Indonesian company partially successful against NZ dairy company

In N V Sumatra Tobacco Trading Company v New Zealand Milk Brands Limited (CA 25/2009 [2011] NZCA 264, June 14 2011), N V Sumatra Tobacco Trading Company has been partially successful in its application to register the trademark ANGKOR.

In November 2005 Sumatra Tobacco applied to register the trademark ANGKOR for “coffee, tea, cocoa, chocolate, artificial coffee, flavourings for beverages, cereal, non-dairy creamer, biscuits, confectionery”. New Zealand Milk Brands Limited opposed the application based on its rights in the trademark ANCHOR, which has been used in New Zealand for many years in relation to dairy products. New Zealand Milk Brands owns numerous registrations for the word mark ANCHOR, and for various ANCHOR device and logo marks.

New Zealand Milk Brands argued, among other things, that the application should be refused on the basis that:

• use of ANGKOR was likely to deceive or cause confusion; and
• given that ANCHOR is a well-known trademark in New Zealand, use of ANGKOR would be taken as indicating a connection in the course of trade between Sumatra Tobacco’s goods and New Zealand Milk Brands, and was likely to prejudice New Zealand Milk Brands’ interests.

The assistant commissioner held that some of New Zealand Milk Brands’ registrations covered goods that were the same as, or similar to, the Angkor goods. She singled out two of the registrations on the basis that she considered that the goods covered by these were closest to the Angkor goods. One of the registrations was for a logo mark, the dominant element of which was the word 'Anchor'. The other was a device mark, the dominant element of which was the image of an anchor. However, the assistant commissioner went on to find that the ANGKOR mark was not confusingly similar to New Zealand Milk Brands’ various ANCHOR marks, on the basis that the marks were visually, aurally and conceptually different.

While the assistant commissioner accepted that, at the date of application, New Zealand Milk Brands’ ANCHOR mark was well known in New Zealand, she did not consider that use of ANGKOR would be taken as indicating a connection in the course of trade between Sumatra Tobacco’s goods and New Zealand Milk Brands. As the other grounds of opposition were not proven, the opposition was unsuccessful.

New Zealand Milk Brands appealed to the High Court, where the assistant commissioner’s decision was overturned. The High Court found that ANGKOR and ANCHOR were confusingly similar, and went on to find that there was a risk that a substantial number of people would be likely to be deceived or confused by the use of the ANGKOR mark. The High Court also disagreed with the assistant commissioner’s view that use of ANGKOR would not be taken as indicating a connection in the course of trade with the ANCHOR mark. Given the risk that members of the public would be deceived or confused by the use of ANGKOR, it followed that use of ANGKOR would prejudice New Zealand Milk Brands’ interests - for example, by diluting the distinctiveness of its ANCHOR mark.

Sumatra Tobacco appealed to the Court of Appeal, which agreed with the High Court that Sumatra Tobacco’s goods were sufficiently similar to the goods covered by New Zealand Milk Brands registrations such that use of ANGKOR would result in deception or confusion among a substantial number of people. The court also agreed that use of ANGKOR would lead to prejudice to New Zealand Milk Brands.

Sumatra Tobacco then argued that, irrespective of the court’s findings, special circumstances existed that made it proper for the court allow the ANGKOR mark to be registered. Sumatra Tobacco argued that a number of New Zealand Milk Brands’ registrations covered goods which New Zealand Milk Brands did not manufacture or supply, and in respect of which it was not demonstrated to have a business reputation. Some of these registrations had been removed or substantially pared back in scope with the consent of New Zealand Milk Brands, following a successful revocation action filed by another party after the ANGKOR application was filed. The court focused on the abovementioned ANCHOR logo mark which had been reduced in scope to cover only milk and chocolate-based beverages. Sumatra Tobacco submitted that its goods of interest did not overlap with the range of goods for which New Zealand Milk Brands “was justified in maintaining a trademark registration… Sumatra submits that there can be no real or material prejudice for Milk Brands if it has not and does not sell products within those categories of goods.”

The court agreed with Sumatra Tobacco that special circumstances existed:

“... the revocation action has resulted in new goods specifications for a number of Milk Brands’ registrations and, accordingly, we need to reassess whether Sumatra’s goods remain similar to Milk Brand’s goods in light of the new goods specifications.”

This analysis resulted in the court finding that Sumatra Tobacco’s goods of cereal, biscuits and confectionery could no longer be regarded as similar to the new goods specifications. Furthermore, as the court considered that ANCHOR is well known only for dairy products, registration of ANGKOR was no longer precluded for cereal, biscuits and confectionery, as a connection in trade and likelihood of prejudice would not be established. It was also held that use of the ANGKOR mark would not reasonably be likely to cause deception or confusion among a substantial number of persons if it was registered in relation to those goods.

Accordingly, the court held that the application should be able to proceed, but in respect of those goods only.

Carrick Robinson, James & Wells Intellectual Property, Auckland