SUMATRA V NEW ZEALAND MILK BRANDS COA CA25/2009

SUMATRA V NEW ZEALAND MILK BRANDS COA CA25/2009 14 June 2011IN THE COURT OF APPEAL OF NEW ZEALANDCA25/2009[2011] NZCA 264BETWEEN N V SUMATRA TOBACCO TRADINGCOMPANYAppellantAND NEW ZEALAND MILK BRANDSLIMITEDRespondentHearing: 1 March 2011Court: Glazebrook, Gendall and Allan JJCounsel: B W F Brown QC and C A Warburton for AppellantK W McLeod for RespondentJudgment: 14 June 2011 at 3:00 PMJUDGMENT OF THE COURTA The appeal is allowed to the extent that registration of Sumatra's markis no longer precluded in relation to the following goods: cereal, biscuits and confectionery. In all other respects the appeal is dismissed.B Costs are to lie where they fall.____________________________________________________________________REASONS OF THE COURT(Given by Glazebrook J)Table of ContentsPara NoIntroduction [1]Statutory provisions [6]Summary of judgments below [11]Assistant Commissioner's decision [11]High Court judgment [16]Issues on appeal [26]Section 25(1)(b) [27]The test to be applied [27]Similarity of goods [34]Similarity of marks [44]Likelihood of deception or confusion [57]Section 25(1)(c) [58]Section 26(b) [65]Section 17(1)(a) [76]Result and costs [80]Introduction[1] Sumatra Tobacco Trading Company (Sumatra) is an Indonesian company that sells tobacco-related products. It adopted ANGKOR as a word mark in 1997 and has registered it in several jurisdictions, including Thailand, Malaysia and the United States.[2] On 17 November 2005 Sumatra applied for registration of the word ANGKOR as a trade mark in New Zealand. The application relates to goods in class 30 of the Nice classification system, namely „coffee, tea, cocoa, chocolate,artificial coffee, flavourings for beverages, cereal, non-dairy creamer, biscuits, andconfectionery‟.[3] New Zealand Milk Brands Limited (Milk Brands) opposes Sumatra‟sapplication for the registration of ANGKOR on a number of grounds, including that it is sufficiently similar to its registered marks to cause deception or confusion or tosuggest a connection between Sumatra‟s products and Milk Brands‟ products.Milk Brands‟ trade marks of relevance to this appeal are set out in the Appendix.1[4] Milk Brands and its predecessors and affiliates have used the ANCHOR word mark, as well as a range of anchor device marks2 for dairy products since 1886. The earliest current registration for the word mark ANCHOR was filed in 1904. Themark has long been recognised internationally as one of the world‟s leading dairy brands and is well known and trusted domestically.[5] The Assistant Commissioner of Trade Marks allowed the registration of the ANGKOR mark to proceed.3 On appeal the High Court refused to allow the registration of the ANGKOR mark.4 Sumatra appeals against the High Court decision.Statutory provisions[6] The Trade Marks Act 2002 (the Act) contains various grounds for refusing a registration application. Section 25(1)(b) provides that the Commissioner of Trade Marks must not register a mark if:it is similar to a trade mark that belongs to a different owner and that is registered in respect of the same goods or services or goods or servicesthat are similar to those goods or services, and its use is likely to deceive orconfuse [7] Under s 25(1)(c) a trade mark also cannot be registered if:it is, or an essential element of it is, identical or similar to a trade mark that is well known in New Zealand in respect of those goods or services or similar goods or services or any other goods or services if the use of [the mark for which registration is sought] would be taken as indicating a connection in the course of trade between those other goods or services and the owner of [the mark already registered], and would be likely to prejudice the interests of the owner.1 These are labelled "A" to "K" for ease of reference.2 Some including the word Anchor and some not.3 Intellectual Property Office of New Zealand Decision T36/2007, 15 October 2007.4 New Zealand Milk Brands Ltd v N V Sumatra Tobacco Trading Co HC Wellington CIV-2007-485-2485, 28 November 2008.[8] Section 17 is also relevant to this appeal. Section 17(1)(a) provides that theCommissioner of Trade Marks must not register a mark or any part of a mark "the use of which would be likely to deceive or cause confusion".[9] A trade mark can still potentially be registered if it contravenes s 25. Section 26 of the Act, entitled "Exceptions", states that a trade mark must beregistered in certain situations, including when:5 the Commissioner or the Court, as the case may be, considers that special circumstances exist, that, in the opinion of the Court or the Commissioner, makes it proper for the trade mark to be registered subject to any conditions that the Court or Commissioner may impose.[10] Section 26 overrides s 25(1),6 meaning that it can be invoked if registration is refused under that subsection. It does not override s 17, however.Summary of judgments belowAssistant Commissioner's decision[11] The Assistant Commissioner of Trade Marks concluded that none of MilkBrands‟ grounds of opposition had been made out. The Assistant Commissioner held that, out of 46 trade mark registrations owned by Milk Brands that were within the scope of the enquiry, only two covered goods in class 30.7 The Assistant Commissioner considered that these marks were visually different from ANCHORbecause of the "GK" in ANGKOR. She accepted that the marks were aurally similarbut considered they were conceptually different.[12] As to non-dairy creamer (contained in Sumatra‟s application), the AssistantCommissioner considered this potentially similar to a wide range of goods coveredby Milk Brands‟ registered trade marks (including those in classes 29, 32 and 42) butultimately concluded that the important (and decisive) point of difference is thatSumatra‟s product is not a dairy product.5 Section 26(b) of the Trade Marks Act 2002.6 Section 25(2) of the Trade Marks Act 2002.7 See trade marks labelled F and G in the Appendix.[13] On the issue of trade marks covering goods in classes other than class 30, theAssistant Commissioner considered that certain of Sumatra‟s goods (coffee, tea,cocoa, chocolate, artificial coffee and flavourings for beverages) were similar togoods covered by Milk Brands‟ registered marks in class 32. With regard to thoseother marks the Assistant Commissioner concluded that they were visually and conceptually dissimilar to the ANGKOR mark.[14] In all the circumstances she held that a substantial number of persons wouldnot be likely to be deceived or confused by the use of Sumatra‟s mark. This meant that ss 25(1)(b) and 17(1)(a) would not be contravened if Sumatra‟s mark wereregistered.[15] With regard to s 25(1)(c) of the Act, the Assistant Commissioner considered that the goods for which Milk Brands is well known (dairy products, in particularmilk, butter and cheese) were different from the goods covered by Sumatra‟s ANGKOR mark. Further, she concluded that the use of Sumatra‟s mark would not be taken as indicating a connection in the course of trade between Sumatra and MilkBrands. The use of Sumatra‟s mark would not be perceived by the general public as being a brand extension of Milk Brands‟ ANCHOR mark. The ANGKOR mark couldtherefore proceed to registration.High Court judgment[16] Milk Brands appealed against the Assistant Commissioner‟s decision andsucceeded on three major grounds. With regard to s 25(1)(b) of the Act, Dobson J took the view that the common denominator of Milk Brands‟ marks was the word ANCHOR. He concluded that the parties‟ marks were similar, that the goods towhich they were applicable were also similar (including non-dairy creamer) and that a substantial number of consumers would likely be deceived or confused ifSumatra‟s mark was used. This meant that the mark should not be registered.[17] The Judge also determined that s 25(1)(c) would be contravened if registration proceeded, as whenever confusion or deception surrounding the ANGKOR mark arose, Milk Brand‟s interests would be prejudiced. The fact thatSumatra‟s mark would likely cause deception or confusion also meant that s 17(1)(a) was successful as a ground of appeal. The High Court therefore held that the Assistant Commissioner should not have allowed the ANGKOR mark to proceed to registration.[18] It is worth setting out a more detailed summary of Dobson J‟s conclusions ons 25(1)(b) as the rest of his judgment follows from that analysis. As noted above,Dobson J took a "common denominator" approach, comparing ANGKOR to ANCHOR. Dobson J accepted that ANGKOR alluded to the image of Cambodian temples and had a general South East Asian connection. He said that the originalconcept behind "ANCHOR" was presumably to convey products delivered by sea, orthe notion of being safe at sea by virtue of the strength of the anchor. The extent and duration of its use in the New Zealand grocery market means that the "ANCHOR"brand has assumed a connotation of its own as a leading brand for dairy products. It is no longer literally associated with matters nautical, if it ever was.[19] The Judge considered that an important preliminary issue in assessing the likelihood of deception or confusion is whether any substantial number of New Zealanders are unaware of "ANGKOR" as the name of a region in Cambodia famous for its temples. For those who are familiar, the Judge considered that there cannot be any realistic likelihood that they will be deceived or confused when seeing products labelled ANGKOR into thinking they were products produced by those responsible for ANCHOR products.[20] The Judge held that, despite increasing migration to New Zealand from South East Asia and the extensive travel habits of New Zealanders, a material part of the New Zealand population would not be aware of the connotation of Cambodiantemples from the term "ANGKOR". Accordingly, he put to one side those familiarwith ANGKOR and separately analysed the situation of what he considered to be the majority of New Zealanders for whom the word has no such connotations. TheJudge held that the conceptual differences between "ANCHOR" and "ANGKOR"are irrelevant to all those who are not so aware, and are therefore insufficient to distinguish the two marks.[21] The Judge then went on to consider aural and visual similarities. In this context the Judge held that the Assistant Commissioner had taken the wrongapproach in comparing the two Milk Brands‟ registered marks for class 30 withSumatra‟s proposed mark. He said that the overall assessment has to be whetherANGKOR bears similarity with any of Milk Brands‟ marks.8[22] Taking an overall assessment would involve looking at the common denominator of all Milk Brands‟ marks, the word ANCHOR. In that regard it is notthe differences but the similarities that are important.9 Further, the marks must be viewed as a whole10 in light of the markets in which the products will be sold and an imperfect rather than photographic recollection of the marks.11[23] The Judge concluded that any slight aural difference would not register as a basis for distinction, especially in the intended market. As to visual similarities, Dobson J considered that the length of the words is identical and that the two words have many of the same letters.[24] Therefore, the Judge concluded that a substantial number of people in the market for the goods in question would be unable to conceptually distinguish"ANCHOR" and "ANGKOR". Given the visual and aural similarities of those twomarks, the Judge held that a substantial number of people are likely to be confusedor deceived by the use of the "ANGKOR" mark.[25] With regard to non-dairy creamer, Dobson J noted that the Assistant Commissioner had listed 22 goods of Milk Brands which would be similar to "non-dairy creamer" but for the fact that they are dairy products. Milk Brands submitted that this is a flawed approach and Dobson J agreed. He considered that the physical composition of the goods is one factor in the British Sugar calculus,12 but it is not determinative. In Dobson J‟s opinion, non-dairy creamer exists to compete with dairy products, for it is a direct substitute for milk or cream in warm beverages such8 At [27].9 At [28].10 At [29]–[30].11 At [31].12 In British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281 (Ch) at 296–297, a numberof factors were identified to assist in the determination of whether there is or is not similaritybetween goods.as tea or coffee. The Judge also accepted that Milk Brands markets a limited number of non-dairy items, such as soy milks. Overall, he considered that the goods in the table to which the Assistant Commissioner referred ought to have been found to besimilar to the goods covered by Sumatra‟s proposed mark, in addition to the goodscovered by the two marks in class 30 which the Assistant Commissioner did find to be similar.Issues on appeal[26] The issues on appeal are:(a) Is registration precluded under s 25(1)(b)?(b) Is registration precluded under s 25(1)(c)?(c) Is registration precluded under s 17(1)(a)?(d) Should registration nevertheless proceed under s 26(b)?Section 25(1)(b)The test to be applied[27] With regard to s 25(1)(b), both the Assistant Commissioner and Dobson J adopted the formulation from Intellectual Reserve Inc v Sintes at first instance and posed the following questions:13(a) Is the mark that has been applied for by Sumatra similar to any ofMilk Brands‟ trade mark registrations?(b) If so, is Sumatra‟s mark to be registered in respect of the same or similar goods or services covered by any of Milk Brands‟ trade markregistrations?13 Intellectual Reserve Inc v Sintes HC Auckland CIV-2007-404-2610, 13 December 2007 at [14].(c) If so, is use of Sumatra‟s mark likely to deceive or confuse?[28] No issue was taken with the approach by the parties, as long as the interrelated nature of the questions is borne in mind.[29] Sumatra submits that Dobson J failed to preserve the identity between the trade mark registrations under consideration in the first and second stages of the test.Sumatra submits that, by taking a "common denominator approach", Dobson J failed to recognise the fact that, while Milk Brands owns a number of marks that consist of the plain word "ANCHOR", none of these relate to goods similar to Sumatra‟s.Sumatra contends that Dobson J erred in failing to address the first and second stage questions from Intellectual Reserve by reference to the same registered trade marks.[30] We acknowledge that the first question proposed by Winkelmann J inIntellectual Reserve would appear to allow consideration of whether Sumatra‟s mark bears similarity with any of Milk Brands‟ marks, and that Dobson J may haveadopted a common denominator approach on that basis. However, the trade marks to be compared are those which relate to similar goods and not all trade marks, whether for similar goods or not. A common denominator approach is therefore inappropriate.[31] We consider that, the Intellectual Reserve sequence of questions requires some adjustment. We note that this Court did not expressly adopt Winkelmann J‟sformulation of the test on appeal, instead focusing its inquiry in relation to s 25(1)(b) on the specific issue of whether the marks were in respect of the same or similar services.14[32] We consider that with regard to s 25(1)(b), the order of inquiry should be:(a) Is an applicant‟s proposed mark (or marks) in respect of the same or similar goods or services covered by any of the opponent‟s trade mark registrations?14 Intellectual Reserve Inc v Sintes [2009] NZCA 305.(b) If so, is the applicant‟s proposed mark (or marks) similar to any of the opponent‟s trade mark registrations for the same or similar goodsidentified in the first inquiry?(c) If so, is use of the applicant‟s proposed mark likely to deceive or confuse?[33] We now deal with each of those questions in turn.Similarity of goods[34] No issue is taken with the proposition that most of Sumatra‟s class 30 goods(coffee, tea, cocoa, chocolate, artificial coffee, flavourings for beverages, cereal, biscuits and confectionery) are similar to goods covered by the two trade mark registrations owned by Milk Brands in class 30.15[35] As discussed above, the Assistant Commissioner held that Sumatra‟s non-dairy creamer (part of Sumatra‟s goods specification) would be similar to 22 of MilkBrands‟ goods (covered by 15 trade mark registrations in class 29, four trade markregistrations in class 32, and two trade mark registrations in class 42), but for the fact that the latter goods are dairy products.16 Dobson J identified non-dairy creamer as a competitive substitute to milk or cream and therefore held that it was similar to those 22 goods.17[36] Sumatra submits that Dobson J erred in his approach to non-dairy creamer. In its submission, the utility of non-dairy creamer lies in the fact that it is not a dairy product and so it is not sound to conclude that it is similar to dairy products.18[37] Milk Brands submits that a comparison of non-dairy creamer with the goodscovered by Milk Brands‟ registrations in classes 29, 30 and 32 (milk, milk products, milk beverages, milk powders, soy milk, cream, non-alcoholic drinks, syrups, other15 See trade marks labelled F and G in the Appendix.16 See at [12] above.17 See at [25] above.18 Even if Dobson J‟s view is preferred, however, Sumatra submits that the ANGKOR mark canstill be registered with a goods specification that excludes non-dairy creamer.preparations for making beverages) indicates that five of the six factors from theBritish Sugar test are present.[38] In British Sugar a number of factors were identified to assist19 in the determination of whether there is or is not similarity between goods. These factors are: the respective uses of the goods; the respective users of the goods; the physical nature of the goods; the respective trade channels through which the goods reach the market; in the case of self-serve consumer items, where in practice they are respectively found or likely to be found in supermarkets but in particular whether they are, or are likely to be, found on the same or different shelves; and the extent to which the respective goods are competitive. Milk Brands submits that all factors except for the third factor, the physical nature of the goods, are present here.[39] We accept Milk Brands‟ submissions (and Dobson J‟s reasoning) on thispoint. As Milk Brands points out, non-dairy creamer and Milk Brands‟ goods areused for the whitening of beverages. The respective use of the goods is therefore identical. The goods are used by the general public. The respective users of the goods are therefore identical. The goods will reach the market through the same trade channels, i.e. food and beverage wholesalers. The goods will be sold in the same kind of outlets, such as supermarkets, and may be in close proximity in those outlets. The goods are competitive with each other, given that they serve the same function and purpose.[40] We accept Milk Brands‟ submission that the physical nature of the goods inquestion is just one of six factors to be weighed under the British Sugar test. In determining the similarity of goods no single consideration is conclusive in itself.20We also accept its submission that Dobson J correctly pointed out that to jump to the conclusion the goods are different, on the basis of their physical nature alone, is a flawed approach. We therefore accept Milk Brands‟ submission that Sumatra‟s non-19 In British Sugar at 297, Jacob J notes: "I do not pretend that this list can provide other thangeneral guidance".20 See for example Application by John Crowther & Sons (Milnsbridge) Ltd (1948) 65 RPC 369 at372.dairy creamer is similar to Milk Brands‟ goods covered by its registrations in classes29, 30 and 32.21[41] Finally, Milk Brands submits that, as well as non-dairy creamer, other goodsof Sumatra are also the same or similar to the goods covered by Milk Brands‟class 29 registrations. For example, coffee, covered by Sumatra‟s goods in class 30,is similar to flavoured milk, which is covered by Milk Brands‟ class 29 registrations.[42] We accept that a number of Sumatra‟s goods (coffee, tea, cocoa, chocolate,artificial coffee, chocolate flavourings for beverages) are similar to goods covered byMilk Brands‟ class 29 registrations (in particular, the milk products). In terms of theBritish Sugar calculus, whilst the former goods may not be "ready to consume" (asflavoured milk would be, for example), we accept that the goods could still be said tobe "competitive" and that the respective uses and users of the goods would be sufficiently similar.[43] We therefore go on to consider whether Sumatra‟s marks bear similarity to Milk Brands‟ registered marks in classes 30, 29 and 32.Similarity of marks(a) Milk Brands‟ class 30 marks[44] One of Milk Brands‟ registered trade marks in class 30 is a pure device mark.22 The other is also a device mark but with the word ANCHOR in stylised font included.23[45] We turn to the question of whether Sumatra‟s ANGKOR mark is similar to Milk Brands‟ device mark featuring the word ANCHOR first. Given the prominent nature of the word ANCHOR in the device mark, we consider it legitimate to compare that word with the proposed mark ANGKOR.21 See trade marks labelled H (for class 29), F and G (for class 30) and B to E (for class 32) in theAppendix.22 See trade mark labelled G in the Appendix.23 See trade mark labelled F in the Appendix.[46] Sumatra submits that ANGKOR conveys a foreign, probably Asian, "flavour"and that the Judge was "too absolute" in refusing to recognise this connotation. InSumatra‟s submission, it is certainly not a word to which even the uninformed reader would attribute a default meaning of the English word "anchor".[47] Sumatra points out that, as to the visual similarity of the marks, the Assistant Commissioner identified that the GK in ANGKOR is different to the CH in ANCHOR. It submits that the letters G and K in juxtaposition present to an English reader as anomalous. The conjoint letters have a jarring effect for an English reader. While Dobson J criticised the Assistant Commissioner for dissecting a mark into constituent parts for comparison, Sumatra submits that the recognition of a particular distinguishing feature such as this is acceptable. In its submission, there is consequently insufficient similarity between the marks, properly compared, to warrant the conclusion that the use of ANGKOR would likely deceive or confuse consumers.[48] Milk Brands submits that Dobson J applied all of the relevant principles correctly, such as the rule that the marks should not be divided up and that it is similarities and not differences that should be compared. Each mark needs to be considered as a whole. Taking a view as to whether GK is different to CH amounts to dissecting a mark, which is not allowable. Taking a "holistic approach", the parties‟ marks are visually similar. It submits that there are also no true conceptual differences to distinguish the marks, further adding to their similarity.[49] We accept Sumatra‟s submission that Dobson J may have been too absolute in rejecting a submission that the word ANGKOR conjures up an Asian or foreign flavour. We also accept that the Assistant Commissioner was entitled to view the juxtaposition of the letters G and K as leading to an overall impression of a foreign word. Thus we accept the submission that, in referring to those two letters, she was not necessarily wrongly dissecting the mark.[50] Nevertheless, even taking those factors into account, we consider that overall the marks ANGKOR and ANCHOR are similar. In this regard we take into account the fact that there is aural similarity and that the length of the words is the same withonly the middle two letters different. That difference would not necessarily be picked up by consumers in a normal shopping situation, particularly taking into account imperfect recollection.[51] We acknowledge that the Milk Brands mark we are considering24 is not made up entirely of the word ANCHOR. However, given that the mark figures the word ANCHOR so prominently, we do not see this as detracting significantly from the visual similarity between the two marks.[52] We reach a different conclusion in relation to the pure device mark.25 Weaccept Milk Brands‟ submission that the device mark (if translated into words) maybe pronounced in only one fashion, as "anchor". Thus aurally the mark remainssimilar to ANGKOR. However, we agree with the Assistant Commissioner that thepure device mark is visually different to Sumatra‟s proposed mark. We view thisvisual dissimilarity as significantly reducing the overall similarity of the marks.[53] In terms of conceptual similarity, we consider that, for the average consumer, the word ANGKOR would not trigger perceptions and recollections of the particularimage of the "anchor" in Milk Brands‟ device mark (or vice versa). That wouldamount to a process of analysis and approximation that the relevant average consumer would not naturally engage in.26(b) Milk Brands‟ class 29 mark[54] Milk Brands‟ registered trade mark in class 29 (which covers all goods in that class) simply uses the word ANCHOR.27 Our earlier assessment of the similaritybetween Milk Brands‟ class 30 device mark featuring the word ANCHOR and24 See trade mark labelled F in the Appendix.25 See trade mark labelled G in the Appendix.26 See for example La Chemise Lacoste SA v Baker Street Clothing Ltd [2011] RPC 5, where it washeld that the applicant‟s word mark "ALLIGATOR" was not sufficiently similar to theopponent‟s pure device mark of a crocodile because (amongst other reasons) the word mark"ALLIGATOR" did not have the power to trigger perceptions and recollections of thedistinctively depicted imagery of the opponent‟s crocodile device mark with spontaneity andspecificity.27 See trade mark labelled H in the Appendix.Sumatra‟s ANGKOR mark28 applies with even more force because this mark is purely a word mark. The mark is therefore similar to Sumatra‟s proposed mark.(c) Milk Brands‟ class 32 marks[55] Two of Milk Brands‟ registered trade marks in class 32 simply use the word ANCHOR.29 The other two marks are pure device marks.30 Again, the assessmentof the similarity between Milk Brands‟ class 30 device mark featuring the word ANCHOR and Sumatra‟s ANGKOR mark31 applies with even more force because this mark is purely a word mark.[56] In relation to the pure device marks, the assessment of the dissimilaritybetween Milk Brands‟ class 30 pure device mark and Sumatra‟s ANGKOR mark32equally applies.Likelihood of deception or confusion[57] The first two Intellectual Reserve questions are answered in the affirmative inrelation to Milk Brands‟ class 30 device mark featuring the word ANCHOR, its class 29 mark featuring the word ANCHOR, and two of its class 32 marks featuring the word ANCHOR.33 Given our conclusion on the first two Intellectual Reservequestions, the answer to the third question is clear. Overall, we consider thatSumatra‟s ANGKOR mark is sufficiently similar to these marks of Milk Brands for there to be a likelihood of deception or confusion if Sumatra‟s ANGKOR mark isused. Dobson J was correct to hold that registration of ANGKOR is precluded by s 25(1)(b).28 See at [45]–[51] above.29 See trade marks labelled B and D in the Appendix.30 See trade marks labelled C and E in the Appendix.31 See at [45]–[51] above.32 See at [52]–[53] above.33 See trademarks labelled F, H, B and D in the Appendix.Section 25(1)(c)[58] There was no challenge by Sumatra to the Assistant Commissioner‟s finding that Milk Brands‟ ANCHOR mark is well known in New Zealand for dairy products,in particular milk, butter and cheese. However, as Sumatra points out, there was no cross appeal by Milk Brands asserting that the ANCHOR brand is well known outside of dairy products.[59] Intellectual Reserve34 provides the following guidelines with regard to s 25(1)(c) of the Act, substituting the parties in the present appeal:(a) Is the trade mark identical or similar to one of the marks of MilkBrands which is well known, or is an essential element of Sumatra‟strade mark identical or similar to that which is well known?(b) Are Sumatra‟s goods and services the same as or similar to the goods and services of Milk Brands? If not,(c) Would use of Sumatra‟s trade mark be taken as indicating aconnection in the course of trade with Milk Brands?(d) If the answer to issue (b) or (c) is yes, would use of Sumatra‟s trademark be likely to prejudice the interests of Milk Brands?35[60] With regard to s 25(1)(c), Milk Brands submits that ANGKOR must not be registered as it is the same or similar to the well known ANCHOR mark; the goods are the same or similar; and the use of the ANGKOR mark is likely to prejudice its interests. On this last point, Milk Brands submits that ANCHOR is an iconic New Zealand brand. If another grocery brand with a similar sounding name emergesthat deals with similar or identical goods, customers "are likely to see what they34 Intellectual Reserve Inc v Sintes HC Auckland CIV-2007-404-2610, 13 December 2007 at [40].35 Sumatra pointed out that the Intellectual Reserve formulation of the questions with regard tos 25(1)(c) involves four stages and that the fourth stage must be undertaken in respect of all threecategories of goods/services (same, similar or dissimilar). This may be contrasted with theequivalent provisions in s 17 of the (now repealed) Trade Marks Act 1953, whereby the fourthstage was only an applicable inquiry if the goods were dissimilar. However, it is not necessaryfor us to engage with the question of which interpretation is correct in this case.know (the ANCHOR brand)" and be deceived or confused, prejudicing Milk Brands‟interests. If the Court does find that the goods are different, the use of the ANCHOR mark would still indicate a connection in the course of trade between Milk Brands and Sumatra. In Milk Brands‟ submission consumers are likely to think, on seeingANGKOR upon non-dairy products, that ANCHOR has expanded its product line (a common practice for iconic brands), without noticing the difference in spelling. This will lead to prejudice to Milk Brands.[61] Sumatra challenges Dobson J‟s findings on both the similarity of marks andsimilarity of goods for the same reasons as advanced in the context of s 25(1)(b). Sumatra further submits that, given ANCHOR is well known for dairy products only, it is going too far to assume (without suitable expert evidence) that the use of the word ANGKOR on different goods would be perceived as establishing a likelihood of prejudice to Milk Brands‟ interests within the meaning of s 25(1)(c).[62] Sumatra supports the Assistant Commissioner‟s consideration of this issueand in particular her point that, in the context of the famous/well known mark jurisdiction, it would be unusual for the form of a well known and successful mark to be altered. Sumatra submits that it is of the nature of a famous mark that its identity is constant and this would apply in particular to any brand icon.[63] We have already rejected Sumatra‟s submissions with regard to the similarityof the marks and the similarity of the goods. We thus accept Milk Brands‟submissions insofar as they relate to similar marks and goods. Section 25(1)(c) thus prevents registration with regard to similar goods.[64] However, if any of Sumatra‟s goods had been dissimilar to Milk Brands‟goods, we would have accepted Sumatra‟s submissions insofar as they relate todissimilar goods. With regard to dissimilar goods, we do not consider a connection in trade and likelihood of prejudice would be established because ANCHOR is only well known for dairy products.Section 26(b)[65] This is a new point raised on appeal and thus was not dealt with by Dobson J.[66] Irrespective of the conclusions on ss 25(1)(b) and (c), Sumatra argues that the present case is one where special circumstances exist within the ambit of s 26(b). Those circumstances include the fact that Milk Brands had inappropriately maintained trade mark registrations in respect of goods which it did not manufacture or supply and in respect of which it was not demonstrated to have a business reputation. Several such registrations had been removed or very substantially pared back with the consent of Milk Brands.[67] This occurred as a result of a successful revocation action filed by another entity on 21 December 2006 on the grounds of non-use of some of Milk Brands‟trade mark registrations for the preceding three years. Milk Brands filed an appeal against that decision but the appeal was determined by the filing of consent orders.Of particular relevance here is that one of Milk Brands‟ trade mark registrationsunder class 30 (the device mark featuring the word "ANCHOR")36 was reduced in scope to cover only milk and chocolate based beverages.37[68] Sumatra submits that Milk Brands was at all material times aware that the trade mark registration was vulnerable to very substantial reduction in scope andthere was in reality no material overlap between Sumatra‟s specification of goodsand the range of goods for which Milk Brands was justified in maintaining a trademark registration. In Sumatra‟s submission, this qualifies as a "special circumstance" under s 26(b). Sumatra submits that such a result fits with policy: trade mark owners such as Milk Brands should not be able to use their registrations defensively when others whose goods do not overlap wish to register a mark. Sumatra submits that there can be no real or material prejudice for Milk Brands if it has not and does not sell products within those categories of goods.36 See trade mark labelled F in the Appendix.37 See the far right column in relation to the trade mark labelled F in the Appendix.[69] Sumatra submits that, if its current registrations are not allowed to proceed, then it will find itself in the position that Cussons (New Zealand) Pty Ltd found itself in Unilever plc v Cussons (New Zealand) Pty Ltd.38 In that case, Unilever had applied to register a trade mark which was identical to one which it had not used in the preceding five years. Cussons alleged that Unilever had made this application because it had learnt that its earlier registration was vulnerable for non-use, and intended to block Cussons from using that mark without any intention itself to use the mark in New Zealand. Cussons alleged that Unilever should therefore be unable to seek an injunction to restrain infringement of its mark by Cussons, because of lackof "clean hands". It was held that there was no duty on Unilever not to register the mark:39In this case, Cussons, in the belief that it enjoyed sufficiently good relations with its competitor Unilever, took the risk of making an approach drawing attention to the vulnerability of the trade mark registration no 44598 without taking the usual precautions of filing an application to remove it (which could have been withdrawn if an arrangement was reached) and its own application to register to secure priority in the event of removal of the registration. By taking that stance and making an assumption that Unilever would not attempt to improve its position, Cussons could not impose any duty upon Unilever. In the world of commerce, between vigorous international competitors, the law does not impose some equivalent of Queensberry Rules. We see no basis in this evidence for refusal of relief forlack of "clean hands".[70] Milk Brands submits that Sumatra‟s alleged "special circumstances" for thepurposes of s 26(b) are irrelevant. There appears to be no special hardship or compelling case that would allow the application of this provision. Sumatra does not trade in the goods covered by the ANGKOR mark and the mark has not been previously used, either domestically or overseas. Nor does it appear that there is an intention to use the mark, at least in relation to non-dairy creamer. The ANCHOR mark, however, has been expanded into other areas that are similar to non-dairycreamer. In Milk Brands‟ submission, this means that there would be a real prejudiceto Milk Brands if the ANGKOR mark were allowed to proceed to registration.[71] We accept Sumatra‟s submission that special circumstances exist within theambit of s 26(b) in order to avoid the situation that arose in Unilever. Milk Brands‟38 Unilever plc v Cussons (New Zealand) Pty Ltd [1997] 1 NZLR 433 (CA).39 At 442.submissions in relation to Sumatra‟s non-use of its proposed mark are not relevant here, as this is not a case where it has been alleged that there has been honest concurrent use of a proposed mark. Rather, the revocation action has resulted in newgoods specifications for a number of Milk Brands‟ registrations and accordingly weneed to reassess whether Sumatra‟s goods remain similar to Milk Brands‟ goods inlight of the new goods specifications.[72] We consider that Sumatra‟s coffee, tea, cocoa, chocolate, artificial coffee,flavourings for beverages and non-dairy creamer are similar to the goods covered byMilk Brands‟ pared back class 30 registration for the device mark featuring the word"ANCHOR" (namely, milk and chocolate based beverages). In terms of theBritish Sugar calculus, the respective uses and users of the goods are similar, the goods will reach the market through similar trade channels and will be sold in the same kind of outlets, and may be in close proximity in those outlets. Because wehave determined that Sumatra‟s mark is sufficiently similar to this device mark to belikely to deceive or confuse consumers, registration of those goods is still precluded by s 25(1)(b) and s 25(1)(c).[73] Further, Sumatra‟s coffee, tea, cocoa, chocolate, artificial coffee, flavouringsfor beverages and non-dairy creamer still remain similar to the goods covered byMilk Brands‟ trade mark registered in class 29.40 The goods specification for this mark, while pared back to a more restrictive class of goods,41 still covers milk products and flavoured milk. Our assessment of the similarity of goods42 therefore still applies. Again, because we have determined that Sumatra‟s mark is sufficientlysimilar to this mark to be likely to deceive or confuse, registration is still precluded by s 25(1)(b) and s 25(1)(c).40 Additionally, Sumatra‟s non-dairy creamer may still be regarded as similar to the goods covered by Milk Brands‟ trade marks registered in class 32. See trade marks labelled B to E in the Appendix. The goods specifications for these marks, whilst pared back to a more restrictive class of goods (see the far right column in relation to those trade marks), still cover milk beverages, milk powder and soy milk (i.e. goods used for the whitening of beverages). Our assessment of the similarity of goods at [37]–[40] above therefore still applies. Again, becausewe have determined that Sumatra‟s mark is sufficiently similar to two of those marks (labelled Band D in the Appendix) to be likely to deceive or confuse, registration is still precluded by s 25(1)(b) and s 25(1)(c).41 See the far right column in relation to the trade mark labelled H in the Appendix.42 See at [41]–[42] above.[74] However, in our view, Sumatra‟s cereal, biscuits and confectionery goods canno longer be regarded as similar to the goods now covered by Milk Brands‟ device mark featuring the word "ANCHOR" registered in class 30. The goods specificationfor this mark no longer includes cereal products, biscuits and confectionery (including chocolate and chocolate confectionery).[75] While Sumatra‟s cereal, biscuits and confectionery goods are still similar to Milk Brands‟ goods covered by its pure device mark registered in class 30,43 we havealready concluded that Sumatra‟s mark is dissimilar to the pure device mark and thus would not be precluded from registration on that basis. Thus, by operation of s 26(b), Sumatra is no longer precluded under s 25(1)(b) from registering its mark in relation to cereal, biscuits and confectionery. Further, registration is no longer precluded under s 25(1)(c) for those goods, as we consider that ANCHOR is only well known for dairy products and thus a connection in trade and likelihood of prejudice would not be established.44Section 17(1)(a)[76] The final point of contention for Sumatra is Dobson J‟s conclusions as tos 17(1)(a). Sumatra submits that, as there is a lack of significant product overlap andMilk Brands‟ reputation is confined to dairy products, and as there are differences inthe parties‟ marks, there would be no significant likelihood of deception or confusionif the ANGKOR mark was used.[77] Milk Brands submits that Dobson J correctly held that deception and confusion among the public would be likely, given the similarity of the marks and the fact that ANCHOR is a well known mark for dairy products and is expanding into other areas.[78] The purpose of s 17(1)(a) is the protection of the public from deception or confusion. The test to apply is whether, having regard to the reputation acquired by43 The goods specification for this mark, whilst pared back to a slightly more restrictive class ofgoods (see the far right column in relation to the trade mark labelled G in the Appendix), stillcovers cereal and confectionery (including chocolate and chocolate confectionery).44 See at [64] above.Milk Brands for ANCHOR, the Court is satisfied that the ANGKOR mark, if used in a normal and fair manner in connection with any goods covered by the registration proposed, will not be reasonably likely to cause deception or confusion amongst a substantial number of persons.45[79] We consider that our conclusion in relation to s 17(1)(a) must follow from our conclusions in relation to s 25(1)(b), s 25(1)(c) and s 26(b). We are therefore satisfied that the ANGKOR mark would be reasonably likely to cause deception or confusion among a substantial number of persons if it were registered in relation toSumatra‟s coffee, tea, cocoa, chocolate, artificial coffee, flavourings for beveragesand non-dairy creamer. However, we do not consider that the ANGKOR mark would be reasonably likely to cause deception or confusion among a substantial number of persons if it were registered in relation to cereal, biscuits and confectionery.Result and costs[80] The appeal is allowed to the extent that registration of Sumatra‟s mark is no longer precluded in relation to the following goods: cereal, biscuits and confectionery. In all other respects, the appeal is dismissed.[81] As there has been success on both sides, costs are to lie where they fall.Solicitors: Acacia Law, Wellington for Appellant A J Park Law, Auckland for Respondent45 Smith Hayden & Co Ltd's Application (1945) 63 RPC 97 at 101, applied in Pioneer Hi-BredCorn Co v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 (CA) at 57.Appendix: Relevant Trade MarksTrade marknoTrade mark OriginalspecificationSpecification afterAnchor Foodsrevocation actionA 33191 ANCHOR 42: Dairy-produce of allkinds and descriptions,both manufactured andunmanufactured42: dairy produce; milkproducts; milk includingfresh milk, long life milk,flavoured milk, milkcontaining dietarysupplements and culturedmilk; milk powder; creamincluding fresh cream,long life cream, thickenedcream and flavouredcream; custard; cheeseincluding block cheese,grated cheese andspeciality cheese; butterand butter blendsB 129083 ANCHOR 32: mineral andaerated waters andother non-alcoholicdrinks; fruit juices andother non-alcoholicbeverages with a fruitbase in this class;syrups and otherpreparations formaking beverages32: non-alcoholic drinksnamely milk, flavouredmilk, milk containingdietary supplements,cultured milk, soy milk,flavoured soy milk, soymilk containing dietarysupplements; milk powderC 129084 32: mineral andaerated waters andother non-alcoholicdrinks; fruit juices andother non-alcoholicbeverages with a fruitbase in this class;syrups and otherpreparations formaking beverages32: mineral and aeratedwaters and other non-alcoholic drinks; fruitjuices and other non-alcoholic beverages with afruit base in this class;syrups and otherpreparations for makingbeveragesD 160165 ANCHOR 32: beers; mineral andaerated waters andother non-alcoholicdrinks; fruit drinks andfruit juices; syrups andother preparations formaking beverages32: non-alcoholic drinksnamely milk, flavouredmilk, milk containingdietary supplements,cultured milk, soy milk,flavoured soy milk, soymilk containing dietarysupplements; milk powderE 160166 32: beers; mineral andaerated waters andother non-alcoholicdrinks; fruit drinks andfruit juices; syrups andother preparations formaking beverages32: beers; mineral andaerated waters and othernon-alcoholic drinks; fruitdrinks and fruit juices;syrups and otherpreparations for makingbeveragesF 194033 30: coffee, tea, cocoaand other beverageproducts in this class;cereal products in thisclass; confectioneryincluding chocolateand chocolateconfectionery, ices andice creamconfectionery,ingredients for icecream; honey; sauces(except saladdressings), vinegar,mustard, salt, pepperand other condiments30: chocolate beverageswith milk and chocolatebased beveragesG 219274 30: coffee, tea, cocoaand other beverageproducts in this class;cereal products in thisclass; confectioneryincluding chocolateand chocolateconfectionery, ices andicecreamconfectionery,ingredients foricecream; honeysauces (except saladdressings), vinegar,mustard, salt, pepperand other condiments30: coffee, tea, cocoa andother beverage productsin this class; cerealproducts in this class;confectionery includingchocolate and chocolateconfectionery, ices andicecream confectionery,ingredients for icecream;honey sauces (exceptsalad dressings), vinegar,mustard, salt, pepper andother condimentsH 273642 ANCHOR 29: all goods in thisclass29: dairy products; milkproducts; milk includingfresh milk, long life milk,flavoured milk, milkcontaining dietarysupplements and culturedmilk; milk powder; soy milkincluding flavoured soymilk and soy milkcontaining dietarysupplements; creamincluding fresh cream,long life cream, thickenedcream and flavouredcream; custard; cheeseincluding block cheese,grated cheese andspeciality cheese; butter;butter blendsI 29102 ANCHOR 33: alcoholicbeverages (exceptbeers)Trade mark revoked as at21 December 2006J 291022 ANCHOR 36: financial services Trade mark revoked as at21 December 2006K 293467 ANCHOR 32: beers; mineral andaerated waters andother non-alcoholicdrinks; fruit drinks andfruit juices; syrups andother preparations formaking beverages32: non-alcoholic drinksnamely milk, flavouredmilk, milk containingdietary supplements,cultured milk, soy milk,flavoured soy milk, soymilk containing dietarysupplements; milk powder