ENERGY BEVERAGES LLC v PROLIFE FOODS LIMITED [2019] NZHC 1691

ENERGY BEVERAGES LLC v PROLIFE FOODS LIMITED [2019] NZHC 1691 [26 September 2019]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2019-485-263[2019] NZHC 1691BETWEEN ENERGY BEVERAGES LLCAppellantAND PROLIFE FOODS LIMITEDRespondentHearing: 15 August 2019Appearances: K McHaffie and P Moodley for the AppellantS Aymeric and J A Hazel for the RespondentJudgment: 26 September 2019JUDGMENT OF CULL JTABLE OF CONTENTSBackground 4The Assistant Commissioner's decision 10Approach to appeal 14Legal framework 20Grounds of appeal 25Issues 26Issue One: section 17(1)(a) 27The reputational threshold - the awareness of Energy Beverages' marks 28Likelihood of deception or confusion 44(a) The similarity of the goods 48(b) The similarity of the marks 62(c) Any other circumstances relevant to the likelihood of deception or confusion 75Conclusion under s 17(1)(a) of the Act 79Issue Two: section 25(1)(b 80Findings 87Results 89[1] Energy Beverages LLC (Energy Beverages) appeals against the decision of theAssistant Commissioner of Trade Marks (the Commissioner) to direct that two trademark applications of Prolife Foods Ltd (Prolife Foods) proceed to registration.1[2] Energy Beverages opposed the applications to register the marksand (Prolife Foods' marks), and now appeals her decision.2 EnergyBeverages says the Commissioner erred in fact and in law in finding that EnergyBeverages failed in their grounds of opposition under s 17(1)(a) and s 25(1)(b) of theTrade Marks Act 2002 (the Act). Energy Beverages' marks are set out in Appendix Ito this judgment.[3] Energy Beverages seeks orders reversing the Commissioner's decision, thatboth Prolife Foods' marks should not be registered, and costs, including a reversal ofthe costs awarded by the Commissioner.Background[4] On 12 August 2015 and 3 February 2016 respectively, Prolife Foods lodgedapplications to register the Prolife Foods' marks. The marks are both 'combined'marks.[5] The August 2015 application was for the mark with the mark name"MOTHER EARTH NATURE AT ITS MOST DELICIOUS FRUIT BITES".[6] The February 2016 application was for the mark with themark name "MOTHER EARTH NATURE AT ITS MOST DELICIOUS ON-THE-GO!"[7] The applications for Prolife Foods' marks are both in relation to class 29 and30 goods. Class 29 goods are described as preserved, dried and cooked fruits andvegetables, jellies, jams, preserves, nuts, edible nuts, food products made from nuts,prepared nuts, nut blends, spreads in the class of peanut butter, dried fruit, and dried1 Prolife Foods Ltd v Energy Beverages LLC [2019] NZIPOTM 12.2 Enlarged copies of the marks are displayed in Appendix II of this judgment.fruit blends. Class 30 goods are described as essentially any and all types of bakingproduct, chocolates, snack foods including muesli bars, cereals, dried fruit and nuts,and importantly in this case, beverages including coffee, tea, cocoa, chocolate-basedbeverages, cocoa-based beverages and drinking powders including chocolate andcocoa drinking powders.3[8] Energy Beverages filed notices of opposition to prevent the registration of themarks, pleading the following grounds of opposition:(a) Due to the awareness, knowledge, cognisance or reputation of EnergyBeverages' marks, use of Prolife Foods' marks by Prolife Foods wouldbe likely to receive or cause confusion. Therefore, registration ofProlife Foods' marks would be contrary to s 17(1)(a) of the Act.(b) Prolife Foods' marks are similar to one or more of Energy Beverages'registered marks, the goods listed in the specification of Prolife Foods'marks are the same as or similar to the goods in the specification ofEnergy Beverages' registered marks, and the use of Prolife Foods'marks by Prolife Foods is likely to deceive or confuse. Therefore,registration of Prolife Foods' marks would be contrary to s 25(1)(b) ofthe Act.(c) An essential element of Prolife Foods' marks is identical or similar toEnergy Beverages' registered mark which is well-known. The use ofProlife Foods' marks on class 29 and 30 goods will indicate aconnection in trade between Prolife Foods and Energy Beverages. Thiswill likely prejudice the interests of Energy Beverages. Therefore, theregistration of Prolife Foods' marks would be contrary to s 25(1)(c).4[9] Prolife Foods denied the grounds of opposition identified above. They saidtheir marks are not visually, aurally, or conceptually similar to any of EnergyBeverages' marks; the goods covered by Prolife Foods' marks are neither identical nor3 See Appendix II for the full description of Prolife Foods' marks' goods.4 Energy Beverages has withdrawn its appeal against the Commissioner's finding on s 25(1)(c).confusingly similar to Energy Beverages' goods; the relevant market for Prolife Foods'marks is natural food and beverages, while the relevant market for Energy Beverages'goods is the artificial energy drink market, and consumers of energy drinks areunlikely to be deceived or confused between the parties' goods.The Assistant Commissioner's decision[10] On 10 April 2019, the Commissioner determined that Energy Beverages'opposition to Prolife Foods' marks did not succeed.5 In relation to s 17 of the Act, theCommissioner found that Energy Beverages failed to produce sufficient evidence tosatisfy the Court that there was a sufficient awareness in the New Zealand market ofits MOTHER trade marks in relation to its products to meet the threshold requirementof reputation in the marks under s 17(1)(a). The Commissioner therefore did notconsider the second stage of the s 17(1)(a) inquiry – the likelihood of deception orconfusion.[11] In relation to s 25(1)(b), the Commissioner found that there is sufficientsimilarity between some of the goods of Prolife Foods' marks, namely the beverages,and the goods in respect of which Energy Beverages' mark is registered to meet therequirement of similarity, but found the marks themselves were not sufficiently similarlargely because of the overall concepts conveyed by the respective marks.[12] Finally, in relation to s 25(1)(c), the Commissioner held that as the evidencewas insufficient to meet the relatively low reputational threshold for the application ofs 17(1)(a), it fell short of the higher threshold for a "well-known" mark in s 25(1)(c).[13] The Commissioner accordingly directed that Prolife Foods' trademarksproceed to registration, and awarded Prolife Foods costs on a scale basis.5 Prolife Foods Ltd v Energy Beverages LLC, above n 1.Approach to appeal[14] Section 170 of the Act allows for any "person who is aggrieved by a decisionof the Commissioner" under the Act the right to appeal to the High Court.6 Notice ofan appeal must be filed in the Court and served on the Commissioner within 20working days after the decision was given.7[15] In hearing an appeal, s 172 provides:(1) On appeal, the Court must hear the parties and the Commissioner.(2) Appeals must be heard only on the materials stated by theCommissioner unless a party, either in the manner prescribed or byspecial leave of the Court, brings forward further material for theconsideration of the Court.(3) In the case of an appeal against the acceptance of an application or theregistration of a trade mark,—(a) No further grounds of objection are permitted by the opponentor the Commissioner, other than those stated by the opponent,except by leave of the Court; and(b) if further grounds of objection are permitted, the applicant'sapplication may be withdrawn without payment of the costs ofthe opponent on giving notice as prescribed.[16] As no special leave to bring forward further material has been sought unders 172, the appeal must be heard only on the materials before the Commissioner. Theseare the statutory declarations by:(a) Samantha Louise Carr in support of the oppositions.(b) Kevin John Hawkes in support of registration.(c) Rodney Cyril Sacks in support of the oppositions.[17] In determining an appeal, s 173 of the Act provides that the Court may:(a) confirm, modify, or reverse the Commissioner's decision or anypart of it:6 Trade Marks Act 2002, s 5 defines the "Commissioner" as including the Assistant Commissioner ofTrade Marks and also defines "court" as the High Court for the purpose of the appeal provisions.7 Section 171.(b) exercise any of the powers that could have been exercised bythe Commissioner in relation to the matter to which the appealrelates:(c) in the case of an appeal against the registration of a trade mark,permit the trade mark proposed to be registered to be modifiedin any manner that does not substantially affect its identity.However, in any such case, the trade mark as so modified mustbe advertised in the prescribed manner before being registered.[18] There is no presumptive level of respect or deference to the original decision-maker.8 As the Supreme Court noted in Austin, Nichols & Co v Stichting Lodestar:9An appeal court makes no error in approach simply because it pays littleexplicit attention to the reasons of the court or tribunal appealed from, if itcomes to a different reasoned result. On general appeal, the appeal court hasthe responsibility of arriving as its own assessment of the merits of the case.This means that "the basis for and extent of respect afforded to factual findings ortechnical attributes of the decision-maker appealed from is an entirely context-specificassessment for the Judge on appeal."10[19] Once an application for trade mark registration is challenged, the onus is onthe applicant – that is, Prolife Foods – to establish that the proposed marks do notoffend against the pleaded grounds of opposition.11Legal framework[20] The relevant dates for determining whether an opposed mark should beregistered is the date of filing of the applications, namely 12 August 2015 for the'FRUIT BITES' mark, and 3 February 2016 for the 'ON-THE-GO!' mark. Theassessment under each section is made on the balance of probabilities.[21] The relevant sections for this appeal are ss 17(1)(a) and 25(1)(b) of the Act.8 New Zealand Milk Brands Ltd v N V Sumatra Tobacco Trading Company HC Wellington CIV-2007-485-2485, 28 November 2008 at [6], citing Austin, Nichols & Co Inc v Stichting Lodestar[2008] 2 NZLR 141; and Crocodile International Pte Ltd v Lacoste [2017] NZSC 14 [2007] NZSC103, at [64]-[65].9 At [5].10 Wistbray Ltd v Ferroro SpA HC Wellington CIV-2007-485-460, 11 December 2008 at [6].11 New Zealand Milk Brands, above n 8, at [7], citing New Zealand Breweries Ltd v Heineken's BierBrowerij Maatschappij NV [1964] NZLR 115 (CA).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; or25 Registrability of identical or similar trade mark(1) The Commissioner must not register a trade mark (trade mark A) inrespect of any goods or services if –(b) it is similar to a trade mark (trade mark C) that belongs to adifferent owner and that is registered, or has priority undersection 34 or section 36, in respect of the same goods orservices or goods or services that are similar to those goods orservices, and its use is likely to deceive or confuse; or[22] The purpose of s 17(1)(a) is the protection of the public from deception orconfusion.12 The relevant test is well-established and requires the Court to considerwhether, having regard to the reputation acquired by Energy Beverages for its marks,the Court is satisfied that Prolife Foods' marks, if used in a normal and fair manner inconnection with any goods covered by the registrations proposed, will not bereasonably likely to cause deception or confusion amongst a substantial number ofpersons.13[23] It is common ground that s 25(1)(b) has three requirements, to be addressed inthe following order:14a) Are Prolife Foods' proposed marks in respect of the same or similargoods or services covered by any of Energy Beverages' trade markregistrations?12 N V Sumatra Tobacco Trading Company v New Zealand Milk Brands Ltd [2011] NZCA 264,[2011] 3 NZLR 206 at [78].13 Pioneer Hi-Bred Corn Company v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 (CA) at 57; and NV Sumatra Tobacco, above n 12, at [78].14 N V Sumatra Tobacco, above n 12, at [32].b) If so, are Prolife Foods' proposed marks similar to any of EnergyBeverages' trade mark registrations for the same or similar goodsidentified in the first inquiry?c) If so, is the use of Prolife Foods' proposed marks likely to deceive orconfuse?[24] There is substantial overlap between s 17(1)(a) and s 25(1)(b).15 The principaldifference is that the comparison under s 17(1)(a) is between the actual use of EnergyBeverages' registered marks and the fair and notional use of Prolife Foods' marks.16This is in contrast to s 25(1)(b), where the comparison is the fair and notional use ofboth marks.17Grounds of appeal[25] Energy Beverages appeals the Commissioner's decision that EnergyBeverages:(a) failed to establish the necessary level of awareness of its mark in theNew Zealand market under s 17(1)(a); and(b) failed to show that the marks are sufficiently similar under s 25(1)(b).Issues[26] There are two issues for determination on appeal:(a) whether the use of Prolife Foods' trademarks would be likely to deceiveor cause confusion under s 17(1)(a); and(b) whether Prolife Foods' marks are similar to Energy Beverages' marks,apply to similar goods, and their use is likely to deceive or confuseunder s 25(1)(b).15 New Zealand Milk Brands, above n 8.16 Anheuser-Busch Inc v Budweiser Budvar National Corporation [2003] 1 NZLR 472 (CA) at [74].17 At [30].Issue One: section 17(1)(a)[27] The Court of Appeal in Sexwax Inc v Zoggs International Ltd has recentlyoutlined a two-stage inquiry for the Commissioner to approach the assessment unders 17(1)(a):18(a) First, inquire into whether Energy Beverages' mark has a reputation inNew Zealand at the relevant date. Such reputation need not bewidespread; it all depends on the nature of the marks and the goods towhich it is applied.(b) Second, assess the likelihood of deception or confusion. This is a fact-specific inquiry, requiring consideration of all the surroundingcircumstances such as the relevant market for Prolife Foods' goods andthe degree of similarity of the marks. Prolife Foods must prove thatregistration will not cause deception or confusion amongst a"substantial number of persons".The reputational threshold – the awareness of Energy Beverages' marks[28] The Commissioner observed, and both parties accept, the reputationalthreshold for the awareness of Energy Beverages' marks is a relatively low one.19Energy Beverages, as the opponent, need only demonstrate "awareness, cognisance orknowledge" of the mark in the New Zealand market.20 This, as the Court of Appealheld in NV Sumatra Tobacco Trading Company v British American Tobacco (Brands)Inc,21 requires Energy Beverages to identify the relevant market and point to evidencethat a substantial number of persons in that market have such awareness, cognisanceor knowledge of its marks at the relevant dates, namely, 12 August 2015 and 3February 2016, when Prolife Foods filed its applications for registration of their marks.[29] Energy Beverages' evidence of reputation comprised:18 Sexwax Inc v Zoggs International Ltd [2014] NZCA 311, [2015] 2 NZLR 1 at [48]–[49].19 Prolife Foods Ltd v Energy Beverages LLC, above n 1, at [13].20 N V Sumatra Tobacco Trading Company v British American Tobacco (Brands) Inc [2010] NZCA24 at [77].21 N V Sumatra, above n 20.(a) the registration of its marks in New Zealand since 2009;22(b) a printout from the website of Coca-Cola Amatil (NZ) Ltd, the NewZealand distributor of Energy Beverages' MOTHER branded energydrinks, showing a can of MOTHER branded drink with a description,its ingredients, and a product warning;(c) an article dated 9 April 2014, written by Damien Venuto from a websitecalled StopPress.co.nz entitled "Energy boost for Ogilvy with Lift Plusand Mother accounts – UPDATED";(d) reply evidence from Mr Sacks, the Chief Executive Officer of EnergyBeverages, which included "representative photographs of theopponent's MOTHER products being offered for sale in various[Auckland area] retailers in New Zealand" and an undated printoutfrom a Fresh Choice supermarket website, showing a MOTHERbranded product being offered for sale; and(e) Mr Sacks' statement that based on information and records available tohim, Energy Beverages' products have been sold under the MOTHERbrand in New Zealand as early as 2009.[30] In advancing its appeal, Energy Beverages submits that the Commissionererred in four ways, by:(a) placing any weight on the date of the StopPress article, which predatedthe relevant dates by 16 months;(b) giving insufficient or no weight to Mr Sacks' statement that EnergyBeverages' products have been sold under the MOTHER brand in NewZealand supermarkets and other retail outlets since 2009;22 N V Sumatra, above n 20, at [80].(c) putting any weight on the fact that evidence of advertising expenditureor sales figures were not provided; and(d) finding that Energy Beverages failed to establish the necessary level ofawareness of its mark in the New Zealand market, and consequentlyfinding that the second stage of the s 17(1)(a) inquiry did not need tobe undertaken.[31] Prolife Foods challenged the admissibility of the StopPress article under s 18of the Evidence Act 2006, submitting the article is hearsay evidence; does not providereasonable assurance that the statement is reliable; and the maker of the statement, ifhe was a representative or staff member of Energy Beverages, would have beenavailable to give evidence of its market share. This, Prolife Foods says, would nothave caused undue expense or delay. Energy Beverages simply failed to do so.[32] Although the Commissioner did not deal with Prolife Foods' hearsay objection,there are four reasons why I consider the Commissioner's decision should be upheld.Those reasons are:(a) the timing of the assessment of reputation;(b) the StopPress article is hearsay;(c) there is no supporting evidence of sales; and(d) there is no supporting material.[33] First, the assessment of reputation must be undertaken at the relevant dates,August 2015 and February 2016. The photographs annexed to Mr Sacks' evidence areundated. The Internet printout showing images of the MOTHER branded drinks inMs Carr's evidence is dated 23 February 2017, and the Fresh Choice website withEnergy Beverages' MOTHER drinks in Mr Sacks' evidence is dated 17 April 2018.The latter dates may well reflect the dates of download from the websites for thepurposes of the declaration, but they postdate the relevant dates.[34] The declaration of Mr Sacks, who attaches "the representative photos" of theMOTHER products for sale in New Zealand retail outlets, is tellingly silent about thedates the photographs were taken.[35] I accept Prolife Foods' submission that Mr Sacks' use of the present continuoustense in his declaration "the MOTHER products being offered for sale" suggeststhe photographs and the screenshot were taken at or around the time Mr Sacks waspreparing his declaration, namely, in May 2018.[36] Second, the StopPress article, dated 9 April 2014, was published 16 monthsbefore the earliest of the relevant dates and is a "marketing, advertising and mediaintelligence report", written by Damien Venuto. There is no evidence as to whatposition Damien Venuto held or whether he was qualified to write about the NewZealand market share of energy drinks and give percentages of the energy drink marketthat Lift Plus and MOTHER products holds in New Zealand.[37] The identity and occupation of Mr Venuto was unknown to counsel for EnergyBeverages, and there is no evidence of steps taken to identify him or obtain hisevidence. The test of his availability to give evidence, as required under s 18 of theEvidence Act, was therefore not engaged. I consider that this article is hearsay andcannot be relied on for the truth of its content.[38] Third, there is no supporting evidence of sales. Mr Sacks, the Chief Executiveof Energy Beverages, in his reply declaration states baldly that "based on informationand records available to me" Energy Beverages' products have been sold under or byreference to the MOTHER brand in New Zealand supermarkets and other retail outletssince at least as early as 2009, but gives no details, such as advertising or sales data inNew Zealand, which would enable either the Commissioner or this Court to assess thelevel of market awareness, even if low, for the MOTHER brand on the relevant dates.The undated photographs do not assist.[39] Fourth, the printout from the Fresh Choice website has the date of 17 April2018, two years after the later of the relevant dates, and there is no supporting materialor indication as to the sales figures or the number of views of the website. As theCommissioner noted in her decision,23 evidence of this kind is not difficult to access.[40] In this case, the Commissioner observed that evidence of reputation willgenerally be provided in the form of advertising expenditure or sales figures.24 EnergyBeverages submits that the Commissioner erred in putting any weight on the fact thatevidence of advertising expenditure or sales figures were not provided because this isnot an evidentiary requirement. However, the Commissioner made her observation inthe absence of any corroborative evidence concerning the relevant date period, and didnot say she put any weight on that fact. I note that the Commissioner, in any event,had completed her reasoning on the issue of reputational awareness of the EnergyBeverages' marks or brand before making her observation, which is therefore obiterdictum in any event.[41] I am in agreement with the Commissioner's conclusion that Mr Sacks'statement as to the sale of MOTHER branded products in New Zealand since "at leastas early as 2009" does not shed any light on the issue of customer awareness of thebrand.[42] I am satisfied that the basis on which the Commissioner reached her findingthat Energy Beverages has failed to establish the necessary level of awareness of itsmark in the New Zealand market is correct. Although the threshold requirement formarket awareness is low,25 the evidence adduced by Energy Beverages at the relevantdates was not sufficiently robust or reliable, in my view, to justify an alternativefinding.[43] I find this appeal ground fails. The Commissioner did not err in finding thatEnergy Beverages failed to establish the "necessary level" of awareness of its mark inthe New Zealand market.2623 Prolife Foods Ltd v Energy Beverages LLC, above n 1, at [21].24 At [21].25 N V Sumatra, above n 20, at [77]–[80].26 Prolife Foods Ltd v Energy Beverages LCC, above n 1, at [22].Likelihood of deception or confusion[44] In the event that I am wrong to uphold the Commissioner's finding onreputation, for completeness, I go on to consider the s 17(1)(a) inquiry into thelikelihood of deception or confusion.[45] If Energy Beverages had established its reputation, the onus of establishing thatthere is no likelihood of deception or confusion in the registration of its marks shiftsto Prolife Foods. Under s 17(1)(a) of the Act, the likelihood of deception or confusionarising must be assessed against the actual use of Energy Beverages' marks and anynotional and fair use of Prolife Foods' proposed marks.27[46] Causing "confusion" may go no further than perplexing or mixing up the mindsof the purchasing public.28 It is not necessary that all persons in the market are likelyto be deceived or confused, but rather it is that a significant or considerable section ofthe public is likely to be confused.29 All the surrounding circumstances are importantin assessing whether the use of the applied-for marks are likely to deceive or confuse,such as the similarities between the marks and the goods for which they areclassified.30 The relevant perspective is of the average consumer in the relevantmarket.[47] I consider the likelihood of deception or confusion under three sections:(a) the similarity of the goods;(b) the similarity of the marks; and(c) any other circumstance relevant to the likelihood of deception orconfusion.27 This is in contrast to the assessment under s 25(1)(b), which assesses the notional use of both theapplicants and the opponents' marks.28 Pioneer Hi-Bred, above n 13.29 Paul Sumpter Trade Marks in Practice (4th ed, LexisNexis, Wellington, 2018) at 99.30 Sexwax Inc, above n 18, at [49]; and Sabel BV v Puma AG, Rudolf Dassler Sport [1998] RPC 199at 224.(a) The similarity of the goods[48] In British Sugar plc v James Robertson & Sons Ltd, a number of factors wereidentified to assist in determining whether there is similarity between goods:31(a) the respective uses of the goods;(b) the respective users of the goods;(c) the physical nature of the goods;(d) the respective trade channels through which the goods reach themarket;(e) in the case of self-service consumer items, where in practice they arerespectively found or likely to be found in supermarkets and inparticular whether they are, or are likely to be, found on the same ordifferent shelves; and(f) the extent to which the respective goods are competitive.[49] The question of similarity in goods or services is one of fact to be determinedon a case-by-case basis, and the approach taken is a practical one, looking at the goodsfrom a business and commercial point of view.32[50] Although Prolife Foods' marks relate to goods in classes 29 and 30 comparedwith Energy Beverages' marks involving goods in class 32 (drinks of various kinds)and class 5 (including energy drinks),33 the Commissioner considered that there wassufficient similarity between some of Prolife Goods' marks, namely those beveragesincluded in class 30, and beverages covered by Energy Beverages' specifications. Inparticular, the Commissioner considered the chocolate and cocoa-based beverages inProlife Foods' application are sufficiently similar to the beverages covered by Energy31 British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281 (Ch) at 296-297.32 New Zealand Milk Brands, above n 8, at [33], citing J Lyons and Co Ltd's Application [1959] RPC120 at 128 and Gutta-Percha & Rubber Manufacturing Co (Toronto) Limited's Application (1909)26 RPC 84.33 Appendix I contains the details of Energy Beverages' registered marks and Appendix II detailsProlife Foods' proposed marks.Beverages' drinks.34 She also accepted Energy Beverages' submission that the parties'respective goods are likely to be available at the same retail outlets.35[51] During the hearing, Prolife Foods submitted that while both specifications ofgoods contained beverages, the nature of the beverages is distinct. It sought tooverrule the Commissioner's finding that there was sufficient similarity between thebeverages in Prolife Foods' application to meet the requirement of similarity.36 Thisis despite the fact that in its submissions, Prolife Foods accepted the Commissioner'sfinding of "sufficient similarity" between the beverages, and explicitly noted there wasno cross-appeal on this point.[52] Ms McHaffie for Energy Beverages objected to the late challenge, submittingthat this was effectively a cross-appeal by Prolife Foods, without notice and withoutgiving Energy Beverages an opportunity to respond. Ms McHaffie asked that if theCourt was minded to reverse the Commissioner's finding in this respect, she reservedthe right to make further submissions on the point.[53] The basis of a hearing on appeal is prescribed under s 172 of the Act. Appealsmust be heard only on the material stated by the Commissioner, unless special leaveis given by the Court to consider further material on appeal.37 Although this sectionfocuses on further grounds of objection or further material for the Court'sconsideration, I consider its design is to ensure that parties are not taken by surpriseon appeal and that the appeal focuses on the considerations undertaken by theCommissioner on the material and grounds of objection at the first instance hearing.In this case, Mr Aymeric's submission for Prolife Foods amounts to a cross-appeal andit should have been brought in accordance with the High Court Rules 2016. In anyevent, the issue is not determinative.[54] Energy Beverages did not direct its submissions to this potential challenge byProlife Foods, and I decline to interfere with the Commissioner's finding on this point,which is confined to the similarity of beverages in each of the parties' respective34 Prolife Foods Ltd v Energy Beverages LLC, above n 1, at [29].35 At [29].36 Relying on the Trade Marks Act 2002, s 173(a).37 Section 172(2).goods. I therefore uphold the Commissioner's finding that the beverages aresufficiently similar. I go on to consider whether the remaining goods are similar.[55] Energy Beverages submits the goods are similar because they are botheveryday items which one might expect to find in a supermarket, petrol station orconvenience store. The users of the respective goods are members of the generalpurchasing public, and both goods include ready to eat, snack and convenience foods.Prolife Foods submits the goods are dissimilar. I deal with each of the factorsidentified above at [48] to assess similarity.[56] In terms of the respective uses of the goods, Energy Beverages' goods areenergy drinks which appeal to a younger audience. Prolife Foods' goods, on the otherhand, are targeted at families and parents who want to buy a healthy nutritional productfor their children.[57] In terms of the respective users, Energy Beverages' goods are very high incaffeine, described in advertising as delivering "full potency". Energy Beverageswarns that its products are not recommended for children, pregnant or lactatingwomen, and individuals sensitive to caffeine. In contrast, Prolife Foods' goods areprimarily aimed at families with children who are conscious of the importance ofhealthy eating but like the convenience of packaged products. These purchasers willtypically take the time to read the packaging of products and make a considereddecision to purchase a healthier product.[58] Turning to the physical nature of the goods, I have accepted the beverages aresufficiently similar. In terms of the remaining goods, the classifications are very wide.There is undoubtedly some overlap in the physical nature of the remaining goods ofboth parties.[59] From the limited evidence provided, it appears that Energy Beverages'products are primarily sold in petrol stations, not supermarkets. In contrast, ProlifeFoods' goods are sold primarily in supermarkets. In Mr Hawke's evidence, he declaresthat in the financial year to 2018, only 1.5 per cent of MOTHER EARTH brandedproducts were sold in petrol stations, with the vast majority of MOTHER EARTHproducts, which would include the two proposed marks, being sold in supermarketsacross New Zealand. I also note his evidence that in his nine years with Prolife Foods,there has been no confusion of which he is aware between MOTHER EARTH productsand MOTHER energy beverages. I accept Prolife Foods' submission that even if asmall percentage of Prolife Foods' goods are sold in petrol stations, they are for themost part placed in different trade channels from Energy Beverages' goods.[60] Finally, I consider the respective goods are not competitive. Energy drinks arein a wholly different market from the food, chocolate or cocoa-based products thatProlife Foods' goods cover, and I accept Prolife Foods' submission that it is unlikelythat a person wishing to purchase an energy drink would find Prolife Foods' healthysnacks an acceptable substitute.[61] This leads me to conclude that the respective goods, apart from the beverages,are not similar for the purposes of s 17(1)(a) of the Act.(b) The similarity of the marks[62] The test for whether the trademarks are similar was defined in New ZealandBreweries:38The rules for comparison of word marks have been summarised as follow[sic]: 1. You must take the two words and judge of them both by their look andby their sound; 2. You must consider the goods to which they are to be appliedand the nature and kind of customer who is likely to buy these goods; and 3.You must consider all the surrounding circumstances and what is likely tohappen if each of the marks is used in a normal way as a trade mark for thegoods of the respective owners of the marks.[63] Often, this comes down to a consideration of the visual, aural, and conceptualsimilarities of the marks.39 It is the similarities that are important, not the differences.4038 New Zealand Breweries, above n 11, at 139. I note this case and many of the others referred toare dealing with s 25(1)(b) or its equivalent, however the same analysis applies to the similarityof the marks under s 17(1)(a).39 New Zealand Milk Brands, above n 8, at [14].40 At [28].Further, consumers' imperfect recollection must be allowed for.41 The relevantperspective is of the average consumer in the relevant market.42[64] Visually, Energy Beverages' marks are registered in plain block capitals, withno additional distinctive material or font, as follows: MOTHERLAND; andMOTHER. Prolife Foods' marks are:43[65] Although not clear from these images, both Prolife Foods' marks contain thelogo 'MOTHER EARTH' in the top left-hand corner, with the tagline 'NATURE ATITS MOST DELICIOUS' directly beneath. All MOTHER EARTH products use thesame distinctive font and have the name 'MOTHER EARTH' in a circle with a leafgraphic above the word 'MOTHER'.[66] Where one trade mark incorporates the essential distinguishing or memorablefeature of another trade mark, confusion may still be likely despite the addition ofother material in the trade marks.44 Energy Beverages submits the word 'MOTHER'is the essential distinguishing or memorable features of both marks. It says theadditional material in Prolife Foods' marks is non-distinctive and commonplace,describing qualities or properties of their goods. It is the feature 'MOTHER' which isnon-descriptive and notable when used in relation to food or beverage products bywhich consumers will identify the marks.[67] Because of this, Energy Beverages submits Prolife Foods' marks are similar toEnergy Beverages' marks, and the Commissioner erred in finding that Prolife Foods'use of the word 'MOTHER' as part of its 'MOTHER EARTH' brand and inconjunction with the tagline 'NATURE AT ITS MOST DELICIOUS' is sufficient todifferentiate Prolife Foods marks from Energy Beverages' marks. Energy Beverages41 Intellectual Reserve Ltd v Sintes HC Auckland CIV-2007-404-2610, 13 December 2007 at[16(iv)].42 At [23].43 See Appendix II for enlarged images.44 Eau De Cologne's Application (1990) 17 IPR 540 at 542; and Re Application by Coles Myer Ltd(1993) 26 IPR 577 at 579.also submit the Commissioner erred in failing to conduct a separate inquiry in relationto each of Energy Beverages' registered marks.[68] Prolife Foods submits that the only visual and aural similarity between theparties' marks is that they contain the word 'MOTHER'. The dominant elements ofProlife Foods' marks are 'FRUIT BITES' and 'ON-THE-GO!' respectively. 'FRUITBITES' and 'ON-THE-GO!' are featured prominently in a much larger font than anyother word in Prolife Foods' marks, and these words ought to be the most importantwords for comparison. Further, it submits the word 'MOTHER' in Prolife Foods'marks is always used in conjunction with the word 'EARTH' in the same font of thesame size, making it a phrase. In contrast, it says, in Energy Beverages' marks theword 'MOTHER' is very prominently featured.[69] I find that the marks are not visually or aurally similar. I accept Prolife Foods'submission that 'FRUIT BITES' and 'ON-THE-GO!' respectively are the mostprominent visual aspect of Prolife Foods' marks, and the phrase 'MOTHER EARTH'is likely to be read by the average consumer in the relevant market as a prefix to either'FRUIT BITES' or 'ON-THE-GO!'. It is the phrases 'MOTHER EARTH FRUITBITES' and 'MOTHER EARTH ON-THE-GO!' that must be compared against thephrase(s) 'MOTHER" and 'MOTHERLAND' from Energy Beverages' marks, notsimply the phrase 'MOTHER EARTH'. It is incorrect to take a portion of a word orphrase and say that, because that portion is the same as another mark, they must besimilar in their entirety.45[70] Both visually and aurally then, the phrases are distinct, with the only similaritybeing 'MOTHER'. I accept Mr Aymeric's submission that Energy Beverages is ineffect trying to claim a monopoly over the word 'MOTHER' in relation to anyeveryday food or beverage item available in retail outlets such as supermarkets. Sucha claim is inappropriate and beyond the scope of the Act.[71] Finally, the conceptual comparison confirms my view that the marks, overall,are not similar for the purposes of s 17(1)(a). The idea conveyed by the marks is45 Bailey (William) Ltd's Application [1935] RPC 136 (CH) at 151.significant in assessing how they will be recalled.46 The idea of a mark is often morelikely to be recalled than its precise details.47[72] It is clear that Prolife Foods' marks evoke nutritional, healthy and natural food,coming from "mother earth". This is shown through the brand 'MOTHER EARTH'and the use of the tagline 'NATURE AT ITS MOST DELICIOUS'. Further, theingredients are sourced from "ethical suppliers", are GM free and contain no artificialcolours or flavours. This idea of a natural product is reinforced by the logo ProlifeFoods has been using since 2015, as described above containing an image of a leaf,and the packaging used on Prolife Foods' goods which are all predominantly green,denoting the earthly nature of the goods.[73] This is in contrast to Energy Beverages' energy drink products which containartificial and other ingredients such as caffeine, food acids, preservatives and flavours.The marks 'MOTHER' and 'MOTHERLAND', even on their own, and with thepackaging and font that is predominantly used in conjunction with the marks asrevealed in the evidence provided by Energy Beverages does not denote the samenatural and earthly concept. It has a somewhat gothic connotation, which iscompletely in contrast to the wholesome family-oriented connotation that the'MOTHER EARTH' products are attempting to portray.[74] For these reasons, I agree with the Commissioner's finding that the marks arenot similar for the purposes of s 17(1)(a).(c) Any other circumstances relevant to the likelihood of deception or confusion[75] Energy Beverages submits that consumers who are aware of its 'MOTHER'mark and 'MOTHER'-formative marks, and those who may be exposed to the goodscovered by Prolife Foods' applications, essentially overlap and comprise the generalpurchasing public. For instance, foot traffic through a petrol station will likely be thesame foot traffic through supermarkets and other food retail outlets. Energy Beveragessubmits that consumers encountering Prolife Foods' marks would be likely to be46 Anheuser-Busch, above n 16, at 75.47 Hannaford & Burton Ltd v Polaroid Corporation [1976] 2 NZLR 14 (PC), cited recently inIntellectual Reserve Ltd v Sintes, above n 39, at [16(iii)].deceived or confused as to the source of the goods bearing Prolife Foods' marks,particularly in the case of beverage products. These kinds of convenience productsare not considered purchases, and the potential for confusion is greater in a morecasual, potentially hurried, purchasing environment.[76] With the exception of beverages included in Prolife Foods' class specification,the majority of the goods are not similar. Further, the marks are not similar, and theconcepts portrayed by the two brands are distinct. I consider there is no likelihoodthat a substantial number of people in the relevant market would be deceived orconfused as to the origin of Prolife Foods' goods. To go beyond those conclusions,however, Prolife Foods gave evidence that its MOTHER EARTH trade mark,including the MOTHER EARTH logo has been in use continuously in New Zealandsince the early 1990s. While that logo has been modified slightly since then, it is stilltoday very close to what it was in the early 1990s.[77] By contrast, and viewing the evidence at its highest, Energy Beverages hasbeen using its MOTHER mark in New Zealand only since 2009. I accept ProlifeFoods' submission that the strength of the reputation of Prolife Foods' marks, whichprecede any reputation acquired by Energy Beverages in New Zealand, is acircumstance that significantly decreases the likelihood of confusion among potentialpurchasers of energy drinks bearing the Energy Beverages' marks.[78] As is evident, the critical factor in this case is that the products are targeted atdifferent markets and will therefore be sold in different locations. They have whollydistinct conceptual meanings behind the use of the word "MOTHER", and do notsound or look similar despite both using the word "MOTHER" in their respectivephrases. In these circumstances, the likelihood of deception or confusion, comparingthe actual use of Energy Beverages products against the notional use of Prolife Foods'products, is extremely minimal and highly unlikely.Conclusion under s 17(1)(a) of the Act[79] If Energy Beverages had established the reputational threshold required ofthem, I find that Prolife Foods has satisfied its onus of proving, on the balance ofprobabilities, that the use of its applied-for marks would not be likely to deceive orcause confusion under s 17(1)(a), nevertheless.Issue Two: section 25(1)(b)[80] As mentioned, s 25(1)(b) has three requirements to be addressed in thefollowing order:48(a) Are the goods similar?(b) If so, are the marks similar?(c) If so, is the use of Prolife Foods' proposed marks likely to deceive orconfuse?[81] As noted above, the comparison and assessment under s 25(1)(b) of the Act isan entirely notional one. It compares the use of the opponent's marks, MOTHER andMOTHERLAND, and those of Prolife Foods, in a normal and fair manner in relationto any of the goods covered by the registration.[82] Although this overlaps with my assessment under s 17(1)(a), theCommissioner found that the goods in respect of which the marks are registered orapplied for are similar only in the limited sense that there was similarity with thebeverages listed in class 30 in Prolife Foods' goods specification. There has been nocross-appeal on this point and I do not disturb the Commissioner's conclusion on thisaspect.[83] However, I accept the submission that the remainder of Prolife Foods' goodsare not the same or similar to the goods covered by Energy Beverages' registeredmarks. I am also satisfied that there is unlikely to be any overlap between theprospective or potential purchasers of Energy Beverages' goods and the prospectiveor potential purchasers of Prolife Foods' goods.48 N V Sumatra Tobacco, above n 12, at [32].[84] Second, I find that the marks are not similar, for the reasons I have canvassedunder s 17(1)(a).49 The only similarity is the use of the word "MOTHER" in therespective trade marks under consideration. However, the way in which the word isused by Energy Beverages is markedly different from the use by Prolife Foods, whichhas MOTHER EARTH in combination on its registered trade marks and in theproposed trade marks. As the European Court of Justice held in Sabel BV v Puma AG,the visual, aural, or conceptual similarity of the marks must be assessed by referenceto the overall impression given by the marks, the perception of marks in the mind ofthe average consumer of the type of goods or services in question, and the fact that theaverage consumer normally perceives a mark as a whole and does not analyse itsvarious details.50[85] I concur with the Commissioner's finding under s 25(1)(b). I am satisfied thereis no similarity between the proposed marks and the Energy Beverages' marks.[86] Finally, I am satisfied that there is no likelihood of deception or confusion inthe notional use of both sets of trade marks of the respective parties. The minor degreeof similarity in the marks, namely the use of the word "MOTHER", the lack of visual,aural, and conceptual similarity between the two respective sets of marks, and thelimited similarity of goods in respect of the specification of beverages only, satisfiesme that there is no likelihood of deception or confusion if Prolife Foods' proposedtrade marks are registered. In these circumstances, I do not consider the relevantconsumers will likely be deceived or confused.Findings[87] I uphold the Commissioner's finding that Energy Beverages failed in itsgrounds of opposition, both under ss 17(1)(a) and 25(1)(b), to Prolife Foods'applications to register their two marks. Accordingly, I direct that the trade markapplication numbers 1025443 and 1036561 proceed to registration.[88] The costs award by the Intellectual Property Office is upheld.49 See [62]–[79] of this judgment.50 Sabel, above n 30, at [224].Results[89] The appeal is dismissed.[90] Costs are awarded to Prolife Foods on a 2B basis, with reasonabledisbursements to be approved by the Registrar.Cull JSolicitors:AJ Park Law, Wellington for the AppellantJames & Wells Solicitors, Auckland for the RespondentAppendix I – details of Energy Beverages' registrationsApplicationnumberMark Goods Date ofregistrationin NewZealand754009 Class 32: drinkingwaters, flavouredwaters, mineral andaerated waters; andother non-alcoholicbeverages, namelysoft drinks, energydrinks and sportsdrinks; fruit drinksand juices; syrups,concentrates andpowders for makingflavoured waters,mineral and aeratedwaters, soft drinks,energy drinks, sportsdrinks, fruit drinksand juices.13 March2008757331 Class 32: same asabove.13December2007802420 Class 32: same asabove.13 August2009811177 MOTHER OF A MIXER Class 32: same asabove.18 February2010811318 MOTHER SMALLBOTTLE, BIG KICKClass 5:pharmaceutical andveterinarypreparations; sanitarypreparations formedical purposes;dietary supplements;energy drinks;dietetic substancesadapted for medicaluse, food for babies;plasters, materials fordressings; materialfor stopping teeth,dental wax;disinfectants;preparations fordestroying vermin;fungicides,herbicidesClass 32: same asabove.25 February2010812664 Class 5: same asabove.Class 32: same asabove.18 March2010819516 MOTHERLAND Class 32: same asabove.Class 33: alcoholicbeverages, namely,distilled spirits,liquors and winesClass 41: education;providing of training;entertainment;sporting and culturalactivities12 August2010848942 MOTHER OF AN ENERGYHITClass 32: same asabove.8 March2012849633 MOTHER ENDURE Class 5: same asabove.Class 32: same asabove.21 March2012981386 Class 32: same asabove.28 January2014998655 MOTHER Class 32: same asabove.29 May2014Appendix II – details of Prolife Foods' registrationsApplicationnumberMark Goods Date ofapplication1025443 Class 29: Preserved, driedand cooked fruits andvegetables; jellies, jams;preserves; nuts; ediblenuts; food products madefrom nuts; prepared nuts;nut blends; spreads in thisclass; peanut butter; driedfruit and dried fruitblends.Class 30: Coffee, tea,cocoa, sugar, rice,tapioca, sago; flour andpreparations made fromcereals, bread, pastry andconfectionery; honey,treacle; yeast, bakingpowder; salt, mustard;vinegar, sauces (exceptsalad dressings); spices;chocolates; snack foods inthis class; cereal basedsnack foods; snack foodsmade from cereal, grain,sugar, fruit, chocolate andyoghurt; muesli bars;breakfast cereals; cakes;12 August2015cake-mixes; pastry;muffins; muffin-mixes;pasta; cookies; biscuits;chocolate-coated biscuits;crispbreads; wafers;confectionery bars;chocolate-coatedconfectionery; candy;chewing gum; popcorn;desserts in this class;mousses; frozenconfectionery; ice cream;ice confections;confectionery ices; frozenyoghurt; sorbets (ices);sherbets (ices); beveragesin this class includingchocolate-basedbeverages and cocoa-based beverages; drinkingpowders in this classincluding chocolate andcocoa drinking powders;cocoa; condiments;spreads in this class;chocolate spread; saladdressings; mayonnaise;fruit cake snacks; breadcasings filled with fruit;fruit pastries; fruit pies;pastries containing fruit;snack bars containing amixture of grains, nutsand dried fruit(confectionery); snackbars containing driedfruits (confectionery); nutconfectionery; snack barscontaining nuts; snackbars made predominantlyof nuts.1036561 Class 29: same as above.Class 30: same as above.3 February2016