Fashion company successfully invalidates competitor's mark

New Zealand
In Cotton On Clothing (New Zealand) Limited v Ruby Apparel (2008) Limited (T20/2010, October 12 2010), the Intellectual Property Office of New Zealand has considered an application for a declaration of invalidity and an opposition involving Ruby Apparel (2008) Limited and Cotton On Clothing (New Zealand) Limited.
Ruby Apparel filed an application for a declaration of invalidity in respect of Cotton On’s registration for the word mark RUBI SHOES in Classes 25 and 35 of the Nice Classification. Cotton On opposed Ruby Apparel’s application to register the non-stylised word mark RUBY for goods in Class 25. 
In addition to its application for the registration of the word mark RUBY, Ruby Apparel owned registrations for two RUBY logo marks, which consisted of the word 'ruby' alongside a gemstone device:

Ruby Apparel argued that Cotton On’s RUBI SHOES registration was invalid because of Ruby Apparel’s earlier rights in the RUBY and RUBY logo marks. Ruby Apparel also alleged that its RUBY marks were well known in New Zealand. As such:
  • Cotton On could not be the owner of the RUBI SHOES mark;
  • Use of RUBI SHOES was likely to deceive or cause confusion, and was contrary to law; and
  • Use of RUBI SHOES would be taken as indicating a connection in the course of trade between Cotton On’s goods and Ruby Apparel, and this would prejudice Ruby Apparel’s interests.
Cotton On’s grounds of opposition focused on the distinctiveness of Ruby Apparel’s RUBY marks, alleging that:
  • RUBY is not a trademark, but rather a descriptive term for ruby-coloured clothing, footwear and headgear - Ruby Apparel’s goods of interest;
  • RUBY has no distinctive character in relation to Ruby Apparel’s goods;
  • RUBY consists only of signs or indications that serve to designate the kind or colour of Ruby Apparel’s goods; and
  • RUBY has not, as a result of either Ruby Apparel’s use of the mark or any other circumstances, acquired a distinctive character.
Referring to its use of RUBY in relation to footwear and other goods, and the sale of same before the relevant date (being the date Cotton On applied to register RUBI SHOES), Ruby Apparel argued that it was the owner of RUBY for the same goods and services covered by Cotton On’s RUBI SHOES mark. As RUBI and RUBY are in essence the same, and “shoes” is non-distinctive, Ruby Apparel argued that it must be the owner of RUBI SHOES because it has a prior claim to the 'rubi' part of RUBI SHOES. 
The assistant commissioner disagreed, finding that, for the purposes of proprietorship, RUBY and RUBI SHOES were not substantially identical (rather than being deceptively similar). RUBY and RUBI are visually and conceptually different. The assistant commissioner also took into account the presence of 'shoes' in RUBI SHOES: “[“shoes”] is part of the trademark and must also be assessed… it would be improper from me to simply ignore the 'shoes' part of the RUBI SHOES trademark in applying the test for substantial identity” (Paragraph 52).
The assistant commissioner went on to consider whether Cotton On’s use of RUBI SHOES would be likely to cause deception and confusion among a substantial number of persons, given Ruby Apparel’s use of, and reputation in, RUBY. 
Ruby Apparel needed to show that, at the relevant date, there was an awareness in the relevant market of its RUBY mark/name. On the evidence, the assistant commissioner found that, at the relevant date, RUBY was a well-known New Zealand fashion brand for women’s wear and the retail of such goods. 
Ruby Apparel also needed to prove that the marks were confusingly similar. In comparing the look, sound and idea of the marks, and allowing for imperfect recollection, the assistant commissioner found that the marks were confusingly similar, primarily because of the similarities between the words RUBY and RUBI. Taking into account the surrounding circumstances, the assistant commissioner was satisfied that there was a risk that use of RUBI SHOES would result in deception or confusion. Accordingly, Ruby Apparel was successful with this ground of invalidity.
In essence, based on the same reasoning, the assistant commissioner also held that use of RUBI SHOES would be contrary to law, or would otherwise be disentitled to protection in any court. Ruby Apparel was successful with this ground of invalidity as well. However, the assistant commissioner did not accept Ruby Apparel’s arguments that RUBI SHOES and Ruby Apparel’s RUBY logo marks were confusingly similar.
Finally, the assistant commissioner considered whether use of RUBI SHOES would be taken as indicating a connection in the course of trade between Cotton On’s goods and Ruby Apparel and, if so, whether this would be likely to prejudice Ruby Apparel’s interests.
Ruby Apparel had already shown that its RUBY word mark was well known in New Zealand as at the relevant date, and that the RUBY word mark was similar to RUBI SHOES. As such, the assistant commissioner held that use of RUBI SHOES would, by causing deception or confusion in the marketplace, prejudice Ruby Apparel’s interests by, among other things, blurring the distinctiveness of the RUBI SHOES mark.
In relation to the opposition, the assistant commissioner was of the view that, because RUBY could have a number of meanings (depending on context), in the circumstances of the case RUBY was more likely to be perceived “as a reference to the well-known fashion brand name when it is used in the context of Class 25 goods” (Paragraph 130), rather than the colour of the goods. There was also no evidence that RUBY was a sign or indication that had become customary in the current language, or in the good-faith and established practices of trade, to describe the colour of Ruby Apparel’s goods. 
Cotton On was successful in convincing the assistant commissioner that RUBY was a term which other traders would, in the ordinary course of their business and without any improper motive, want to use to describe ruby-coloured clothing, or where the trader’s name was Ruby, to give their name to the goods. Accordingly, registration of RUBY should be refused because the mark had no distinctive character. 
Cotton On’s success was, however, short lived. The assistant commissioner went on to find that RUBY had, as at the date of application, acquired a distinctive character as a result of Ruby Apparel’s use of the mark. Accordingly, the RUBY mark should be registered. 
In summary, Ruby Apparel was successful both in its application to invalidate Cotton On’s registration for RUBI SHOES, and in its defence of Cotton On’s opposition in respect of Ruby Apparel’s application to register RUBY.
Carrick Robinson, James & Wells Intellectual Property, Auckland

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