persons potentially at risk. That class comprises those people who will be exposed to goods bearing the applicant’s mark and who know, as at the application date, of the opponent’s reputation in its mark.²⁶Where the goods are sold in the same market, the relevant class is ordinarily the entire market.²⁷

[20] In relation to the second stage – the main enquiry – Richardson J in Pioneer set out ten propositions as matters that were clearly settled.²⁸Including some points already touched on, these propositions are as follows:

(1) The onus is on the applicant for registration of the trade mark to establish that the proposed mark does not offend against s 16; and that onus is discharged on the balance of probabilities (Polaroid Corporation v Hannaford & Burton Ltd [1975] 1 NZLR 566).

²³We use the plural because markets have product, supply chain level and geographic dimensions, and the decision maker’s choice among them is instrumental in nature; that is, market definition is not an end in itself but an aid to analysis. In Pioneer, for example, the market was a small one

because the product concerned (breeding poultry) was a raw material in a supply chain, and the

²⁴New Zealand Breweries Ltd, above n 8, at 139. See also Anheuser-Busch Inc, above n 17, at [75] where the test is put this way: “It is necessary to consider how the trade marks will be regarded and how they will be pronounced and heard by those to whom they will be presented in the

²⁶Sexwax, above n 5, at [54]; Pioneer SC, above n 6, at 429; and New Zealand Breweries Ltd, above n 8, at 134.

(2) On an application for registration the rights of the parties are to be determined as at the date of the application. The evidence as to likelihood of deception or confusion must relate to the position at that time.

(3) The concern is with the possible future use of the mark in respect of goods coming within the specification applied for: registration gives the holder protection to that extent.

(4) The section is not concerned with the particular mode of presentation of the product adopted or proposed to be adopted by the applicant, but with the use of the mark in any manner which may be regarded as a fair and proper use of it (Hack’s Application (1940) 58

(5) In considering the likelihood of deception or confusion all the surrounding circumstances have to be taken into consideration, including the circumstances in which the applicant’s mark may be used, the market in which his goods may be bought and sold and the character of those involved in that market.

(6) But, it is the use of the mark in New Zealand that has to be considered and association of a similar mark with another trader in overseas countries or market is irrelevant, except in so far as it bears on the likelihood of deception or confusion in the New Zealand market.

(7) It is in relation to commercial dealings with goods that the question of deception or confusion has to be considered, and the persons whose states of mind are material are the prospective or potential purchasers of goods of the kind to which the applicant may apply his mark and others involved in the purchase transactions.

(8) For a mark to offend against s 16 it is not necessary to prove that there is a commercial probability of deception leading to a passing off or infringement action. Detriment or financial loss to an opponent need not be established. It is sufficient if the result of the registration of the mark will be that persons to whom the mark is addressed are likely to be deceived or confused. “Deceived” implies the creation of an incorrect belief or mental impression and causing “confusion” may go no further than perplexing or mixing up the minds of the purchasing public (New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV [1964] NZLR 115, 141). Where the deception or confusion alleged is as to the source of the goods, deceived is equivalent to being misled into thinking that the goods bearing the applicant's mark come from some other source and confused to being caused to wonder whether that might not be the case.

(9) The test of likelihood of deception or confusion does not require that all persons in the market are likely to be deceived or confused. But it is not sufficient that someone in the market is likely to be deceived or confused. A balance has to be struck. Terms such as “a number of persons” (Jellinek’s Application), “a substantial number of persons”

(Smith Hayden & Co Ltd’s Application), “any considerable section of the public” (New Zealand Breweries Ltd v Heineken's Bier Browerij Maatschappij NV), and “any significant number of such purchasers” (Polaroid Corporation v Hannaford & Burton Ltd) have been used. As Cooke J put it in his judgment in this case:

“The varying terminology in the judgments is a reminder that it is not always necessary that large numbers of people should be, or should probably be, of the state of mind in question: rather it is a question of the significance of the numbers in relation to the market for the particular goods” ([1975] 2 NZLR 422, 429).

(10) Where goods are sold or may be sold to the general public for consumption or domestic use, the judge or officer making the decision is entitled to take into account his own experience and his own reactions as a member of the public, as will [sic] as evidence from other members of the public, when considering whether buyers would be likely to be deceived or confused by use of a trade mark. But where the goods are of a kind not normally sold to the public at large, but are ordinarily sold and expected to be sold in a specialist market consisting of persons engaged in a particular trade, evidence of persons accustomed to dealing in that market as to the likelihood of deception or confusion is essential (GE Trade Mark [1973] RPC

The Assistant Commissioner’s decision on s 17(1)(a) and the grounds of appeal

[21] The Assistant Commissioner applied the two-stage process outlined in the leading cases.

[22] On the threshold issue she was satisfied, having regard to evidence for the appellants summarised in the decision, that there was sufficient awareness of their marks at the relevant date for the main enquiry to proceed.²⁹

[23] On the main enquiry the Assistant Commissioner applied the Smith Hayden test as explained and expanded on in subsequent decisions. In terms of appearance, the Assistant Commissioner concluded that the marks “are near identical or closely similar”. On a comparison of the goods or services of the appellants and the respondent, the Assistant Commissioner referred to the factors outlined in British

³⁰British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281 (Ch) at 296-297.

41. In my view, there is very little similarity between the goods and services provided by the parties. The fact that both parties’ goods and services can (arguably) be described as “communications” says more about the breadth of that term than about the realities of the goods and services provided by the parties.

43. The applicant does not provide PR, marketing or communications services of the type provided by the opponents. Its core focus – reflected in its trade mark specifications – is computer hardware and software to be used with satellite navigation systems, telecommunications services, and other similar goods and services.

[24] The Assistant Commissioner dealt at some length with evidence adduced by the appellants and which the appellants submitted was actual evidence of confusion or deception.³¹It is on the basis of this evidence that the appellants contend that the Smith Hayden test does not apply. The evidence falls into two broad categories. The first is that, from July 2006, before the respondent’s products were launched in New Zealand, TomTom Communications, or Ms Hosking personally, have received a

reasonably substantial number of enquiries, by telephone, email or postal mail, which were in fact intended for the respondent company. Numbers of those making enquiries expressed frustration or surprise that they had not contacted the respondent or its representative. The other category was summarised by the Assistant Commissioner as follows:

53. When Ms Hosking and/or TomTom Communications attempt to promote TomTom Communications or otherwise communicate with third parties, this also gives rise to confusion because of the immediate assumption that TomTom Communications is associated with the applicant.

54. Ms Hosking says that the majority of her clients are obtained through networking and word of mouth. However, this method of obtaining clients has been disrupted by confusion between TomTom Communications and TomTom International.

55. In the past, the trade mark TOMTOM was very valuable in networking situations, and elicited an instant and positive response. Now, however, Ms Hosking spends all of her networking

opportunities explaining that she is not from, or associated with, TomTom International.

[25] The Assistant Commissioner provided numbers of examples from the evidence and then said:

57. Ms Hosking says that in addition to affecting her ability to promote and sell her business, this confusion has been detrimental as people incorrectly assume that her company has copied the name from TomTom International. She says that a copycat assumption is damaging for any company, but particularly so for her company, as it offers branding services.

[26] The appellants’ argument on appeal that the Smith Hayden test did not apply in this case had been argued before the Assistant Commissioner. It is convenient at this point to record part of Mr Gray’s submissions for the appellant on the appeal, before outlining the Assistant Commissioner’s conclusion. Mr Gray submitted:

22. In cases where there is evidence of actual confusion or deception, the Appellants submit that it is not necessary to apply a hypothetical like that in the Smith Hayden Test in order to determine whether there is a likelihood of deception or confusion. The likelihood of deception or confusion arising from fair and notional use of the applicant’s marks in the context of the opponent’s actual use of its marks is answered by the fact of actual confusion. Using the Court of Appeal words in Sexwax, the Smith Hayden Test is useful “absent empirical or actual evidence of confusion”.³²

25. Where, as here, the extra requirements of the Smith Hayden test are not required, there is no requirement that the likelihood of deception or confusion be considered in the context of the opponent’s reputation in its mark, and there is no need to adopt the approach taken by the Court of Appeal on the facts in Virbac and Sexwax. In the words of the Assistant Commissioner, there is no need to “begin with a threshold enquiry as to whether or not the opponent has established sufficient awareness of its mark in New Zealand to make confusion a reasonable possibility”.³³The fact of the confusion or deception is itself sufficient to show that confusion is a reasonable possibility.

[27] In anticipation of my evaluation of this issue I note now, in relation to Mr

Gray’s inclusion of the quote from Sexwax, at the end of his paragraph 22, that the quote in isolation takes the matter out of context. There was no suggestion in

Sexwax that, if there is actual evidence of confusion, the Smith Hayden test, or at least the full scope of the Smith Hayden test, does not apply.

[28] On this contention, the Assistant Commissioner said that she agreed that “actual evidence of confusion and deception will often be a complete answer to the issue of ‘likelihood’ of confusion or deception based on fair and notional use of the marks”. But she also said, in essence, that the nature of the evidence required analysis to determine the extent to which it assisted, if at all, in answering the questions that need to be answered under s 17(1)(a). One particular question she posed was: “Is it the use of the marks that is giving rise to the deception and confusion or something else?” She said that “at least one contributing factor”, to confusion or deception, was the difficulty for customers of the respondent in New Zealand to contact the respondent, “especially in the first few years after its launch in

67. I consider that if Tomtom International had provided readily accessible contact details and had been easier to reach, then much of the confusion described above would have fallen away, despite the similarities between the marks.

70. I do not believe that all of the instances of confusion in this case arose simply as a result of similarities between the marks and/or the respective goods and services, and the evidence of confusion must be viewed in this light.

[29] The appellants’ second ground of appeal is directed to this conclusion. The

[The] Assistant Commissioner erred in fact and in law by finding that ... the Respondent’s ineptitude in its conduct meant that the deception and confusion caused by the Respondent’s use of the TomTom Marks did not satisfy s 17(1)(a).

[30] The remaining issue considered by the Assistant Commissioner was whether “wrong way round confusion” was confusion of a type contemplated by s 17(1)(a). The appellants’ third ground of appeal is that the Assistant Commissioner was wrong to conclude that “wrong way round” deception or confusion was not sufficient to meet an objection pursuant to s 17(1)(a).

[31] Wrong way round confusion occurs when members of the public are confused into thinking that an opponent to registration is associated with the applicant; in this case, a belief by members of the public that the appellant TomTom Communications was associated with the respondent TomTom International. The appellants accept that much of the evidence relied on is wrong way round confusion.

[32] The Assistant Commissioner, after reference to some authorities and submissions of counsel, said that she accepted that this sort of confusion can be relevant for some purposes; for example, it may tend to show there is a similarity between two marks. But she said that she had “some difficulties” with the concept. She set out a number of reasons for what is, in essence, a conclusion that wrong way round confusion did not assist the appellants as opponents in the case before her.³⁴

[33] In the result the Assistant Commissioner concluded, on application of what is appropriately described as the orthodox approach to s 17(1)(a), that the respondent had met the onus on it to establish that it was not likely that there would be confusion or deception. The appellants’ fourth ground of appeal under s 17(1)(a) is that, on the assumption that the Smith Hayden test does apply, the Assistant Commissioner was in error in this conclusion.

[34] The heart of the appellants’ submissions on the argument that the Smith Hayden test did not apply were recorded above. Mr Gray submitted that the need to consider what he referred to as “the hypothetical” was, in effect, a gloss on the actual words of s 17(1)(a), but that this was introduced and was applicable only where there was need to consider the hypothetical. He cited an observation of Richardson J in Pioneer that s 17(1)(a) is “concerned not with hypothetical possibilities of deception

or confusion, but with practical business probabilities”.³⁵That statement, however,

is not concerned with the hypothetical to which the appellants’ submissions are

[35] For the respondent, Mr Williams submitted that the principles outlined in the leading cases, and as recorded earlier in this judgment, apply to all applications under s 17(1)(a) where there is opposition by the owner of another mark. He also gave some emphasis to a statement in Sexwax that it is important not to conflate the tests for establishing an awareness or reputation of the opponent’s mark with the test for establishing that a substantial number of those persons are likely to be deceived

[36] I am satisfied that the Assistant Commissioner’s approach was correct as a matter of principle having regard to the decisions of the Court of Appeal to which I have referred, and to which the Assistant Commissioner referred.

[37] The single sentence from Smith Hayden, expressly adopted by the Court of Appeal in Pioneer, and applied in the later cases, encapsulates both stages of the enquiry – the threshold issue relating to awareness of the opponent’s mark and the main enquiry with the onus on the applicant. Mr Gray sought to distinguish the decisions, binding on the Assistant Commissioner and on this Court, on the basis that evidence said to constitute relevant evidence of confusion or deception was available in this case but not in those cases. Mr Gray did refer to some other cases which refer to evidence of actual confusion or deception, but these do not suggest that the

principles stated in the Court of Appeal cases are not of general application.³⁷

[38] Although the Court of Appeal cases did not give rise to the issue that has now been raised by Mr Gray, I am satisfied that the principles stated in those cases apply to all applications under s 17(1)(a) and, therefore, to all applications where there is evidence of actual confusion or deception. There are statements on specific aspects of the enquiry which implicitly indicate that the principles, and more specifically the Smith Hayden test as expanded in subsequent cases, are of general application. I will

³⁷Mr Gray referred to Wineworths Group Ltd v Comité Interprofessionel du vin de Champagne [1992] 2 NZLR 327 (CA) at 342; Bourne v Swan and Edgar Ltd [1903] 1 Ch 211 (Ch)at 227; Nortel Networks Corporation v Telecom Corporation of New Zealand HC Wellington CIV-2003-

485-2631, 24 June 2004; Neutrogena Corp v Golden Ltd [1996] RPC 473 (EWCA) at 482.

[39] I was not referred to any case, in New Zealand, or in a comparable jurisdiction, which suggests that the Smith Hayden test is not of general application. Roby Trustees Ltd v Mars New Zealand Ltd is another recent Court of Appeal decision dealing with evidence said to demonstrate actual confusion.³⁸The evidence sought to be relied on in that case was rejected, but the Court, which reiterated the Smith Hayden test, did not suggest that actual evidence of confusion, if admissible and probative, would mean that the orthodox approach should not apply.³⁹

[40] On the basis of authority I therefore reject the appellants’ argument as to the applicability of the Smith Hayden test. For the avoidance of doubt, I expressly record that I am satisfied that the Smith Hayden test, as explained and developed in the leading New Zealand cases, applies to both the threshold test and the main enquiry. In consequence, I reject the appellants’ specific submission that, where there is actual evidence of confusion or deception, “there is no requirement that the likelihood of deception or confusion be considered in the context of the opponent’s reputation in its mark, and there is no need to adopt the approach taken by the Court of Appeal on the facts in Virbac and Sexwax”.

[41] This conclusion, based on the way in which the leading decisions are expressed, is reinforced by interpretation of s 17(1)(a) and specific observations in the authorities on particular aspects of the enquiry.

[42] Section 17(1)(a) prevents registration where the use of the mark “would be likely to deceive or cause confusion”. The provision is forward-looking. Whether there has actually been confusion or deception is not of itself determinative.

[43] The forward-looking approach is confirmed in Pioneer, where the Court held that “the concern is with the possible future use of the mark ... the persons whose states of mind are material are the prospective or potential purchasers”.⁴⁰Further, and as a natural consequence to this, evidence of actual confusion is just one factor

_{to be adopted amongst all of the “surrounding circumstances”
which have to be}

³⁸_{Roby Trustees Ltd v Mars New Zealand Ltd [2012]
NZCA 450, (2012) 98 IPR 353 at [44].}

taken into consideration in considering the future likelihood of a significant number of people being deceived or confused.⁴¹

[44] In other words, s 17(1)(a) is inherently a hypothetical assessment, and actual evidence of confusion is only relevant insofar as it colours an assessment of whether confusion or deception is likely to occur with regards to a significant number of people in the future. There is no statutory separation between hypothetical cases and others. Section 17(1)(a) requires a future assessment.

[45] As the Assistant Commissioner said, actual evidence of confusion and deception will often be a complete answer, although in her opinion it was not because of the nature of that evidence. In Wineworths Group Ltd v Comité Interprofessionel du vin de Champagne, Gault J said that: “Evidence of actual deception is not essential. It is, of course, the best evidence of likely future deception”.⁴²Both the House of Lords and High Court of Australia have also confirmed that actual confusion is a “strong indication that continued confusion is likely”.⁴³On the other hand, absence of evidence of actual confusion may be

considered to indicate that the likelihood of confusion is not high.⁴⁴And that general

proposition necessarily applies to evidence of actual confusion which is not confusion of the type to which s 17(1)(a) is directed. The Assistant Commissioner’s conclusion to the essential effect that the evidence relied on by the appellants in this case was not relevant, or at least of limited probative value, is a conclusion I agree with, for reasons I will come to. But this also illustrates the issue now being considered in relation to the applicability of the Smith Hayden test, as has been discussed in other cases.

Evidence of what actually is occurring in the marketplace reflects particular forms of use and cannot fully answer the question. Evidence of the absence

⁴²_{Wineworths Group Ltd v Comité Interprofessionel
du vin de Champagne, above n 37, at 342.}

⁴³General Electric Co v General Electric Co Ltd [1972] 1 WLR 729 (HL) at 737; Australian

_{Woollen Mills Ltd v FS Walton and Co Ltd [1937] HCA 51; (1937) 58 CLR 641 at
658.}

⁴⁴_{Hannaford & Burton Ltd v Polaroid Corporation
[1976] UKPC 9; [1976] 2 NZLR 14 (PC) at 18.}

of actual confusion might be explained by reference to particular factors such as additional label features or market circumstances that will not always be present. By way of example, in the present case, when the Judge dealt with the passing-off claim (in which actual usage is at issue) the Judge said that even if he had found the trade marks deceptively similar he could still have rejected passing off because of the distinguishing market factors such as market sectors, likely customers, and promotion strategies. Those factors might explain the absence of confusion but have no relevance in the trade mark comparison by reference to any fair use of the marks.

[47] In Virbac the Court of Appeal confirmed that the question is “simply whether use of the applicant’s mark is likely to deceive or confuse the public”; while the “Commissioner assesses the opponent’s reputation and the risk of deception and confusion at the application date”, and does this by “reference to actual use of the opponent’s mark and any fair use of the applicant”, the inquiry is “nonetheless

[48] In Higgins Coatings Pty Ltd v Higgins Group Holdings Ltd, Simon France J was reluctant to give too much weight to actual evidence of confusion.⁴⁷It was proof that some confusion had happened, but it fell short of persuading the Judge that the applicant had failed to discharge its onus to show absence of likelihood of confusion.

[49] For these various reasons I am satisfied that the Smith Hayden test, as explained and developed in the leading cases, is of general application and, in particular, applies even though there may be evidence of some type of actual confusion or deception. An opponent is bound to meet the evidential burden arising from the threshold test if the main enquiry is to be undertaken, and on the main enquiry the principles stated in the leading cases also apply.

Commissioner’s decision that there was sufficient threshold awareness of the appellants’ marks at the relevant date.

⁴⁷Higgins Coatings Pty Ltd v Higgins Group Holdings Ltd HC Wellington CIV-2009-485-2594, 30

June 2010 at [19]. See also Unliever PLC v McPherson’s Consumer Products Pty Ltd [2013] NZHC 1458 at [13].

[51] The Assistant Commissioner provided a succinct summary of the evidence relied on by the appellants to establish the reputation or awareness of the appellants’ marks. It is convenient to reproduce this summary. There was no issue on the appeal that there was any additional evidence. The approach of counsel on the appeal on this issue was to address each of the items and advance their competing contentions that each item did or did not establish sufficient awareness.

(b) On 26 June 1998, Ms Hosking registered the domain name www.tomtom.co.nz, and subsequently assigned this to TomTom Communications. TomTom Communications’ website was launched in November 2005.

(c) Since 1998, the opponents have used the mark TOMTOM on office stationery, such as business cards letterheads, envelopes and invoices.

(e) In 2002, TomTom Communications advertised in the Dominion Post for consultants. The response was “huge”. The advertisement included the mark TOMTOM and the words “hear the beat, feel the rhythm, let’s dance”.

(g) In 2008, TomTom Communications was listed in the Yellow Pages and Yellow Pages Online, although it was forced to withdraw this listing only three months later due to “increasing misdirected enquiries and confusion”.

(h) According to Ms Hosking’s evidence dated 1 March 2011, at that time a Google search listed TomTom Communications as the first hit.

(i) As at the application date, TomTom Communications worked with clients such as BioVittoria, McDouall Stuart Securities Ltd, Citizens Advice Bureau, New Zealand Transport Association, Antipodes

(j) Ms Hosking has attended a significant number of networking events each year for the last 15 years, examples of which are set out in her evidence.

(k) Media coverage in relation to the long-running dispute with the applicant over the use of the name “TomTom” in New Zealand has also raised awareness of TomTom Communications.

[53] I have taken account of the submissions in this evaluation. As earlier noted, in large measure Mr Gray submitted that each of the items recorded in the Assistant Commissioner’s items supported the appellants’ argument that it had met the threshold test, with Mr Williams arguing to the contrary. The submissions were not confined to that approach and additional points made, particularly from Mr Williams, have also been taken into account.

[54] In my view, although the evidence is not particularly strong, and the assessment is reasonably close, the appellants have established the necessary awareness, or reputation, as at August 2011, the relevant date.

[55] The focus is on the awareness of the appellants’ mark of prospective purchasers of the services to which the mark attaches, and who are also likely to be exposed to the respondent’s mark. In my opinion, the prospective purchasers of the appellants’ services are small, and coming from segments only of the public, not from the purchasing public as a whole. I disagree with Mr Williams’ submission that the service sector in which the appellants operate is large, and embraces the entire communications industry. In my judgment Mr Gray’s submission is more accurate: it is more of a specialist service used for specific projects including, for example, national marketing and promotional campaigns. This sets the broad parameters for assessment in this case. In particular, having regard to the limited numbers who might consider using the appellants’ services, awareness amongst a small number may be sufficient, as illustrated by the facts in Pioneer, although the size of the “market” for the appellants’ services is no doubt larger than the one in question in Pioneer.

[56] I do not consider that registration of the appellants’ marks supports the appellants’ case to any relevant extent. In NV Sumatra Tobacco Trading Co v British American Tobacco (Brands) Inc, Glazebrook J suggested, obiter, that awareness could be established by registration because registration is notice to the world.⁴⁹In my respectful opinion the legal consequence of registration does not bare on the evidential question of actual awareness and the extent of that awareness.

[57] The registration of the domain name, the presence of the website, the Google search function and the hits on the website are not, in my view, strong evidence of reputation. The number of times a website is visited is not necessarily demonstrative of a reputation of the owner or operator of the website. In particular there is nothing to indicate whether the hits were from the relevant prospective purchaser group, whether they were hits from New Zealand computers, and whether the results provided come from more than a year after the application date (late 2012 to late

2013). Further, given the context, it is possible that a significant proportion of the “hits” were from people, possibly around the world, clicking on the website when they intended to click on the respondent’s website. On the other hand use of the website by established or prospective clients, with that website featuring the trade mark, can be said to have increased the reputation amongst that group. The fact that the appellants’ website turned up on a Google search provides little evidence of reputation. There is nothing to suggest that this would increase the reputation amongst the relevant people.

[58] I do not think the evidence of listing in the White Pages assists the appellants. The White Pages lists contact details in alphabetical order. This includes personal and residential contact details. It is not a form of promotion nor would it serve to increase the marks’ reputation. The Yellow Pages, on the other hand, is a form of promotion. However, the entry was only in 2008, and only for three months, and whether or not it resulted in increased exposure at the time, the listing is only of limited relevance (at best) considering it was some three years before the relevant

[59] The advertisement in the Dominion Post is of very little relevance in my opinion given that the advertisement was nine years before the relevant date. The same can be said of the single news item about the present dispute. I doubt that the relevant persons would recall either the advertisement or the news item.

[60] Materially in support of the appellants on the threshold issue is the evidence of the appellants’ client base and of the long term use of the mark on office stationery and electronic communications.

[61] The range of the appellants’ clients, coupled with the type of people likely to be involved, and what the evidence indicates is an established role in providing services to Government organisations, suggests a level of reputation sufficient at a general level for the appellants to meet the threshold. On the other hand, with the exception of Wright Wool Ltd, there is little direct evidence that these client relationships existed at the relevant date. This evidence is equivocal.

[62] Finally, there is evidence of networking from Ms Hosking, and presentations given at various events, conferences and functions. Again, there is little evidence of Ms Hosking’s involvement in these during 2011 and at the relevant date. The only evidence exhibited appears to be the programme from the Network of Public Sector Communicators Conference 2013. While the fact that this occurred after 2011 does not render this evidence irrelevant, it is still not abundantly helpful in establishing reputation during August 2011.

[63] Overall, I think it is a close call. I have, in fact, given more emphasis to the matters which are against the appellants. However, as I have indicated several times, the threshold is low and it is an evidential burden of a preliminary nature. Looking at all of the evidence relied on in the round, and drawing reasonably inferences from it, I am not persuaded by the respondent on the cross-appeal that the Assistant Commissioner’s assessment of this was wrong. Accordingly, the cross-appeal is dismissed and focus shifts to the main enquiry.

[64] A substantial part of the appellants’ case under this heading was their argument that the likelihood of confusion or deception is established by the evidence of actual confusion or deception. The strength of this argument in turn depends, in considerable measure, on the validity of the appellants’ second and third grounds of appeal: that is, that the Assistant Commissioner was in error in concluding, in effect, that the evidence of actual confusion or deception was of marginal relevance, and that wrong way round confusion was not confusion as contemplated by s 17(1)(a). I will therefore deal with those two grounds of appeal under one heading, with the main focus being on the wrong way round confusion issues.

[65] The appellants presented a body of evidence said to be evidence of actual confusion or deception of the sort with which s 17(1)(a) is concerned. In very substantial measure this was evidence of contact with one or both of the appellants by members of the public who were well aware of the respondent’s goods and the respondent’s mark, but who had no knowledge of the appellants’ mark. In these cases knowledge of the appellants’ mark only arose at the point where these people were endeavouring to contact the respondent or a representative of the respondent. The other category of evidence of confusion or deception was essentially the same as to its nature if not its genesis – people approached by Ms Hosking who already knew about the respondent’s mark, and presumably with knowledge of some of its products, but without prior knowledge of the appellants or their mark. The appellants appear to accept that most, if not all, of the evidence they rely on, if it is evidence of the sort of confusion with which 17(1)(a) is concerned, is wrong way round confusion. In any event, I am satisfied that almost all of the evidence is appropriately described as evidence of wrong way round confusion. (I will refer only to confusion, rather than confusion or deception, because the distinction is not material for this appeal.)

general agreement with the Assistant Commissioner’s reasons for her conclusion that

wrong way round confusion is not relevant under s 17(1)(a). Her reasons were as follows:

81. I note, for example, that an assessment under s 17(1)(a) of the Act always begins with a threshold enquiry as to whether or not the opponent has established sufficient awareness of its mark in New Zealand to make confusion a reasonable possibility. If non-linear, wrong way round confusion could suffice, there would be little point in conducting such an enquiry – the awareness could arise at a later point in time.

82. Nor is a “wrong way round” approach consistent with the wording of the longstanding test in Smith Hayden, i.e. “having regard to the

reput at i on acquired f or t he opponents’ marks , is the Court satisfied that the opposed marks, if used in a normal and fair manner, will not be reasonably likely to cause deception and confusion”.

84. To the extent that more significant issues arise, such as when TomTom Communications attempts to promote itself to potential new customers, difficulties arise precisely because the opponents do not have a major existing reputation in New Zealand.

85. This is not the way in which s 17(1)(a) of the Act is generally understood to operate. Usually, an opponent points to its own reputation, and says that because of that reputation, confusion or deception is likely to arise. The larger the opponent’s existing reputation, the higher the risk of confusion.

86. If it were the opponents whose mark was famous or well known, they would have special, additional protection under s 25(1)(c) of the Act. The converse does not apply. A small trader is not entitled to special, additional protection on the basis that the other party’s mark is famous or well known and that the small trader’s reputation is being swamped as a result.

87. As mentioned above, s 17(1)(a) of the Act is concerned with “fair and notional” use of the mark by the applicant; the size and reputation of the particular applicant company should not be relevant.

[67] There are further statements of principle in the leading cases which are contrary to the appellants’ argument. There is, for example, proposition (7) in the summary of settled principles stated by Richardson J in Pioneer, which I will

It is in relation to commercial dealings with goods that the question of deception or confusion has to be considered, and the persons whose states of mind are material are the prospective or potential purchasers of goods of the kind to which the applicant may apply his mark and others involved in the purchase transactions.

[30] ... The requirement that a “substantial number” of individuals be at risk of deception or confusion is a judicial gloss, establishing that the s 17 threshold involves the exercise of judgment having regard to the commercial setting, comprising those who will be exposed to the applicant’s mark and those who know of the reputation the opponent’s goods enjoy.⁵¹

[46] Section 17(1)(a) prohibits the Commissioner from registering an applicant’s mark, the use of which would be likely to deceive or cause confusion by leading people to wonder whether goods or services bearing the mark are those of the opponent. By focusing on use of the applicant’s mark, the legislation inquires whether those exposed to the applicant’s goods are likely to be confused. It is enough if members of the public are caused to wonder whether goods bearing the applicant's mark are related or connected in trade to the opponent’s goods.

[54] These authorities demonstrate that the risk of confusion is properly measured by reference to those who may be exposed to the applicant’s goods and are aware of the opponent’s mark. ...

[69] There was an application for leave to appeal against the Court of Appeal’s decision in Sexwax. In dismissing the application for leave the Supreme Court said that the Court of Appeal statement at [54] was a correct statement of the law.⁵²

decision as to confusion “is made having regard to the class of persons potentially at risk”, and that this class “comprises those people who will be exposed to goods

⁵¹_{A view emphasised by Cooke J in the Supreme Court in
Pioneer SC, above n 6, at 429.}

[71] Mr Gray cited three statements in decisions of the High Court of England and Wales which he submitted provide support for the appellants’ submission.⁵⁴The observation of Mr Roger Wyand QC, sitting as a Deputy High Court Judge in the Comic Enterprises case comes closest to a direct statement that wrong way round confusion is sufficient. Arnold J in the Enterprise Holdings case appears to express some reservation as to the correctness of the statement of Mr Roger Wyand QC in

the Comic Enterprises case. In any event, I am satisfied that the statements in these cases that wrong way round confusion is, or may be, sufficient to establish a likelihood of confusion in the United Kingdom are not persuasive having regard to the authorities in New Zealand.

[72] The evidence relied on by the appellants is not evidence of confusion, whether actual confusion or likelihood of confusion, of the nature clearly described in the three decisions of the Court of Appeal and the Supreme Court. Those who were confused, or even deceived, were not aware of the appellant’s marks.

[73] In any event, the evidence falls well short of demonstrating confusion as required by s 17(1)(a); that is, confusion as to the origin of the respondent’s goods. Putting the matter this way brings the enquiry to the related conclusion reached by the Assistant Commissioner as to the real nature of the confusion. I agree with her that in its essence it was simply a failure by people to make contact with the organisation they were trying to make contact with. The Assistant Commissioner

reached conclusions recorded earlier in this judgment.⁵⁵This was not confusion as

[74] The respondent accepted the Assistant Commissioner’s conclusion that the marks are near identical or closely similar. The focus of the remaining arguments for the parties was on the appropriate definition of the types of goods and services of the parties.

[75] The respondent supported the Assistant Commissioner’s conclusion to the effect that the parties operated in such different fields that there was no material risk of confusion or deception as contemplated by s 17(1)(a). The appellants argued that the parties trade and use their marks in the same field of activity, which the appellants defined as “communications”. In respect of the argument on the main enquiry the parties in substantial measure reversed the positions they had adopted for the threshold enquiry.

[76] The nature of the goods and services of the applicant and the opponent is one only of a range of circumstances that may be required to be taken into account, and to the extent that there are other relevant circumstances I have taken them into account. But as the Court of Appeal said in Sexwax, the enquiry is fact specific. I am satisfied that the facts relating to the nature of the goods and the services are determinative. And I am satisfied that they are determinative against the appellants even if I am wrong that the evidence of confusion is not relevant because it is wrong way round confusion and because it is not confusion of the sort contemplated by s 17(1)(a).

[77] The issue in practical terms is whether it is likely that a substantial number of people would be caused to wonder whether the goods and related services of the respondent, bearing the respondent’s mark, might come from the appellants (confusion) or led into thinking that goods bearing the respondent’s mark came from the appellants. As Richardson J said in Pioneer, the section “is not concerned with

hypothetical possibilities of deception or confusion, but with practical business

[78] In my opinion it is in fact most unlikely that there will be confusion or deception of a substantial number of people with requisite knowledge of the goods and services of both parties.

[80] I also agree with Mr Williams’ submissions that the goods and services are different to the extent that the respective users of each are not likely to be the same, at least in terms of substantial numbers, the goods and services are not in competition with each other, and the goods and services of the respondent cannot be a substitute for the services of the appellants. The low likelihood of confusion is also indicated, with some emphasis, by the extent of the reputation of the respondent’s marks in New Zealand as well as internationally.

[81] For these reasons I am satisfied that the Assistant Commissioner came to the correct conclusion. The respondent established that, if the respondent’s marks were registered, the use would not be likely to deceive or cause confusion.

The Commissioner must not register as a trade mark or part of a trade mark any matter—

⁵⁶Pioneer CA, above n 7, at 76. The reference to “practical business probabilities”, was cited by the Court of Appeal in Sexwax, above n 5, at [49]. This is the sense in which Richardson J was eschewing hypothetical possibilities, not in the manner suggested in the submission from Mr Gray on the argument about the applicability of the Smith Hayden test.

the use of which is contrary to New Zealand law or would otherwise be disentitled to protection in any court.

[83] In their opposition the appellants contended that use of the applicants’ mark would be contrary to law because it would amount to passing off and it would be in breach of ss 9, 13 and 16 of the Fair Trading Act 1986. The Fair Trading Act contention is pursued on the appeal, but not passing off.

[84] The appellants’ referred in general terms to ss 9, 13 and 16, but the focus seems to be on s 9 of the Fair Trading Act. There was no analysis of the provisions of ss 13 and 16 of the Fair Trading Act in Mr Gray’s submissions. Section 13 is concerned with false or misleading representations of 10 carefully defined types, and I am satisfied that none of those have any application in relation to the evidence in this case. The same conclusion applies to s 16 which is concerned with forging a trade mark, falsely applying a mark to goods, or falsely using a mark in the provision of services.

[85] Section 9 provides that “no person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”.

absolute terms (“is contrary to law” and “would be disentitled to protection”). This can be contrasted with the language of s 17(1)(a) of the Act (“would be likely to deceive or cause confusion”).

[87] I note that the Assistant Commissioner referred to “confusion” but s 9 of the Fair Trading Act is concerned with misleading or deceptive conduct, not confusion. However, nothing would appear to turn on this point. The use of the expression “a higher threshold of confusion” may be taken to refer compendiously to what is actually required, whether in relation to passing off or the Fair Trading Act. Mr Gray

appears to have implicitly acknowledged this when noting that “the appellants do not dispute that the threshold for confusion is higher under s 17(1)(b)”. Mr Gray’s submission was that there was error by the Assistant Commissioner in failing to recognise that “the threshold for confusion”, although higher, is also different from that under s 17(1)(a), and that this difference required analysis which it did not receive from the Assistant Commissioner.

[88] Mr Gray submitted, in particular, that there is no need for an assessment as to whether there has been misleading or deceptive conduct by considering the extent of the reputation or awareness of the opponents’ mark, because the Smith Hayden test does not apply to s 17(1)(b). From this it was submitted that the evidence of actual “confusion” (and Mr Gray at this point continued to refer to “confusion”) was sufficient to meet the higher threshold of misleading or deceptive conduct under the Fair Trading Act. It was submitted that the evidence established that “the public believe that the goods and services offered by the appellants are those of the respondent”.

[89] Mr Williams’ relied in substantial measure on authority, to which I will come. He also submitted that the marked difference between the goods and related services offered by the respondent and the services offered by the appellants meant that the practical likelihood of the public being misled or deceived was “implausible”.

[90] In Neumegen v Neumegen & Co in the Court of Appeal, Blanchard J said, for himself and Richardson P:⁵⁸

Generally, indeed it may be thought in virtually all cases, a defendant’s conduct will not be deceptive or misleading unless it amounts to a misrepresentation. The misrepresentation may be express or arise from silence or from conduct. It need not be intentional and often will not be. (Bonz Group Pty Ltd v Cooke [1996] NZCA 301; (1996) 7 TCLR 206.)

However, there will be no misrepresentation by means of the adoption of a trading name unless the name has already acquired a reputation amongst a class of consumers as denoting the goods or services of another trader, so that members of that class will be likely mistakenly to infer that the goods or

services are connected with the business of that other trader (Chase Manhattan Overseas Corp v Chase Corp Ltd (1986) 8 IPR 69 at p 78 and Taco Co of Australia Inc v Taco Bell Pty Ltd [1982] FCA 136; (1982) ATPR 40-303). The more unusual the name, the more likely it will be that its use by another trader has given rise to a secondary signification.

[91] In my opinion this is a case where it would be necessary for there to be a misrepresentation from conduct by the respondent, with the conduct giving rise to the misrepresentation being use of the respondent’s marks. There is no remote evidential foundation for what amounts to an express misrepresentation. I am satisfied that there is no evidence sufficient to conclude that there has been the equivalent of a misrepresentation from conduct by the respondent up to the date of its application, and in particular at that date, and that use following registration would not constitute a misrepresentation.

[92] That conclusion is sufficient to dismiss the appeal on s 17(1)(b). It is nevertheless appropriate to consider whether the respondent’s use of its marks would, in terms of s 9, be “likely to mislead or deceive”. I am satisfied that this is not likely, for the following reasons.

[93] In the Neumegen case, in a passage following the paragraph cited above, the

It is not necessary to show that any consumer has suffered economic loss nor that a rival trader has lost custom because of the defendant’s conduct.

However, in our view, if the number of affected members of the public is or will be very small and the impact upon those persons is or will be minimal a Court may be justified in taking the view that, looked at in the round, the conduct of the defendant is not properly to be characterised as deceptive or misleading or that, even if it has to be so characterised, what has occurred or is likely to occur is so lacking in real importance to any consumers who may be affected that the Court’s discretion may fairly be exercised against the granting of a remedy. In considering these questions the Court will make a judgment about whether the conduct is of a kind which it is the object of the legislation to curb.

[94] The Supreme Court considered the scope of s 9 of the Fair Trading Act in Red Eagle Corp Ltd v Ellis.⁶⁰Blanchard J, giving the reasons of the Court for its unanimous decision, said:

[28] It is, to begin with, necessary to decide whether the claimant has proved a breach of s 9. That section is directed to promoting fair dealing in trade by proscribing conduct which, examined objectively, is deceptive or misleading in the particular circumstances. Naturally that will depend upon the context, including the characteristics of the person or persons said to be affected. Conduct towards a sophisticated businessman may, for instance, be less likely to be objectively regarded as capable of misleading or deceiving such a person than similar conduct directed towards a consumer or, to take an extreme case, towards an individual known by the defendant to have intellectual difficulties. Richardson J in Goldsbro v Walker said that there must be an assessment of the circumstances in which the conduct occurred and the person or persons likely to be affected by it.⁶¹The question to be answered in relation to s 9 in a case of this kind is accordingly whether a reasonable person in the claimant’s situation – that is, with the characteristics known to the defendant or of which the defendant ought to have been aware

– would likely have been misled or deceived. If so, a breach of s 9 has been established. It is not necessary under s 9 to prove that the defendant’s conduct actually misled or deceived the particular plaintiff or anyone else. If the conduct objectively had the capacity to mislead or deceive the hypothetical reasonable person, there has been a breach of s 9. If it is likely to do so, it has the capacity to do so. Of course the fact that someone was actually misled or deceived may well be enough to show that the requisite capacity existed.

[95] In this case there are the two categories of evidence of confusion relied on by the appellants, and as earlier described. The first category consisted of people contacting the appellants, thinking they were the respondent, and with some of these people then becoming argumentative. Section 9 is there for the protection of consumers, and the consumers in this category are those who mistakenly contacted the appellants. This does not come close to misleading or deceptive conduct by the respondent. The fact that some of those who mistakenly contacted the appellants may have become argumentative does not change these events into misleading or deceptive conduct by the respondent. The other group of “consumers” dealt with in the appellants’ evidence were those approached by Ms Hosking who were not existing clients of the appellants. There is no evidence suggesting that any of these

_{people were misled or deceived. In addition, as made clear in the
statement from the}

⁶⁰_{Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2
NZLR 492 (some footnotes omitted).}

Red Eagle case, the responses of both groups are to be judged objectively. In the circumstances of this case the objective standard applies generally, even if some in the first group may have been unsophisticated or unduly irascible, because there is no reasonable basis for assessing the respondent’s liability by references to unreasonable people of whom they had no knowledge. In other words, in respect of this unreasonable group, there was no conduct by the respondent towards the particular people who may have responded in that way.

[96] The second statement from the Neumegen case, cited above, is also applicable. The appellants’ evidence of what occurred, and being the only evidence for an assessment of what might in the future occur, is so lacking in real importance to any consumers who may be affected, that I am satisfied that this would not be something that the Fair Trading Act is intended to guard against.

[97] I am satisfied there was no error by the Assistant Commissioner in her conclusion that opposition under s 17(1)(b) was not made out.

[98] Section 17(2) provides that the Commissioner must not register a trade mark if the application is made in bad faith.

[99] What is meant by “bad faith”, and the applicable test, are well established. This was summarised by the Assistant Commissioner as follows:

95. Bad faith is not confined to dishonesty, and may be established by dealings that fall short of reasonable standards of commercial behaviour.⁶²

96. The test for bad faith combines a subjective element (what the particular applicant knew) and an objective element (what ordinary persons adopting proper standards would think).⁶³The subjective element of the test relates only to the applicant’s knowledge. The fact that the applicant thinks his or her behaviour is acceptable is no defence.⁶⁴

⁶²_{Gromax Plasticulture Ltd v Don & Low Nonwovens Ltd
[1999] RPC 367 (Ch) at 379.}

⁶³_{Newman v Sons of a Desert SL HC Auckland
CIV-2007-485-212, 5 November 2007 at [33].}

⁶⁴See, for example, Barlow Clowes International Ltd v Eurotrust International Ltd [2005] UKPC

[100] The appellants’ case on s 17(2) arises from the fact that the respondent applied to register the same marks in 2006 and 2007, withdrew those applications following opposition from the appellants, and then made the present application. Bad faith is said to arise not from the mere fact of abandonment and re-filing, but abandonment and re-filing for the same core goods and services with knowledge that there was a substantial amount of evidence of what is said to be deception and confusion. This is amplified by a submission that the fresh applications failed to address “the underlying issue of substantial and ongoing confusion” between the marks. There is a further contention that the respondent “was well aware that it would benefit from filing fresh applications by putting the appellants to significant cost and that its size and resources meant that the appellants would be swamped in the market place”.

[101] The respondent’s submissions are taken into account in the evaluation that follows.

[102] The following observations in Royal Enfield Trade Marks are apposite:⁶⁵

An allegation that a trade mark has been applied for in bad faith is a serious allegation. It is an allegation of a form of commercial fraud. A plea of fraud should not lightly be made (see Lord Denning MR in Associated Leisure v Associated Newspapers [1970] 2 QB 450 at 456) and if made should be distinctly alleged and distinctly proved. It is not permissible to leave fraud to be inferred from the facts (see Davy v Garrett (1878) 7 Ch D 473 at 489).

[103] There are differences between pleadings in a conventional civil action alleging fraud and those required in opposition to an application for a trade mark. But I am nevertheless satisfied that the observations as to what is required having regard to the gravity of the allegation are applicable. The observation concerning inference is directly applicable. This is because the appellants’ case depends entirely

_{on inferences to be drawn from the direct evidence, and not only in
relation to the}

subjective element (where inference may often be required) but also the objective element.

100. In my view, nothing sinister or untoward can be drawn from the mere fact that, having encountered difficulties with obtaining registration of its marks, the applicant chose to file fresh trade mark applications in respect of a narrower range of goods and services.

[105] I agree. There is no evidence justifying the inference that would have to be drawn. The fact of filing successive applications, with the earlier applications giving rise to some knowledge, at best warrants an assessment to see whether an adverse inference could properly be drawn, but it cannot be. The contention to the essential effect that the respondent was attempting to game the system, or to grind the appellants down, has no evidential foundation.

The Commissioner must not register a trade mark (trade mark A) in respect of any goods or services if ... it is similar to a trade mark (trade mark C) that belongs to a different owner and that is registered, or has priority under section 34 or section 36, in respect of the same goods or services or goods or services that are similar to those goods or services, and its use is likely to deceive or confuse.

[107] The Assistant Commissioner rejected this ground because of her earlier conclusions that the use of the marks would not be likely to deceive or cause confusion and the substantial dissimilarity between the respondent’s goods and services and the appellants’ services.

[108] The essence of the submissions for the parties can adequately be captured in the evaluation which follows. The evaluation is directed to the three essential elements of s 25(1)(b) as identified by Mr Gray.

[109] The first question is whether there is similarity between the marks. There is, as earlier noted.

[110] The second question is whether there is similarity between the goods or services of the applicant and those of the opponent. This issue also has been addressed and the conclusion is against the appellants. The goods, and related services, of the respondent are markedly different from the services of the appellants.

[111] The third question is whether use of the applicants’ mark is likely to deceive

104. There is usually a considerable overlap in the assessment of confusion under s 17(1)(a) and s 25(1)(b) of the Act unless, for example, an opponent’s actual use of its marks and the goods and services for which the marks are registered are not aligned.

There are some points of difference as to the approach to this question under each of the provisions, as implicitly recognised by the Assistant Commissioner. However, these do not assist the appellants. When the evidence relied on by the appellants is assessed at a general level, leaving aside particular elements of the Smith Hayden test and the approach to s 17(1)(a) discussed in the New Zealand cases, I am satisfied that use of the respondent’s mark is not likely to deceive or confuse.

The Commissioner must not register a trade mark (trade mark A) in respect of any goods or services if ... it is, or an essential element of it is, identical or similar to, or a translation of, a trade mark that is well known in New Zealand (trade mark D), whether through advertising or otherwise, in respect of those goods or services or similar goods or services or any other goods or services if the use of trade mark A would be taken as indicating a connection in the course of trade between those other goods or services and the owner of trade mark D, and would be likely to prejudice the interests of the owner.

[113] The Assistant Commissioner rejected this of ground of opposition because, although there was sufficient awareness of the appellants’ mark for the threshold test under s 17(1)(a), the mark was not well known in New Zealand at the relevant date.

[114] As with the preceding ground of opposition, I will note relevant submissions in this evaluation directed to the essential elements of this provision.

[115] The first question is whether the appellants’ trade mark was well known in New Zealand at the relevant date. The appellants submitted that it was, with this established by the evidence also relied on for the threshold enquiry under s 17(1)(a). The respondent submits that the evidence falls well short of what is required.

[116] More is required to establish that a mark is well known in New Zealand than to establish the threshold test of awareness under s 17(1)(a). The Act does not define what is meant by “well known in New Zealand”. It has been suggested that a party relying on this provision needs to demonstrate a level of reputation similar to that required to establish the tort of passing off. This opinion was expressed in Automobile Club de L’Ouest ACO v South Pacific Tyres New Zealand Ltd.⁶⁶The authority relied on a decision of the South African Supreme Court in McDonald’s Corp v Joburgers Drive-Inn Restaurant (Pty) Ltd.⁶⁷This approach has been

Marks,⁶⁹the South African decision may not be directly applicable. And it is suggested that to equate the test under s 25(1)(c) with the passing off test is

⁶⁷_{McDonald’s
Corp v Joburgers Drive-Inn Restaurant (Pty) Ltd [1996] ZASCA 82; (1996) 36 IPR 11 (SCSA
(AD)).}

⁶⁸See, for example, Prada SA v The Farmers Trading Co Ltd HC Auckland CIV-2010-485-58, 21

September 2010 at [31], [44] and [46]; Intellectual Reserve Inc v Robert Sintes HC Wellington CIV-2007-404-2610, 13 December 2007 at [41]; New Zealand Milk Brands Ltd v NV Sumatra Tobacco Co HC Wellington CIV-2007-485-2485, 28 November 2008, at [48].

simplistic. For this appeal it is unnecessary to decide whether it is sufficient simply to say that the test is similar to the passing off test, and in this case both counsel, as well as the Assistant Commissioner, equated the test to that in passing off. Fuller analysis is best left for a case where the decision turns on a precise definition of the meaning of “well known” as it is used in the section. For present purposes it is sufficient to say that, on any interpretation of the words used, the level of awareness to be well known in New Zealand requires substantially more than what will be sufficient to establish the low threshold of awareness under s 17(1)(a).

[118] The evidence relied on by the appellants, which has already been analysed, falls well short of establishing, on the balance of probabilities, that the appellants’ mark is well known in New Zealand. Indeed, the evidence relied on by the appellants to seek to establish confusion or deception supports a positive conclusion that the appellants’ mark is not well known at all. That observation is not intended in any way to disparage the appellants’ business. There can be a successful business with barely any public reputation. But that does not meet the statutory test under s 25(1)(c).

[119] I therefore agree with the reason for the Assistant Commissioner’s rejection of this ground of opposition. Given this conclusion it is strictly unnecessary to consider the other elements of s 25(1)(c). And the remaining provisions in s 25(1)(c) have a degree of ambiguity.⁷⁰However, both counsel made submissions on the other elements of the section, and in case I am wrong on the first conclusion I will consider at least some of the other elements, or at least note my conclusion.

[120] For reasons already outlined, the appellants’ mark does not have a reputation in respect of goods or services which are the same as or similar to those of the respondent.

[121] I am also satisfied that use of the respondent’s trade mark (“trade mark A”) would not be taken as indicating a connection in the course of trade between the respondent’s goods and Ms Hosking as the owner of the other mark, (“trade mark

⁷⁰This also is discussed by the authors of Copyright and Design, above n 69, at [TMA25.11](f).

[122] In Intel Corporation Inc v CPM United Kingdom Ltd, Jacob LJ discussed the equivalent provision in the United Kingdom Trade Marks Act 1994, as follows:⁷¹

[29] ... I would hold that a “link” requires more than such a tenuous association between the two marks. If a trade mark for particular goods or services is truly inherently and factually distinctive it will be robust enough to withstand a mere passing bringing to mind when it or a similar mark is used for dissimilar goods or services. The average consumer is a reasonably sensible individual. He is used to lots of trade marks in different fields – some of which may resemble trade marks for other fields. In this country for example, for a long time Jif lemon juice and Jif washing up liquid co-existed happily, not to mention Jiffy for padded bags and condoms. Sometimes, but perhaps not surprisingly, trade mark owners of big brands want more protection than they really need.

[35] Turning to question 2, the further factors which I think should be taken into account are:

(a) Whether, having regard to the nature of the goods or services for which the later mark is used, the average consumer would consider that there is an economic connection between the owners of the two marks, and

(b) Whether the distinctiveness or repute of the earlier mark for the goods or services for which it is registered is really likely to be affected if the later mark was used for the specific goods or services covered by its registration...

[37] ... it is very important that the harm or prospect of harm must be real and tangible. A mere possibility or assertion of damage is just too remote and would leave trade mark owners in too monopolistic a position. Trade mark law is there to protect a proper system of competition, not to provide trade mark owners with overreaching rights which may obstruct trade.

[123] In Wistbray Ltd v Ferrero SpA, Dobson J cited those observations and described them as “a useful contemporary analysis on the requirements under s 25(1)(c)”.⁷²I agree.

[124] I also agree with Mr Williams’ submission, made in the light of the observations of Jacob LJ in particular, that the “connection” must be such as to give rise to the impression that the owner of the well known mark is involved in the production of the goods or services in question, or offering the goods or services, or

_{that the production or offering was licensed or sponsored by the owner
of the well}

⁷¹_{Intel Corporation Inc v CPM United Kingdom Ltd
[2007] EWCA Civ 431, [2009] RPC 15.}

⁷²Wistbray Ltd v Ferrero SpA HC Wellington CIV-2007-485-460, 11 December 2008 at [40]-[43].

known mark. In other words, that the appellants, assumed at this point to have a well known mark, associated with its business activities already described, were also involved in some way in the production or supply of the respondent’s goods. There is no sufficient evidential foundation for that conclusion.

[125] There is also the question of prejudice. I am satisfied that the significant differences between the appellants’ services and the respondent’s goods and related services are such that the likelihood of material prejudice to the appellants is remote.

[126] The respondent is entitled to costs on a category 2B basis as already fixed. There were no submissions on the appropriate time allocation under schedule 3, but there does not appear to be any reason why costs should not be fixed on a 2B basis. Unless the respondent contends that costs should be fixed on some other basis, there will be an order that the appellants pay the respondent’s costs on a 2B basis, together with reasonable disbursements with any issue as to particular items or the reasonableness of disbursements to be determined by the Registrar in the first instance.

[127] If the respondent contends that they are entitled to costs on some other basis a memorandum in that regard should be filed and served by 29 January 2016 with any memorandum for the appellants in response to be filed and served by 19 February

[129] There is an order that the appellants pay the respondent’s costs on a 2B basis

Trade mark	TOMTOM
Trade mark name	TOMTOM
Trade mark type	Word
Classes	8, 38 and 39 [Nice Classification Schedule 9]
Goods/services	Class 9 Computer hardware and software; hardware and software to be used with (satellite and/or GPS) navigation systems; hardware and software for travel information systems for the provision of rendering of travel advice and/or information concerning service stations, car parks, multi- storey car parks, restaurants, car dealers and other information regarding travel and transport; hardware and software for information management for the transport and traffic industries; hardware and software for the use of electronic maps; hardware and software to be used with electronic maps; electronic maps; hardware and software for route planners; hardware and software to be used with route planners; route planners (being hardware and software); hardware and software for digital dictionaries; digital dictionaries; hardware and software, in particular positioning, orientation and navigation-apparatus and ‘Global Positioning Systems’ (GPS) as well as parts thereof, components and accessories for these, such as, but not limited to, connecting cables, (GPS and/or satellite) receivers and holders for pocket personal computers, not included in other classes; satellite and radio transmission and receiving apparatus; telecommunication installations, networks and apparatus; computer terminals, all in particular to be used with and for the use of navigation systems, route planners and/or digital maps, magnetic data carriers and recording discs; audio and video apparatus; hand-held personal computers; personal digital assistants; electric and electronic apparatus and instruments for providing information regarding maps, navigation, traffic, weather and interesting locations; alarm apparatus and instruments to be used for tracking and tracing vehicles. Class 38 Secured or not secured telecommunication services, such as transmission, storage and passing-on of digital data, light, sound, data, information and image signals, as well as providing and making available the (tele)communication infrastructure necessary for this, including cable, radio and satellite networks, all in particular for navigation systems, route planners and the use of electronic maps;

	telecommunication and (wireless) data communication, by means of multimedia or otherwise, including videotext, the internet, GSM (global system for global communication), and WAP (wireless application protocol); wireless transmission of digital data; communication by way of computer terminals; telecommunication services for the communication with means of transport; rental of telecommunication apparatus; providing access to computers as part of telecommunications infrastructure, especially for navigation systems, route planners and the use of electronic maps, technical consultation concerning all services mentioned above. Class 39 Navigation services; information services regarding traffic and traffic congestion; provision of information regarding travel; provision of data regarding the positioning of goods flows, transports, means of freight transports and vehicles (tracking and tracing); provision of information to travellers regarding fares, time tables and means of public transport; services of a travel agency, namely the booking of rental services of cars, boats and other vehicles; all of the aforesaid services also provided via a communications network or a mobile telephone or a wireless navigation device.
Applicant	TomTom International B.V.
Statement of use	The mark is being used or proposed to be used, by the applicant or with his/her consent, in relation to the goods/services
Status	Under opposition
Filed on	23 August 2011

Trade mark
Trade mark name	TOMTOM
Trade mark type	Combined
Classes	9, 38 And 39 [Nice Classification Schedule 9]
Goods/services	Class 9 Computer hardware and software to be used with satellite and/or GPS navigation systems for navigation purposes; computer software to be used with route planners, electronic maps, and digital dictionaries for navigation and translation purposes; software for travel information systems for the provision of rendering of travel advice and/or information concerning service stations, car parks, restaurants, car dealers and other travel and transport related information; software for information management for the transport and traffic industries; software to be used for viewing electronic maps; downloadable electronic maps; software for operating route planners; route planners in the nature of handheld personal computers; software for operating electronic digital dictionaries; electronic dictionaries; location, orientation and navigation, and global positioning systems (GPS) consisting of computers, computer software, transmitters, GPS and/or satellite receivers, network interface devices, connection cables, and parts and fittings thereof; holders for pocket personal computers, satellite and radio transmission apparatus technology, namely, processors, mobile telephones and receivers; telecommunications installations, networks and apparatus, namely, mounting racks for telecommunications hardware, telecommunication switches; computer terminals, all in particular to be used with navigation systems, route planners and/or digital maps; blank magnetic and disc shaped data carriers; audio and video apparatus namely, audio and video receivers and processors; handheld personal computers; personal digital assistants. Class 38 Secured or unsecured telecommunication services, namely, transmission and delivery of digital data, light files, sound files, data, information and image signals by means of computer, cable radio and satellite, transmissions, all in particular for navigation systems, route planners, and the use of electronic maps; wireless transmission of data, by means of videotext, the internet, GSM (global system for mobile communication) and WAP (wireless application protocol); wireless transmission of digital data; electronic transmission of data and documents via computer terminals; rental of telecommunication equipment; technical consultation with all of the aforesaid.

	Class 39 Providing navigation and information services, namely, information regarding traffic and traffic congestion; provision of information regarding travel; provision of data regarding the tracking and tracing of goods; transport services, including freight transportation; provision of information to travellers regarding fares, time tables and means of public transport; services of a travel agency, namely the booking of rental services of cars, boats and other vehicles; all of the aforesaid services also provided via a communications network or a mobile telephone or a wireless navigation device.
Applicant	TomTom International B.V.
Statement of use	The mark is being used or proposed to be used, by the applicant or with his/her consent, in relation to the goods/services
Status	Under opposition
Filed on	23 August 2011

UNDER	the Trade Marks Act 2002
IN THE MATTER	of an appeal from the decision of the Assistant Commissioner of Trade Marks dated 27 March 2015
AND IN THE MATTER	of New Zealand Trade Mark Applications Nos. 848087 and 848088
BETWEEN	TOMTOM COMMUNICATIONS LIMITED AND GAYLENE RUTH HOSKING Appellants
AND	TOMTOM INTERNATIONAL B.V. Respondent

Hearing:	9 September 2015
Appearances:	E C Gray and K E Tidbury for the Appellants G C Williams and T C Kirk for the Respondent
_Judgment:	_{18 December 2015}

Trade mark registration number	292250
Trade mark	TOM TOM
Classes	35
Goods/services	Marketing and advertising services; business communications services; public relations services; planning and implementation of public awareness campaigns; launches of products or services
Priority date	12 May 1998

Trade mark registration number	292251
Trade mark	TOM TOM
Classes	41
Goods/services	Planning and facilitation of conferences, seminars and training programmes
Priority date	12 May 1998

Trade mark registration number	292252
Trade mark	TOM TOM
Classes	42
Goods/services	Visual communications and design services, creative writing services; editing and proofing services
Priority date	12 May 1998

High Court of New Zealand Decisions

TomTom Communications Limited v TomTom International B.V. [2015] NZHC 3333 (18 December 2015)