Use establishing connection can be trademark use, says appellate court

In Aqua Technics Pool and Spa Centre New Zealand Limited v Aqua-Tech Limited (Case CA257/05, March 22 2007), the Court of Appeal was asked to consider whether the respondent, Aqua-Tech Limited (Aqua-Tech), had established use of the trademark AQUA-TECH in relation to spa and swimming pools.

Aqua-Tech manufactures spa and swimming pools and sells mostly to trade. In particular, it sells to an associated company, Cascade Industries Limited, which acts as a retailer. Aqua-Tech's materials refer to these pools as Cascade pools, however, all the products are advertised under the heading 'Aqua-Tech' and the sign AQUA-TECH features on catalogues as well as in notices attached to each pool.

The appellant, Aqua Technics Pool and Spa Centre New Zealand Limited (Aqua Technics), argued that the use was part of a company or trading name, as in Aqua-Tech Industries Limited or Aqua-Tech Industries, which featured on some materials. It also argued that it was:

• not use on or in relation to goods;
  
  
• not use as a trademark; or
  
  
• was use for services not for goods.

The Court of Appeal rejected all of Aqua Technics arguments.

It had no difficulty in accepting that (i) a trademark can be used as part of a company or trading name and still constitute use as a trademark, and (ii) use can be on promotional materials and not on the goods themselves.

The court said that Aqua-Tech's use of the AQUA-TECH sign was sufficient to qualify as use as a trademark because it was designed to establish a connection between the goods and the manufacturer. This was considered to be a link between Aqua-Tech and the origin of the goods and was therefore use as a trademark.

Because Aqua-Tech was the manufacturer the Court of Appeal accepted that its use of the mark was in relation to goods, as opposed to services. The Court of Appeal linked this back to the connection between the goods and the manufacturer and a manufacturer being responsible for the quality of goods.

An interesting aspect to this case was Aqua Technics criticisms of Aqua Tech's evidence for being unreliable. The case began as a trademark opposition where evidence is given by statutory declaration or affidavit. There is a right to cross-examine witnesses, but this is rarely done. The Court of Appeal held that if Aqua Technics had wanted to challenge Aqua-Tech's evidence it should have asked for the right to cross-examine. It went on to say that it is unfair to challenge the veracity of a witness when the challenge has not been put.

Aqua Technics has applied for leave to appeal to the Supreme Court. However, the application for leave is yet to be determined.

For background discussion of this case, see Trademark use does not require use on goods themselves.

Kate Duckworth, Baldwins, Wellington