McCain makes a healthy choice

The New Zealand Court of Appeal has handed down an important decision in ConAgra Inc v McCain Foods (Aust) Pty Ltd in relation to the trademark HEALTHY CHOICE. The court ruled that the capacity for a trademark to distinguish the goods of one party from those of another must be present at the time of application, even if registration is sought in Part B of the Trademarks Register.

ConAgra filed its trademark application in 1989 and obtained acceptance on the basis that the mark, while not inherently distinctive, was capable of becoming distinctive (thereby satisfying the test for registration in Part B of the Trademarks Register, pursuant to the Trademark Act 1953). ConAgra did not use the mark in New Zealand either before or after the application.

McCain opposed the application on two grounds. First, by virtue of its extensive use of the mark in New Zealand subsequent to the date of ConAgra's application, the mark was not capable of distinguishing ConAgra's goods. Second, in any event, the mark was inherently descriptive and therefore not capable of distinguishing ConAgra's goods.

In dismissing the opposition, the assistant commissioner and, on appeal, the New Zealand High Court found that the words 'healthy' and 'choice' in combination were not so descriptive as to be unregistrable. Furthermore, they took into account the fact that the opponent, McCain, had extensively used the expression as a trademark in New Zealand and, by such use, had demonstrated that the mark possessed the capacity to distinguish.

The Court of Appeal disagreed. It declined to concur in the view expressed in some earlier English decisions that the test of 'capability of distinguishing' is entirely forward looking. It stated:

"We consider that the capacity to distinguish must be shown at the date of the application. It must be inherent in the mark or it must be proved to exist in fact by reference to use of the mark or by other circumstances."

It also did not accept the argument that McCain's subsequent use could be called in aid of ConAgra's earlier application.

It concluded, therefore, that there was no inherent capacity of the mark to distinguish at the date of ConAgra's application, nor any subsequent use by ConAgra to demonstrate such capacity. The court allowed the appeal and refused registration.

Desmond Ryan, Davies Collison Cave Solicitors, Melbourne