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Where’s the evidence? Proving reputation of your trade mark in opposition proceedings

In oppositions before the Intellectual Property Office of New Zealand (IPONZ), it is necessary to file evidence to support particular grounds. That evidence must comply with the requirements of the Oaths and Declarations Act 1957 which specifies the form and mode of execution of the evidence. An ongoing point of contention is whether the evidence must also meet the requirements of the Evidence Act 2006.

This article looks at what will constitute acceptable evidence to establish reputation under section 17(1)(a) of the Trade Marks Act 2002 in trade mark oppositions based on decisions of various IPONZ Assistant Commissioners that have issued over the last six months.¹

The Evidence Act sets out the rules for admissibility of evidence in Court proceedings. For example, evidence that is irrelevant, unfairly prejudicial, hearsay or non-expert statement of opinion is not admissible under the Evidence Act.²

One of the purposes of the Trade Marks Act 2002 is to “simplify procedures for registering a trade mark in order to reduce costs to applicants and to reduce business compliance costs generally”.³ This therefore points away from a strict application of the Evidence Act in trade mark proceedings. Successive Assistant Commissioners of Trade Marks have taken the approach that rather than strictly applying its requirements, the Evidence Act provides a guideline as to the reliability and probative weight of evidence in trade mark opposition proceedings.

However, that does not mean any old evidence will do. Evidence that is hearsay, not relevant, non-expert opinion or legal submission is likely to be given little if any weight in the determination of the issues before the Assistant Commissioner.⁴

Section 17(1)(a) of the Act provides that the “Commissioner must not register as a trade mark or part of a trade mark any matter... the use of which would be likely to deceive or cause confusion”. The purpose of s 17(1)(a) is to protect the relevant New Zealand buying public rather than protecting the trade mark applicant’s competitors.⁵

There are two broad kinds of deception or confusion which may arise under s 17(1)(a) of the Act:

• deception or confusion with marks belonging to another party; and
• deception or confusion caused by something intrinsic to the mark – for example, the trade mark suggests that the goods have specific characteristic.

This article considers the first type of deception or confusion, in other words, where there is “inter-mark rivalry”.⁶

Where an opponent opposes the registration of a trade mark on the basis that consumers may be confused as to the source of goods based on the similarity of an applicant’s mark with the opponent’s mark, those consumers must at least have some awareness of the opponent’s mark. Establishing a reputation involves meeting the relatively low threshold of showing “awareness”, “cognizance” or “knowledge” of the trade mark.⁷  The threshold for establishing reputation for the purposes of section 17(1)(a) is relatively low because of the public protection focus of this provision.⁸

Therefore, the initial onus is on the opponent to establish, as a matter of fact, the existence of its claimed reputation.⁹ The timing or date of use of the trade mark is critical as the reputation must exist at the date of the filing of, or the priority date for, the application being opposed - this is the relevant date. If the evidence is undated or dated after the relevant date then it cannot be relied upon.¹⁰

The Court of Appeal has provided the following guidance on the approach to take when considering section 17(1)(a) of the Act:¹¹

When applying this section, the Commissioner begins by inquiring whether the opponent’s mark has a reputation in New Zealand at the relevant date. Such reputation need not be widespread; it all depends on the nature of the marks and the goods to which it is applied. Where marks are used in respect of goods with only a very narrow or specialised use or purpose, the mark may be known only to a small number of people. Pioneer Hi-Bred is a good example: the opponent to registration sold hatching eggs and breeding poultry, goods purchased only by those in the poultry breeding industry. It was only those in that industry who were aware of its existence, and therefore only among persons in that class that a reputation needed to be established. In other cases, a mark may be applied to goods sold very broadly or applied to numerous different goods under a brand’s penumbra. This is the initial inquiry into the “circumstances of trade”, against the background of which the marks are regarded as notionally in use.

The correct focus is on awareness of the opponents mark in relation to prospective purchasers of the goods to which its mark attaches and individuals and entities involved in that trade; not the entirety of the purchasing public of New Zealand. The question of likelihood of deception or confusion must then be assessed against that reputation, considering the fair, notional use of the goods bearing each of the marks.

Further, the Court of Appeal noted that:¹²

... it is important not to conflate the test for establishing a reputation or awareness in an industry or in New Zealand, with the test for establishing that a substantial number of those persons are likely to be deceived or confused. Each of these aspects requires separate consideration. Assessment of reputation and awareness will occur first, taking into account the circumstances of trade of the opponent as a basis for comparison of the two marks, which must be regarded as notionally in use.

Evidence of actual use of the opponent’s mark in the marketplace is necessary to show that this reputation has been acquired.¹³  The usual method for demonstrating awareness of a mark is to infer it from evidence of the extent of use of the mark in the relevant market in New Zealand.  Generally, parties will submit evidence of sales figures and advertising from which a reputation can be inferred. The larger the sales figures, “the more people who have bought the product and the more people who are aware of the mark”.¹⁴

In addition, evidence of awareness of a mark may take the form of turnover figures, examples of advertising and information regarding the channels used to promote the mark and consumer uptake of promotional materials.¹⁵

The absence of information that quantifies the extent of use of the opponent’s trade mark in New Zealand means that the Assistant Commissioner will not be able to infer the necessary awareness.¹⁶

Along with such quantitative information relating to the volume and value of sales and promotion, it is necessary to provide qualitative evidence corroborating how the trade mark is used in relation to the goods/services and the goods/services for which the trade mark is used. If the evidence regarding the manner and timing of use is vague or imprecise then it cannot be relied upon to establish the requisite reputation.¹⁷

Mere verbal statements of use without evidence in the form of supporting exhibits to corroborate the statements will not be sufficient for a finding of the requisite reputation.¹⁸

It is the opponent’s reputation in New Zealand that is relevant.¹⁹ Therefore, if the evidence of sales figures or customer numbers cover markets other than New Zealand it will be necessary to drill down into how many of the sales and customers are in New Zealand.²⁰

It is also necessary to show exactly how the trade mark was used. If there are a number of ways or variations in how the trade mark is used examples of such use should be included and if necessary connection of the sales figures to each version of the mark. For example, if the opponent uses a composite mark comprising verbal and non-verbal elements which may be used together or separately, the sales figures to each variant of the mark should be apportioned so that the Assistant Commissioner can easily see which variant was used when and the scope of that use.²¹

It has been accepted that social media influencer marketing can be an effective channel for targeting a large audience however, such posts alone is unlikely to be enough to establish a reputation in New Zealand.²² This is particularly so if it cannot be established from the evidence how many followers the influencer had at the relevant date and what proportion of the followers are based in New Zealand.

If relying upon articles in published magazines, or online blogs, also include information about the readership of such publications, e.g. the number of issues distributed or sold in New Zealand or the number of followers in New Zealand. A number of overseas published magazines are circulated in New Zealand. For any reliance to be placed on such promotional information it is necessary to provide details of New Zealand readership. The same goes for promotions on overseas television shows, confirmation of airing of the show/episode in New Zealand and a breakdown of viewership numbers will be required.²³

If the opponent’s trade mark has an international reputation there may be “spill-over” of that reputation into New Zealand.²⁴ A spill-over reputation may be established in the following way:²⁵

[R]eputation within the jurisdiction may be proved by a variety of means including advertisements on television, or radio or in magazines and newspapers within the forum. It may be established by showing constant travel of people between other countries and the forum, and that people within the forum (whether residents there or persons simply visiting there from other countries) are exposed to the goods of the overseas owner.

Such spill-over reputation cannot be inferred but must be positively proven. There needs to be evidence linking the overseas reputation to New Zealand, for example, figures of circulation of overseas publications in New Zealand, New Zealand based social media followers, email addresses in distribution lists, online sales shipped to New Zealand,²⁶ numbers of New Zealand-based visitors to overseas websites, and official statistics that establish the movement of people between New Zealand and the relevant overseas markets where reputation has been established and information about how those people are likely to have been exposed to the opponent’s trade mark.²⁷ The Assistant Commissioner cannot simply infer that persons in the New Zealand market have been exposed to any overseas use as to do so would amount to mere conjecture or speculation.²⁸

If the applicant files evidence, then the opponent may “file evidence strictly in reply”.²⁹ If the purported evidence in reply contains evidence that should have – and could have – been adduced earlier then it will not be admitted as evidence in reply. For example, evidence of awareness of the opponent’s mark that should have been included in its primary evidence and cannot be admitted as evidence in reply.³⁰

While the formal requirements of the Evidence Act may not come into play in trade mark oppositions before the Assistant Commissioner, the decisions make it clear that care needs to be taken in the preparation of evidence filed to establish a reputation for the purpose of section 17(1)(a). It is necessary for the opponent to establish, as a matter of fact, that a reputation existed at the relevant date and to do so, the opponent needs to quantify that use, show how the trade mark was used, the goods/services for which it was used, and that the use was in or can be linked to New Zealand.