NEW ZEALAND MILK BRANDS LIMITED V NV SUMATRA TOBACCO TRADING CO HC WN CIV-2007-485-2485

NEW ZEALAND MILK BRANDS LIMITED V NV SUMATRA TOBACCO TRADING CO HC WN CIV- 2007-485-2485 28 November 2008IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV-2007-485-2485UNDER the Trade Marks Act 2002 IN THE MATTER OF an appeal from the decision of the Assistant Commissioner of Trade Marks dated 15 October 2007 AND IN THE MATTER OF Trade Mark Application No 738887 ANGKOR in class 30 BETWEEN NEW ZEALAND MILK BRANDS LIMITED Appellant AND NV SUMATRA TOBACCO TRADING CO Respondent Hearing: 21 August 2008 Counsel: K McLeod for appellant C Warburton for respondent Judgment: 28 November 2008RESERVED JUDGMENT OF DOBSON J Background[1] The appellant ('Milk Brands') brought this appeal in its position as owner of a range of trade marks registered for the word 'ANCHOR'; both for the word used on its own and together with the symbol of an anchor as used to moor ships to the sea bottom. A challenge was raised as to the coincidence of the corporate entity owning the marks, and other companies under common ownership in the widerFonterra group that used them. However, I do not see any substantive merit in that point. Milk Brands adequately represents the legal owners of the marks as well as the affiliated entities that have, over a period of more than 100 years, used marks including the word 'ANCHOR', relevantly for a wide range of dairy products. [2] The respondent ('Sumatra') is an Indonesian company involved in trading tobacco products. It has, however, in recent years sought registration of trade marks for the word 'ANGKOR' in a number of countries for goods in class 30 of the Nice Classification system, namely:Coffee, tea, cocoa, chocolate, artificial coffee, flavourings for beverages, cereal, non-dairy creamer, biscuits and confectionery.[3] Sumatra applied to register its trade mark 'ANGKOR' in New Zealand on 17 November 2005. The application was advertised on 24 February 2006, Milk Brands filed a notice of opposition on 22 May 2006 and Sumatra filed a counter-statement on 17 July 2006. The relevant date for determining the parties' rights in relation to the application was 17 November 2005. A hearing on the opposition to the application was heard by an Assistant Commissioner of Trade Marks on 7 September 2007, and a decision on 15 October 2007 determined that none of the grounds of opposition succeeded. Accordingly, that decision directed that Sumatra's application may proceed to registration, subject to any appeal. Not all of the grounds of opposition which were unsuccessful before the Assistant Commissioner have been re-argued on appeal, and I will deal with each of the grounds that remain relevant, in my own consideration of them. [4] A notice of cross-appeal was also filed on Sumatra's behalf, which sought a reversal of certain findings that had been determined against its case by the Assistant Commissioner, notwithstanding that, on each of the grounds of opposition raised for Milk Brands, Sumatra had ultimately succeeded. Much of the discussion on Milk Brands' appeal will be relevant to Sumatra's cross-appeal, and I make a determination of that cross-appeal after considering the main appeal.Approach to determination of the appeal[5] It was submitted for Milk Brands that I was required on appeal to consider the Assistant Commissioner's decision and assess what weight, if any, should be given to it, relying on the Court of Appeal's decision in Stichting Lodestar v Austin Nicholls & Co Inc [2007] NZCA 61. However, by the time the appeal was argued that decision had been overtaken by the decision of the Supreme Court in a further appeal in the same proceedings (Austin, Nichols & Co Inc v Stichting Lodestar[2008] 2 NZLR 141). The different emphasis appearing from the Supreme Court judgment makes the extent of consideration a Court exercising a general power of appeal gives to the decision appealed from, simply a matter for the judgment of the Court on appeal. The Chief Justice's judgment for the Court included the observation at [5]:An appeal court makes no error in approach simply because it pays little explicit attention to the reasons of the court or tribunal appealed from, if it comes to a different reasoned result. On general appeal, the appeal court has the responsibility of arriving at its own assessment of the merits of the case.[6] That means the basis for and extent of respect afforded to factual findings or technical attributes of the decision-maker appealed from is an entirely context- specific assessment for the Judge on appeal. There is no presumptive level of respect or deference to the decision-maker. [7] The law also provides two other relevant parameters on the way in which such an appeal is to be considered. The first is that once an application for trade mark registration is challenged, the onus is on the applicant to establish that the likelihood of deception or confusion does not arise: New Zealand Breweries Ltd v Heineken's Bier Browerij Maatschappij NV [1964] NZLR 115 (CA). [8] The second aspect is that whether use of the proposed mark is likely to deceive or confuse is a question of fact to be decided on the circumstances in a particular case by the Court. Older authorities tend to be more emphatic about the consequence of this proposition, namely that witnesses ought not to be expressing a view on that, but rather leaving it entirely for the Court. In New Zealand Breweriesthe Court of Appeal commented:It is for the Court to decide the question of fact as a matter of impression, having due regard, of course, to any relevant evidence which has been produced. But the question is not one to be decided upon the opinion of the witnesses. It is a matter for the Judge. He looks at the exhibits before him, and, while he must pay due regard to any relevant evidence produced, the matter remains one of personal impression, visual or phonetic. He cannot shelter behind another Judge's decision. Proper weight must, of course, be given to any opinion which the Commissioner has expressed on the matter in dispute, but his decision cannot absolve the Judge of his own individual responsibility: Lord Wright In re Rysta's Application [1945] AC 68, 100; [1945] 1 All ER 34, 47. (p 139)[9] In this case, the major deponents for Milk Brands and Sumatra have both expressed their own reasoned views, in the former case as to why confusion arises, and in the latter as to why it does not. I see no need to formally rule any aspect of the affidavit as inadmissible, simply approaching the totality of the evidence on the basis that I must form my own view on this critical factual issue.First ground of appeal: section 25(1)(b) of the Act[10] The first ground argued on the appeal was that the Assistant Commissioner erred in not declining registration under s 25(1)(b) of the Trade Marks Act 2002 ('the Act'). That provides:25 Registrability of identical or similar trade mark (1) The Commissioner must not register a trade mark (trade mark A) in respect of any goods or services if—[](b) it is similar to a trade mark (trade mark C) that belongs to a different owner and that is registered, or has priority under section 34 or section 36, in respect of the same goods or services or goods or services that are similar to those goods or services, and its use is likely to deceive or confuse.[11] I gratefully adopt the sequence of questions posed by Winkelmann J inIntellectual Reserve Limited v Sintes HC AK CIV-2007-404-2610 13 December 2007 as guiding a determination on this ground of opposition. Substituting the parties to the present appeal, Her Honour's formulation of the questions and the approach to their resolution was:[14] Three issues arise for determination under s 25(1)(b) as follows: a) Is the mark that has been applied for by [Sumatra] similar to any of [Milk Brands'] trade mark registrations? b) If so, is [Sumatra's] mark to be registered in respect of the same or similar services covered by any of [Milk Brands'] trade mark registrations? c) If so, is use of [Sumatra's] mark likely to deceive or confuse? [15] While the outcome of the third issue is likely to be largely informed by the resolution of the first two, it remains a separate issue, but it need only be determined if the answer to issues (a) and (b) is yes. [16] The relevant principles are not in dispute. They are as follows: (i) The applicant [Sumatra] has the onus of establishing that [its] mark does not breach s 25(1)(b) of the Act:New Zealand Breweries Ltd v Heineken's Bier Browerij Maatschappij N.V. [1964] NZLR 115, 132. (ii) In addressing the issues arising under s 25(1)(b) the court should consider the marks in their entirety; the overall or net impression of the marks should be considered: Clarke v Sharp (1898) 15 RPC 141, 146. It is not proper to divide up the marks and compare portions of them either visually, or aurally: Aristoc Ltd v Rysta Ltd [1945] 1 AC 68. Whilst differences between two marks may be significant it is the similarities which are most significant, whether visual, audible, distinctive or conceptual: Austin, Nichols & Co Inc. v Stichting Lodestar (2005) 11 TLCR 265 at [13]. (iii) The impression or idea conveyed by the marks is important in assessing how they will be recalled: Anheuser-Busch Inc v Budweiser Budvar National Corporation [2003] 1 NZLR 472 (CA) at [75]. The idea of a mark is more likely to be recalled than its precise details: Hannaford & Burton Ltd v Polaroid Corporation [1976] 2 NZLR 14 (PC). (iv) Comparison is not of the opponent's mark with the mark of the applicant when taken side by side, but taking into account imperfect recollection in all the circumstances in which the products might be sold: the question is whether the person who sees the proposed trade mark in the absence of the other trade mark, and in view only of his general recollection of what the nature of the other trade mark was, would be liable to be deceived and to think that the trade mark before him is the same as the other, of which he has a general recollection.Re Sandow (1914) 31 RPC 196, 205. (v) The marks are to be compared as they would be encountered in the usual circumstances of trade. The Court must take into account the nature of the goods and/or services. This comparison is based on practical business probabilities rather than hypothetical possibilities of deception or confusion: Pioneer Hi-Bred Corn Company v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50, 76.[12] Accordingly, with these principles in mind, I adopt the Intellectual Reservesequence of questions.Similarity between the two marks[13] This analysis begins with what has become the standard test fromNew Zealand Breweries at p 139:The 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 and by their sound; 2. You must consider the goods to which they are to be applied and 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 to happen if each of the marks is used in a normal way as a trade mark for the goods of the respective owners of the marks: In re Pianotist Co.'s Application (1906) 23 R.P.C. 774, 777.[14] Milk Brands' argument addressed the similarity between 'ANCHOR' and 'ANGKOR' under the headings of visual, aural and then a comparison of the concepts they were intended to convey. Whilst ordinarily that would be the logical sequence in which to measure the extent of similarities, because of its impact on the other ways of measuring similarity, I consider the conceptual comparison first.Conceptual Comparison[15] It was submitted for Milk Brands that a comparison of the concepts the brands are intended to convey is of little significance and fails to distinguish the marks. However, I consider 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 Cambodian temples.For those who are familiar, then there cannot be any realistic likelihood that they will be deceived or confused when seeing products labelled ANGKOR, as if they were products produced by those responsible for ANCHOR products. [16] The original concept behind 'ANCHOR' was presumably to convey products delivered by sea, or the 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. [17] The concept of 'ANGKOR' is intended to allude to the image of Cambodian temples, and a general south-east Asian connection. Mr Bingei, deponent for Sumatra, suggests that it signifies "beauty, mystery, grandiosity and splendidness". That aside, anyone who is familiar with it as referring to Cambodian temples is likely to be sensitive to the change in spelling as the two words appear, and perhaps more importantly, to expect a different intonation in the their aural presentation. It seems likely that the vast majority of those familiar with the concept of ANGKOR as referring to Cambodian temples would also be familiar with the most famous of them, Angkor Wat. Pronunciation either of the word ANGKOR on its own, or in combination with Wat, by those who make the connection with Cambodia, will most likely also pronounce it with an emphasis on the last syllable, An-Kor. That intonation is sufficient to distinguish the word, pronounced in that way, from 'Anchor' where an emphasis in New Zealand diction falls on the first syllable, An- ka. [18] A similar distinction can be drawn in predicting the reaction to the visual impression of the two words. For those familiar with ANGKOR, that familiarity would trigger a sensitivity to the two middle letters of the word being different from the 'ch' in Anchor. For those familiar with ANGKOR as the word for Cambodian temples, there is no realistic risk of being deceived or confused when seeing the word, by treating it as associated with products made by ANCHOR.[19] I have addressed this analysis of the prospects of confusion at the very outset because it leads to a critical question on the prospect of confusion or deception, namely whether a substantial number of New Zealanders remain unfamiliar with the concept of ANGKOR as relating to Cambodian temples. The submissions for Milk Brands were critical of the absence of any empirical data provided by Sumatra demonstrating the extent of familiarity with the concept to which it intends use of the mark to be linked. [20] As part of the factual analysis on the relative likelihood of confusion or deception, in the end the Court must have regard to its own impression on the matter. On the one hand, with increasing migration to New Zealand from south-east Asia, and increasing travel by New Zealanders to Asia, it is reasonable to expect a growing appreciation of Asian culture and society. On the other hand, the reality is that there may still be a material portion of New Zealand society that has not had any reason to be exposed to the fundamental concepts of Cambodian culture, to an extent that they have not, for example, heard of Angkor Wat. [21] Since the connotations of Cambodian temples provide a sufficient basis for distinction in the minds of those familiar with the term 'ANGKOR', that would be a complete answer if I were to find that there was no longer a considerable number of New Zealanders who would fail to identify with the concept. Mrs Warburton sought to argue that New Zealanders' extensive travel habits, and outward looking attitudes mean that I could assume the concept of ANGKOR was widely understood. However, whilst I would be pleased to find to the contrary, the reality is that there is currently a material part of the New Zealand population that would not be aware of that connotation of ANGKOR. [22] Accordingly, I put to one side those familiar with ANGKOR as being excluded from those who are likely to be confused or deceived, and separately analyse the situation of what I consider to be the majority of New Zealanders for whom the word has no such connotations. Thus, for the remaining, and substantial, number of consumers in the market, I find that there would be a lack of understanding of the concept of ANGKOR. Accordingly, the conceptual differences between 'ANCHOR' and 'ANGKOR', while significant to the fully informed, areirrelevant to all those who are not so aware, and are therefore insufficient to distinguish the two marks. [23] I do not accept Mrs Warburton's argument that there is a material proportion of New Zealanders who fall between these two positions. She suggested that persons unaware of the allusion to temples might nonetheless realise that 'ANGKOR' is intended to conjure up a foreign, Asian, romantic image distinguished from ANCHOR. That is speculative and in my view not likely in relation to any material proportion of New Zealanders.Aural similarities[24] I thus revert to the 'look and sound' comparison as considered inNew Zealand Breweries. As discussed above, there are differences in pronunciation of 'ANCHOR' and 'ANGKOR'. Whilst the first syllable of each is phonetically identical, the second differs. So, on minute examination, 'An-chor', especially in the New Zealand accent, is equivalent to an amalgam of 'kher' or 'kha' – somewhere between her and car. Conversely, Ang-kor instead emphasises the 'o' vowel, as in 'for'. Thus the emphasis on the vowel is different. [25] However, like the Assistant Commissioner, I consider that any slight aural difference would not register as a basis for distinction, especially in the intended market. While I am not prepared to accept Milk Brands' hypothetical of a consumer confusing a shop assistant when asking for 'ANCHOR' products by name when 'ANGKOR' products are also available, I am prepared to accept that the marks sound substantially similar. At this stage, I need not entertain Milk Brands' hypothetical: when spoken as they would be spoken in context, they are difficult to differentiate, and that is all that is necessary.Visual similarities[26] In her decision, the Assistant Commissioner used two of Milk Brands' registered marks – numbers 219274 and 194033 to make the comparison with'ANGKOR'. Milk Brands argues that in doing this, the Assistant Commissioner erred in her visual assessment of the two marks for two reasons. First, her assessment was premised on the fact both of Milk Brands' registered marks involve class 30 goods, just as the mark ANGKOR does, when the classification is irrelevant – it is the mark and not the goods the mark is on that is important. Secondly, the Assistant's Commissioner's approach was too narrow – undermining a more holistic approach. [27] I note that the Assistant Commissioner stated the same legal principles I have stated earlier in this judgment. However, it appears that she did not then adhere to those principles. Had she done so, it is unlikely that she would have begun her comparison with an immediate concentration on two specific marks of Milk Brands. Not only does that ignore the overall assessment of whether 'ANGKOR' bears similarity with any of Milk Brands' marks, but it ignores the fact that at present, neither the Assistant Commissioner nor the Court knows what the final form of Sumatra's ANGKOR mark will take. Thus when the Assistant Commissioner stated at p 14 of her decision that: "my immediate overall impression of the applicant's ANGKOR mark and the first ANCHOR mark is that those marks look different", such a focus appears not to be the correct starting point. [28] An overall impression would involve looking at the general word 'ANCHOR' – the common denominator of all Milk Brands' marks – and what we know of Sumatra's mark, namely the word 'ANGKOR'. Moreover, instead of looking for the differences, as per Austin Nicholls (HC) as quoted in Intellectual Reserve, it is the similarities that are important. [29] Further, as per Aristoc Ltd as quoted in Intellectual Reserve, 'ANCHOR' and 'ANGKOR' must not be compared side by side, nor have their constituent parts compared in isolation as the Assistant Commissioner did. In her decision, the Assistant Commissioner, at this point using Milk Brands' word mark as the basis for comparison, stated at p 15:I consider that the opponent's ANCHOR word mark looks different to the applicant's mark because I consider that the 'GK' in the applicant's mark immediately makes that mark look different to the opponent's ANCHOR mark.[30] This approach involves dissecting the constituent parts of the marks at issue, rather than viewing them as a whole. The question is not whether GK is different to CH. It is whether ANGKOR is similar to ANCHOR. [31] Thus on my reassessment of the visual similarities I look to the marks as a whole. I also look to the markets in which the products will be sold – relatively inexpensive consumer goods – and an imperfect rather than photographic recollection of the marks. Further, I have taken the word mark 'ANCHOR' and compared it to 'ANGKOR' because the word mark is the common denominator of all Milk Brands' marks. The length of the words is identical. The two words have many of the same letters. On this basis, I believe that there are sufficient similarities between the two marks.Will Sumatra's mark be registered for similar goods to Milk Brands'?[32] The principles underpinning the determination of whether there is or is not similarity between goods are also clear. Like the Assistant Commissioner, I use the factors identified in British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281, pp 296-297, namely:a) the respective uses of the goods or services; b) the respective users of the goods or services; c) the physical nature of the goods or acts of service; d) the respective trade channels through which the goods or services reach the market; e) 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; f) the extent to which the respective goods or services are competitive.[33] The question of similarity is one of fact to be determined on a case-by-case basis: J Lyons and Co Ltd's Application [1959] RPC 120 at 128, and the approach taken is a practical one, looking at the respective goods or services from a businessand commercial point of view: Gutta-Percha & Rubber Manufacturing Co (Toronto) Limited's Application (1909) 26 RPC 84. [34] Within class 30 where it is classified, 'ANGKOR' is specified as applying to the following goods:Coffee, tea, cocoa, chocolate, artificial coffee, flavourings for beverages, cereal, non-dairy creamer, biscuits and confectionery.[35] The question is whether any of Milk Brands' registered marks apply to goods that are similar to these specified goods. In her decision, the Assistant Commissioner stated that only two registered marks of Milk Brands covered goods that were similar to goods covered by Sumatra's mark. Predictably, those two marks were the only two marks of Milk Brands that were classified under section 30. At p 11 of the decision, the Assistant Commissioner stated:I conclude that the opponent's trade mark registration no. 219274 for the mark and the opponent's trade mark registration no. 194033 for the mark cover goods that are the same or are similar to almost all of the goods covered by the applicant's ANGKOR mark (except non dairy creamer). I conclude that the opponent's milk or cream that is covered by each of the opponent's marks set out in the table below could be considered to be similar to the applicant's non dairy creamer on the basis of many of the factors set out in British Sugar. However, I consider that an important point of difference between the opponent's milk and cream and the applicant's non dairy creamer is that the opponent's goods are dairy products and the applicant's creamer product is not a dairy product. [emphasis added][36] The table to which the Assistant Commissioner refers lists 22 goods of Milk Brands which would be similar to 'non-dairy creamer', but for the fact that they are dairy products. Milk Brands submits that this is a flawed approach, and I am inclined to agree. The physical composition of the goods is one factor in theBritish Sugar calculus, but it is not determinative. Another factor is that they are competitive. In my opinion, non-dairy creamer exists to compete with dairy products, for it is a direct substitute for milk or cream in warm beverages such as tea or coffee. I can accept Milk Brands' contention that non-dairy creamer will often not be located alongside other Milk Brands' products, but this is only because Milk Brands' products will often need to be chilled. This does not mean they are not a competitive substitute for one another. I do accept that not all of Milk Brands'products will be presented in a "dairy" section of supermarket shelves. I also accept that Milk Brands markets a limited number of non-dairy items, such as soy milks. Overall, I believe that the goods in the table to which the Assistant Commissioner refers ought to have been found to be similar to Sumatra's mark, in addition to the two marks the Assistant Commissioner did find to be similar. [37] I note that as a result of this conclusion, my approach above in taking a common denominator approach to the mark and using the word mark ANCHOR as the basis for comparison, is strengthened. This is a consequence of following the logical steps in Intellectual Reserve.Is Sumatra's mark likely to deceive or confuse?[38] The final question in the three-stage test outlined in Intellectual Reservebecomes pertinent because I have answered 'yes' to the first two questions: Milk Brands' and Sumatra's marks are similar and some of the goods to which Sumatra's mark will attach are similar in kind to Milk Brands' goods. On that basis, will the mark 'ANGKOR' be likely to deceive or confuse consumers? Guidance for this analysis is found in Pioneer Hi-Bred at p 62:The test of likelihood of deception or confusion does not require that all persons in the market are likely to be deceived or confused. But it is not sufficient that someone in the market is likely to be deceived or confused. A balance has to be struck. Terms such as "a number of persons" (Jellinek's Application), "a substantial number of persons" (Smith Hayden & Co Ltd's Application), "any considerable section of the public" (New Zealand Breweries Ltd v Heineken's Bier Browerij Maatschappij NV), and "any significant number of such purchasers" (Polaroid Corporation v Hannaford & Burton Ltd) have been used.[39] Regardless of which incarnation is used, the test remains the same. A substantial number of people in the relevant market must be likely to be deceived or confused by Sumatra's 'ANGKOR' mark. 'Deceived or confused' was defined inPioneer Hi-Bred, also at p62:"Deceived" implies the creation of an incorrect belief or mental impression and causing "confusion" may go no further than perplexing or mixing up the minds of the purchasing public (New Zealand Breweries Ltd v Heineken's Bier Browerij Maatschappij NV [1964] NZLR 115, 141). Where thedeception or confusion alleged is as to the source of the goods, deceived is equivalent to being misled into thinking that the goods bearing the applicant's mark come from some other source and confused to being caused to wonder whether that might not be the case.[40] The Assistant Commissioner gave a short conclusion that a substantial number of persons in the relevant market are not likely to be deceived or confused. She did not specify separate reasoning for this conclusion, but it was a logical one given the finding that the marks were visually distinct and that it would be unlikely that members of the public would ever confuse the concept behind the marks. [41] My conclusions on these matters diverged from the Assistant Commissioner's. I have held that there are both visual and aural similarities between the two marks. Moreover, though I found that for the section of the New Zealand public familiar with Cambodian culture, ANGKOR and ANCHOR are obviously conceptually distinct, I held that for the considerable section of the New Zealand public without knowledge of Cambodian culture, the conceptual distinction would be irrelevant. Because of that, the distinction would be insufficient to distinguish the marks for those who are not familiar with Cambodian culture. [42] The question is whether the number of people who do not have knowledge of Cambodian culture and for whom therefore the visual and aural similarities between the two marks would not be distinguished because of a conceptual trigger, amount to a substantial number of persons in the relevant market. I am satisfied that the answer to this question is 'yes'. The goods in question are not luxury goods. They are relatively inexpensive consumer goods. That means that they are purchased without much forethought or consideration. Moreover, especially in the case of non-dairy creamer, I would expect that the goods attract the lower-end of the market, since in New Zealand, with its high consumption of dairy products, non-dairy creamer substitutes are regarded as cheaper alternative. [43] Therefore, a substantial number of people in the market for the goods in question would be unable to conceptually distinguish 'ANCHOR' and 'ANGKOR', and given the visual and aural similarities of those two marks, I find that ultimately, a substantial number of people are likely to be confused or deceived by the use of the 'ANGKOR' mark.[44] On that basis, I find that the Assistant Commissioner erred in her conclusion on s 25(1)(b) of the Act and should not have registered Sumatra's mark. Milk Brands succeeds on this ground of appeal.Second ground of appeal: s 25(1)(c) of the Act[45] Section 25(1)(c) of the Act states as follows:25 Registrability of identical or similar trade mark (1) The Commissioner must not register a trade mark (trade mark A) in respect of any goods or services if—[](c) it is, or an essential element of it is, identical or similar to, or a translation of, a trade mark that is well known in New Zealand (trade mark D), whether through advertising or otherwise, in respect of those goods or services or similar goods or services or any other goods or services if the use of trade mark A would be taken as indicating a connection in the course of trade between those other goods or services and the owner of trade mark D, and would be likely to prejudice the interests of the owner.[46] Intellectual Reserve at para [40] provides the following guidelines for s 25(1)(c) of the Act, again substituting the parties in the present appeal:1. Is the trademark identical or similar to one of the marks of [Milk Brands] which is well known, or is an essential element of the applicant's trade mark identical or similar to that which is well known? 2. Are [Sumatra's] goods and services the same as or similar to the goods and services of [Milk Brands]? If not, 3. Would use of [Sumatra's] trade mark be taken as indicating a connection in the course of trade with [Milk Brands]? 4. If the answer to issue 2 or 3 is yes, would use of [Sumatra's] trade mark be likely to prejudice the interests of [Milk Brands]?[47] Much of the analysis of this issue depends on the conclusions reached in the analysis of s 25(1)(b). Such was the case in the Assistant Commissioner's decision, where while she accepted that 'ANCHOR' was a well known mark in New Zealand,she did not accept that the goods were similar or could indicate a connection in the course of trade. [48] For my part, I reach the same conclusion as the Assistant Commissioner on whether Milk Brands' mark is 'well known'. Without recourse to the affidavit evidence that was before me, it is clear that 'ANCHOR' is an iconic and long- standing brand of dairy products, and would meet the standard of reputation required for the tort of passing off: Automobile Club De L'Quest v South Pacific Tyres New Zealand Ltd (2006) 70 IRP 639, p. 646. [49] As I have outlined above however, I differ from the Assistant Commissioner on whether the marks and the goods to which they attach are similar. I have found that 'ANCHOR' and 'ANGKOR' are similar marks – visually and aurally. Any conceptual distinction would be insufficient to distinguish the marks for those who have no knowledge of Cambodian culture. Thus the answer to (1) in the Intellectual Reserve sequence of questions is 'yes'. [50] The answer to (2) must also be 'yes', since I have already held that the goods of the respective parties are similar: non-dairy creamer is a competitive substitute for dairy products. [51] To a certain extent then, my analysis of (3) is somewhat academic. The Assistant Commissioner gave detailed reasons why she did not see any risk of 'ANGKOR' mark as indicating a connection in the course of trade with the 'ANCHOR' mark. Those reasons were effectively circular insofar as the lack of similarity of the goods and marks meant that they were unlikely to indicate that there was a connection in trade. Another reason however was that it would be unusual for an established and well-known mark to risk altering the essential character by using anything other than a mark identical to it on other products. However, this reason appears to focus on best practice from a proprietor's perspective, when in fact the consumer's perspective is paramount. Would a consumer assume that Milk Brands would only use an identical mark on other products lest the 'ANCHOR' mark be diluted, and therefore when a non-identical mark is used there cannot be a connection in trade?[52] With respect, I do not attribute such a complicated thought process to the average consumer, especially in the relevant market. Instead, I think that there is a tangible risk that consumers would believe there is some sort of connection in trade between 'ANCHOR' dairy products and the substitute competitor 'ANGKOR' non- dairy creamer: it is a physically different product, so that could be justification for a slightly different mark. On that basis, I would hold that there is potential that 'ANGKOR' could indicate a connection in trade with 'ANCHOR'. The connection would also follow for consumers who bought 'ANGKOR', thinking it was actually 'ANCHOR', ie without noting the difference in the word. [53] The last question is whether the use of 'ANGKOR' would prejudice the interests of Milk Brands. This was not the subject of much argument from the parties, and because of her findings on prior points the Assistant Commissioner did not address the issue either. There are suggestions that the prospect of such prejudice should be the subject of expert evidence, for example the decision of Simon France J in Zespri Group Limited v Enza Limited HC WN CIV 2008-485- 1072 18 September 2008, para [65]. [54] Here, there was no expert evidence specifically analysing whether Milk Brands will suffer prejudice. However, in the present circumstances I do not need such evidence when I have found that consumers are likely to be deceived or confused by the two marks. The logical consequence of such confusion or deception is prejudice to the existing mark and therefore the interests of the mark's owner. I cannot envisage a situation where a consumer would be confused or deceived and as a result, Milk Brands' interests are not prejudiced. The distinctiveness of the mark 'ANCHOR' would be diluted, and potentially market share would fall. On this basis, given I have found earlier in the judgment that confusion or deception is likely to result, I consistently find that prejudice arises. [55] Accordingly, since the answer to the four questions above are all 'yes', I find that the Assistant Commissioner erred in her decision and the 'ANGKOR' mark should not have been registered by on the grounds that s 25(1)(c) of the Act was met. This ground of appeal succeeds.Third ground of appeal: s 17(1)(a) of the Act[56] Section 17(1)(a) of the Act states that the Commissioner must not register a trade mark if its use "would be likely to deceive or cause confusion". There is substantial overlap between this section and s 25(1)(b) because the key criterion is deception or confusion arising from the registration of a mark. [57] For the reasons I stated in the first ground of appeal, I find that the 'ANGKOR' mark would deceive or confuse consumers insofar as it is similar visually and aurally to the Milk Brands' 'ANCHOR' mark. On this basis, consistency requires a finding that the Assistant Commissioner erred in her determination that s 17(1)(a) does not apply and this ground of appeal succeeds.Fourth ground of appeal: s 17(1)(b) of the Act[58] Section 17(1)(b) of the Act states that the Commissioner must not register as a trade mark if "the use of which is contrary to New Zealand law or would otherwise be disentitled to protection in any court". Under this ground, Milk Brands contends that since the use of the 'ANGKOR' mark would breach ss 9, 10, 13 and 16 of the Fair Trading Act 1986 and would amount to passing off, it is contrary to New Zealand law and should not have been registered. [59] Milk Brands acknowledges that the threshold for s 17(1)(b) is higher than that for s 17(1)(a); risk of confusion or deception is insufficient. For this reason, the Assistant Commissioner (who held s 17(1)(a) had not been met) did not give s 17(1)(b) any consideration. [60] Although the test is more stringent, there is some logic in the argument that if a mark is likely to confuse or deceive a substantial number of persons in terms of s 17(1)(a), then it is also likely to mislead or deceive those same consumers in terms of s 9 of the Fair Trading Act. There is a measure of difference between confusion, which may be resolved before a purchase is made, and being misled, which has a connotation of continuing to apply at the material point (ie a purchase influenced by the misleading conduct).[61] Even more than under the Trade Marks Act, I see conceptual difficulties in projecting the relative likelihood of consumers being misled or deceived by trading in Sumatra's ANGKOR products, when the get up, colours, and style in which Sumatra might use the name remain unknown. The Fair Trading Act inquiry is vastly more meaningful when two or more actual products, and the circumstances of their presentation, are able to be compared in detail. The commonly applied presumption in proceedings under the Trade Marks Act of an applicant's "fair and notional" use of its mark is less than useful in this context. [62] Intuitively, I would be inclined to find that the outcome should be consistent. Particularly as I have excluded those for whom the intended concept of ANGKOR is familiar, then the visual and aural similarities must give rise to a likelihood that the remainder of consumers would be misled or deceived. If necessary, therefore, I would also likely find this ground of appeal made out. However, I am bound to treat it as the most difficult of the grounds of opposition raised in the present circumstances. [63] The s 17(1)(b) grounds were not strongly argued by Milk Brands. Given the outcome on the prior grounds, I do not express a final opinion on whether the registration of 'ANGKOR' is contrary to law insofar as it would breach provisions of the Fair Trading Act or commit the tort of passing off. [64] Despite their inclusion in its notice of appeal, Milk Brands did not pursue argument on the Assistant Commissioner's findings on s 17(1)(b)(iii) (bad faith) or s 18 (no distinctive character) of the Act. I therefore do not express an opinion on those matters, and the Assistant Commissioner's decision on those two grounds stands.Conclusion on appeal[65] I hold that the three major grounds of appeal advanced by Milk Brands succeed. Applying the tests in Intellectual Reserve has led me to the conclusion that the marks 'ANGKOR' and 'ANCHOR' are sufficiently similar as to confuse or deceive a substantial number of persons. This led to the several overlappingconclusions that to register the mark would be in contravention to ss 25(1)(b), 25(1)(c) and 17(1)(a) of the Act, and therefore should not have been registered by the Assistant Commissioner.Sumatra's cross-appeal[66] Having reviewed all the analysis necessary to reach this decision, I have reflected on the materiality of Sumatra's cross-appeal, seeking to have excluded evidence from Ms Green providing a purportedly expert analysis of linguistics to support arguments on the aural similarity between ANCHOR and ANGKOR. I have also considered the challenge raised more generally on behalf of Sumatra that the range of goods marketed by the appellant appears to depend in some respects on examples that post-date the relevant date in November 2005. [67] In the end, neither of these points affected the outcome on the appeal. I have completed my analysis on the aural similarities without any reference to Ms Green's analysis. It is unnecessary to analyse whether her evidence sufficiently establishes her as an expert on that matter. The topic is one that is quintessentially for the Judge's opinion. [68] As to the range of Milk Brands' products, again my conclusions do not depend on a fine analysis of particular products that may only have been introduced post-November 2005. It is sufficiently clear for me to be satisfied that the essence of the marks used have been in existence, and used in New Zealand for a range of products within the relevant classes, for many years before that date. [69] Certain particulars in the notice of cross-appeal also disputed detailed factual findings made by the Assistant Commissioner. To the extent they are relevant, I have made my own determinations on those matters, mindful of the criticisms raised. There is no point in separately dealing with them at this point in the judgment.Costs[70] Milk Brands is entitled to costs on the appeal, in accordance with category 2B. I quash the costs order made against it by the Assistant Commissioner.Dobson JSolicitors: A J Park, Auckland for appellant Acacia Law, Tawa for respondent