Essential feature test on its way out

New Zealand
The decision of the Intellectual Property Office of New Zealand (IPONZ) in Timaru Bluestone Industries Limited ([2009] NZIPOTM 7, March 16 2009) further indicates that the essential feature test, as set out in De Cordova v Vick ((1951) 68 RPC 103), is on its way out in relation to assessing the similarity of marks.
The decisions of the hearings officer in PUREBABY v BABY (T19/2008) and ULTRA v ULTRA LAMP (T10/2007) indicated that even if a mark is wholly contained within another mark, it may still be possible to argue that the marks are not confusingly similar (for further details please see "PUREBABY decision: the end of the essential feature test?").

In the present case, Timaru Bluestone Industries Limited applied for the registration of the mark TIMARU BLUESTONE (and Stonehenge-type design) for goods in Class 19 of the Nice Classification. IPONZ objected to the registration on the grounds that the mark was confusingly similar to the series mark BLUE STONE; BLUESTONE for goods in Classes 19 and 37. IPONZ stated that the element of the TIMARU BLUESTONE mark that predominated both visually and phonetically was the word 'bluestone', which was the main idea behind the mark. Further, IPONZ contended that the Stonehenge device reinforced the concept of 'blue stone' and that the word 'Timaru' simply referred to the origin of the goods (Timaru being a town in New Zealand).   
Timaru Bluestone sought a hearing. The hearings officer, in denying that the TIMARU BLUESTONE mark was similar to the series mark BLUE STONE; BLUESTONE, stated that the marks looked and sounded different and, as such, conveyed an entirely different idea. The hearings officer concluded that:

  • the Stonehenge device was the dominant part of the TIMARU BLUESTONE mark;
  • the presence of the word 'Timaru' ensured that the marks were phonetically different; and
  • therefore, the idea conveyed by the marks was different.
Despite the series mark BLUESTONE; BLUE STONE being subsumed within the TIMARU BLUESTONE mark, the hearings officer considered that IPONZ had not given an appropriate weighting to the descriptiveness of the words 'bluestone' and 'blue stone'.  In reaching his decision, the hearings office placed significant weight on the fact that the subsumed mark lacked inherent distinctiveness, as the dictionary defines 'blue stone' as, among other things, a bluish-grey stone used for building. There did not appear to be any evidence that 'blue stone' was a common term in trade in New Zealand.
The lack of inherent distinctiveness of the subsumed mark was a point much laboured by the hearings officer. This argument is hard to reconcile with the fact that the series mark was registered in the first instance, and registration is prima facie evidence of the validity of that mark. While the hearings officer is entitled to consider whether the term is common to the trade, the hearings officer in this case has in effect ruled that the trademark was invalid, without being asked to determine its validity.
This developing body of case law suggests that owners of registered trademarks may be unable to prevent their competitors from registering a mark which wholly contains their registered trademark.
Kate Duckworth, Baldwins, Wellington

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