AUTOMOBILE CLUB DE L'OUEST, ACO V SOUTH PACIFIC TYRES NEW ZEALAND LIMITED HC WN CIV 2005 485 248

AUTOMOBILE CLUB DE L'OUEST, ACO V SOUTH PACIFIC TYRES NEW ZEALAND LIMITED HC WN CIV 2005 485 248 23 March 2006IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV 2005 485 248UNDER The Trade Marks Act 1953 IN THE MATTER OF A decision of the Assistant Commissioner of Trade Marks dated 18 January 2005 BETWEEN AUTOMOBILE CLUB DE L'OUEST, ACO Appellant AND SOUTH PACIFIC TYRES NEW ZEALAND LIMITED Respondent Hearing: 11 August and 7 September 2005 Appearances: K Duckworth and N Jackson for the Appellant G C Williams for the Respondent Judgment: 23 March 2006JUDGMENT OF WILD J Introduction[1] The appellant appeals, and the respondent cross-appeals, against a decision of the Assistant Commissioner of Trade Marks given on 18 January 2005. [2] In that decision, the Assistant Commissioner found that: a) The appellant's trade mark LE MANS ('the mark') was sufficiently distinctive, and was therefore eligible for registration under s 14(1)(e) of the Trade Marks Act 1953 ("the Act"); butb) The respondent was the proprietor of the mark in New Zealand in respect of tyres; c) The respondent had established that use of the mark in respect of tyres and related goods would create a risk of deception or confusion under s 16(1) of the Act; d) The respondent had also established that Le Mans was "well-known," in relation to tyres, for the purposes of s 17 of the Act, and that registration by the Club of the mark would offend against s 17(2) of the Act. Accordingly, the Assistant Commissioner held that the appellant's trade mark application could proceed, provided that tyres and parts, fittings, and accessories for tyres were excluded from the specification of goods in the application. [3] The central issue in this dispute is which, if either, of the parties is entitled to use the mark LE MANS in New Zealand for tyres and tyre accessories. In particular, does the foreign owner of a trade mark remain proprietor of the mark, notwithstanding use by another trader in New Zealand?Background[4] Le Mans is a town of some 150,000 people, the capital of the Sarthe Département in the Loire Region in north-western France. Although there is some dispute as to this aspect, Le Mans appears also to have prominence as a centre for the production of car parts and vehicles. It is the location of the famous annual 24-hour car race, the Le Mans Grand Prix d'Endurance ("the Race"). [5] The appellant, Automobile Club de l'Ouest ("the Club") has organised the Race since its inception in 1923, and owns the event. [6] The respondent, South Pacific Tyres New Zealand Limited, is a New Zealand tyre manufacturer. It is a partnership between Pacific Dunlop Holdings (NZ)Limited and Goodyear New Zealand Limited. The former company is owned by Ansell Limited. The latter is a wholly owned subsidiary of the American corporation, Goodyear Tyre and Rubber Company. I will call the respondent "Dunlop". [7] Since 1986 Dunlop has been selling high performance tyres in New Zealand under the names 'Le Mans' and "Dunlop Le Mans'. It appears the Club was unaware of this; it certainly had not authorised Dunlop's use. Dunlop has never applied for registration of either of those names as trade marks. [8] On 22 December 2000, the Club filed an application with the Trade Marks Office for the registration of the mark 'LE MANS' in respect of the following goods in class 12:vehicles and their engines, tyres; parts, fittings and accessories for all the aforesaid goods.After first seeking clarification from the Club of some aspects of its application, the Intellectual Property Office accepted the application on 1 August 2002 and it was advertised in the Journal on 30 August 2002. [9] It is common ground that The Trade Marks Act 1953, although now repealed, continues to apply to the Club's application: s 203(1)(a) of the Trade Marks Act 2002. [10] On 28 November 2002 Dunlop filed a Notice of Opposition to the Club's application. By this Notice, Dunlop opposed registration of the mark on five grounds, which are identical to those Dunlop argued on this appeal (I have conflated two grounds in [c] below): [a] Registrability: The words 'Le Mans' are of geographical significance, and therefore lack the requisite distinctiveness for registration: s 14(1)(d);[b] Proprietorship: The Club is not the proprietor of the mark, as required by s 26(1). Dunlop is the owner of the mark in New Zealand through prior use; [c] Confusion/illegality: Use by the Club of the mark on class 12 goods would, as a result, be [i] likely to confuse or deceive; and [ii] contrary to law (constituting passing off, and a breach of the Fair Trading Act 1986). Registration is therefore prohibited by s 16(1) of the Act. [d] Identical mark: The Club's mark is identical to Dunlop's mark, which is well-known in New Zealand. Registration would therefore also breach s 17(2).The evidenceFor the Club[11] The Club's evidence outlined the history of the Club and of the Race, including details of the Club's advertising of and other publicity on the Race. The evidence also detailed the Club's trade mark applications and registrations worldwide for LE MANS or incorporating those words. The main aspects of this evidence were: a) The Club operates a website www.lemans.org. In addition to a history of the Race and the Race results, this website has an online boutique selling various items under the Le Mans trade mark including T shirts, caps, DVDs, books, posters, key rings and pens. Since 1999, over 600,000 users have accessed the website.b) Since 1999, the Club has maintained a website focusing on the American series of races conducted under the trade mark. Also from 2001, there was a website containing information on the Asian Le Mans series. Both websites were operated through licencees. The Asian website is not presently operational. c) In the past two years the Club has spent between about AUD774,000 and 1.29 million on advertising the Race in French and international newspapers, magazines, specialist automotive publications and radio and television broadcasts. d) Numerous books have been written about the Race. In evidence was a print out of the list of about 50 books available from Amazon through its website www.amazon.com. All those books are available to be shipped to New Zealand. Some of those books are also available from New Zealand bookshops, for example "Le Mans, The Porsche and Peugot Years 1992-1999" is available from Capital Books in Wellington. e) The Race features in a number of motoring magazines. For instance, the 28 May 1998 edition of "Autosport" magazine contained a special supplement entitled "The Ultimate Guide: Le Mans 98 – How to Survive the World's Toughest Race". Autosport magazine is available in New Zealand. f) Printouts from six websites referring to the Race. An example was the New Zealand Herald website of 7 May 2004, which featured an article on a planned attempt by the 63 year old former Formula One champion Mario Andretti to compete in "One of the few classic races he hasn't won – the 24 Hours at Le Mans". g) In 1971 a fictional film titled "Le Mans" starring Steve McQueen was made based on the race. The DVD is available from video stores in New Zealand.h) The Club has also licensed its trade mark LE MANS for a Playstation 2 game called "Le Mans 24 Hour" which is available in New Zealand. i) A list of the Club's trade mark applications and registrations in various countries around the world. The marks include 24 HEURES DU MANS, LE MANS + CIRCUIT and LE MANS. The list indicates that the latter mark is registered in Argentina, Chile, the United States and Japan with applications for registration pending in four other countries, including New Zealand. j) The Club licenses the use of its trade marks in North and South America, Europe and Africa. [12] The Club also provided to the Assistant Commissioner survey evidence obtained by interviewing a total of 273 people on the streets of Wellington. The results of those surveys can be summarised as follows:First Survey: May 2002 Sample size: 103 people, all men.Question: Each man was shown a card with "Le Mans" written on it and asked: "What do these words mean to you?" or "Thinking in terms of motoring what do these words mean to you?"Responses:Car Race Tyres French Town/Word Other Don't know Total77 (75%) 1 (1%) 3 (3%) 6 (6%) 16 (16%) 103 (101%)* * Due to rounding the % figures add to more than 100%Second Survey: March 2003 Sample size: 100 people, all car owners.Question: Each person was shown a card with "Le Mans" written on it and asked: "Thinking in terms of tyres for cars, with what or with whom do you associate these words?"Responses: Of the 100:• 69 mentioned the Le Mans race, 55 of those as a first reaction to the question.• 21 did not associate the words Le Mans with anything specific.• 28 mentioned a brand of tyre. Of those 28: - 5 mentioned Dunlop. - 22 also mentioned an association with the Le Mans car race. According to the researcher, 89% of this sample mentioned the Le Mans race during the interview, 70% as their first reaction. Of the 35% who mentioned a brand of tyre, 79% also mentioned the car race, but only 6% mentioned Dunlop.Third Survey: December 2003 Sample size: 70 people, mainly adults.Question: Each person was asked first whether they owned a car, then shown a "Le Mans" card and asked: with what or with whom do you associate these words? They were asked to explain to explain their answer and why tyres would be called Le Mans tyres.Responses: 46 people (65%) associated the words Le Mans with and explained their answer by:• The 24 hour Le Mans car race.• A car racing track in France.• Car racing.• Formula 1. 13 people (18%) associated the words Le Mans with:• A brand of tyre, or a specific brand of tyre e.g. Dunlop, Firestone or Pirelli. Most of those 18%, when pressed to explain their answer, associated the words with motor racing but not specifically with the Le Mans race. Two people (3%) associated the words Le Mans with Pontiac's Le Mans car. Eight people (11%) did not know or associate the words with anything.For Dunlop[13] Dunlop responded to this survey evidence with a declaration by Dr Roderick Brodie, Professor of Marketing at the University of Auckland. Dr Brodie levelled several criticisms against the surveys conducted for the Club, including that: a) They were not directed at a clear target population. Dr Brodie queried whether the people surveyed reflected the market relevant to a trade mark application.b) The interviewees were neither randomly selected nor representative of the New Zealand market as a whole. The 273 people surveyed were an insufficient sample to provide statistically significant results. c) Testing an association between the words "Le Mans" and class 12 goods would require more than a single question to passers-by in central Wellington. It would require specific questions regarding consumers' knowledge of goods and services that may be sold under that brand. [14] Dr Brodie concluded that the survey evidence provided by the Club was unreliable. His opinion was that the purchase of specialist high performance car tyres was a high-involvement purchase decision, and that consumers would generally exercise considerable deliberation and discrimination between brands. His view was that appropriate research would be likely to show that any association between Dunlop's "Le Mans" brand and the 24 hour car race in the French town of Le Mans is a secondary association. Consumers' primary associations with the brand would be based on Dunlop's reputation, the technical specifications of the product and the way in which it is marketed. [15] Dunlop provided further evidence relating to the use of the mark Le Mans in New Zealand. Briefly, this evidence encompassed: a) Sales figures for Dunlop Le Mans tyres for the period 1996-2004; b) Evidence of the development and launch (in 1986) of tyres under the name Dunlop Le Mans; c) Marketing, advertisements, newspaper articles and websites promoting or discussing Dunlop Le Mans tyres; d) Statutory declarations from 8 specialist tyre retailers, each indicating that customers who know what they want will ask for a 'Le Mans' or (to a lesser extent) a 'Dunlop Le Mans' tyre.e) Evidence that Dunlop currently has no licensing arrangements with the Club, and never has had, in Australasia.The Assistant Commissioner's decision[16] The Assistant Commissioner summarised the evidence provided by the parties. After recording that the Club had the overall onus of establishing that its LE MANS mark is eligible for registration, the Assistant Commissioner set out the grounds for Dunlop's objection to registration. Dealing first with proprietorship, the Assistant Commissioner noted that the Club conceded it had not used at all the mark 'Le Mans' in New Zealand in relation to the goods covered by the application. Conversely, the Assistant Commissioner accepted that Dunlop had since 1986 sold tyres bearing that mark in New Zealand. [17] The Assistant Commissioner distinguished several cases in which foreign traders have had claims to local proprietorship upheld, on the basis that the applicant in those cases had made either direct or indirect use of the mark in question. It was noted that, in the absence of fraud, it is not unlawful for a trader to become the registered proprietor of a mark which has been used on similar goods in a foreign country by another trader: Pioneer Hi-Bred Corn Co v Hy-Line Chick Pty Limited[1978] 2 NZLR 50. Accordingly, the Assistant Commissioner found that the Club was not the proprietor in New Zealand of the mark 'Le Mans' in relation to tyres, because of Dunlop's prior use. [18] Turning to distinctiveness, having reviewed the evidence, in particular the Club's survey evidence, the Assistant Commissioner found that, in New Zealand, Le Mans had more than one ordinary signification. It was associated with the Club's famous car race; with the town in France where that race was held; and with Dunlop's tyres. Although the geographical significance of these words meant they were not registrable under s 14(1)(d), the words 'Le Mans' were nevertheless registrable under s 14(1)(e) on evidence of distinctiveness. The Assistant Commissioner defined the issue as whether the New Zealand public at the relevant date (22 December 2000) would ordinarily think of Le Mans as a geographical name. She accepted that Le Mans was only registrable under s14(1)(e) if it had someinherent distinctiveness since, if it did not, proof of 100% factual distinctiveness would not suffice: "York" Trade Mark [1984] RPC 231. [19] Applying the test from W & G du Cros Ltd's Application (1913) 30 RPC 660 at 672, the Assistant Commissioner found the words to have a low inherent distinctiveness because the fact that it was the name of a town associated with the automobile industry increased the likelihood of other traders desiring to use Le Mans in the ordinary course of their business without improper motive. But the Club's survey evidence, and evidence of other use of those words in New Zealand in relation to the Race, established that the words were in fact capable of distinguishing the Club's goods. [20] However, in respect of tyres, Dunlop's prior use of those words will effectively prevent them from distinguishing the Club's tyres which are included in the specification of goods in its trade mark application. Accordingly, the words were registrable by the Club only if goods covering tyres and related accessories were excluded from the application. [21] Turning to confusion and deception, the Assistant Commissioner noted that under s16 the onus was on Dunlop to establish awareness of its Le Mans mark for the goods covered by the Club's trade mark application. On the evidence, Dunlop had established through its actual use of that mark on high performance tyres since 1986. As the Club's and Dunlop's marks were identical, no comparison to gauge their similarity was necessary. [22] The Assistant Commissioner concluded that there is "almost an inevitable" risk of deception and confusion of the general public if both parties were to use LE MANS in relation to tyres. [23] As Dunlop had discharged the onus under ss 16 and 17 of establishing the likelihood of deception or confusion if the Club also used the mark on its tyres in New Zealand, the Assistant Commissioner did not consider whether Dunlop had also met the higher threshold of confusion required to establish a breach of the FairTrading Act or passing-off, and thus that use by the Club of the trade mark would also be contrary to law under s 16. [24] As to Dunlop's objection under s 17(2), the Assistant Commission held that Dunlop again bore the onus of establishing that its mark was well known at the time of the Club's application. This required it to establish a reputation similar to that required for the tort of passing-off: McDonald's Corporation v Joburgers Drive-Inn Restaurant (Pty) Ltd & Ors (1996) 36 IPR 11, at 23-24. [25] In light of his/her findings under s 16 as to Dunlop's reputation in New Zealand and the likelihood of deception and confusion, the Assistant Commissioner found that registration by the Club of the mark in respect of tyres would offend equally against s 17(2). Accordingly, the Assistant Commissioner held that the reference to tyres and parts, fittings, and accessories relating to tyres should be omitted from the Club's specification of goods in its trade mark application. Subject to that alteration, the Club's application was allowed to proceed.Approach on this Appeal[26] Subject to the fact that a comparison of the competing marks is not required, I find these comments of Hammond J in VB Distributors Limited v Matsushita Electric Industrial Co Limited (1999) 9 TCLR 349, 356, a helpful guide to the approach to appeals of this kind:"Section 66 of the Trade Marks Act 1953 provides that, on an appeal, this Court "shall have and may exercise the same discretionary powers as are conferred upon the Commissioner". The appeal to this court is therefore a rehearing. In Effem Foods Ltd v Commission of Trade Marks (1996) 7 TCLR 246; 5 NZBLC 104,209, Salmon J said (at p 248; p 104,211): Despite the fact that this appeal is by way of rehearing, I think it appropriate that I should place great weight on the views of the hearing Commissioner because of his position as an expert tribunal (NZ Breweries Ltd v Heineken's [1964] NZLR 115, 117 (CA)). Nevertheless, it is clear that I must come to my own decision as to whether the appellant has shown that there is no reasonable probability of confusion (above, at 133).I would add these observations. An appeal on the basis of a statutory provision of this character is not a case for deference. This Court is required to form its own views. How much (if any) weight should be given to the Commissioner's views may well depend on what is in dispute. If, for instance, what is at issue is a matter of practice in trade mark applications then the experience of the Commissioner is not lightly to be disregarded. On the other hand, as with all specialist tribunals, there is real benefit in that tribunal's views being subjected to independent scrutiny from time to time. And to the extent that the determination of likelihood of confusion rests upon a comparison of the marks themselves, the appellate court is in as good a position as the trial tribunal to come to a conclusion."[27] I will deal in turn with the issues as I identified them in paragraph [10] above.RegistrabilitySection 14[28] Section 14 of the Act requires that, to be registrable, a mark must be capable of distinguishing goods in trade. A mark may be either inherently distinctive, or factually so:14 Distinctiveness requisite for registration in Part A(1) In order for a trade mark to be registrable in Part A of the register, it must contain or consist of at least one of the following essential particulars: (d) A word or words having no direct reference to the character or quality of the goods or services, and not being according to its ordinary signification a geographical name or a surname: (e) Any other distinctive sign, but a name, signature, or word or words, other than such as fall within the descriptions in the foregoing paragraphs (a), (b), (c), and (d), shall not be registrable under the provisions of this paragraph except upon evidence of its distinctiveness.(2) For the purposes of this section distinctive means adapted, in relation to the goods or services in respect of which a trade mark is registered or proposed to be registered, to distinguish goods or services with which the proprietor of the trade mark is or may be connected in the course of trade from goods or services in the case of which no such connection subsists, either generally or, where the trade mark is registered or proposed to be registered subject to limitations, in relation to use within the extent of the registration. (3) In determining whether a trade mark is adapted to distinguish as aforesaid, the Commissioner or the Court may have regard to the extent to which— (a) The trade mark is inherently adapted to distinguish as aforesaid; and (b) By reason of the use of the trade mark or of any other circumstances, the trade mark is in fact adapted to distinguish as aforesaid.Submissions[29] The Club submits that the purpose of the requirement for distinctiveness is to ensure that the use of common words, which could legitimately be used to describe a product, is not restricted. The Club accepted that the Assistant Commissioner had correctly identified the test as being whether other traders would want to use the mark in the ordinary course of business and without any improper motive to describe their goods: W&G Du Cros Ltd's Application (1913) 30 RPC 660, 672. [30] The Club also accepted that the Assistant Commissioner was correct in defining the issue as being whether the public in New Zealand would ordinarily think of Le Mans as a geographical name. But it contended that she then erred in holding that a word with several significations, one of which is geographical, is debarred from registration by s14(1)(d). [31] The Club contended that such a word is not necessarily barred from registration. The geographical reference must have some relevance to the goods concerned before it will be unregistrable. For examples, "Bluff" would not be registrable for oysters, but "North Pole" would be registrable in respect of bananas,because it is unlikely that other traders would want to use that location to describe their bananas. [32] The issue, contends the Club, is the primary signification of the words in question. It claims its survey evidence establishes that, in New Zealand, the words 'Le Mans' are primarily associated with the Club's 24-hour car race. The international knowledge of Le Mans as a small French town exists only by virtue of its association with that race. The mark is therefore sufficiently distinctive for registration. [33] In the context of the relevant trade (automobile parts etc), the meaning of the name 'Le Mans' is not geographical. Nor is it commonly used by traders. The Club notes that, should traders legitimately wish to use the words 'Le Mans' to describe the origin of their goods, s 12 of the Act expressly permits bona fide use of a geographical name. [34] Further, Dunlop is not using the mark as a geographical name, nor is its use 'without any improper motive'. Dunlop seeks to profit from the fame of the Club's Le Mans Motor Race. Any trader using the words 'Le Mans' would be doing so only to 'coat-tail' on the Club's reputation. [35] In reply, Dunlop submits that the Club's mark is insufficiently distinctive pursuant to s 14(1)(d). The ordinary signification of the words 'Le Mans' is that of a French town. Dunlop submitted that it is relevant that 'Le Mans' "is a manufacturing centre for, among others, motor vehicles". It cited Boots Pure Drug Company Co Ltd, Registered Trade mark No 530,535 [1938] Ch 54) in which the mark "Livron", which had been put forward as an invented word and registered for "tonic medicines", was expunged from the register, Livron being a French town of some importance with a pharmaceutical industry. [36] Dunlop argued that only one of a word's significations need be geographical before registration will be denied. The geographical significance of the word need not be the paramount one: "Phoenix" [1985] RPC 122, 124.[37] Nor, Dunlop submits, is there evidence that those words have acquired distinctiveness for the purpose of s 14(1)(e). It is acknowledged that a geographical name can acquire distinctiveness, but to become inherently adapted under s 14(1)(e), it must be a name that would never occur to another trader to use regarding similar goods: Yorkshire Copper Works Ltd's Application [1954] 71 RPC 150, 157. Therefore, a place name cannot become factually distinctive if there is an obvious connection between the geographical location and the goods in respect of which the place name is sought to be used. [38] Dunlop's case is that the words 'Le Mans' have been used by other traders in New Zealand (namely, Dunlop) for 20 years. Those words cannot have acquired distinctiveness regarding the Club's goods, because they are already factually distinctive of the defendant's goods. Further, other traders may legitimately wish to use the sign 'Le Mans' because of its association with motor racing and the automobile industry. [39] Dunlop concludes that the Club is seeking to trade mark a geographical and inherently non-distinctive name; the only evidence of distinctiveness is overseas use, which was unrelated to the goods for which protection is now sought.Decision[40] The Assistant Commissioner's holding that the mark 'Le Mans' is registrable under s14(1)(e), is not, of course, challenged by the Club, although the Club's counsel contended in their oral submissions that the Club should have succeeded under s14(1)(e) on both the grounds of inherent distinctiveness and that of factual distinctiveness. However, given the Assistant Commissioner's s14(1)(e) holding, I am unsure what gain the Club sees in challenging the Assistant Commissioner's decision that a word with several significations, one of which is geographical, is debarred from registration under s14(1)(d). I nevertheless need to deal with that first aspect of the Club's challenge to the Assistant Commissioner's decision on registrability. The second aspect of that challenge is the Club's contention – not accepted by the Assistant Commissioner – that Dunlop is not using the mark"without any improper motive", and thus fails to meet the test laid down in W & G Du Cros Ltd's Application. [41] The Assistant Commissioner held that s14(1)(d) prevented the registration of 'Le Mans', because one of its ordinary significations is geographical. Relying onPhoenix [1985] RPC 122 at 124, she dismissed the Club's argument that it is the paramount signification that is relevant. Phoenix followed Cannon Trade Mark[1980] RPC 519 in holding that, once it is established that a word has more than one ordinary significations, then it is immaterial which of those significations is paramount. Phoenix is a decision of the English Registrar of Trade Marks, and thus is not particularly authoritative. However Cannon Trade Mark is a relatively recent (in terms of trade mark law) decision of the English Court of Appeal and is thus persuasive authority. The two cases differ in that Phoenix concerned the registration of the geographical mark 'Phoenix' for footwear and sporting goods, while Cannoninvolved the registrability of the surname mark 'Cannon' for specified tobacco goods. Delivering the Court's judgment in Cannon, Ackner LJ at 526 said this:It is well settled that an application for registration of a surname must be closely scrutinised: see the cases referred to by the Registrar in his decision, the Teofani case, (1913) 30 RPC 446 at 461, lines 50 to 52, which was affirmed in the Burford case, (1919) 36 RPC 139 at 147, lines 20 to 24. The learned Judge pointed out that the exclusion of surnames and geographical names from consideration for registration was essentially dependent upon the undesirability of allowing one individual to monopolise a very common surname, or one trader to secure a monopoly of a geographical location. Therefore, when the word sought to be registered is, according to its ordinary signification, a surname, the Registrar has, rightly, over the years proceeded upon the basis that in the absence of evidence of distinctiveness it ought to be refused altogether. There was in this case no such evidence, and accordingly I would dismiss the appeal.Both 'Phoenix' (at least on the evidence before the Registrar) and 'Cannon' were held not to be registrable as trade marks. [42] The Club relies on Windsurfing Chiemsee Productions und Vertriebs GmbH v Boots und Segulzubehor Walter Huber [2000] 2 WLR 205, [1999] ETMR 585 andTrade Mark No. 223479 "Eden" T17/2001 10 May 2001 for the propositions:a) The fact that a trade mark has a geographical signification will not prevent its registration if the geographical name is unknown to the relevant class of persons, or is unknown as a geographical location, or if the name is unlikely to convey to the relevant class of persons that the category of goods originates there e.g. the name is of a mountain or a lake. b) A word which has no direct reference to the character or quality of the goods and is not according to its ordinary signification a surname will not prevent registration e.g. Eden in relation to perfumes and toilet waters. [43] I cannot regard Windsurfing Chiemsee or "Eden" Trade Mark as more authoritative than Phoenix and Cannon. Windsurfing Chiemsee was an advisory judgment of the Court of Justice of the European Communities upon a reference from Landgericht Munchen I (which I understand was the relevant German regional trade mark authority). It was decided under European Community law. In particular it was concerned with the application in the circumstances of an Article in the German Trade Mark Directive proscribing registration of trade marks "which may serve, in trade, to designate the geographical origin of the goods" in question. The case concerned an application to register the word 'Chiemsee' as a trade mark for sportswear. Chiemsee is the largest lake in Bavaria. It is a mecca for windsurfing, but is not an established centre for clothing manufacture. [44] "Eden" Trade Mark was a decision of Assistant Commissioner Frankel. She found the mark "Eden" registrable in Part A in relation to "perfumes; eau-de- cologne, toilet water". [45] In their oral submissions, counsel for the Club sought to distinguish Phoenixbecause the geographical signification of 'Le Mans' is not the/an ordinary signification, "in its Cannon sense". While other manufacturers of sporting goods in Phoenix (the capital of the State of Arizona in the United States of America) might want to put 'Phoenix' on their goods, but for the Club's race, no tyre manufacturer would want to put 'Le Mans' on its tyres. The nub of the Club's submission on thisaspect of its appeal is that the geographical signification or the words 'Le Mans' is not one of the ordinary significations. In support of this submission the Club referred to what it termed "the United Kingdom Le Mans decision". This is the decision of the Appointed Person (Richard Arnold QC), delivered on 8 November 2004, upholding the Club's opposition to an application by the English company Le Mans Autoparts Ltd to register the trade mark Le Mans in respect of four classes of goods, generally relating to automotive parts. At paragraph 42 of his decision the Appointed Person said this:As the hearing officer himself found, LE MANS had become famous in the United Kingdom as the name of a motor race. Indeed, as he noted, the applicant's managing director Mr Cumming conceded in his evidence that LE MANS had become a "colloquialism" for a race and that someone had established a reputation for organising races under the name LE MANS 24 HOURS. It is implicit in the hearing officer's findings that this signification had entirely swamped the original purely geograhical significance of the term LE MANS.While this decision describes the position in Britain when the English company applied for registration on 12 November 1999, it is not determinative, nor even really reliably indicative, of the position in New Zealand in December 2000 when the Club applied to register 'Le Mans'. [46] Significantly, in her "Eden" decision, Assistant Commissioner Frankel did not refer to Phoenix, the authority relied upon by Dunlop as establishing that only one of a word's significations need be geographical before registration will be denied. However, Assistant Commissioner Frankel did refer to the English Court of Appeal's decision in Cannon Trade Mark. She cited it as illustrative of one of what she termed "a variety of approaches to the issue" (I take "the issue" to be what constitutes an ordinary signification in terms of s14(1)(d)). Assistant Commissioner Frankel cited Ciba Trade Mark [1983] RPC 75 as demonstrating another approach which she said has led to the application of the "de minimis" principle in relation to surname trade marks in the United Kingdom, and subsequently also in New Zealand. [47] Describing as "useful" three decisions of the High Court of Ireland, Farah Trade Mark [1978] FSR 234, Kreuzer Trade Mark [1978] FSR 234 and Dent Trade Mark [1979] FSR 205, and having noted that 'Eden' was a surname appearing notmore than 15 times in the four main centre telephone directories, but without referring to any survey evidence, Assistant Commissioner Frankel held:I hold that the surname significance of EDEN is just one of its ordinary significations. Whether surname or otherwise the most common signification is in relation to the Garden of Eden "a paradise". As such it is a word which has no direct reference to the character or quality of the goods and is not according to its ordinary signification a surname.[48] This passage can be read as contradicting itself i.e. having stated that the surname significance of EDEN is just one of its ordinary significations, the passage continues then to hold that EDEN is not, according to its ordinary signification, a surname. But, more importantly, Eden concerned a surname trade mark and, in particular, involves the exercise of the discretion the 1987 IPONZ Practice Note gave the Assistant Commissioner, and is not of much assistance in dealing with the registrability of the geographical trade mark 'Le Mans'. [49] Dealing with the evidence, Assistant Commissioner Walden referred first to the details of the town of Le Mans, in much the same terms as I have in [4] above. He then referred in some detail to the Club's survey evidence and continued:Having reviewed all the evidence, it seems to me that, in New Zealand LE MANS may have more than one ordinary signification: (1) the name of the applicant's famous car race: (2) the name of the place in France where the applicant's car race is held: (3) the name of a brand of tyres.[50] In relation to the last of those ordinary significations, the evidence of Dr Brodie (outlined in [13] above) criticising the Club's surveys should not be overlooked. Dr Brodie considered the Club's survey evidence unreliable, although primarily because it was not gathered from the relevant (as I understand it, in terms of consumers of performance tyres) target market. The nub of Dr Brodie's evidence is that a survey, if properly conducted in New Zealand, would show that the ordinary signification of 'Le Mans' as the name of a brand of tyres was more prominent than the Club's surveys indicated.[51] On the evidence he had, I am not prepared to hold that Assistant Commissioner Walden was wrong to find that one of the ordinary significations of 'Le Mans' was geographical: the name of the French town. It could be argued that the Club's survey evidence does not really support that: only 3% of people surveyed in the first survey who associated the words 'Le Mans' with the French town. However, it seems to me that one of the questions asked in that first survey was not an entirely open one, as it asked "in terms of motoring". And the second and third surveys appear to have been directed specifically to 'Le Mans' in relation to tyres for cars, or at least to cars. And there is also Dr Brodie's criticisms of the Club's surveys, to which I have just referred. [52] I agree with the observation of Assistant Commissioner Frankel in Eden that the decided cases show variations in the application of s14(1)(d) by different Courts in different jurisdictions. Assistant Commissioner Frankel supported her decision with authorities, particularly from Ireland, which supported her view. Similarly, the Club has sought to support its argument on this aspect of its appeal by relying onEden and Windsurfing Chiemsee. For the reasons I have explained, I do not consider either of those cases assists the Club much, if at all. Amongst the authorities on s14(1)(d) there is solid and authoritative support for Assistant Commissioner Walden's decision that the fact that one of the significations of the words 'Le Mans' was geographical meant they were not registrable under s14(1)(d). I am not prepared to hold that that view was wrong in law. In addition to Phoenix and Cannon Trade Mark, there is another judgment of the English Court of Appeal, In Re Registered Trade Mark No. 530,535 of Boots Pure Drug Company, Limited [1938] Ch 54. In that case Boots, an English drug company, had registered the word 'Livron' as a trade mark for medicines. It claimed to have invented the word, as a combination of the words liver and iron, to describe a tonic. Unbeknown (it seemed) to Boots at the time of registration, Livron was the name of a small (population approximately 4,000) French town, in which a French drug manufacturer had one of its factories. The Court of Appeal unanimously dismissed Boots' appeal against the decision of the Assistant-Controller of Trade Marks, upheld in the High Court by Crossman J, expunging Boots' trade mark from the register.[53] That leaves the Assistant Commissioner's holding that the use by Dunlop in New Zealand for some 20 years of the words 'Le Mans' on its high performance tyres prevented the Club from distinguishing any tyres it might market in New Zealand from Dunlop's tyres, or those of other traders. The Club's response to this was its submission that Dunlop had been "coat-tailing" on the reputation of the Club's race. The Club contended that, in terms of the test laid down in W & G Du Cros Ltd's Application, Dunlop had been using the mark 'Le Mans' in New Zealand with improper motive. It had sought to profit from the fame of the Club's 'Le Mans' motor race – to trade off the reputation of the race. [54] Given that the Assistant Commissioner had found that the Club's mark failed the test for registrability under s14(1)(d), the onus lay on the Club to prove that its mark had nevertheless become distinctive of its goods in New Zealand. The Club's evidence on this aspect comprised the three surveys I have referred to in paragraphs [12] and [51] above, as well as evidence of various websites about the Race and the Club which are accessible in New Zealand. [55] For the reasons I explained in [51] above, the Club's surveys fall well short of establishing that New Zealanders think of the Club or its goods when they see the words 'Le Mans'. The way in which the questions were cast was likely to have skewed the results away from the geographical associations some consumers may well have had with the words 'Le Mans'. [56] The Club's task under s14(1)(e) was made more difficult by the fact that it has not offered goods for sale in New Zealand. Accordingly, whatever the words 'Le Mans' mean to New Zealanders, it is most unlikely that they would associate them with the Club as a trade source. The Club has not come close to discharging the onus imposed on it by s14(1)(e) of establishing that the 'Le Mans' mark has come to be associated with and distinctive of the Club's goods in New Zealand. I note that the same result was arrived at by the Australian Registrar of Trade Marks delegate in the decision to which I refer in paragraph [98] below. In dismissing the Club's opposition to Dunlop's application, the delegate stated: I believe that without any evidence of merchandising in Australia, it is hardly likely that members of the public would expect a connection between the applicant's (Dunlop's) mark and the opponent (the Club).[57] Accordingly, the Club's reliance on alleged "improper" use by Dunlop is misplaced. First, in the absence of the requisite evidence of factual distinctiveness, the Club's mark is barred from registration under s14(1)(e). Improper use of the mark by Dunlop, even if established, would not have overcome the Club's failure to establish that New Zealand consumers associate the mark with the Club's goods. [58] Secondly, the test in W&G Du Cros Ltd's Application has the aim of examining whether a geographical place name is likely to be used descriptively i.e. as indicating the origin of the relevant goods. If there is no obvious link between the goods and the place (e.g. Bluff oysters or Marlborough sauvignon blanc), it will be less likely that other traders will legitimately want to use the place name. Thus the test is whether other traders might wish to use the name as a description of their goods. Evidence of use of a geographical mark by Trader A with the improper motive of "coat tailing" on Trader B would be evidence that the place name had become factually distinctive of Trader B's goods. After all, assuming there is no link between the place and the goods concerned, there would be no other reason to use that mark. But improper use by Trader A does not automatically render a geographical mark registrable by Trader B. [59] To overcome the prohibition on registration of Le Mans as a geographical place, the Club must prove that the words 'Le Mans' are factually distinctive of its own goods in the New Zealand market. It is not sufficient simply to point to improper use by another trader. Put another way, use of the mark by Dunlop, even with improper motive, cannot give the Club any property right in the mark 'Le Mans' that it did not already have. [60] Although it is not strictly necessary to decide this point, I hold that Dunlop's use of the mark was not unlawful or improper. At no time during the 20 years or so that Dunlop marketed 'Le Mans' tyres in New Zealand was the Club the registered proprietor of that mark in New Zealand. As I have recorded in paragraph [8] above, it applied for registration only in December 2000. Further, the Club concedes that atno time during that 20 years did it sell or licence for sale in New Zealand competing tyres (or any other automotive products). In those circumstances there is nothing unlawful or improper about Dunlop's use of the words 'Le Mans' as a mark on its tyres. The legal position was authoritatively summarised by Williams J, in a passage expressly approved on appeal by the High Court of Australia in Seven Up Co. v OT Ltd (1947) 75 CLR 203 at 211. That summary, in turn adopted by our Court of Appeal in Pioneer Hi-Bred Corn Company v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 at 68-69, is as follows:In my opinion the effect of these cases is that in the absence of fraud it is not unlawful for a trader to become the registered proprietor under the Trade Marks Act of a mark which has been used, however extensively, by another trader as a mark for similar goods in a foreign country, provided the foreign mark has not been used at all in Australia at the date of the application for registration. But the position is different if at that date the mark has become identified with the goods of the foreign trader in Australia because those goods have been brought into Australia by the foreign trader himself or by some importer or in some other manner. The Court frowns upon any attempt by one trader to appropriate the mark of another trader although that trader is a foreign trader and the mark has only been used by him in a foreign country. It therefore seizes upon a very small amount of use of the foreign mark in Australia to hold that it has become identified with and distinctive of the goods of the foreign trader in Australia. It is not then a mark which another trader is entitled to apply to register under the Trade Marks Act because it is not his property but the property of the foreign trader. The registrar is entitled to refuse to register the mark for such goods. [61] The Assistant Commissioner relied upon that authority, though in dealing with the issue of proprietorship to which I now turn.ProprietorshipSection 26[62] Section 26 of the Act requires, as a prerequisite to registration, that the applicant be the proprietor of the mark concerned. Section 26(1) provides:26 Application for registration(1) Any person claiming to be the proprietor of a trade mark used or proposed to be used by him who is desirous of registering it shall apply inwriting to the Commissioner in the prescribed manner for registration either in Part A or in Part B of the register.Submissions[63] The Club submits that it was the author of, and had a reputation in respect of, the trade mark Le Mans; that Dunlop has misappropriated this trade mark; and that Dunlop's use has accordingly not displaced the Club's reputation. Because the reputation and fame of the Club's mark pre-dates Dunlop's use, Dunlop cannot have become the proprietor of the mark: Arsenal Football Club Plc v Reed [2003] RPC 144 and 696 (CA); Wineworths Group Ltd v Comite Interprofessional Du Vin De Champagne [1992] 2 NZLR 327 (CA); Settef v Riv-Oland (1988) 12 IPR 321. [64] The Club sought to distinguish the cases relied on by Assistant Commissioner Walden in holding that the Club was not the proprietor of 'Le Mans' in relation to tyres: Newnham v Table for Six (1996) Ltd 44 IPR 269; Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Limited [1978] 2 NZLR 50 and Seven-Up Co Ltd v OT Ltd(1947) 75 CLR 203. The Club submitted that those two cases, and also Philip Morris (NZ) Ltd v Liggett & Myers Tobacco (1978) 1 NZIPR 195, have no application here because in each the overseas owner of the mark did not have a reputation in New Zealand. Their marks were unknown in New Zealand or (in the case of Seven Up) Australia. The Club contends that the Courts have not dealt with the misappropriation of a known foreign trade mark before. [65] The 'Champagne' case (Wineworths Group Ltd v Comité Interprofessionel du Vin de Champagne [1992] 2 NZLR 327) held that the length of improper use by a competitor did not mean that the original owner had lost proprietorship. The Club relied strongly on this, submitting that it established that if a trade mark has been misappropriated, use of the mark by the subsequent user is irrelevant. The trader could not rely on that subsequent use to render the original owner's mark no longer distinctive. [66] The Club contends that the essential function of a trade mark is as a guarantee of the origin of goods: Arsenal Football Club Plc v Reed [2003] RPC 144 and 696 (CA). In this case, the location of Le Mans has become synonymous withthe event, namely the race organised by the Club. The Club submits a trade connection will therefore be assumed between goods under that name and the event itself. [67] Any value in the brand 'Le Mans' is derived from the Club's race. Why else, the Club asks, would Dunlop name its tyres after a small French town? The Club also queries why Dunlop has not attempted to register the trade mark itself since 1986, and infers that this is because Dunlop would have met with opposition from the Club and could not have shown proprietorship. [68] Dunlop responds that, at common law, the proprietor is the first person to use a trade mark. It acknowledges that, where there has been no prior use, the author of the mark will be the proprietor. But if someone else has already used it within the relevant jurisdiction, the author cannot be the proprietor: Malibu Boats West Inc v Catanese (1999) 51 IPR 134.[69] Dunlop notes that a competitor may deliberately use a foreign mark, and that while this may be sharp business practice it is not illegal (quoting Seven Up, and Re Registered Trade Mark "Yanx" (1951) 82 CLR 199. Extensive overseas use by the foreign author does not prevent a local competitor that has adopted the mark from becoming the proprietor of the mark in New Zealand: Malibu Boats. [70] Dunlop points to evidence establishing that it has used the name 'Le Mans' as a trade mark in New Zealand in connection with tyres since 1986. It is said that this prior use shifts the onus to the Club to establish its proprietorship of the mark in the New Zealand market. Dunlop submits there is no evidence of the Club using the words 'Le Mans' in new Zealand as a trade mark at all, let alone prior to Dunlop's use of that mark. [71] Dunlop contends that the Club's allegations of misappropriation thus fail to recognise the jurisdictional nature of trade mark law. There cannot be a 'misappropriation' if the Club's mark is not already in use in New Zealand. In any case, Dunlop argues, there is no evidence that Dunlop fraudulently or intentionally appropriated a trade mark.Decision[72] As with registrability, the Club challenges the Assistant Commissioner's decision on proprietorship as a "formulaic application" of trade mark rules (this time the rule that the first to use a mark is the owner), without regard for the function of a trade mark. [73] In submitting that the Assistant Commissioner erred in relying on the authorities she did, the Club sought to distinguish those authorities on the basis that they did not deal with proprietorship of a mark already internationally famous at the time Dunlop began using it in New Zealand. The Club urged reliance on other authorities, which it submitted are more apt to the circumstances of this case. [74] Lastly, the Club contends that the (presumably, New Zealand) Courts have not dealt with the situation of subsequent use of a mark already internationally famous, and contends that a fresh approach for that situation is required. [75] Those submissions overlap. They could also be viewed as inconsistent in that the Club's reliance on cases which it submits apply to the circumstances of this case does not fit comfortably with its submission that the Courts have not ever dealt with a similar case. Dealing with the Club's argument essentially involves deciding whether the Assistant Commissioner's approach was wrong in law, and the cases he relied upon inapplicable, and whether the different approach contended for by the Club is the correct one, and the authorities it relies upon the relevant ones. [76] What is proprietorship? The Assistant Commissioner took, as the requirements for proprietorship, those adopted by Cartwright J in Newnham, from Brown and Grant's, The Law of Intellectual Property in New Zealand (1989) at 20- 22:(a) There is no prior use or prior assertion of proprietorship. (b) The applicant is using or has a sufficiently definite intention to use the mark. (c) There is no fraud or breach of duty involved.[77] Newnham is one of the cases the Club submitted are distinguishable because "the overseas owner did not have a reputation in New Zealand". Newnham did not involve an overseas owner: it was a purely domestic trademark dispute. Further, the Assistant Commissioner cited Newnham only for its adoption of the requirements for proprietorship as stated in Brown & Grant. Beyond that, I agree with the Club thatNewnham has no relevance to this case. [78] In Malibu Boats ([68] above), Finkelstein J outlined the basis for proprietorship in the following way:[25] "Proprietorship can arise in two ways. In the case of a mark that has never been used, the proprietor is the person who is the "author" of the mark and who has applied for its registration with the intention of using the mark: Re Hudson's Trade Marks (1886) 32 Ch D 311 at 319; Seven-Up Co v OT Ltd (1947) 75 CLR 203; [1947] ALR 436 (Seven-Up Co); Shell Co of Australia Ltd v Rohm & Haas Co (1949) 78 CLR 601 at 626; [1949] ALR 661; 1A IPR 438 (Shell Co of Australia). Authorship in this context is not confined to the person who originated the mark. A person may be the author even if he has copied a foreign mark; he or she need only be the first person to have applied the mark in Australia: Aston v Harlee Manufacturing Co(1960) 103 CLR 391 at 400; [1960] ALR 605 citing Re Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corp Ltd (1951) 82 CLR 199 at 202 (Re Registered Trade Mark "Yanx"). A person is also the proprietor of a mark if, at the time of application for registration, he or she is entitled to the exclusive use of that mark under the common law: Shell Co of Australia at 625, 627. At common law that is the person who first used the mark.[79] The Club claims proprietorship as the author of the trade mark 'Le Mans'. As I understand its argument, it claims authorship because "Club Le Mans had a reputation before Dunlop used the trade mark", because of the international fame of its Race. It contends that, in using 'Le Mans' as a mark on its tyres from 1986, Dunlop misappropriated the Club's mark. The Club submitted:Dunlop can never be the de facto owner because of the fame of Club Le Mans, which pre-dates Dunlop's use.[80] This argument by-passes, rather than addresses, the requirements for proprietorship as adopted in Newnham or spelt out in Malibu Boats. The Club could not and does not submit that it invented or originated the words 'Le Mans'. They obviously derive from the French town near which the Race takes place. The Race took its name from the town. The Club also accepts that Dunlop, and not the Club,was the first person to apply or use the mark in New Zealand. The Club acknowledges that that was in 1986 when Dunlop began selling high performance tyres in New Zealand under the names 'Le Mans' and 'Dunlop Le Mans'. [81] Applying the established proprietorship principles to which I have referred to the facts, the Assistant Commissioner concluded that Dunlop was the proprietor of the mark 'Le Mans' for tyres in New Zealand. [82] It is that conclusion which the Club criticised as a "formulaic" application of the law which overlooked the function of a trade mark. It was also the genesis of the Club's submission that the circumstances here require a fresh, and novel, approach by the Court. [83] Lest this judgment also be criticised for overlooking the function of a trade mark, I start with that. As Brown and Grant state at 11:The function of a trade mark is as an indication of the origin or trade source of the goods or services to which it is applied or in relation to which it is used.The authors then refer to Bowen LJ's classic statement of the function of a trade mark in In Re Powell's Trade Mark [1893] 2 Ch. 388, as that most often cited by New Zealand Courts. [84] Similarly, Kerly's Law of Trade Marks 14 th edition 2005 at para 2-003 states:A trade mark is (or should be) a badge of origin. In other words it indicates the source or the trade origin of the goods or services in respect of which it is used. A trade mark may do other things as well, but it must act as badge of origin.[85] There are obvious problems for the Club in respect of the function of the mark 'Le Mans', since it needs to argue that Dunlop's use of the mark conveys that Dunlop's tyres originate from the Club or have some trade connection with the Club. As emerges from Dr Brodie's evidence for Dunlop (I have summarised it in [14]), it is equally if not more likely that the concern of would be purchasers of Dunlop's Le Mans tyres is that Dunlop manufactured them. Similarly, the concern for prospective purchasers looking to buy a set of performance tyres would be that theseparticular tyres were manufactured by Dunlop. Any association with the Club's race would be a secondary consideration, if one at all. In short, buyers' concern is with Dunlop's reputation and not that of the Club. Buyers want tyres made by a reputable manufacturer. Dunlop's evidence proved its reputation as a well established and respected tyre manufacturer and supplier in New Zealand. I do not accept that the Assistant Commissioner overlooked something as fundamental as the function of a trade mark. Nor do I accept the Club's argument that Dunlop's use of the 'Le Mans' mark conveys to buyers that Dunlop's tyres have a trade connection with the Club. I think it more probable that the words 'Le Mans' would convey or confirm to consumers that these particular Dunlop tyres are high performance tyres – suitable for cars that are going to be driven hard – perhaps even in a manner akin to racing cars. To that extent, I accept an association between Dunlop's Le Mans branded tyres and the Club's Race. But it is an association descriptive or indicative of the type of tyre. It is not a "badge of origin". [86] Are the cases relied on by the Assistant Commissioner distinguishable, as inapplicable to the circumstances of this case, as the Club submits? The first case in point of time is Seven-Up. I accept that the mark 7up in issue there was not one famous in Australia. At first instance, Williams J had found that there was no evidence that, prior to the respondent's application to register the mark 8UP, the appellant had ever used its mark 7up in Australia, or that there was any association in the minds of the Australian public between the expression "Seven Up" or the mark7up and the appellant's business. The case is thus similar to this, in that the Club has never used its mark in New Zealand. Seven-Up differs in that the Club's evidence established that the New Zealand public do associate 'Le Mans' with the Club's Race. But the point of Seven Up is that it established that even very extensive use (i.e. fame) of a mark overseas was not a bar to registration in Australia if the mark had not been used at all there at the date of application for registration. I am referring to the first sentence of the, since widely adopted, passage from the judgment of Williams J which I have set out in [60] above. [87] Pioneer Hi-Bred is next in time. The views two of the three Court of Appeal Judges expressed on proprietorship were obiter, since neither party appealed from Cooke J's holding at first instance that it was unnecessary to decide theproprietorship (s26) issue (he decided the case under s16 – confusion and deception in the marketplace). The American plaintiff company had first registered the trade mark "HI-LINE" in the United States in 1941. Since then it had made the mark famous, establishing an international reputation as the world's largest seller of chicks. Notwithstanding that, both Richmond P (at 52) and Woodhouse J (at 56), expressed the view that the American company could not have made out a claim to proprietorship in New Zealand, because it had no business here. Import restrictions related to a poultry disease continued to prevent the American company selling its chicks in Australasia. As Richmond P noted at 53:Cooke J came to the conclusion, on the evidence before him, that at the date of the application (by the Australian company for registration in New Zealand of the mark HY-LINE) the American company's mark was known to a substantial number of persons in or associated with the poultry industry in New Zealand.Richmond P then referred to additional evidence received by the Court of Appeal which confirmed Cooke J's factual finding. Here, the Club's evidence establishes a level of knowledge amongst the New Zealand public of the Club's Race. I therefore do not accept that Pioneer Hi-Bred can be dismissed as irrelevant to the circumstances of this case. After all, the Club accepts that it has not used 'Le Mans' as a mark in New Zealand. [88] Philip Morris, a decision of the New Zealand Supreme Court (now High Court), was decided a year after Pioneer Hi-Bred and adds little to it. It involved the registrability in New Zealand in 1972 by Philip Morris of the trade mark "Eve", which Liggett & Myers (in New Zealand, Rothmans) had in earlier years registered and used in many overseas countries, but never in New Zealand. It is not clear from the judgment whether White J viewed 'Eve' as a famous trade mark. However, relevant to trade marks with a reputation overseas, is White J's comment about the following passage in the then current 10th Edition of Kerly's Law of Trade Marks and Trade Names at paras 4-02/03: it is difficult to see what objection there can be to a claim to proprietorship of a mark which is not in use and has no reputation in this country, whoever makes it, provided at least that he genuinely means to use it. There has, nevertheless, been a tendency in recent years to disqualify on this ground applications for the registration in the United Kingdom of marks which do have a reputation (in some other proprietor) elsewhere.White J's view was that this passage stated the law as Kerly thought it ought to be, but not as it then was. In other words, Kerly suggested a change in the sense that "our law ought to make greater provision than it does for safeguarding the rights of the owners of foreign marks". [89] The Club relied on Wineworths Group to support its submission that "Dunlop can never be the de facto owner because of the fame of Club Le Mans, which predates Dunlop's use". The facts of Wineworths are quite distinct from those here. The evidence established that French Champagne had been imported into New Zealand since the early colonial days. For example, in evidence were advertisements for French Champagne in a Wellington newspaper published in 1845. Imports of French Champagne into New Zealand had increased substantially after 1977. Only a decade later, in 1987, did the Australian company begin exporting "Australian Champagne" to New Zealand, subsequently dropping the word "Australian" and advertising its product simply as "Champagne" or "Brut Champagne". Cooke P at 333 noted that the trial Judge had expressly found that the word "Champagne" is distinctive in New Zealand of the French product and that it would be deceptive for other traders, whether foreign or domestic, to seek to attach themselves to that reputation by using the word "Champagne" to describe sparkling wine made other than in Champagne, France. Cooke P had earlier held (at 331) that there could be no question of concurrent rights to use a trade name where the second class of entrant to the New Zealand market (the Australian producer) did not enter that market for more than 100 years after the first. [90] That fact situation contrasts strikingly with the present case where the Club has never sold tyres or other motor accessories in New Zealand. In short,Wineworths is distinguishable on its facts, and does not assist the Club. It should perhaps be noted that the French producer's proceeding against the Australian producer alleged passing off and breach of s9 of the Fair Trading Act. Strictly speaking, it was not a trade mark case. [91] The Club's reliance on Arsenal was for its explanation of the function of a trade mark. I have already referred to trade mark function (in paragraphs [83]-[84] above). Although the Club's submissions went into the facts of Arsenal in somedetail, I do not find them instructive here. The case was about whether the respondent, Mr Reed, who was selling in Britain unofficial Arsenal souvenirs and memorabilia bearing the Club's trade marks 'Arsenal' and 'Arsenal Gunners', was infringing those marks. Mr Reed claimed his use was not trade mark use. He argued that he was using the Club's trade marks as badges of allegiance, not in a manner that indicated a connection in the course of trade between the goods he was selling and the Arsenal Football Club. It was that fact situation that gave rise to the issue: what is the purpose or function of a trade mark? The case simply did not touch on the issue of the relevance of overseas reputation and fame to proprietorship of a trade mark in New Zealand. Insofar as the Club relies on the fact situation in Arsenal as comparable to that here, there is force in Dunlop's protest that the Club's allegations of misappropriation fail to recognise the jurisdictional nature of trade mark law. [92] To bolster its submission that Dunlop's use in new Zealand since 1986 of the mark 'Le Mans' is irrelevant, the Club also relied on Settef v Riv-Oland. Again, the facts of that case differ markedly from those here. Settef, an Italian company, manufactured a marble wall finish, selling it under the mark 'Riv-Oland'. Having become aware of this product on a trip to Italy, a Mr Ferraro incorporated in Australia a company called Riv-Oland Marble Co. Pty Ltd which obtained a sole agency for Riv-Oland in Australasia. Presumably because of the agency arrangement, Settef raised no objection to the inclusion of 'Riv-Oland' in the Australian company's name. The Marble Co. imported two consignments of the Italian product into Australia before terminating the agency and beginning to make and sell in Australia similar products under the name 'Riv-Oland'. Settef continued to supply small quantities of its Italian product to the Australian market through the 1970s. In 1978 Settef registered the mark 'Riv-Oland' in Australia and successfully sued the Marble Co. for infringement of this mark. [93] The holdings of the Court in Settef as to proprietorship were these: a) Settef was the initial proprietor of the mark 'Riv-Oland': it was the inventor of the mark and had also used it in Australia, initially through the Marble Co. as its agent, and then through small continuing exports to Australia.b) Although extensive use overseas by the foreign owner of a trade mark does not establish proprietorship in Australia, the Court will frown on an attempt by one trader to appropriate the mark of another. Accordingly, the Court will seize upon "a very small amount of use" of the foreign mark in Australia to establish proprietorship: Seven-Up Co. v OT Ltd. c) Settef had not lost its mark by acquiescence: the evidence did not indicate that it knew of the Marble Co.'s continuing use in Australia of its mark 'Riv-Oland' after the agency ended. d) Nor had Settef abandoned its mark through disuse. Establishing abandonment involved more than demonstrating mere "slightness of use". e) Thus, Settef remained the proprietor of 'Riv-Oland' when it applied for registration of that mark in Australia on 30 June 1978. [94] Dunlop supported its argument that it was the proprietor of the mark 'Le Mans' in New Zealand by relying on a number of cases which do not feature in Assistant Commissioner Walden's decision. The first of those cases is Re Registered Trade Mark "Yanx" (1951) 82 CLR 199 in which the judgment of Williams J includes this passage at 202:The registration was, as I have said, admittedly made to forestall the applicant and prevent it selling cigarettes in Australia under the name of "Yanx". To try and register in Australia a word which the applicant to the knowledge of the respondent is using elsewhere on its cigarettes is sharp business practice. But it is not in itself fraudulent or a breach of the law. The two companies were competitors in business and there were no agreements or business arrangements between them which prevented the one company outwitting the other if it could lawfully do so.[95] Yanx was an application by an English company to expunge from the Register the mark "Yanx" registered by an Australian company for cigarettes. The Australian company had registered the mark after becoming aware that the English company planned to sell "Yanx" cigarettes in Australia. Williams J expunged the mark on the grounds that an order placed with the English company for supply forsale in Australia of "Yanx" cigarettes constituted prior use by the English company of the mark in Australia, even though the order had not arrived in Australia when the Australian company applied for registration. Yanx supports Dunlop's proprietorship argument in two respects. The first is that the English company prevailed because it established prior, and first, use of the "Yanx" mark in Australia. Prior to seeking registration, the Australian company had never used the mark in Australia. Similarly, Dunlop's evidence establishes that it was the first to use the 'Le Mans' mark in New Zealand, and the Club concedes that it has never used it here on class 12 goods or on any other goods. [96] Secondly, the passage in Williams J's judgment relied on by Dunlop provides a further answer to the Club's allegation that Dunlop has misappropriated its mark. The Club has neither alleged nor established fraud on Dunlop's part. It does not even contend for "sharp practice" on Dunlop's part, simply submitting that the "silence from Dunlop as to how it came to choose the name" 'Le Mans', indicates misappropriation". [97] Valley Girl Co. Ltd v Hanama Collection Pty Ltd HC WN CIV 2004-485- 2005 6 April 2005 , Blackadder v Goods Road Machinery Co. Inc. (1926) 38 CLR 332 and Trade Mark No. 265448 OASIS Assistant Commissioner Brown 15 August 2002 are amongst further cases relied on by Dunlop to establish that any claim to proprietorship by the Club based on prior use would need to be prior use of 'Le Mans' as a trade mark in New Zealand. Again, Dunlop emphasises the territorial nature of trade marks. [98] When dealing with registrability (the geographical signification aspect), I mentioned (in [45] above) the Club's reliance on "the United Kingdom 'Le Mans'decision". To support its proprietorship argument, the Club relied on the same decision and also on a decision of the Trade Mark Trial and Appeal Board of the United States of America and a decision of the Federal Court of Canada. In the US decision the Board was asked to consider whether Bridgestone's registration of LE MANS as applied to "pneumatic rubber tyres" falsely suggested a connection with the Club and its race. The Board determined that the term LE MANS pointed "uniquely and unmistakably" to the Club and its race and raised a presumption of aconnection between Bridgestone's tyres and the race. I note, however, that the cause of action was based on s2(a) of the American Federal Trademark Act which, as the Board observed, was promulgated in order to give statutory effect to the notions of rights of privacy and of publicity, "the elements of which are distinctly different from elements of a trademark or trade name infringement claim", which are provided for in s2(d). [99] The Canadian decision is Automobile Club de L'Ouest v Bridgestone/Firestone Inc. (1995) 99 FTR 261; 62 CPR (3d) 292. It was an appeal from a decision of the Registrar of Trade Marks refusing Bridgestone's application to register the mark LE MANS in association with tyres. The Registrar had determined that the mark was not distinctive as the mark was sufficiently known in Canada as the Club's mark. The Court agreed that the Club's mark was well-known in Canada and that the use of that mark by Bridgestone was likely to cause consumers to presume a connection or business relationship between Bridgestone and the Club. [100] Dunlop responded to these cases by referring to what might be termed "theAustralian 'Le Mans' decision (Acting Hearing Officer Sharyn Sullivan, 15 May 1995, IP Australia). The Club had opposed Dunlop's registration in Australia of the mark DUNLOP LE MANS for tyres and tyre accessories. The evidence established extensive use of that mark by Dunlop in Australia since 1983, as opposed to no use by the Club at all. The Club's opposition failed. In particular the Club failed to establish that the mark 'Le Mans' was its property in Australia. [101] To similar effect is All England Lawn Tennis Club (Wimbledon) Ltd v Nike International Ltd (1984) 1 C.P.R. (3d) at 185. In that case the Canadian Trade Marks Hearing Officer rejected the All England Lawn Tennis Club's opposition to registration in Canada by Nike of the trade mark "Wimbledon" for athletic shoes. The head note, which seems to me accurately to summarise the decision reads:The term "Wimbledon" is geographical and would tend to suggest that it does not point to a source of origin of the services of any particular party. There is no clear evidence that the opponent or its predecessor in title has used "Wimbledon" as a trade mark anywhere, much less in Canada, for any services. Even if "Wimbledon" has been used as a trade mark by theopponent, or its predecessor in title, such use has only been in England and has only been apparently in association with tennis tournaments.[102] To summarise, I consider the Club's claim to New Zealand proprietorship of the mark 'Le Mans' based on the international fame of its Race fails. The Club cannot claim to have invented the words 'Le Mans', and it concedes that it was not the first person to use the mark in New Zealand. For those reasons, I agree with Assistant Commissioner Walden's decision that the Club failed to establish that it was the proprietor of the mark 'Le Mans' in New Zealand at the time of its application, and failed therefore to establish an entitlement to register the mark here.Section 16: Likelihood of Confusion or Deception[103] Section 16 of the Act provides:16 Prohibition of registration of deceptive, etc., matter(1) It shall not be lawful to register as a trade mark or part of a trade mark any scandalous matter or any matter the use of which would be likely to deceive or cause confusion or would be contrary to law or morality or would otherwise be disentitled to protection in a Court of justice.[104] Before the Assistant Commissioner, Dunlop advanced two objections under this section, alleging that registration would be both likely to confuse or deceive, and contrary to law.Submissions: 'Likely to Confuse or Deceive'[105] Dunlop accepted it carried the onus of establishing that the marks 'Le Mans' and 'Dunlop Le Mans' it had used on its tyres in New Zealand had a reputation (at the date the Club applied for registration) sufficiently substantial to create the possibility that the Club's proposed use of the mark 'Le Mans' would deceive or cause confusion: Pioneer High-Bred Corn Company v Hy-Line Chicks Pty Ltd[1978] 2 NZLR 50 at 62, 63.[106] Dunlop submits it has discharged this initial onus of establishing reputation for the marks it has been using. It refers to the evidence of sales and marketing of Dunlop Le Mans tyres in New Zealand, the physical presence of the words 'Le Mans' and 'Dunlop Le Mans' on those tyres, and evidence from retailers that customers ask for Le Mans tyres by name. This is the evidence summarised in [13]- [15] above. Referring to the Club's survey evidence, Dunlop points out that 42 of the 273 people interviewed (15.5%) associated the name 'Le Mans' with a tyre sold in New Zealand. As already mentioned, Dunlop contends that the percentage would have been significantly higher if the survey had been directed at the relevant target market, namely consumers of specialist tyres. Dunlop contends that this demonstrates a sufficiently substantial reputation attaching to the marks it has used in New Zealand. [107] Assuming Dunlop discharges the initial onus of establishing reputation, the onus shifts to the Club to prove that the mark it has applied to register is not likely to confuse or deceive a substantial number of individuals in the relevant market:Polaroid Corporation v Hannaford & Burton Ltd [1975] 1 NZLR 566; Pioneer Hi- Bred at [57], [61] and [63]. The term "substantial" does not require a majority of the market to be confused: Pioneer Hi-Bred at [54]. Confusion can simply mean causing one to ask: "I wonder who made these tyres?": Pioneer Hi-Bred at [62]. Dunlop refers to the Club's own pleadings (its Counterstatement, evidence and arguments) as acknowledgments that concurrent use by the parties of the Le Mans mark, in respect of the same or similar goods, would result in the likelihood of confusion or deception. Dunlop points to the increase of brand extension and the public awareness of it as exacerbating the likelihood of deception and confusion in those circumstances. Dunlop submits that the likelihood of deception or confusion arising from Dunlop and the Club using the mark 'Le Mans' concurrently is to be assessed taking into account that it will be used on tyres and tyre accessories, taking account also of the kind of customer who is likely to buy these goods and "considering all the surrounding circumstances and what is likely to happen if each of the marks is used in the normal way as a trade mark for the goods of the respective owners of the marks": New Zealand Breweries Limited v Heineken's Bier Browerij Maatschappij N.V. [1964] NZLR 1; Trust Bank Auckland v ASB Bank[1989] 3 NZLR 385 at 389. Dunlop argues that sale of tyres and car accessoriesoccurs in various ways: purchase may be wholesale or retail, requests may be in oral or written form, the purchaser may be knowledgeable or otherwise, and may be on- or off-site. It is likely that both the Club's and Dunlop's tyres would be sold in the same location. [108] Lastly, Dunlop emphasises that there is no evidence from the Club that their use of the mark 'Le Mans' would not deceive or confuse. [109] The Club accepted that, if Dunlop discharged the initial onus of establishing reputation for the marks it had been using, then the onus shifted to the Club to disprove the likelihood of deception or confusion if the marks were used concurrently. The Club's submissions as to what constituted reputation and confusion for trade mark purposes accorded with those advanced for Dunlop. [110] The Club submitted that Assistant Commissioner Walden had erred in equating Dunlop's use of the mark with the existence of a reputation. It submitted that all Dunlop had done was prove that it had used the name 'Le Mans' on its tyres. The Club contended that the Assistant Commissioner had ignored the fact that the Club had a reputation before Dunlop used the mark on its tyres in New Zealand. Given that Dunlop had used the Club's mark, the Club submitted that Dunlop must go further, and prove that its reputation had not derived from the fame associated with the Le Mans Race. [111] The Club asserted that the general public in New Zealand predominately associates the words 'Le Mans' with the Race, and argued that Dunlop has not shown that its goods are identified with the mark Le Mans. Consumers in New Zealand would simply assume that Dunlop's use of this mark had been endorsed by the Club. Any reputation in the New Zealand market therefore belongs to the Club. Once the Club starts using the mark, there will be no confusion because, in the eyes of the public, the words 'Le Mans' have always referred to the Race. [112] In respect of this first aspect of s16, the Club again submitted that Dunlop's 'misappropriation' of the mark was relevant. The Club relied particularly on Settef(referred to at [63] and [92]-[93] above, as authority that Dunlop cannot "cash in" onan alleged reputation from a trade mark it misappropriated and rely on that to establish a s16 reputation.Decision[113] There is no dispute as to the incidence of the initial onus to establish reputation, nor that if Dunlop discharges it, there shifts to the Club the onus of disproving the likelihood of deception or confusion if there is concurrent use of the trade mark 'Le Mans' in New Zealand. [114] Nor is there any difference between the parties as to the relevant requirements for "reputation" and "confusion". [115] I am satisfied Dunlop has discharged the initial onus of establishing that its 'Le Mans' branded tyres have a reputation in the New Zealand market place. Quite apart from the evidence adduced by Dunlop, the Club's own survey evidence shows that 15.5% of the people interviewed associated 'Le Mans' with a tyre sold in New Zealand. And, as I have pointed out, those were people stopped at random on Wellington streets, not consumers of high performance tyres, which I find is the relevant target market. [116] I consider that the Club failed to discharge the onus of disproving the likelihood of deception or confusion. Again, its own survey evidence really established that likelihood, as a major plank of the Club's argument was that Dunlop's use of 'Le Mans' on its tyres deceives and confuses: consumers associate it with the Le Mans Race and therefore with the Club. The converse is surely equally true. [117] Further, as Dunlop points out, there is no evidence from the Club that concurrent use will not deceive and confuse. [118] In [85]-[93] above, I have considered and rejected the Club's submission, again advanced on this first aspect of s16, that the reputation in the mark 'Le Mans' arises from the international fame of the race which pre-dates Dunlop's use of themark on its tyres, with the consequence that Dunlop has misappropriated that reputation and cannot rely on it for s16 purposes. I need not again deal with that argument in detail. What is fatal to the Club is that it has never established a New Zealand reputation for goods sold by it or under licence from it in this country under the 'Le Mans' mark, because it has never sold goods in New Zealand. The cases in my view establish overwhelmingly that reputation or fame unrelated to the function of a trade mark is not sufficient. I have already made the point that the Club itself contended that the Assistant Commissioner had overlooked the function of a trade mark. [119] Accordingly, I agree with and uphold the Assistant Commissioner's decisions on the first, "deception and confusion", aspect of s16. Although the parties directed submissions to the point, I also agree with the Assistant Commissioner that no comparison to gauge the similarity of the Club's and Dunlop's marks is necessary, as they involve identical words.'Contrary to Law'[120] In view of her finding on the "deception and confusion" limb of s16, Assistant Commissioner Walden did not go on to consider whether Dunlop had also proved that use by the Club of the mark 'Le Mans' on tyres would be a breach of the Fair Trading Act or passing off, and thus also contrary to law under the second limb of s16. [121] As I have upheld the Assistant Commissioner's decision on the first limb, I need not consider the second limb either. However, notwithstanding that the threshold on the second limb is higher, I incline strongly to the tentative view that Dunlop has also met that threshold.Section 17: Well-known marks[122] Section 17(2) prohibits the registration of a mark that is similar or identical to a well-known mark, where registration would be likely to confuse or deceive:17 Prohibition of registration of identical and similar trade marks (2) Subject to subsection (5) of this section, no trade mark shall be registered in respect of any goods if the trade mark (or an essential element) is identical or similar to or a translation of a trade mark which is well-known in New Zealand (whether through advertising or otherwise)— (a) As respects those goods or any similar goods; or (b) As respects any other goods if use of the first-mentioned trade mark would be taken as indicating a connection in the course of trade between those other goods and the proprietor of the well-known trade mark, and would be likely to prejudice the interests of such proprietor, where use of the first-mentioned trade mark would be likely to deceive or cause confusion.[123] The Club submits that the Assistant Commissioner erred by equating the concept of 'awareness' (under s 16) with the standard of a 'well-known' mark under s 17. This threshold has not been met on the facts; hardly any of the individuals surveyed connected the words 'Le Mans' with Dunlop. If Dunlop meets the test for a well-known mark, the Club would also meet this test. The Club reiterates that Dunlop has misappropriated the Club's mark and cannot now use it to prevent the Club registering the mark. [124] Dunlop notes that establishing that a mark is 'well-known' requires a similar degree of knowledge to the tort of passing-off: McDonald's Corporation v Joburgers Drive-Inn Restaurant (Pty) Ltd & Ors (1996) 36 IPR 11. That knowledge need only be within the relevant sector of the public. Again, Dunlop refers to the evidence of tyre retailers, and the survey evidence provided by the Club, to suggest that 'Le Mans' is already a well-known mark in New Zealand. [125] I accept Dunlop's submission. As deception or confusion was a likely, indeed in my view inevitable, result of the concurrent use by the parties of the mark 'Le Mans' on tyres in New Zealand, I consider that s17(2) also prohibits registrationof the mark by the Club. I agree with the Assistant Commissioner whose decision was to the same effect.Cross-AppealSubmissions[126] Dunlop's cross-appeal effectively asserts that its objections to registration of the mark in relation to tyres apply equally to all class 12 goods (vehicles, engines and engine parts, and fittings and accessories for vehicles and their engines). Accordingly, the Assistant Commissioner erred in permitting registration of the mark to proceed, provided that tyres and tyre accessories were excluded from the application. It reiterates its objections that the Club's mark is insufficiently distinctive (s 14(1)(e)); that use of the mark would be contrary to law (s 16); and would be likely to deceive or confuse (s 16 and s 17(2)), even if tyres were excluded from the class of goods covered. Dunlop reiterated its submission that the likelihood of confusion was exacerbated by the increasing commonness and public awareness of brand extension. It referred in particular to the evidence of Professor Brodie about this. [127] Dunlop contended that the Assistant Commissioner failed to take into account that its use of the trade mark 'Le Mans' meant that those words are distinctive of Dunlop's goods. Dunlop's use means it is "inevitable", or at least very likely, that use of the mark by the Club would be associated with Dunlop. Therefore, the mark cannot be factually distinctive of the Club's goods under s 14(1)(e). [128] Dunlop reiterates its objections under ss 16 and 17(2), asserting that registration of the mark would be likely to confuse or deceive consumers, would breach the Fair Trading Act, and would constitute passing-off. This would be so if the mark were used by the Club in respect of any class 12 goods, not merely tyres. [129] In response, the Club simply submits that it is "preposterous" that the words 'Le Mans' could be thought of as linked to Dunlop. Consumers will think of theClub, even when the words are used on tyres. Dunlop has not established a distinct reputation, as compared with mere use of the mark on its goods. No evidence was called to establish this reputation. The Club concluded its submission by submitting strongly that Dunlop's cross-appeal cannot succeed.Decision[130] The concept of brand extension was discussed (albeit in relation to distinctiveness) in Advantage Group Ltd v Advantage Computers Ltd CA136/02 7 October 2002, at para [21]. The Court held:Reasonable generalisation does no more than recognise the reality of the market place. Distinctiveness proved in relation to raspberry jam will flow over to other jams. There are limits, of course. Proved distinctiveness in relation to jam could not justify a registration covering all foodstuffs.[131] I regard the exclusion of tyres and tyre accessories from the specification of goods in the Club's trade mark application as an appropriate and correct limit, which will avoid the likelihood of deception or confusion in relation to Dunlop's 'Le Mans' brand of tyres. [132] I note a concession by Mr Williams when arguing this point for Dunlop. When he was making submissions about the damage which would result from confusion in the market place from concurrent use of the same mark in connection with identical or similar goods, I intervened. I asked Mr Williams to be more specific as to how damage might result from the use of the mark on similar rather than identical goods. I instanced a Holden Le Mans motorcar or 'Le Mans' windscreen wipers. Mr Williams acknowledged that, if clearly packaged as goods from another trade source, cars or car accessories of this sort would be unlikely to cause confusion. I consider that to be a responsible and realistic concession. [133] Accordingly, I agree with the exclusion required by the Assistant Commissioner from the Club's specification of goods in its trade mark application, and I hold against the cross-appeal.Result[134] None of the several grounds on which the Club appeals has succeeded. Its appeal is accordingly dismissed. [135] As I agree with the Assistant Commissioner's exclusion from the specification of goods in the Club's trade mark application, I hold against Dunlop's cross-appeal and dismiss it. [136] As Dunlop's unsuccessful cross-appeal was incidental to the Club's appeal, and occupied an insignificant amount of time, Dunlop is entitled to its costs of the proceeding, together with its disbursements. In the event that they cannot be agreed, I will fix them upon receiving memoranda.Solicitors: Baldwins, Wellington for the Appellant Bell Gully, Auckland for the Respondent