Protection of well known marks

The New Zealand Trade Marks Act 2002 provides strong protection for well known trade marks. A trade mark registration traditionally protects the use of a mark for the goods and services specified in the registration. Rights conferred by the registration are infringed by the use of an identical or similar mark on any of the goods or services covered by the registration, or similar goods or services. A likelihood of consumer confusion or deception may also be required. (Section 89(1)(a) – (c) of the Trade Marks Act 2002.) Subsequent applications to register the same or similar trade mark, for the same or similar goods or services, will be refused (section 25(1)(a) – (b)).

But where a registered trade mark is well known, the protection afforded to that mark has a wider reach and can extend, in certain circumstances, to dissimilar goods and services. A well known registered trade mark will be infringed if another party uses an identical or similar sign in relation to dissimilar goods or services, and that use “takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the mark” (section 89(1)(d)). And regardless of whether a trade mark is registered or used in New Zealand, if it is well known, its reputation may prevent the registration of an identical or similar mark for any goods or services (section 25(1)(c)). Protection of this kind is aimed at preventing the unique identity of a well known mark from being diluted or taken advantage of.

What, then, is a well known mark? In the South African decision of McDonald’s Corporation v Joburgers Drive-Inn Restaurant (Pty) Ltd (1996) 36 IPR 11 it was held that the degree of knowledge required for a mark to be well known is similar to that for passing off – the mark must be known to a substantial number of persons in the relevant sector.

The South African approach was accepted in New Zealand by the Assistant Commissioner of Trade Marks in King’s Choice Trade Mark Application (T45/2003) in the context of the registrability of trade marks that are identical or similar to well known marks, and by the High Court in Automobile Club De L’ouest Aco v South Pacific Tyres New Zealand Limited (2006) 70 IPR 639. The Assistant Commissioner in King’s Choice proposed to “treat ‘well known’ as requiring a mark be known to a substantial number of persons interested in purchasing the goods to which the mark relates.”

In the United States, famous marks receive protection from dilution under the Lanham Act – a piece of legislation which contains the federal statutes governing trade mark law. Under section 43 of the Lanham Act, the following factors may be considered when assessing whether a mark is famous and therefore covered by the Act’s anti-dilution provisions:

“(i) The duration, extent, and geographic reach of advertising and publicity of the mark, whether advertised or publicized by the owner or third parties.

(ii) The amount, volume, and geographic extent of sales of goods or services offered under the mark.

(iii) The extent of actual recognition of the mark”.

These factors would be relevant in New Zealand also.

The issue of what will amount to unfair advantage or detriment to the distinctive character or repute of a well known mark, under section 89(1)(d), is yet to be judicially examined in New Zealand. Even so, it appears that the use of an infringing mark need not result in consumers being confused or deceived as to trade origin, because the confusion element of other forms of infringement is not a requirement for well known marks.

Detriment to the distinctive character or repute of a well known mark is commonly referred to as dilution. Dilution can be generally categorized into two separate concepts – “blurring” and “tarnishment”. Unfair advantage exists separately from dilution. While the New Zealand courts are yet to wrestle with these concepts, the experience in the United Kingdom and the United States sheds valuable light on the topic.

Blurring occurs when the use of a mark causes harm to the distinctive character of a well known mark so as to lessen the capacity of that mark to identify or distinguish its goods or services. The Lanham Act defines “dilution by blurring” as an “association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark”.

In the United Kingdom, tarnishment was described as being a situation where “a similar, or indeed identical, sign would lead to the tarnishing of a mark due to potentially damaging connotations associated with the sign being then linked with the mark” (Premier Brands UK v Typhoon Europe [2000] FSR 767, at page 798, per Neuberger J). This description is similar to the definition provided in the Lanham Act, whereby “dilution by tarnishment” is defined as “association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark”.

Unfair advantage takes place when one trader obtains some kind of benefit by riding on the coat tails of an earlier, well known mark. However, what constitutes an ‘unfair’ advantage is imprecise and, as observed by the Court in Pfizer Ltd v Eurofood Link (UK) Ltd [2001] FSR 17, requires an enquiry into the benefit to be gained from the use of the mark complained of. In C.A. Sheimer (M.) SDN BHD’s Trade Mark Application [2000] RPC 484, a finding of unfair advantage could not be made because, while one trader would gain attention for its products by feeding on the fame of an earlier mark, it was not clear whether it would gain anything more by way of a marketing advantage.

Another nuance of section 89(1)(d) is that is it worded in the present tense (“takes unfair advantage” and “is detrimental to”). By contrast, other types of infringement contained in the Trade Marks Act are predictive and require only a likelihood of harm (“likely to deceive or confuse”). Notably, the United States Supreme Court in Moseley v V Secret Catalogue, Inc 537 US 418 (2003), held that actual dilution was required, rather than a likelihood of dilution. This raised questions concerning how to prove actual dilution and what will suffice in order to meet the burden of proof. The Moseley decision was overturned in 2006, when the Trademark Dilution Revision Act took effect. Under the Revision Act, a plaintiff is now only required to prove a likelihood of dilution.

Looking forward, it will be fascinating to see how the New Zealand courts deal with section 89(1)(d). In particular, the courts’ assessment of whether the use of a mark “takes unfair advantage of, or is detrimental to, the distinctive character or the repute of” an earlier, well known mark and how the courts integrate the growing body of overseas case law into their own decisions, will be of interest.

Barbara Sullivan - February 2008