Not so Happy Valley following interim injunction ruling

In Solid Energy NZ Limited v Save Happy Valley Coalition (unreported, CIV-2007-409-441, July 26 2007), the High Court of New Zealand has upheld Solid Energy NZ Limited's motion for an interim injunction in relation to Save Happy Valley Coalition's use of Solid Energy's marks in a parodic report.

Solid Energy operates coal mines in New Zealand. Save Happy Valley Coalition is an environmental group. The parties have been involved in litigation in relation to Solid Energy's proposed mine at Happy Valley in New Zealand.

Solid Energy became aware of a mock report about its mining activities produced by Save Happy Valley and/or some of its members. The mock report featured Solid Energy's logo and name. The mock report also copied parts of earlier Solid Energy reports and was highly critical of Solid Energy.

Solid Energy filed proceedings for an interim injunction claiming:

• infringement of its registered trademarks;
  
  
• infringement of its copyright; and
  
  
• breach of the Fair Trading Act 1986, which prohibits misleading and deceptive conduct in the course of trade.

Solid Energy was careful to categorize this as a property rights case and not to be seen as interfering with Save Happy Valley's freedom of expression. Solid Energy had earlier pleaded injurious falsehood and defamation, but restricted the interim injunction application to IP rights causes of action.

Save Happy Valley argued that its mock report was a parody and that the use of Solid Energy's name and logo was designed to add an element of surprise.

The judge found no arguable case under the Fair Trading Act, as Save Happy Valley carried out no trade activities. He did not, however, apply the same reasoning to the Trademarks Act.

The judge referred to Section 10 of the Trademarks Act 2002, which provides that the owner of a trademark has the exclusive right to use the trademark. The judge deliberately chose not to consider the infringement provision, Section 89.

Save Happy Valley argued that it was not using the mark in the course of trade or in relation to the sale of fuel and coal. However, the judge did not consider:

• whether the activities were in the course of trade, or for the same or similar goods or services; and
  
  
• whether there was a likelihood of confusion or deception.

Moreover, there was no consideration paid in the judgment to the dilution provision of the Trademarks Act, which provides relief for the owner of a well-known mark in relation to dissimilar goods or services where such use is likely to damage the character or repute of the mark. In the circumstances, dilution was arguably Solid Energy's strongest ground under the Trademarks Act.

Thus, although it was an interim injunction application and Solid Energy had to show only an arguable case, the judge ignored the normal trademark infringement requirements.

The judge referred only briefly to copyright. He stated that there was an arguable case that use of Solid Energy's name and logo infringed its copyright, but did not discuss whether the name or logo were original copyright works. While the logo may have been an original copyright, it is doubtful that the words 'solid energy' would qualify as a copyright work.

The judge dismissed Save Happy Valley's arguments that its copying was fair dealing, stating that it was a matter for the trial. The judge also appeared to ignore the large time delay between the publication of the mock report and the hearing (five months), a factor which is often fatal to a plaintiff under the balance of convenience head in an interim injunction application.

Accordingly, the judge allowed the interim injunction application and the matter will now proceed to trial, unless it is settled before then.

Kate Duckworth, Baldwins, Wellington