SEA WORLD LLC v SEA WORLD MANAGEMENT PTY LTD [2018] NZHC 1995

SEA WORLD LLC v SEA WORLD MANAGEMENT PTY LTD [2018] NZHC 1995 [7 August 2018]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-Ā-TARA ROHECIV-2018-485-139[2018] NZHC 1995BETWEEN SEA WORLD LLCAppellantAND SEA WORLD MANAGEMENT PTY LTDRespondentHearing: 2 July 2018Appearances: L Carter and P Moodley for the AppellantB P Cain for the RespondentJudgment: 7 August 2018JUDGMENT OF COOKE JTable of ContentsAssistant Commissioner's Decision [4]Delays in the case [9]Arguments for Sea World US [14]Arguments for Sea World Australia [18]Issues not in dispute [23]Section 16 confusion – consistency of approach [28](1) Nature of reputation [34](2) Prominence of the words in the design marks [37](3) Implications [42]Is there confusion? [47]Ensuring geographical limitation [59]Honest concurrent use [63]Summary and result [66][1] Sea World LLC (Sea World US) is a corporation based in the United States ofAmerica. It has operated marine mammal amusement parks in San Diego and otherlocations in the United States. At the time of its application it was a well-establishedbusiness, with a well-established reputation. Sea World Management Pty Ltd (SeaWorld Australia) is an Australian based company which has offered a similar marinemammal amusement park on the Gold Coast in Queensland, Australia. At the time ofits application it was also a well-established business with a well-establishedreputation.[2] Both parties had used the name "Sea World" in association with their marinemammal amusement parks for many years in their respective countries. Both partiespromoted their parks as tourist destinations to New Zealanders within New Zealand.On 27 May 1994, Sea World US's predecessor submitted an application forregistration of the word mark SEA WORLD in New Zealand. Sea World Australia'spredecessor lodged a notice of opposition in November 2001. On 1 May 1996, SeaWorld Australia's predecessors submitted an application for the combined markin New Zealand. Sea World US's predecessor lodged a notice of oppositionon 23 August 1999.[3] The contested applications were consolidated, and evidence was filed by theparties at various dates between 2000 and 2002, although some of the evidence datesback as far as 1994. Following those initial steps, a large number of extensions oftime were sought and obtained by consent over many years. Ultimately, on 26 May2016, the Intellectual Property Office of New Zealand (the Office) advised that therewould be no further delays noting that it was "strongly against the public interest,irrespective of the situation between the parties". Ultimately the disputes between theparties were subject to a decision made by Victoria Casey QC, AssistantCommissioner of Trade Marks, on 26 January 2018.1 This was some 24 years afterthe first application had been filed. In the meantime, the Trade Marks Act 2002 (the2002 Act) had been passed. It is accepted that the transitional provisions apply to theapplications, and they were accordingly addressed under the terms of the Trade MarksAct 1953 (the 1953 Act).Assistant Commissioner's Decision[4] The Assistant Commissioner dealt first with the Sea World US's application,which had been filed first in time. She rejected the argument that Sea World US had1 Sea World LLC v Seaworld Management Pty Ltd [2018] NZIPOTM 4.no intention to use its trade mark on the basis that the inference of a genuine intentionto use a mark at the time the application was lodged was not displaced. She alsorejected the argument that the trade mark lacked distinctiveness on the basis that themark was sufficiently distinctive to refer to identifiable marine amusement parks,noting the evidence from travel agents that Sea World was recognised as referringspecifically to particular marine amusements parks either in Queensland or in theUnited States.[5] The Assistant Commissioner nevertheless upheld the objection based on s 16of the 1953 Act, which provides:16 Prohibition of registration of deceptive, etc, matter(1) It shall not be lawful to register as a trade mark or part of a trademark any scandalous matter or any matter the use of which wouldbe likely to deceive or cause confusion or would be contrary to lawor morality or would otherwise be disentitled to protection in aCourt of justice.[6] The key reason for that conclusion was that the Sea World Australia mark hadreputation in New Zealand and that the identical words and sounds of the marks, andthe similarity in meaning and idea behind the marks, would inevitably lead toconfusion such that registration would be contrary to s 16.[7] In relation to the Sea World Australia application, she rejected the contentionthat Sea World Australia was not the owner of the trade mark. Whilst it was unclearwhich party first used the words Sea World in New Zealand and thereby obtainedownership, there was no dispute that Sea World Australia owned the mark . Interms of the application of s 16, the Assistant Commissioner concluded that theevidence was sufficient to show that Sea World US had the necessary reputation toengage s 16, but only in relation to the particular highly stylised marks that Sea WorldUS used, and not in relation to the words "Sea World" on their own. Then in relationto the highly stylised marks that each party used, she held that the visual differencesbetween them were sufficient to alert consumers and those in the travel industry thatthey indicated different trade origins such that s 16 confusion would not arise. Shealso rejected a further argument that a Sea World US trade mark referred to in writtensubmissions was sufficiently similar to Sea World Australia's trade mark to engages 17(3)(c).[8] In accordance with s 66 of the 1953 Act, Sea World US appeals the AssistantCommissioner's decision to this Court. It is a general appeal to which the approachreferred to in Austin, Nichols & Co Inc v Stichting Lodestar applies.2 Section 66(3)also provides that this Court on appeal has the same discretionary powers as theCommissioner.Delays in the case[9] Before proceeding to address the arguments made on the appeal, it isappropriate to record a concern arising from the delays associated with theproceedings.[10] It seems somewhat surprising that applications filed in 1994 and 1996 canappropriately be delayed for decision until 2018. As I understand it, whilst the trademarks applied for would not have the protection of full registration, once anapplication had been made the fact of the application is apparent, and any third partywould have been aware that any subsequent successful registration could lead toenforcement proceedings arising from any infringement of the trade mark in theinterim. So allowing for delays might be in the tactical best interests of both theparties.[11] Given the delays I issued a minute before the hearing to understand theapproach that was being applied that had led to this outcome. The parties clarified theposition with the Office, and supplied information to the Court, including furtherinformation that I requested be provided following the hearing. On the basis of thismaterial I understand that the Office previously allowed applications of this kind to bedelayed in this manner. In addition, the approach has been adopted that the Office cansubsequently grant an extension to a trade mark when it is ultimately granted, even ifthe period of its initial registration has passed. In the present case, the initial seven-year period of registration under s 29(1) of the 1953 Act would have expired for these2 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.particular trade marks in May 2001 and in May 2003. It is said that such registrationscan nevertheless be treated as having been renewed under s 29(2) of the 1953 Act fora further 14 years until May 2015 and May 2017, and then further renewed under s 58of the 2002 Act. It is also said that such extensions would be granted even though theoriginal registration periods have passed, provided that the extension fees that wouldhave been payable are all paid.[12] It might be questioned whether this approach is truly consistent with whatParliament would have intended. Parliament may not have contemplated thatextensions could be granted so many years after the application has been made wherethe initial registration period has passed. I accept, however, that it is not appropriatefor me to reach any conclusion, or make any finding to that effect. The practice of theOffice has apparently been to the effect described above for many years, and partieshave presumably acted in reliance on that approach. Similar delays are apparent fromother cases dealt with by the Courts.3 I am advised that the Office is no longer aslenient in relation to extensions of time. I take it from that that, prospectively, there islittle risk of cases with such extraordinary delays reoccurring.[13] This background does lead to a peculiarity with the present case. The AssistantCommissioner, and this Court, have been called on to make the judgments requiredunder the (now repealed) 1953 Act on the basis of evidence from 16–24 years ago inrelation to the state of the relevant knowledge in the market of the marks in 1994 and1996. There is also no information before the Court on what has happened over thelast 16 or more years. In the present case, the difficulties of that exercise are increasedbecause, as the Assistant Commissioner found, the evidence that was filed at the timewas very limited on some of the key issues.Arguments for Sea World US[14] By way of summary, on appeal Sea World US contends that its trademarkapplication should have been registered, and Sea World Australia's rejected.3 See, for example, Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 (CA)where the Court of Appeal in 1977 dealt with an application made in 1963.Alternatively it argues that both applications could have been granted with appropriatelimitations to reflect 30 years of concurrent use.[15] It argued that the Assistant Commissioner erred in concluding that Sea WorldUS's trademark would give rise to confusion in under s 16 because of the Sea WorldAustralia mark. Based on the approach in Pioneer Hi-Bred Corn Co,4 NV SumatraTobacco Trading Company v British American Tobacco (Brands) Inc5 and Sexwax Incv Zoggs International Ltd,6 it argued that the full circumstances bearing on thelikelihood of confusion had not been addressed, including the fact that there was noevidence of any actual confusion between the marks. It argued that the power to limitthe specification of services could have been used to deal with any remainingconcerns.[16] It further contended that the principle of honest concurrent use, as recognisedin General Electric Co v General Electric Co Ltd7 and VB Distributors v Matsushita8should have been applied given the period of concurrent use, and notwithstanding thatit had not been pleaded. It said that the Assistant Commissioner erred in not allowingthe argument to be raised.[17] In terms of the challenge to the registration of the Sea World Australia trademark, it contended there was an inconsistency in the approach of the AssistantCommissioner in identifying stylisation differences in the marks as a basis to allowthe Sea World Australia registration, but not allowing the Sea World US registration.None of the evidence of the travel agents referred to such stylisation as beingsignificant. Nor had the Assistant Commissioner limited the scope of registration toavoid confusion.4 Pioneer Hi-Bred Corn Co, above n 3.5 NV Sumatra Tobacco Trading Company v British American Tobacco (Brands) Inc [2010] NZCA24, (2010) 86 IPR 206.6 Sexwax Inc v Zoggs International Ltd [2014] NZCA 311, [2015] 2 NZLR 1.7 General Electric Co v General Electric Co Ltd [1973] RPC 297 (HL) per Lord Diplock at 326.8 VB Distributors v Matsushita (1999) 9 TCLR 349 (HC).Arguments for Sea World Australia[18] By way of summary, Sea World Australia generally supported the AssistantCommissioner's decision on the Sea World US's applications. It objected to theunpleaded argument of honest concurrent use, relying on the potential prejudicearising from allowing the argument to be raised at such a late stage, a factor regardedas important by the relevant authorities.9[19] It supported the Commissioner's finding on the reputation associated with theSea World Australia design mark, and argued further that it would be illogical to findit had a reputation in the design mark but not the name, particularly given theprominence of the name, its oral use, and the use of the word in the written material.[20] Sea World Australia further argued that it was significant that neither of themarks incorporated reference to the physical location of the parks, which wouldmitigate the likelihood of confusion. In terms of oral use of the marks consumerswould simply say the word Sea World. Moreover the category of services involvedwas identical.[21] In terms of the evidence relevant to that question, it submitted it was clear thattravel agents distinguished between the operations on the basis of the location of therespective parks, so that the use of the simple words without geographic limitationswould be likely to cause confusion. It further emphasised that it was the likelihood ofconfusion at the relevant date, rather than actual evidence of confusion that wasimportant. It said that the Commissioner was accordingly right to reject the Sea WorldUS application given that the words were a key feature of the Australian trade mark.It said that the outcome was similar to that found in Schuhhaus Dielmann GmbH &Co KG v Office for Harmonisation in the Internal Market (OHIM) with respect totrademarks using the word "Carrera".109 Such as Paper Reclaim Ltd v Aotearoa International Ltd (further evidence) (No 2) [2007] 2 NZLR124 at [15]; and Saunders v Project Management Agreement and Associates Ltd [2018] NZCA 18at [57].10 Schuhhaus Dielmann GmbH & Co KG v Office for Harmonisation in the Internal Market (OHIM)T-600/11 (2014), [2014] All ER (D) 14 (Feb).[22] In terms of the Sea World Australia application, in addition to supporting theCommissioner's reasoning, Sea World Australia argued that Sea World US had notestablished a reputation in the more stylised logos and devices. It further argued thatthe knowledge of geographical limitation of the respective operations was not treatedby the Commissioner as determinative.Issues not in dispute[23] Before addressing the key issues relevant to the appeal, it is important toidentify certain matters that have arisen in the proceedings which are no longer indispute.[24] First, when rejecting the argument that the Sea World US mark was notdistinctive, the Assistant Commissioner held:1127. Applying these principles to the present application, I consider that theword mark SEA WORLD is sufficiently distinctive that it is capable ofacting as a trade mark to signify the trade origins of marine amusementpark services.28. The evidence filed by Seaworld Australia appears to confirm thatposition. Mr Menzies' evidence is consistent with the view that as farback as the 1970s the phrase SEA WORLD was regarded as sufficientlydistinctive to refer to identifiable marine amusement parks. Theevidence from the various travel agents similarly confirms that "SeaWorld" is recognised as referring specifically to particular marineamusement parks either in Queensland or the US. This is not consistentwith the words being generic across marine amusement parks or similarservices generally.[25] This finding is not disputed. It is important as it demonstrates there is a marketreputation for marine park amusement services associated with the word Sea Worldfor both Sea World Australia and Sea World US.[26] Secondly, in the context of Sea World Australia's application, the AssistantCommissioner noted that the evidence was unclear on who first started using the wordsSea World in New Zealand to obtain ownership of the mark. Before me neither partyreally disputed that the state of the evidence is unclear on that point. The evidence11 Footnotes omitted.simply demonstrates that both parties began using those words in describing theiramusement parks some time before 1987.[27] Finally Sea World Australia no longer pursues its argument that Sea World UShad no intention to use its trade mark, and Sea World US no longer pursues itsargument under s 17(3)(c) in relation to another of its trade marks.Section 16 confusion – consistency of approach[28] The Assistant Commissioner considered whether Sea World Australia's markhad sufficient reputation in New Zealand at the relevant date to engage s 16, and sheconcluded that it did. She then considered whether registration of the Sea World USmark would likely lead to confusion of the type contemplated by s 16 in light of thatreputation. She held:39. The two marks use the words SEA WORLD: this is the full content ofthe mark in 237315 and a key feature in Seaworld Australia's mark. Theaddition of the marine animal above the words and the generalstylisation in the latter mark is not in this case sufficient to distinguishthe two. Those differences do not off set the identical words and soundsof the marks, and the similarity in meaning and idea behind the marks.Both marks bring to mind marine amusement parks and associatedgoods and services. In the context of application 237315, a consumeror person in the trade familiar with Seaworld Australia's markwho then encountered the simple word mark SEA WORLD, wouldinevitably be caused to wonder whether there was a trade connectionbetween the two.40. This ground of opposition is made out. Registration of Sea World US'strade mark SEA WORLD would be contrary to section 16 of the TradeMarks Act 1953.[29] The Assistant Commissioner was also required to conduct a similar analysis inrelation to the application of s 16 to the Sea World Australia application. In thiscontext, she found that Sea World US had failed to demonstrate the required reputationin the word mark SEA WORLD. She held:63. While it could be inferred that substantial numbers of New Zealanderswere aware of the existence of the Sea World theme parks in the US atthe relevant date, this is not the same as people identifying the wordsSEA WORLD on their own as a trade mark belonging to that brandspecifically. In my view, it is more likely that for both those in the travelindustry and end consumers, the words SEA WORLD appearing ontheir own would be taken as referring to either the US or the Australiantheme parks as a destination, and not the US theme parks specifically.It would only be the more stylised representations used by each partyin their promotional material would have been recognised as the trademarks belonging to each brand.64. On that basis, I find that on the evidence before me Sea World US didnot at the relevant date have sufficient reputation in New Zealand in thebare words SEA WORLD to engage section 16.65. This may, however, not be the end of the matter. The pleadings andevidence in these two applications are not particularly clear and tend tomerge the concepts of market recognition of the marine amusementparks with market recognition of particular trade marks. It may be thatSea World US relies not only on its reputation in the word mark SEAWORLD (which I have found is not supported by the evidence) but alsoon its reputation in the more stylised logos and devices that appear inthe brochures and other promotional material put forward in itsevidence, described above. There is support in the evidence for a levelof market awareness in New Zealand of those marks at the relevant date.It is also a reasonable assumption that New Zealand visitors to the parkswere also exposed to these marks at the time. Overall, this evidence issufficient to meet the low threshold for a sufficient reputation to engagesection 16, but only in relation to those particular, highly stylised,marks.[30] The Assistant Commissioner then closely considered the particular, highlystylised, trade marks used by each of the parties including the following Sea WorldUS trade marks:[31] The Assistant Commissioner then held:67. Adopting the approach set out above to assessing the similaritiesbetween the marks, I conclude that a fair notional use of SeaworldAustralia's mark in relation to these services is not likely to deceive orcause confusion.68. Of particular note is the absence of any wave pattern in the US marks,which is a strong feature of the Australian mark. The stylised marinemammal in the first US mark is also very different visually from themore realistic dolphin in the Australian mark. The second US markwith its more realistic killer whale image is distinguished from theAustralian mark because of the circular impression (as opposed to thelinear form of the Australian mark), the splash of water and the verystylised writing below it, especially the swirl on the W letter. Similarpoints of difference arise with the third mark, where the circular devicereplaces the letter 'o' in World.69. While the marks all have the same idea, and clearly relate to marineamusement parks, the visual differences between them are sufficient toalert consumers and those in the travel industry that they indicatedifferent trade origins. This is particularly so given the evidencedemonstrating a general understanding in the market at the relevant datethat there are two different Sea World brands operating, one based inthe US and one based in Australia. People aware of both wouldtherefore be likely to exercise a level of attention to the differencesbetween their associated trade marks.[32] Accordingly, the Assistant Commissioner concluded that the registration of theSEA WORLD mark would likely cause confusion with the mark, but theregistration of the mark would not cause confusion with the SEA WORLDmark. The different approach arises from the Assistant Commissioner's findings inrelation to the reputation existing (or not existing) in the more simple word mark.[33] I accept the submissions advanced by Ms Carter that this involves an erroneousapproach. That is so for two related reasons.(1) Nature of reputation[34] First, the Assistant Commissioner erred when considering the nature of thereputation arising from Sea World US's use of the name Sea World. In the leadingcase of Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd, the Court of Appeal wasdealing with a situation having some factual similarities with the present case.12 AnAustralian company had used the trade mark HY-LINE for its live chicken and poultryservices. An American company, Pioneer Hi-Bred Corn Company, used the identicalname in its trade mark for its similar products in the United States. The Australian12 Pioneer Hi-Bred Corn Co, above n 3.company applied to register a trade mark for the simple words in New Zealand inassociation with conducting business here. The American company had neverconducted business in New Zealand, but had a business reputation here, and it opposedregistration. There was no cross-application for a trade mark by the Americancompany. The Court of Appeal upheld the Supreme Court decision that the Australianapplication should be denied because of s 16.[35] When addressing the enquiry under s 16, the Court emphasised that therelevant focus was on the confusion arising from the knowledge of the mark of theopposing party, even when the opposing party could not establish a proprietary rightin that mark. Richardson J held:13It must be remembered, too, that the object of s 16 is not to protect competitorsand potential competitors of the applicant so, the likelihood of damage to thetrade of the opponent is not a relevant consideration under s 16 (Hack'sApplication, pp 106-107). The object is to protect the public interest byrefusing to accord monopoly rights to a mark, the use of which is likely todeceive or confuse those in the market for the goods. The concern is with theprotection of the relevant New Zealand buying public, not with the protectionof the applicant's competitors. Therefore, consideration in narrow terms ofquestions as to whether the opponent has as established business goodwill inNew Zealand, which is important in a passing off action (Alain Bernardin etCompagnie v Pavilion Properties Ltd [1967] RPC 581), is not helpful in aninquiry under s 16. Indeed, by diverting attention from the real issue, it maymislead or at any rate unnecessarily complicate the issues under s 16. And atest framed in terms of the "user" of the opponent's mark in New Zealand hasundesirable overtones of proprietorship. For myself I prefer to use a moreneutral term such as "awareness" or "cognisance" or "knowledge" and on thatbasis to ask: having regard to the awareness of the opponent's mark in the NewZealand market for goods covered by the registration proposed, would the useof the applicant's mark be likely to deceive or cause confusion to persons inthat market.[36] For the same reasons, it seems to me that the Assistant Commissioner'sapproach was diverted, or unnecessarily complicated, by a focus on the reputationassociated with the word mark as a trade mark. It does not matter that Sea World USis not able to establish a reputation in the word mark SEA WORLD of a kind that givesit a proprietary interest in such words as a trade mark. All that needs to be establishedis that there was relevant awareness, cognisance or knowledge of that mark in the NewZealand market. And having an awareness of a "mark" in this context means no more13 At 63.than awareness of a business name being used for the relevant services. On thatquestion, the evidence is that significant parts of the relevant New Zealand marketwere well aware of the marine mammal amusement park operating under the nameSea World in the United States and promoted in New Zealand. That was essentiallywhat the Assistant Commissioner had found at [27] and [28] of her decision whenconcluding that the words Sea World were distinctive of marine mammal amusementpark services in Australia and the United States. The fact that there was a knowledgeof use of the name Sea World for such parks in the United States by the New Zealandmarket is sufficient in itself to engage s 16, even if the market was also aware of theuse of the words Sea World in relation to the park in Australia. Indeed, the fact thatthere is knowledge of such services being offered by both the American and Australianbusinesses is precisely the type of problem that s 16 is directed to. So the AssistantCommissioner's finding at [63] that the words Sea World on their own were morelikely to be known to refer to either the Australian or US theme parks, rather than theUS parks specifically, means that a s 16 issue arose, rather than meaning it did not.(2) Prominence of the words in the design marks[37] There is a second, and closely related point. To the extent the AssistantCommissioner found that there was no confusion in the New Zealand market becauseany such confusion did not arise because of the particular features of the more styliseddesign marks used by each party, then I do not accept that that finding is correct. Thewords "Sea World" dominate the visual presentation of each of the more detaileddesign marks. The relevant marine parks are known as "Sea World". On an objectivebasis, I do not accept that relevant consumers would recognise only the design details,and not the key striking similarity arising from the use of exactly the same words inthe design marks.[38] This is consistent with the evidence that was filed, which did not suggest thatthe different design details were the focus of consumers and industry experts. Forexample, Mr Glenn Ormsby, who was the New Zealand manager of the QueenslandTourist and Travel Corporation in 1997, said in his declaration:AUSTRALIA is a more affordable holiday destination for New Zealandersthan the United States. I believe many prospective holiday makers would beaware that there is a SEA WORLD organisation in San Diego, SouthernCalifornia but I do not think it is nearly as well known as the SEA WORLDin Australia's Gold Coast. I expect that is partly because more NewZealanders head for Queensland than to the United States so that they are morefamiliar with Australia's Gold Coast attractions than those in other countriesand towns such as San Diego.I have no doubt at all from my experience that very many New Zealanders areaware of the Australian SEA WORLD and certainly far more than would beaware of the US SEA WORLD.[39] As this says, there was market knowledge of Sea World Australia and SeaWorld US. Mr Ormsby was contending that Sea World Australia was better known.But he accepted that Sea World US was known to the market. That arose from the useof the words Sea World in connection with the marine mammal amusement parks inthe United States. This evidence is consistent with the evidence of other witnesses.14[40] A similar point arises from the Assistant Commissioner's comparison betweenthe two sets of design marks. The features of those marks she concentrated on doindeed demonstrate distinctive differences between the more detailed designs. Butwhen comparing the marks, she did not address the one key feature that makes themsimilar. That is that they both use the words Sea World as the central feature. Heranalysis focuses on the differences, without taking account of the thing that is thesame. It may be possible for the design details to be so significant that they effectivelydistinguish between two trade marks that use exactly the same name. But those detailswould need to overwhelm the key point of similarity.[41] It is unrealistic to suggest that is so here. First, such design detail differencesonly arise in relation to the visual display of the mark. When describing the servicesorally, such design features would not be present. A travel agent, or a traveller, wouldsimply be describing the experience they had, or were hoping to have, at "Sea World".Secondly, even in the visual representation of the trade marks, the Sea World namedominates. As the Commissioner held when dealing with the Sea World USapplication the "differences do not off set the identical words and sounds of the marks,and the similarity in meaning and idea behind the marks".1514 See [49]–[53] below.15 Sea World LLC v Seaworld Management Pty Ltd, above n 1, at [39].(3) Implications[42] For these reasons, there is an inconsistency in the findings made by theAssistant Commissioner on the two applications. The different treatment does notlegitimately arise from a finding that there is no reputation established by Sea WorldUS in the bare SEA WORLD mark. The evidence, and the Assistant Commissioner'searlier findings, recognise there was knowledge of the words Sea World associatedwith the Sea World US marine mammal assessment parks that were promoted inNew Zealand. That is sufficient to trigger s 16. Confusion under s 16 would also notbe avoided by the particular design features of the parties' respective marks.[43] It is accordingly necessary to consider the implications of these findings forthe two applications. Does this mean that both should have been granted, or that bothshould have been declined?[44] This situation is again similar to that considered by the Court in Pioneer Hi-Bred Corn Co. There the Australian company was applying for New Zealandregistration of the word mark HY-LINE. It had obtained such a registration inAustralia, but it also used trade marks with that word in conjunction with designfeatures.16 The American company had an American trade mark with the words "HY-LINE" in a design mark.17 When denying the Australian company the registration,Richardson J noted that it did not matter that there may be confusion even withoutregistration. He held:18 But under s 16 it is not a matter of whether, in the absence of registration,the relevant public are likely to be uncertain whether goods marketed in NewZealand under the HY-LINE mark are associated with the appellant or therespondent. The use of an unregistered mark may be likely to deceive or causeconfusion. Section 16 is concerned with something different; with thelikelihood of deception or confusion arising from the use of a registered mark.Moreover, it is sufficient if a considerable section of those in the New Zealandmarket are likely to think that, in buying goods under a New Zealandregistered mark, HY-LINE, they are buying a product of or associated with theAmerican company. It is not relevant that, because of awareness of theappellant's activities, some others in the market would not be misled orconfused. There may be very special cases in which no-one may be able toregister a mark. That is where there is a significant section of the market which16 Pioneer Hi-Bred Corn Co, above n 3, at 59.17 Pioneer Hi-Bred Corn Co, above n 3, at 58.18 At 77.associates goods under that mark with one firm and there is another significantsection of the market which associates goods under that or a similar mark withanother source. It seems to me entirely reasonable in the public interest that inthat situation neither firm should have the monopoly rights in New Zealandconferred by registration and thereby benefit from the misleading or confusinguse of the mark[45] Following that approach, it does not matter that some sections of theNew Zealand market associated Sea World solely with the Australian company. Allthat matters is that some sections of the market associated the word Sea World withthe American company, or that the market associates Sea World with both. If so, it isnot appropriate to give the Australian company the monopoly.[46] A key question in this case, therefore, becomes whether we are within the veryspecial category of case described by Richardson J. Given that both companies haveoperated in their respective countries for some time, and both have promoted theirservices in New Zealand using the word Sea World, is this a case where both shouldbe denied registration because there is inherent confusion arising from either of themobtaining a trade mark incorporating the words Sea World? Or put another way, is thisa case where both should be denied registration, or a case where both registrationsshould be allowed? The answer to this question may lead to consideration of honestconcurrent use under s 17(5) of the 1953 Act.Is there confusion?[47] The answer to the above question turns on whether there is the likelihood ofconfusion in the manner contemplated by s 16. This may also involve the possibilityof confusion as addressed by s 17(3) of the 1953 Act as the Sea World US applicationwas first in time.[48] In her decision, the Assistant Commissioner correctly set out the principles thatwould apply to that question. One of the principles from the case law, as summarisedby Richardson J in Pioneer Hi-Bred Corn Co, is:19(5) In considering the likelihood of deception or confusion all thesurrounding circumstances have to be taken into consideration,including the circumstances in which the applicant's mark may be used,19 Pioneer Hi-Bred Corn Co, above n 3, at 61.the market in which his goods may be bought and sold and the characterof those involved in that market.[49] One of those considerations arising from the circumstances, which to my mindis critical to the outcome of this case, is the clear geographic separation between SeaWorld US and Sea World Australia. In Pioneer Hi-Bred Corn Co, the Australiancompany was selling goods within New Zealand that could be confused with theAmerican products. But here Sea World Australia offers marine mammal amusementpark services solely in Australia, and Sea World US offers marine mammal amusementpark services solely in the United States. Consumers will know which services areinvolved because they are location based services. Consumers will also need to travelto the specific countries to have access to the services, and such consumers knowwhich country they are travelling to when accessing the services. Any initialuncertainties would be clarified in the processes involved in making decisions aboutservices to be accessed during international travel such that there would be no realconfusion.[50] The position is accurately identified in the evidence that was filed, particularlythe evidence from Sea World Australia. Mr Graeme Manson, who was the NewZealand Manager of Tourism Queensland in 2002, said:I am not at all confused between the Australian Sea World theme park, and theSea World theme parks operated in the USA under the same name.I do not believe that when booking a visit to the Sea World theme park a NewZealand holiday maker would be likely to be either confused or deceived asto their destination. America and Australia are two totally geographicallyopposed destinations.[51] Similarly, Mr Ralph Levinson, who was the Managing Director of TravelworksNew Zealand Limited in 2002, said:I am not at all confused between the Australian Sea World theme park, and theUS Sea World theme park. They are separate businesses, in differentcountries. If it is necessary to differentiate between the two, I use the terms"Sea World Australia" or "Sea World San Diego", as appropriate, qualifyingthe words "Sea World" by the appropriate geographical location for the themepark.[52] Mr William Mabey, who was the Managing Director of Tours and Travel(Newmarket) Limited in 2002, said:If a client was to tell me that he or she wished to visit Sea World, I wouldimmediately make enquiry of that client as to which Sea World they wantedto visit. Because the Sea World theme park in Queensland is in a differentdirection to the Sea World theme parks in the USA, clients will always knowwhich of the Sea World theme parks they wish to visit, as these visits arenormally part of a bigger tour schedule, involving other attractions in therelevant geographical location.Therefore, I identify each of the Sea World theme parks by reference to theirindividual locations. I am not confused between the theme parks because oftheir wide geographical separation, and I am not aware of any customers everhaving been confused between Sea World Queensland on the one hand, andthe Sea World theme parks in the USA, on the other.[53] And Ms Carol Kirkley-Newton, who was a Business Development Manager ofSea World Australia in 2002, said:I am unaware of any reports from within my Company or from our NewZealand travel wholesalers or agents of any confusion between my Company'sTrade Mark and any "Sea World" trade mark owned by Sea World, Inc. [54] That evidence is consistent with the circumstances surrounding the use of thesemarks. It is highly unlikely that there will be any confusion in the minds of the relevantconsumers of any material kind. We are dealing with two distinct travel locations forNew Zealand travellers. Any initial potential misunderstanding or confusion will beresolved when consumers attend to the more detailed analysis of their travel plans. Onthat basis both trade marks can be utilised within New Zealand to promote therespective marine mammal amusements parks in the respective countries without realconfusion arising.[55] Notwithstanding this evidence, which was filed by Sea World Australia, theAssistant Commissioner upheld Sea World Australia's objection that registering theSea World US trade mark would cause confusion. I accept the AssistantCommissioner's view that the evidence does not deal with the critical date associatedwith the period leading up to the actual applications for the trade marks in 1994 and1996. But this evidence is nevertheless relevant to an assessment of the character andcircumstances of the use of a trade mark at the relevant date. In reality, the evidencerelated to the earlier period was little more than evidence that the parties promotedtheir respective trade marks in the New Zealand market at that stage. The evidencerelevant to the subsequent period gives a fuller picture of the character of the trademarks, and the circumstances of their use in the New Zealand market. That evidenceis appropriately considered when assessing the application of ss 16 and 17 at therelevant period.[56] There remains possible confusion on the basis that consumers might think thatthere is a business connection between Sea World Australia and Sea World US. It maybe that the Assistant Commissioner was referring to that possible confusion at [39] ofher decision. Such confusion has not been referred to anywhere in the evidence.Indeed, this hypothetical confusion is not consistent with the evidence I have referredto. Given that the marine mammal amusement parks operate in different countries thatare geographically distinct, I think it unlikely that this possible confusion of this kindwould operate in any material way.[57] Accordingly, I conclude that the Assistant Commissioner erred in reaching theconclusion expressed at [39] and [40] that there was s 16 confusion that meant that theSea World US trade mark should not be registered. It is not a case that falls within thespecial circumstances described by Richardson J. Rather it is a case where both theunregistered trade marks in use can now be duly registered. The appropriate outcomefor the applications, therefore, is that both should be granted. That is subject to onequalification, which I turn to next.[58] Before addressing this qualification, I should make express what is implicit inthese findings. Subject to any different evidence being provided, and to thequalifications outlined below my conclusions mean that Sea World Australia wouldalso be entitled to register a Sea World name mark, and that Sea World US would beentitled to register its design marks.Ensuring geographical limitation[59] In addressing this potential outcome during the hearing, I asked Mr Cain toexplain what the key difference was between Sea World US obtaining registration ofa word mark, and Sea World Australia obtaining registration of a design mark. Heresponded by saying that a word mark was a more significant right in the hands of theregistered party. He argued that Sea World US would have a more powerful weapon.A design mark might adapt over the years such that the originally registered markwould no longer protect what was being used. But a word mark would retain itsregistration notwithstanding any such adaptions over time. The rights in a word markexist for all manifestations of a word. He further emphasised these points in thewritten submissions that I gave him leave to file following the hearing. These includedexamples of the advice given, including by the Office, that word marks provide rightsof greater significance because of such factors. And he argued that a trade mark in thewords could be used by Sea World US to prevent Sea World Australia ever using thewords "Sea World" in its promotional material, as this by definition would infringethe Sea World US word mark.[60] I put to Mr Cain that that the scenario of Sea World US preventing Sea WorldAustralia using the words Sea World would not arise if the specification for the SeaWorld US trade mark was limited to a trade mark protecting marine mammalamusement park services solely in the United States. That would give Sea World USthe monopoly right over use of the word Sea World in the New Zealand market, butonly in relation to such services in the United States. This would mean that Sea WorldAustralia could continue to use those words in connection with such services inAustralia. Such qualifying words could qualify both marks, so that Sea WorldAustralia's trade mark would similarly be limited to such services in Australia. Andsuch limitations would also be required for future registrations.[61] Mr Cain accepted that that may well be the case, whilst emphasising therewould be residual risk. Given the findings of this judgment I see no material residualrisk. Mr Cain was unable to identify any other inappropriate prejudice arising to SeaWorld Australia if that step was taken either at the hearing, or in the subsequent writtensubmissions.[62] It seems to me that such qualifications on each trade mark would be appropriatein any event given the remaining potential area of consumer confusion identified at[56] above. That remaining possible confusion is further protected against if the trademarks are overtly limited to use in association with the services offered by Sea WorldAustralia and Sea World US in their respective jurisdictions. I asked the parties toconfirm the relevant wording limitations in the specifications should this be theCourt's ultimate conclusion, and they duly did so in a joint memorandum dated 23 July2018. Sea World US's specification will accordingly be for "marine amusement parkservices within the United States of America", and Sea World Australia's specificationwill accordingly be for "travel services in the nature of providing of information totravellers and vouchers for tours abroad inclusive of entry into amusement parkswithin the Commonwealth of Australia".Honest concurrent use[63] Given the above conclusions, it is not necessary to address the further argumentof Sea World US that honest concurrent use under s 17(5) arose, which would allowboth trademarks to be registered. Had it been necessary to decide that matter, I mayhave allowed the argument to be advanced, and may have held that the section applied.[64] There is an issue whether s 17(5) applies to confusion covered by s 16. Itclearly does with respect to the type of confusion arising under s 17, but inNew Zealand confusion arising as a result of the use and existence of two trademarkshas been addressed under s 16 as well as s 17. In my view the better view is thats 17(5) applies notwithstanding s 16 if the relevant question arises purely fromconfusion between two trademarks. That is more consistent with the purpose of theprovisions.[65] Sea World Australia objected to s 17(5) being raised when it had not beenpleaded, and the Assistant Commissioner accepted that objection. It is certainly raisedvery late. I may nevertheless have been inclined allow the argument to be advanced.The parties appear to have filed complete evidence on the use of the trademarks byeach other at the time. It is unclear what further evidence could have been providedon honest concurrent use. Moreover, this seems to be the very type of situation thats 17(5) is directed to. It does seem to be a case where there has been honest concurrentuse by both parties in a manner meeting the requirements of the subsection asrecognised by the authorities. But, given that my conclusions on the other issues, it isnot necessary to reach concluded views on this point.Summary and result[66] For the above reasons, I conclude that the Assistant Commissioner erred whenapplying s 16 by concluding that the market knowledge of the Sea World UStrademark was limited to its highly stylised design marks, and by concluding that thestylistic differences between the Sea World Australia and Sea World US design marksmeant there was no s 16 confusion. I have found that there was market cognisance ofthe use of the word "Sea World" by Sea World US, and the use of those words in thedesign marks creates obvious similarity between those marks, and accordingly thepotential for confusion. But I further find that the clear geographic limitationassociated with each of the business operations, and accordingly of the trademarks,means that no s 16 confusion arises when the full circumstances are considered. Itfollows that both marks can be registered. The geographical limitation shouldnevertheless be reflected in the amendments to the schedule referred to at [62] above.[67] The Assistant Commissioner was accordingly correct to allow the Sea WorldAustralia application, but erred in declining the Sea World US application. The appealis accordingly allowed in part.[68] As to costs my preliminary view is that the appellant has succeeded with oneof its arguments, but failed on the other. In those circumstances it seems to me thatthe appropriate order is that costs should lie where they fall. That outcome would alsobe consistent with the result of the proceedings generally. If costs cannot be agreed, amemorandum from the appellant is to be filed within 15 working days of the releaseof this judgment, and a memorandum from counsel for the respondent within 10working days of receipt of the appellant's memorandum. Both memoranda are to beno more than 10 pages.Cooke JSolicitors:A J Park Law, Wellington for appellantJames & Wells, Hamilton for respondent