ENERGY BEVERAGES LLC v FRUCOR SUNTORY NEW ZEALAND LTD [2020] NZHC 3296 [14 December 2020]

ENERGY BEVERAGES LLC v FRUCOR SUNTORY NEW ZEALAND LTD [2020] NZHC 3296[14 December 2020]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2020-485-301[2020] NZHC 3296UNDER the Trade Marks Act 2002IN THE MATTER OF an appeal from the decision of the AssistantCommissioner of Trade Marks dated 11 May2020, [2020] NZIPOTM 5BETWEEN ENERGY BEVERAGES LLCAppellantAND FRUCOR SUNTORY NEW ZEALANDLIMITEDRespondentCIV-2020-485-302UNDER the Trade Marks Act 2002IN THE MATTER OF an appeal from the decision of the AssistantCommissioner of Trade Marks dated11 May 2020, [2020] NZIPOTM 6BETWEEN ENERGY BEVERAGES LLCAppellantAND FRUCOR SUNTORY NEW ZEALANDLIMITEDRespondentHearing: 16 and 17 November 2020Counsel: G F Arthur, M C Hayes and G M Toner for appellantA H Brown QC, A E Isaacs and S Lee for respondentJudgment: 14 December 2020RESERVED JUDGMENT OF DOBSON JContentsIntroduction [1]Invalidity appeal [10]The scope of s 75 [19]Mark at issue not a sign capable of being represented graphically [35]Analysis [66]The revocation appeal [76]The Assistant Commissioner's reasoning [79]Arguments on appeal [81]Analysis [89]Costs [97]Introduction[1] These two appeals are brought from decisions of the Assistant Commissionerof Trade Marks (the Assistant Commissioner), both issued on 11 May 2020, rejectingtwo forms of challenge by the appellant (EBL) to a trade mark for class 32 (energydrinks, none being cocoa-based beverages) which is in terms including thepredominant use of a particular shade of green, Pantone 376C.1 The respondent(Frucor) uses the trade mark in the marketing of its V energy drink. EBL markets itsown energy drink in containers that may arguably be the same or a similar shade ofgreen and commenced their challenges fearing infringement proceedings by Frucor.[2] In the first appeal (the invalidity appeal), EBL appeals the AssistantCommissioner's dismissal of a claim that the trade mark had been invalidly registered.That appeal is procedurally somewhat complicated and I begin the analysis of it belowby reviewing its history.[3] The second appeal (the revocation appeal) is from the AssistantCommissioner's separate decision dismissing EBL's application for revocation of thetrade mark on the grounds of non-use. The basis for that application was that thecolour swatch as reproduced on the register for the trade mark does not accuratelyreproduce the swatch of Pantone 376C as provided with Frucor's application. Instead,the register includes a somewhat darker shade of green. The different shades areillustrated as follows:1 Energy Beverages LLC v Frucor Suntory New Zealand Ltd [2020] NZIPOTM 6 [the invaliditydecision] and Energy Beverages LLC v Frucor Suntory New Zealand Ltd [2020] NZIPOTM 5 [therevocation decision].Pantone 376C The green represented in the register[4] Frucor's application had been lodged in August 2008, relying on the extent ofits use of Pantone 376C on containers, packaging and promotional material beingsufficient for it to have acquired a distinctive character. The explanation for the markwas that it: consists of the colour green (Pantone 376C), as shown in the representationattached to the application, applied as the predominant colour to the goods,their packaging or labels. Section 18(2) of the Trade Marks Act 2002 applies.[5] The Intellectual Property Office of New Zealand (IPONZ) was satisfied thatthe use of that colour for Frucor's energy drinks had acquired a distinctive characterand the trade mark was accordingly granted. It was registered on 23 June 2012 withthe filing date acknowledged as 29 August 2008.[6] After assessing the evidence Frucor had submitted in support of its application,the principal trade mark examiner corresponded with Frucor's patent attorneys inNovember 2011, reiterating a proposed change to the explanation for the mark to beexpressed in terms that it:2 consists of the colour green (Pantone 376C) as shown in the representationattached to the application, applied as the predominant or predominantbackground colour to the packaging of the specified goods.[7] It was part of Frucor's defence of the trade mark that the wording in theexplanation challenged by EBL was not only approved by IPONZ, but reflected termsproposed by the chief examiner.2 IPONZ Compliance Report (23 November 2011).[8] On the basis of the discrepancy between the colour as represented on theregister, and the colour used on the drink containers in which the V product is sold, aswell as packaging and associated promotional material, EBL sought revocation fornon-use of the registered mark. The Assistant Commissioner's decision was thatrequisite use of the mark had occurred, essentially on grounds that Frucor could relyupon the representation of the colour in its application, and not be bound by theinaccurate reproduction of it on the register.[9] Both appeals are general appeals, to be determined on a rehearing that appliesthe approach in Austin, Nichols & Co Inc v Stichting Lodestar.3 The Court must besatisfied that the appealed decision was wrong, and the Court has all the powers theAssistant Commissioner had.Invalidity appeal[10] Before the Assistant Commissioner, EBL pleaded that the registration of themark was invalid, relying on s 17(1)(b) of the Trade Marks Act 2002 (the Act), whichprovides:17 Absolute grounds for not registering trade mark: general(1) The Commissioner must not register as a trade mark or part of a trademark any matter—(a) the use of which would be likely to deceive or causeconfusion; or(b) the use of which is contrary to New Zealand law or wouldotherwise be disentitled to protection in any court; or(2) The Commissioner must not register a trade mark if the application ismade in bad faith.[11] That provision was invoked because of the terms of s 75 of the Act, whichrecognises a degree of indefeasibility for a trade mark, once registered, if a challengeis brought any later than seven years after its date of registration. Section 75 is to beconsidered together with s 73. Those sections provide:3 Trade Marks Act 2002, s 173; Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103,[2008] 2 NZLR 141.73 Invalidity of registration of trade mark(1) The Commissioner or the court may, on the application of anaggrieved person (which includes a person who is culturallyaggrieved), declare that the registration of a trade mark is invalid tothe extent that the trade mark was not registrable under Part 2 at thedeemed date of its registration.(2) Despite subsection (1), the registration of a trade mark that hasacquired a distinctive character after its registration must not bedeclared invalid even though the trade mark was not registrable undersection 18(1)(b), (c), or (d) at the deemed date of its registration.(3) The Commissioner or the court, as the case may be, may refuse anyapplication for a declaration of invalidity that is vexatious.75 Presumption of validity of registration of trade markThe registration of a trade mark is, after the expiration of 7 years from thedeemed date of registration, deemed to be valid unless—(a) the registration was obtained by fraud; or(b) the trade mark should not have been registered on any of the groundsset out in section 17(1) or (2); or(c) the registration may be revoked on any of the grounds set out insection 66.[12] In the invalidity proceeding before the Assistant Commissioner, Frucor arguedthat the substantive basis for EBL's challenge was under s 18 of the Act, but wasmislabelled as being brought under s 17 to avoid the indefeasibility provision in s 75.EBL's challenge had been brought some two years after the expiry of the seven yearperiod since the date of registration of the mark.[13] Section 18 is in the following terms:18 Non-distinctive trade mark not registrable(1) The Commissioner must not register—(a) a sign that is not a trade mark:(b) a trade mark that has no distinctive character:(c) a trade mark that consists only of signs or indications that mayserve, in trade, to designate the kind, quality, quantity,intended purpose, value, geographical origin, time ofproduction of goods or of rendering of services, or othercharacteristics of goods or services:(d) a trade mark that consists only of signs or indications thathave become customary in the current language or in the bonafide and established practices of trade.(2) The Commissioner must not refuse to register a trade mark undersubsection (1)(b), (c), or (d) if, before the date of application forregistration, as a result of either the use made of it or of any othercircumstances, the trade mark has acquired a distinctive character.[14] EBL contended that inclusion of the term "the predominant use" ofPantone 376C in the description of the mark meant that the registration was of a signthat was not capable of graphic representation. EBL relied on criticism of the use intrade marks for colours of expressions such as "predominant", particularly by LordJustice Mummery in the English Court of Appeal.4 The Assistant Commissioneraccepted that the challenge was indeed brought in substance under s 18 of the Act,rather than s 17, and that a challenge to registration of a mark because of breach ofs 18 is a ground that is caught by the presumption of validity under s 75. Accordingly,that limited indefeasibility provision precluded the invalidity challenge beingdetermined.[15] In the event that the Assistant Commissioner was wrong in that, she analysedthe substance of the criticism as one under s 18, and held that the criticism could notin any event be made out.[16] On its appeal from the invalidity decision, EBL sought leave to advance thesame argument, but now acknowledging that it was advanced under s 18(1)(a), ratherthan s 17(1)(b) of the Act. Mr Arthur characterised the change as raising a new pointon appeal, which he submitted relied upon the same facts and evidence. In opposingleave, Mr Brown QC for Frucor submitted that what was proposed was in fact a newground for the appeal and one which Frucor would have adduced additional evidenceto oppose.4 Société des Produits Nestlé SA v Cadbury UK Ltd [2013] EWCA Civ 1174, [2014] 1 All ER 1079at [51], [52].[17] Prior to the filing of submissions, I directed that I would hear the opposedapplication for leave to argue invalidity under s 18(1)(a) of the Act as part of thesubstantive hearing. I heard counsel separately on whether leave should be given,including argument on Frucor's ground of opposition that leave should not be givenfor a ground of appeal that was, in any event, time-barred because a challenge to thetrade mark under s 18 is now precluded by s 75 of the Act.[18] Mr Brown's submission on this point was that if Frucor is correct in arguingthat a challenge to the validity of the trade mark could not be brought under s 18 ofthe Act because it is outside the seven year time period for such challenges, then therewould be no utility in granting leave to now argue the appeal on that ground. Thatmakes it appropriate to address first whether indeed an application to declare thetrade mark invalid under s 18(1)(a) could not now be entertained because it wasadvanced more than seven years after the date of registration of the trade mark.The scope of s 75[19] Mr Arthur argued that the presumption of validity in s 75 once seven years haselapsed since the date of registration only applied to registrations of trade marks.Relevantly in this case, he submitted that what had been registered was not, and couldnot be, a trade mark because the registration was for a sign that did not constitute atrade mark.[20] Mr Arthur submitted that on the definitions in s 5 of the Act, a trade mark hadto comprise a sign that was capable of being represented graphically and capable ofdistinguishing the goods or services of one person from those of another person.Because the explanation of the mark included the reference to Pantone 376C beingapplied as the predominant colour to the goods, he contended there was no singlegraphic representation conveyed to the reader of the register so the register wasdescribing something that could not conform to the definition of a trade mark. If itwas not a trade mark in the first place, then its inclusion on the register could not beprotected by the provisions of s 75.[21] Mr Arthur accepted that this approach required distinguishing the provisionsof s 18(1)(a) of the Act from the other provisions in s 18(1)(b), (c) and (d). Hesubmitted such a distinction is contemplated because in both ss 18(2) and 73(2) theAct makes separate references to subss (1)(b), (c) and (d). This arguably reflectsParliament's intention to treat the circumstances in which the Commissioner must notregister a trade mark because the sign proposed is not a trade mark differently fromthe other circumstances where registration cannot occur.[22] Texts on the New Zealand Act do not make the distinction Mr Arthur arguedfor. They do not treat the grounds for challenging a mark in s 18 as being excludedfrom the presumption of validity in s 75 so that, at least implicitly, their commentarieswould require any challenge to a mark on any of the grounds in s 18 to be broughtprior to the expiration of seven years from the date of deemed registration.5[23] Nor has Mr Arthur's argument found favour with the Assistant Commissioner.The authority principally relied upon by Mr Brown on the scope of the presumedvalidity in s 75 and the policy behind it was Bohemia Crystal Pty Ltd v CrystalliteBohemia SRO.6 That proceeding involved an application seeking a declaration ofinvalidity for three marks that had been brought more than 11 and 16 years after theirregistration. Although advanced on the ground that the original registrations had beenmade in bad faith (that is, under s 17(2)), the argument was characterised on the factsas being "a s 18 (non-distinctiveness) ground masquerading as a bad faith claim". Theapplications were held to be time-barred. The point was dealt with as follows:7[73] In my view, there are important reasons for the presumption of validityin s 75 of the Act. It achieves certainty for registered trade mark holders tothe effect that they can be reassured that their trade marks may only bedeclared invalid after seven years on one of the limited grounds in s 75(a)-(c)of the Act. Those exceptions to the presumption of validity in s 75 fulfil astrong and clear public interest purpose. The primary focus of those groundsis not to protect competitors. ·74. The presumption of validity also minimises situations whereapplications for declarations of invalidity are decided on stale evidence. Overthe years memories fade, records may be lost and witnesses may even die. Itis clearly advantageous if applications such as the present one are broughtwhile evidence is available and fresh. 5 For example, Paul Sumpter Trade Marks and Practice (4th ed, LexisNexis, Wellington, 2018) at[TMA75.3]; Ian Finch (ed) James & Wells Intellectual Property Law in New Zealand (3rd ed,Thomson Reuters, Wellington, 2017) at [7.17.7].6 Bohemia Crystal Pty Ltd v Crystalite Bohemia SRO [2015] NZIPOTM 25.7 Footnotes omitted.75. Another justification for the presumption of validity is that, with thepassage of time, owners of registered trade marks should be able to order theirbusinesses according to the status quo, without fear of being held to accountfor ancient obligations. The owner submits that if the registrations for therelevant marks are declared invalid it will have been prejudiced by theapplicant's substantial delay given it has not had the opportunity to re-brandearlier.76. If the legislature had intended that invalidity applications such as thepresent, which are essentially based on s 18 of the Act, could have beenbrought seven years after the deemed date of registration of the relevant markthen I consider it would have included s 18 of the Act in the clear exceptionsto the presumption of invalidity, which are set out in s 75(a)-(c). Thelegislature has not done so and, for the reasons set out above, I am concernedabout the implications of allowing what is essentially a backdoor attempt tobring a s 18(1) claim despite that being prohibited by s 75 of the Act.[24] The Assistant Commissioner has adopted the same approach in the presentcase.8[25] Mr Arthur submitted that the analysis of the then authors of Kerly in its twelfthedition is to be preferred.9 That 1986 edition is the last dealing with the UnitedKingdom Trade Marks Act 1938. The learned authors commented that s 13 (theequivalent in the United Kingdom 1938 Act of s 75 of the Act):10 only operates if what is registered is a mark, and is a trade or service markwithin the definition in s 68(1).[26] Translating those references to apply to the Act reflects the view:Section 75 only operates if what is registered is a sign, and is a trade markwithin the definition in s 5.[27] The authors of Kerly acknowledged an observation by one of the judges in theEnglish Court of Appeal decision in Imperial Group Ltd v Philip Morris & Co Ltd(Nerit) to the effect that the presumption of validity overrides the objection that whatwas registered was not a mark.11 Therefore apart from the academic commentary by8 That approach was also taken in S C Johnson & Son Inc v International Consolidated BusinessPty Ltd [2017] NZIPOTM 4.9 T A Blanco White and Robin Jacob Kerly's Law of Trade Marks and Trade Names (12th ed, Sweet& Maxwell, London, 1986).10 At 11-06.11 Imperial Group Ltd v Philip Morris & Co Ltd (Nerit) [1982] FSR 72 (EWCA) at 88.highly respected academics and practitioners, that English authority reflects the sameapproach to the policy behind, and terms of, s 75 as has prevailed in New Zealand.[28] For Frucor, Mr Brown submitted that the legislative history supported aninterpretation that confined the exceptions to s 75 to just those s 17 grounds explicitlycited in it. He referred to a submission on the Trade Mark Bill by the New ZealandInstitute of Patent Attorneys that raised concerns at the exclusion of what has becomes 18 from the list of exceptions to s 75. The Ministry of Economic Development'sresponse to the submission rejected the concern, observing:12If the trade mark has been registered for such a significant period of timewithout challenge, it should be allowed to remain on the register subject to thestated exception.[29] Mr Brown also submitted that the legislature should be taken to have intendedconsistency of approach between ss 73 and 75 of the Act. Both are to be interpretedas treating the status of registration as what, first, can be challenged under s 73 but,second, what is protected by s 75 after a period of seven years. An explicit legislativepurpose was to simplify procedures,13 and it would instead add complexity if theconcept of registration was to be used distinctly in ss 73 and 75.[30] There is something of an existential aspect to Mr Arthur's argument. Becausean opponent now wishes to argue that the Assistant Commissioner was wrong to treatthe sign in issue as capable of being represented graphically, the mark that has beenregistered for a substantial period of years should be treated as not comprising atrade mark to afford the challenger jurisdiction to seek to make out that assertion. Thatapproach relegates the consequences of registration to no more than a reflection ofwhat the challenger asserts was a mistake by the Commissioner in allowing the markonto the register.[31] The contrary proposition in existential terms is that the trade mark does havestatus as such because the effect of registration says that it has. For seven years fromthe date of deemed registration, that status is able to be challenged on the ground that12 Ministry of Economic Development, "Report to the Commerce Committee on the Trade Mark Bill2001" (26 November 2001).13 Trade Marks Act 2002, s 3(b).the Commissioner erred in treating the sign as capable of being representedgraphically. However, if any such challenge to the Commissioner's decisionrecognising its status is not pursued within seven years, then the trade mark isthereafter secure from challenge on grounds that contend an error by theCommissioner.[32] I am satisfied that the provisions of s 75, read in the context of the purpose ofthe Act, support the latter approach. The proposition Mr Arthur relies on to contendthat the mark is in fact not a trade mark may well be tenable (as I traverse below), butit is by no means an unassailable proposition. Acceptance of his proposition that thisis not a trade mark would require the challenger to prevail over the defence of itsstatus, and the Assistant Commissioner's justification for previously arriving at thecontrary conclusion.[33] I am not persuaded that a challenge advanced under s 18(1)(a) of the Act canbe brought after the expiration of seven years from the deemed date of registration ofthe trade mark, because I find the presumption of validity in s 75 prevents thatargument being raised. Mr Arthur's submission that there is policy justification forpurging the register of marks that ought not to be there has to yield to the policy aimof affording owners of trade marks a measure of certainty in respect of their rightsafter a period of seven years. I accept Mr Brown's points about the interpretation ofthe scope of s 75.14 It follows that I find there is no basis on which to grant leave forEBL to advance a challenge to the validity of the trade mark under s 18(1)(a) of theAct.[34] That outcome renders it unnecessary to resolve the contest between counsel asto whether EBL's initiative to challenge the validity of the trade mark under s 18(1)(a)instead of s 17 constitutes a new point within the appeal as foreshadowed, or anentirely new ground of appeal. It also obviates the need to determine the merits ofFrucor's claim that it would be prejudiced because, had it known that s 18(1)(a) wasto be raised, it would have adduced additional evidence.14 See [28]–[29] above.Mark at issue not a sign capable of being represented graphically[35] Against the prospect that she was wrong in deciding that s 75 of the Act appliedso that the challenge to the validity of the mark was out of time, the AssistantCommissioner went on to consider the substance of EBL's challenge to the validity ofthe trade mark. Her decision was that those grounds for challenging the trade markwere not made out and accordingly she would in any event have dismissed thechallenge to its validity.[36] Against the prospect that this challenge may go further, it is appropriate for meto similarly record the comprehensive arguments I heard on the substance of theinvalidity challenge, and provide my view on it.[37] Under the definition of "sign" in s 5 of the Act, that concept may include adiverse range of items such as colour, device, letter, name, shape, smell or sound or acombination of such signs. To qualify as a trade mark, the sign must be capable ofboth being represented graphically, and distinguishing the goods or services of oneperson from those of another.[38] As set out at [13] above, under the heading "Non-distinctive trade mark notregisterable", s 18(1)(a) provides that the Commissioner must not register a sign thatis not a trade mark.[39] Mr Arthur challenged the terms of the register for this trade mark on twogrounds. The first was that the explanation did not describe a sign that is capable ofbeing represented graphically because the reference to applying a particular colour asthe predominant one to the goods, and extending the trade mark to not only the goodsbut their packaging or labels, contemplated not a single, definitive mark, but rather arange of signs.[40] The second of the grounds overlapped with the point taken in the revocationappeal, namely that the swatch of colour included on the register is not Pantone 376Cso (among other consequences) that results in the registration being ambiguous andlacking the required clarity and precision to qualify as a sign and therefore a trade markunder the Act.[41] The Assistant Commissioner rejected the first argument in the followingterms:1555. I do not think that asking whether a colour is predominant if itconstitutes say 50% of the colour on packaging, for example, ishelpful. In some cases (for example, if the packaging features asignificant proportion of another colour such as white or grey) thecolour may still be predominant, in the sense of being the most eye-catching or obvious. Ultimately, whether a colour is predominant inany given context will depend on the particular circumstances. Thefact that this might be a difficult judgement to arrive at in some casesdoes not automatically mean that the formula "application as thepredominant colour" will render a mark insufficiently clear to becapable of graphical representation under s 5.[42] Mr Arthur submitted that this approach, which has been adopted in an earlierproceeding in New Zealand, is wrong, and is out of step with the correct approachtaken in the United Kingdom, in Europe and, he suggested, in Australia.[43] Mr Arthur relied in particular on the decision of the Court of Appeal of Englandand Wales relating to Cadbury's attempt to register predominant use of a particularshade of purple for its chocolate confectionary products.16 Nestlé had opposed anapplication for registration of a trade mark of a sign described as:The colour purple (Pantone 2685C), as shown on the form of application,applied to the whole visible surface, or being the predominant colour appliedto the whole visible surface, of the packaging of the goods.[44] In that litigation, the hearing officer (the United Kingdom equivalent of ourAssistant Commissioner) and a first appeal had allowed registration of the trade markbut those decisions were reversed by the Court of Appeal.[45] Trade mark law in the United Kingdom has, throughout the period in whichthe authorities he cited were decided, been influenced by the need for conformity withthe approach in the European Union. The decisions cited in argument in Cadbury'scase were predominantly judgments of the Court of Justice of the European Union(CJEU).15 The invalidity decision, above n 1.16 Société des Produits Nestlé SA v Cadbury UK Ltd, above n 4.[46] Mr Arthur distilled propositions from European case law, much of which isconsidered in the Cadbury's appeal, including that graphical representationencompasses both the visual representation and any description in words, and that thesign must always be perceived unambiguously and uniformly. Further, he citedauthority that wording to the effect that a colour is applied as the predominant colourto the goods is not sufficiently precise, and that wording which encompasses multiplesigns does not satisfy the requirement that the registered trade mark has to be for a(singular) sign. Specifically, the term "predominant" was submitted by Mr Arthur asnot being sufficiently clear for the Commissioner, the public or traders to knowwhether what they are using is "identical" to the registered trade mark.[47] These propositions derived from by the European jurisprudence are reflectedin the analysis of the Court of Appeal in the Cadbury's case. In that appeal, Sir JohnMummery concluded his reasoning with the following observations:17[55] the description of the mark as including not just the colour purpleas a sign, but other signs, in which the colour purple predominates over othercolours and other matter, means that the mark described is not 'a sign'. Thereis wrapped up in the verbal description of the mark an unknown number ofsigns. That does not satisfy the requirement of 'a sign' within the meaning ofart 2, as interpreted in the rulings of the CJEU, nor does it satisfy therequirement of the graphic representation of 'a sign', because the unknownnumber of signs means that the representation is not of 'a sign'. The markapplied for thus lacks the required clarity, precision, self-containment,durability and objectivity to qualify for registration.[48] In his concurring judgment, Sir Timothy Lloyd also reflected a concern on theneed for precision:18In my judgment the use of the word 'predominant' in this context, makes thedescription of the mark too subjective, too imprecise, and inadequately clearand intelligible, to be capable of registration.[49] Mr Arthur cited the more recent English Court of Appeal decision in GlaxoWellcome UK Ltd (t/a Allen & Hamburys) v Sandoz Ltd as a further example of therequirement for precision in the explanation for a colour trade mark.19 That case17 Société des Produits Nestlé SA v Cadbury UK Ltd, above n 4.18 At [63].19 Glaxo Wellcome UK Ltd (t/a Allen & Hamburys) v Sandoz Ltd [2017] EWCA Civ 335.involved Glaxo's allegation of infringement of a trade mark for an inhaler device thatwas both pictorially represented and described in the following terms:20The trade mark consists of the colour dark purple (Pantone code 2587C)applied to a significant proportion of an inhaler, and the colour light purple(Pantone code 2567C) applied to the remainder of the inhaler.[50] Sandoz successfully defended the alleged infringement. The reasoning of LordJustice Kitchin included:21 in order to fulfil its role as a trade mark and meet the requirements ofprecision and clarity, the sign must always be perceived unambiguously anduniformly. In my judgment it follows that if the authorities and the public areleft in a state of confusion as to the nature of the sign then these requirementswill not be satisfied. As Advocate General Philippe Leger explained in his opinion inHeidelberger at [56], assessment of notions of "identity" and "risk ofconfusion" necessarily implies a precise knowledge of the sign and mark inquestion, as they are or as they may be seen by the public concerned.[51] In that case, the Court was concerned that the terms of the trade mark couldextend protection for its owner to a range of inhalers with different proportions of thedark and light purple tones. The Court was concerned that those options would leavethe public (including economic operators) "in a position of complete uncertainty as towhat the protected sign actually is".22[52] Mr Arthur also relied on the Australian Federal Court decision in oppositionproceedings to Frucor's application for registration of the same mark as has beenregistered in New Zealand. That application was lodged in the same terms, butFrucor's application had copied the incorrect shade of green from the New Zealandregister, rather than attaching a swatch of colour that accurately reproducedPantone 376C. Accordingly, the error was Frucor's responsibility rather than that ofthe trade mark regulator.20 Glaxo Wellcome UK Ltd (t/a Allen & Hamburys) v Sandoz Ltd, above n 19, at [4].21 At [35]–[36].22 At [80].[53] In those circumstances, Coca-Cola's opposition to registration of the trademark was successful. Yates J reasoned:23121. The matter can be considered in the following way. A personinspecting the Register would readily understand that application has beenmade for the colour green shown graphically by the representation. He or sheis told that this colour is "Pantone 376c". He or she may accept that as a fact,not knowing that the colour is not Pantone 376C. However, if he or she wereto inquire further, he or she might come to know that the colour, as depictedin the representation, is not Pantone 376C. At this point, it becomes manifestthat the representation and the description are in conflict. They cannot bothbe correct. Where does the error lie? Is it in the description of the colourdepicted in the representation as "Pantone 376c" or in the graphicrepresentation of the colour itself? Each alternative is equally possible on anobjective assessment. A person presented with this conundrum would notknow how to resolve it and thus come to an understanding of what mark hasbeen applied for. This is why the delegate accepted that the application wasfatally flawed. I do not accept that a person inspecting the Register should be taken ashaving an understanding that the reproduction of colour through processessuch as scanning, uploading, downloading and printing can be compromisedin the process. A person inspecting the Register is entitled to act on theassumption that the trade mark applicant's own depiction of colour in therepresentation accompanying the application is accurate.[54] Mr Arthur submitted that the mark could not be represented graphicallybecause its description admitted of numerous alternative representationsaccommodating the part of the packaging not presented in the predominant colour.[55] Mr Arthur supported his submission as to the need for a single precisedescription of the mark by referring to the test for infringement in s 89 of the Act.Paraphrasing s 89(1), infringement of a registered trade mark can occur by:(a) the use of a sign identical with a registered trade mark in relation togoods in respect of which the trade mark is registered; or(b) the use of a sign identical with a registered trade mark in relation togoods similar to goods in respect of which the trade mark is registeredif that use is likely to deceive or confuse; or23 Frucor Beverages Ltd v The Coca-Cola Company [2018] FCA 993 at [121]–[122].(c) the use of a sign similar to the registered trade mark in relation to anygoods or services that are identical with or similar to the goods inrespect of which the trade mark is registered if that use is likely todeceive or confuse.[56] The distinction between the identical and deceptively similar forms of potentialinfringement have been referred to as the umbra and penumbra of the trade mark. Ifthe owner of the mark can establish a competitor's use of an identical mark, then thatfact alone makes out infringement. Alternatively, if there is use of a similar mark, butto an extent that it is likely to deceive or confuse, then the owner must establish thatlikelihood of deception or confusion: hence the "umbra" for identical use and the"penumbra" for similar use.24[57] Mr Arthur argued that if the description is of predominant use ofPantone 376C, then it will be impossible to draw the distinction between the umbraand the penumbra when considering a competitor's use of what is arguably the samecolour.[58] Mr Arthur also contended there was a lack of necessary precision by instancinga product packaged in this shade as to 51 per cent, or a product packaged in this shadeof green as to 40 per cent, with three other colours, each appearing as to 20 per cent.The Assistant Commissioner acknowledged that whether a competitor was using asign that was identical or merely similar to the registered trade mark might involve adifficult judgement.25 Mr Arthur submitted this indicated that the trade mark wasinsufficiently precise in the first place.[59] Mr Arthur also argued that allowing a description of a colour with theimprecision inherent in "predominant" meant that the owner could get protection fora mark wider than the get up relied upon to make out distinctive use of the colour inthe first place.24 As applied by the Supreme Court in Crocodile International PTE Ltd v Lacoste [2017] NZSC 14,[2017] 1 NZLR 679 at [46]. The Court derived these terms from a number of United Kingdomtrade mark cases.25 The invalidity decision, above n 1, at [55].[60] For Frucor, Mr Brown sought to distinguish the European jurisprudence bydistinguishing the factual circumstances in which the various applications had beenconsidered, and on the basis that European decisions require a graphically representedsign to be "clear, precise, objective, durable, self-contained, easily accessible andintelligible" to comply with art 2 of the EU Trade Mark Directive. Such requirementswould arguably place an unwarranted and unnecessary gloss on the requirements ins 5 of the New Zealand Act. Mr Brown also distinguished a majority of the cases onthe ground that they involved various forms of opposition proceedings, rather thanchallenges to the validity of a registered mark.[61] Mr Brown emphasised that the terms used in Frucor's description of its markreflected the evidence that had been advanced for Frucor to establish that thosefeatures of its products had acquired a distinctive character under s 18(2) of the Act.He also attributed relevance to the distinction that Nestlé was opposing an applicationfor a trade mark rather than challenging the validity of an existing one.[62] Perhaps most importantly, Mr Brown criticised the analysis of the EnglishCourt of Appeal decision for attributing relevance to the remainder of the packagingwhich was implicitly contemplated because the description of the colour purple wasonly that it was used "predominantly". Sir John Mummery had reasoned:26 If the colour purple is less than total, as would be the case if the colour isonly 'predominant', the application would cover other matter in combinationwith the colour, but not graphically represented or verbally described in thespecific, certain, self-contained and precise manner required. [63] However, in the present case, the description of the rest of the appearance ofthe products that are not presented in Pantone 376C is irrelevant. The distinctivecharacter of the mark is the predominant use of that shade of green, and nothing morenor less. Arguably, it was therefore wrong for the English Court of Appeal to attributerelevance to the remainder of the packaging, on the basis that it would extend theprotection enjoyed by the owner of the mark to a variety of other combinations offeatures in the packaging of its products, thereby giving rise to the rights to claim26 Société des Produits Nestlé SA v Cadbury UK Ltd, above n 4, at [51].infringement for not just one, but a variety of get ups that might be used by otherproducers of (in that case) chocolate bars.[64] Mr Brown submitted that the law and practice in New Zealand providing forregistration of colour marks was intended to provide for registration of marks used asa predominant colour where the evidence justified the recognition of the distinctivecharacter of its use. Mr Brown produced a search of the register showing 123 existingcolour trade mark registrations, 21 of which used the same or substantially similarwording to the explanation contained in Frucor's application for the current mark.[65] Mr Brown cited an earlier decision of the same Assistant Commissionerdealing with an application in this country by Cadbury for a colour mark in respect oftheir distinctive purple wrapping on chocolate blocks.27 Although Cadbury'sapplication in that case did not include the specification of the Pantone shade of purple,the Assistant Commissioner considered that should be included and, subject to that,the reference to its "predominant" use was sufficiently certain.28 The extent ofdistinctive use of the particular colour was critical:29 I conclude that the applicant has established the very substantial level offactual distinctiveness needed to overcome the low inherent distinctiveness ofits colour mark.Analysis[66] I do not accept that the strict requirements for the definition of a mark in theEuropean jurisprudence is either necessary or appropriate in the context of theNew Zealand Act. I accept as appropriate the practice of descriptions such as wasproposed and accepted in this case as being capable of providing a sufficiently certaindefinition for a colour trade mark. The essence for an applicant is in discharging theevidentiary onus on distinctiveness of use of that colour.[67] I am also not inclined to adopt the concerns reflected in the English Court ofAppeal decision in respect of Cadbury's use of a shade of purple. The analysis in those27 Cadbury Ltd v J H Whittaker & Sons Ltd [2004] NZIPOTM 26.28 At 26.29 At 26.judgments reflects an expectation that the terms of the written explanation for the markmust necessarily be distinctive of its whole appearance. That approach does notcontemplate acceptance of a mark that is described in less than entirely exhaustivedetail, in part at least because that would enable non-material details to be present inmore than one form. That reasoning would require every detail of the mark as soughtbeing identical in every form, and all being aspects of what renders its use distinctive.[68] The approach of the English Court of Appeal in Cadbury reflects a concernthat the breadth of protection where the relevant colour's use is described as"predominant" would be illegitimately extended by acknowledging that the distinctivecharacter extended to products with a range of other features in addition to thepredominant use of the distinctive colour. However, that does not necessarily arise onthe approach adopted for colour marks in New Zealand. The viable alternative is thatthe mark affords protection only for the predominant use of the distinctive colour, withthe remainder of the get up being a matter of indifference so that any additionalfeatures can neither add to nor detract from the scope of the trade mark that isprotected. That is the approach reflected in the Assistant Commissioner's decision inthe present case[69] I do not accept the various examples cited by Mr Arthur of difficulties createdin identifying the boundaries of the trade mark protection that is granted in such casesas a ground for rejecting a formula of words that include reference to the predominantuse of an objectively identifiable shade of colour. Certainly, as the AssistantCommissioner acknowledged, determining the line between the umbra and thepenumbra may involve a greater level of judgement in the case of a colour mark thanis the case with, say, a distinctive three-dimensional logo. However, that is a reflectionof the nature of the mark, and whilst the terms of the explanation must still reflect withsufficient accuracy the existing use that makes out its distinctive character, it does notjustify confining the permissible terms for a colour mark only to applications where asingle specific nominated colour is used to the entire exclusion of others.[70] Nor do I accept that permitting explanations for a colour mark in such termsnecessarily leads to an applicant acquiring rights over a multitude of signs. Rather,the mark prevents use by others of the get up for the relevant class of goods that usesthe specific nominated shade of green predominantly. Use of that formula of words islikely to reduce the scope of the umbra, and require proof of deceptive similarity inthe penumbra, but that does not prevent use of this formula of words for a colourtrade mark.[71] The Glaxo decision also reflects a requirement for precision and lack ofambiguity. Because the terms of the trade mark extended to prevent competitorsproducing inhalers with a different combination of the two shades of purple from thatgraphically relied upon by Glaxo in its application, it failed the requirement for a lackof ambiguity.[72] In the present case, there is only a single distinctive feature, namely thepredominant use of Pantone 376C in the packaging. That does not create a similarconcern over the precision of what is involved, even if judgement calls may berequired to determine whether a competitor's container or packaging indeed makespredominant use of the distinctive colour.[73] The parallel proceedings in Australia occurred in factually differentcircumstances. Frucor, as applicant, was itself responsible for a materially inconsistentand consequently confusing explanation for its mark. This arose from its havingclaimed that the distinctive colour it used was Pantone 376C, and then attaching to theapplication a swatch of colour that was not that shade of green. That situation isdistinguishable. Rejection of the application was appropriate because the applicationwas internally inconsistent, with the applicant being responsible for the consequentambiguity or confusion arising. In contrast, here the explanation was consistent in thatthe written description was of Pantone 376C and the graphic swatch referred to in theapplication was of that same colour.[74] I address the substance of the second ground for the invalidity appeal, namelythe inconsistency between the colour displayed on the register and an accuraterepresentation of Pantone 376C, in dealing with EBL's revocation appeal below.[75] It follows that, even if jurisdiction existed for a challenge to the trade markunder s 18(1)(a) of the Act, I would agree with the Assistant Commissioner thatgrounds for it could not be made out.The revocation appeal[76] The second appeal arises out of EBL's application for revocation of thetrade mark on the grounds of its non-use. The essence of this initiative was that thetrade mark is to be interpreted as including the darker shade of green shown on theIPONZ register. It being common ground that this shade of green has not been usedat all, EBL sought revocation of the trade mark on the grounds of non-use.[77] This application was made pursuant to s 66 of the Act, the relevant parts ofwhich provide as follows:66 Grounds for revoking registration of trade mark(1) The grounds for revoking the registration of a trade mark are asfollows:(a) that at no time during a continuous period of 3 years or morewas the trade mark put to genuine use in the course of tradein New Zealand, by the owner for the time being, in relationto goods or services in respect of which it is registered:(1A) For the purposes of subsection (1)(a), continuous period means aperiod that commences from a date after the actual date of registrationand continues uninterrupted up to the date 1 month before theapplication for revocation.[78] EBL argued before the Assistant Commissioner that the interpretation of thetrade mark included the representation of a shade of green that is inconsistent withPantone 376C, being the darker shade that appears by mistake on the register. Thatargument was rejected by the Assistant Commissioner who found that the writtendescription, including the reference to Pantone 376C, was determinative of the scopeof the trade mark.The Assistant Commissioner's reasoning[79] The Assistant Commissioner adopted the approach of David Williams J in theHigh Court decision in Levi Strauss & Co v Kimbyr Investments Ltd.30 That litigationinvolved a potential inconsistency between the written description of a contrastingcoloured tab appearing on the rear pocket of pants or shorts, and a pictorialrepresentation of the tab. David Williams J stated:31The true construction of the trade mark register in this caseAccepting that it is permissible in appropriate cases to enter words upon theregister to define a trade mark, the question then becomes whether the wordsor the pictorial representation govern the delineation of the trade mark in thiscase. In my view the answer is plain. The opening words of the writtendescription state that "the mark consists of". In the absence of any other wordsexplicitly stating that the pictorial representation is to govern, those words aredecisive.[80] The Assistant Commissioner accepted the owner's explanation for thedifference being the processes of copying and uploading the colour swatch under thecontrol of IPONZ. However, she considered it not strictly necessary to reach aconclusion as to the reason for the difference because the written explanation prevailedover the representation in the colour swatch. Because the terms of the writtenexplanation of the mark referred expressly to the colour "as shown in therepresentation attached to the application", it was the colour as originally presentedthat was relevant, rather than the different representation of the colour on the register.Adopting that approach, the Assistant Commissioner was satisfied that there had beenrequisite use.32Arguments on appeal[81] Mr Arthur acknowledged the difference for colour marks when compared withmore usual forms of trade marks for a word or a device or logo where the subjectmatter is graphically represented and there is no issue about its scope. With colourmarks, a description is required by reg 44(g) of the Trade Marks Regulations 2003 (the30 Levi Strauss & Co v Kimbyr Investments Ltd [1994] 1 NZLR 332.31 At 352.32 The revocation decision at [50]–[55].Regulations), which requires that an applicant must supply certain information,relevantly:(g) if the trade mark is a colour or colours, a description acceptable to theCommissioner of the colour or colours;The requirement for such a description introduces the prospect for issues as to itsinterpretation.[82] Mr Arthur submitted that as it constitutes a public register, the interpretationshould be from the perspective of a member of the public including trade competitors.He cited the decision in Levi Strauss, in which David Williams J adopted anobservation of Lord Diplock about the nature of the proprietorial right of the owner ofthe mark:33 although by [the United Kingdom equivalent of s 10 of the New ZealandAct] it is expressed to be an "exclusive right to use the trade mark in relationto those goods", what is created by registration is not the proprietor's right touse the mark but a right to prevent other persons from using it as a trade markor in certain other specified ways. Every member of the public is thusconcerned to know what acts on his part will constitute an infringement of aregistered trade mark, and one would expect the register, which is open topublic inspection, to contain a record of all particulars necessary to enable aperson inspecting the register to ascertain this.[83] Mr Arthur invited analogy with the United Kingdom and European Uniondecisions in which trade marks have been interpreted by having regard to visualrepresentations, where they had been filed as part of the application. Adopting theperspective of a member of the public searching the register, Mr Arthur submitted thatthe trade mark was ambiguous because it included reference to a colour that was notthe shade described in the reference to Pantone 376C. In this regard, he cited theapproach in the Australian Frucor decision where Yates J had found that personsinspecting the register were entitled to assume the colour shown on the registerconformed to the description of that colour by reference to a colour system such asPantone. Those searching the register would not have access to the application, whichincluded the correct shade of green, so the reference in the explanation for the mark tothe colour as shown in the representation "attached to the application" was of no use.33 Levi Strauss & Co v Kimbyr Investments Ltd, above n 30, at 351, citing Svenska AktiebolagetGasaccumulator's Trade Marks [1962] RPC 106 at 113.[84] In response to Frucor's point that the inconsistency in the references to colourhad occurred without any fault on its part, Mr Arthur submitted nor was it any fault ofthird parties searching the register who could not be expected to check the conformitybetween the Pantone 376C reference and the colour swatch appearing on the register.A refinement on this point was a criticism of the alleged inappropriateness of usingthe suffix "C" after the numbers 376. The C connotes how the colour appears whenapplied to solid coated or glossy paper. There is no equivalent letter suffix for howthe colour appears on glass or metallic surfaces. Arguably, this introduces a furtherelement of uncertainty.[85] In addition, Mr Arthur submitted that Frucor could not be treated as entirelyfaultless because it has been on notice for many years that the uploaded colour swatchwas not Pantone 376C and has done nothing to correct the confusion that inconsistencyis liable to cause.34[86] Mr Brown supported the Assistant Commissioner's decision and opposed theappeal, essentially adopting the reasoning that had been applied by the AssistantCommissioner. He invited the Court to reflect on why the jurisdiction to remove atrade mark for non-use existed, suggesting that it is to avoid the register beingunnecessarily cluttered with marks that have fallen out of use. This is clearly not sucha mark and Frucor had not only established sufficient use to have the distinctivecharacter of its use of the colour recognised under s 18, but has continued to spendsubstantial amounts ensuring that its products continued to be marketed in termsconforming to the description in its application.[87] Arguably, Frucor ought not to be held to account for an error made by IPONZ.Frucor has recently made an application under s 76 of the Act and reg 86 of theRegulations to rectify or correct the register, seeking an order that the colour swatchas originally submitted with the application should replace the wrongly reproduceddarker shade of green that currently appears on the register. The future of thatapplication must await the judgment on the two appeals, but Mr Brown cited it as the34 Mr Arthur instanced compliance reports from IPONZ to Frucor's patent attorneys in April 2009,August and October 2010 and May 2011, from which it was clear that the original swatch hadbeen substituted with a darker and different shade of green.appropriate response by the owner of the mark to the challenge by EBL that the markwas not being used because of an inconsistency between the swatch on the registerand both the colour standard under Pantone 376C, and the swatch originally submitted.[88] As to the absence of a reaction to the correspondence from IPONZ whichsuggested they were using a shade of green other than Pantone 376C, Mr Brownsubmitted that Frucor was entitled to rely on the terms of its application, and the weightof consistent evidence of the colour for which it made out distinctive use.Analysis[89] If the competing positions were to be resolved by resort to equitable principles,an interesting weighing of the competing positions would arise. Observers of theregister – at least relatively casual ones – would likely be misled into thinking that thetrade mark was for the predominant use of the colour that is incorrectly representedthere, and that that colour is Pantone 376C. That is an unsatisfactory situation.Equally unsatisfactory is the predicament of the owner of the trade mark. Havingmade out the justification for a colour mark by virtue of the distinctive character of itsuse of it, the register currently represents a colour mark which is materially differentfrom the colour the owner is using on its goods and the extent of the use of whichjustified the registration of the mark in the first place.[90] A weighing of the relative unfairness to those with opposing interests cannotbe determinative in resolving which of them ought to bear the adverse consequencesof an error in the maintenance of the register. The nature of the statutory regime is,however, a factor in the approach adopted to the interpretation of the scope of theprotection afforded by the trade mark.[91] Adopting the approach from Levi Strauss, I consider that the wording in thedescription ought to dictate the interpretation of what is subject to trade markprotection. The need for precision in a written description of the colour is reflected inIPONZ guidelines for such applications. Consistently with the requirement in theregulations for an application to contain a clear representation of the trade mark,35 theIPONZ practice guidelines include the following comments:364.3.1 Colour marksWhere an applicant seeks to register a colour or colours as a trade mark, theapplicant will be required to file with the application either:• a representation of the colour(s), or• a description of the colour(s) using a widely known and readilyavailable colour standard (such as the colour indexing scheme ofthe Pantone ® colour system).The description of the trade mark should also include information on how thecolour(s) are being used, or are to be used, in relation to their goods orservices, such as in this example:The mark is the colour blue (Pantone xxx) as shown in therepresentation attached to the application, applied to the exteriorsurface of the goods.[92] Other things being equal, that suggests a primacy being given to the code ofcolour and a written description of that colour nominated in the application. Whilstcasual readers of the explanation for the mark may well be misled by the incorrectswatch that has been reproduced, those competitors wishing to be certain of theparticular shade of green, use of which is precluded by the trade mark, might equallybe expected to check the Pantone coding. I accept Mr Arthur's point that to do so byreference to the terms of the application for a trade mark would now not be possible,given that IPONZ has destroyed the original application, including the swatch of thecorrect colour, but that does not preclude independent reference to the Pantone code.His further point is that anyone checking against the Pantone code would then be leftconfused, which is antithetical to the certainty required for registration in the firstplace.35 Trade Marks Regulations 2003, reg 42(1)(b).36 IPONZ practice guidelines: <www.iponz.govt.nz/about-ip/trade-marks/practice-guidelines>. Seealso 9.1.2 of the IPONZ Practice Guidelines on absolute grounds distinctiveness<www.iponz.govt.nz (about-ip/trade-marks/Practice-guidelines/current/absolute-grounds-distinctiveness/>.[93] As to Mr Arthur's submission that it is nonsensical to interpret registration asdefined by a document that it is impossible to inspect, the non-availability of theapplication which is referred to certainly reduces the reliability of the register.However, that is not a justification for exposing the owner of the mark to a claim forrevocation for non-use on the ground that it continues to use the distinctive shade ofgreen, the previous use of which justified a finding of sufficiently distinctive characterto entitle it to registration, but which is inconsistent with the colour now appearing onthe register. That same answer applies to the unsatisfactory aspect of inconsistencythat presently exists. It is not a sufficient reason to deprive the owner of the trade markof the rights it has previously made out.[94] It appears likely on the details of other colour marks referred to in Mr Brown'ssubmissions that the transposition of other shades of colours that are distinguishablefrom the Pantone colours cited in the related application is something of a systemicproblem. The preferable solution to such a problem is to correct the register in thosecases rather than have errors by IPONZ deprive the registered owners of their propertyrights in the trade marks that registration entitles them to assume subsists.[95] It is similarly illogical to hold Frucor as having protection only for a darkershade of green than it has ever intended to use, and in respect of which it has neverattempted to make out sufficient use to establish the distinctive character justifyingregistration. The answer is to correct the register and, depending on the circumstances,for any allegations of infringement during the period in which the register has misledthird parties to have regard to the potentially misleading state of the register.[96] I accordingly agree with the Assistant Commissioner's conclusion that non-useof the mark cannot be made out, given the consistent use (as admitted) of the mark byFrucor throughout the relevant period, adopting Pantone 376C as a predominantcolour.Costs[97] Frucor has successfully defended both appeals. It is entitled to costs on a 2Bbasis for single counsel, as for two one-day appeals, together with necessarydisbursements, if necessary to be fixed by the Registrar.Dobson JSolicitors:A J Park, Wellington for appellantBell Gully, Auckland for respondent