Descriptive name no impediment to obtaining injunction

In NZ Tax Refunds Limited v Brooks Homes Limited (CA715/2012 [2013] NZCA 90), the Court of Appeal has granted an injunction prohibiting the respondent from using the trade name Tax Refund NZ and the web address 'www.taxrefundnz.co.nz'.

In October 2012 NZ Tax Refunds Limited obtained an interim injunction preventing Brooks Homes Limited from using the name NZ-Tax Refund and its associated websites 'www.nz-taxrefund.co.nz' and 'www.nz-taxrefunds.co.nz'. The court declined to issue an injunction preventing use of the name Tax Refund NZ and its associated website 'www.taxrefundnz.co.nz'. NZ Tax Refunds Limited appealed that decision to the New Zealand Court of Appeal.

The background to the case was that NZ Tax Refunds Limited began offering online tax refund services in New Zealand in 2008. Its main website was 'www.nztaxrefunds.co.nz'. 

Brooks Homes Limited established the website 'www.taxrefundnz.co.nz' and began offering online tax refund services from that website in mid-2011. It had since 2008 also offered tax refund services, but initially did not have an online service offering. 

The market is reasonably crowded with another competitor offering services at 'www.taxrefunds.co.nz' and around 15 or so other websites offering services in New Zealand using the words 'tax refund' or some similar wording in their web addresses, such as 'www.mytaxrefund.co.nz' and 'www.taxreturn.co.nz'. The judge who determined the interim injunction application said “it is abundantly plain that every competitor in the market tries somehow to introduce the words 'tax' and 'refund' into the domain name”.

Despite the crowded market, and no exclusivity over such descriptive terms, NZ Tax Refunds Limited had engaged in a lot of television advertising, and was the market leader. NZ Tax Refunds Limited was found to have established a goodwill and reputation in the name NZ Tax Refunds, which the Court of Appeal found “may amount to distinctiveness”.

The Court of Appeal found that it was at least arguable that Brooks Homes Limited adopted the name Tax Refund NZ to free ride on NZ Tax Refunds Limited’s reputation. Brooks Homes Limited’s explanation for this choosing these names was that it wanted a name and web address with 'NZ' in it, because consumers generally search on generic terms like tax refund, rather than searching under the name of a specific provider.  The court was dubious about why it did not build on its existing business My Refund, which operated at 'www.myrefund.co.nz', especially because the websites were linked, and My Refund forms and terms and conditions were used.

In terms of balance of convenience, the Court of Appeal took into account the fact that Brooks Homes Limited could continue with its My Refund business and the interim injunction would not prevent it from continuing with that business.

The Court of Appeal allowed the appeal and interim injunctions are now in place over the names NZ-Tax Refund and Tax Refund NZ, and the websites 'www.nz-taxrefund.co.nz', 'www.nz-taxrefunds.co.nz' and 'www.taxrefundnz.co.nz'. 

This is not the first descriptive trademark case to be decided in this way – Great Barrier Airlines prevented use of Great Barrier Air and Airport Rentals prevented use of Airport Car Rentals.

Kate Duckworth, Catalyst Intellectual Property, New Zealand