SEXWAX INCORPORATED V ZOGGS INTERNATIONAL LIMITED CA461/2013 [2014] NZCA 311

[9 September 2014]

IN THE COURT OF APPEAL OF NEW ZEALAND

CA461/2013

[2014] NZCA 311

BETWEEN

SEXWAX INCORPORATED

Appellant

AND

ZOGGS INTERNATIONAL LIMITED

Respondent

Hearing:

22 May 2014 (further submissions received 26 May 2014)

Court:

O'Regan P, Stevens and Miller JJ

Counsel:

N J Robb and C A Edmonds for Appellant

J O Upton QC and T A Huthwaite for Respondent

Judgment:

9 September 2014 at 3.15 pm

JUDGMENT OF THE COURT

A The appeal is allowed.

B The direction given in the High Court that the respondent was entitled to

register the ZOGGS mark is quashed.

C The determination of the Assistant Commissioner that the appellant’s

opposition based on s 17(1) of the Trade Marks Act 2002 succeeds is

reinstated.

D The respondent must pay the appellant costs for a standard appeal on a

band A basis and usual disbursements.

E In the absence of agreement, any question of costs in the High Court is to

be determined by that Court.

____________________________________________________________________

REASONS OF THE COURT

(Given by Stevens J)

Table of Contents

Para No

Introduction [1]

Background [8]

Assistant Commissioner’s decision [15]

High Court judgment [22]

Statutory framework [26]

Issue one: the MR ZOGS SEX WAX mark [31]

Submissions of the parties [31]

Our analysis [35]

Issue two: reputation/awareness [43]

Need for awareness of the opponent’s mark [43]

The correct approach to s 17(1)(a) [48]

Submissions on reputation/awareness [66]

Our analysis [69]

Issue three: likelihood of deception or confusion? [79]

Submissions of the parties [79]

Our analysis [83]

Relief [88]

Result [91]

Introduction

[1] The appellant Sexwax Incorporated (Sexwax) has since the 1980s marketed a

large selling brand of surfboard wax through a New Zealand distributor. It does so

using a distinctive unregistered mark or logo of which it is the proprietor, (the

MR ZOGS SEX WAX mark):

[2] The respondent, Zoggs International Ltd (Zoggs), applied in December 2009

to register the trade mark (the ZOGGS mark):

ZOGGS

[3] Zoggs’ application was declined by the Assistant Commissioner of Trade

Marks under a number of statutory provisions, including s 17(1)(a) of the Trade

Marks Act 2002 (the Act), on the basis that its use in New Zealand would be likely to

deceive or cause confusion.1

[4] Zoggs successfully appealed to the High Court.2 Simon France J found that

there was no likelihood that the ZOGGS trade mark would be confused with the

MR ZOGS SEX WAX mark if registration were allowed.3 He said the MR ZOGS

SEX WAX mark was “quite dissimilar” to the ZOGGS mark, with the “predominant

feature of the logo [being] the central Sexwax brand”. The concept of “Sex Wax”

was “attention grabbing” and was the “single feature of the logo which would linger

with people”.4 Those findings were enough to dispose of the appeal, but the Judge

also concluded: “With less conviction, but on balance, I would also have allowed

the appeal against the finding of a sufficient reputation”.5

[5] Sexwax appeals to this Court, contending there was a sufficiently substantial

awareness of the MR ZOGS SEX WAX mark for goods covered by the proposed

registration of the ZOGGS mark. Further, it contends Zoggs has not discharged the

onus of establishing that there is no reasonable likelihood of deception or confusion

resulting from the use of the ZOGGS mark.

[6] It follows that the key issues on appeal are:

(a) What was the nature of the mark owned by Sexwax?

(b) What is the reputation or awareness of that mark?

1 Zoggs International Ltd v Sexwax Inc [2012] NZIPOTM 31 (Assistant Commissioner’s

decision). 2 Zoggs International Ltd v Sexwax Inc [2013] NZHC 1494 (High Court judgment).

3 At [68].

4 At [61].

5 At [63]. The Judge also upheld two other grounds of appeal, namely, against findings by the

Assistant Commissioner that the application was made in bad faith (at [37]) and that there was

no sufficiently definite intention to use the mark (at [45]). There was no appeal on these

grounds.

(c) Has Zoggs discharged the onus of showing there is no reasonable

likelihood of deception or confusion resulting from the notional use of

the ZOGGS mark?

[7] The questions of reputation and awareness and the likelihood of deception or

confusion were advanced before us in the context of the “relevant market”. In

determining the above questions, therefore, we discuss whether and in what

circumstances the concept of the market ought to be used in applying s 17(1)(a) of

the Act.

Background

[8] Sexwax is owned by a Mr Frederick Herzog III of California, USA.

Commonly known as Mr Zog, he has used the name Zog in connection with his

business for over 38 years. He first started manufacturing surfboards under the

“Zog” and “Wave Delineation” brands. These were sold through retail outlets in

California and through surf shops on the East Coast of the United States. In 1972 the

Zog Industries business began manufacturing and selling surfboard wax under the

brand name MR ZOGS SEX WAX. The label embodying the logo, set out at [1]

above, has remained largely unchanged.

[9] Mr Herzog’s business was originally named Zog Industries. It changed name

formally in 1978 to Sexwax Incorporated, the name of the appellant, but has

continued to use the name Zog Industries on all its business forms such as invoices,

statements, sales and purchase orders and correspondence. Mr Herzog’s evidence is

that the name Zog is integral to the mark by which the surfboard wax is sold. It is

typically referred to or ordered as “a bar of SEX WAX” or “a bar of Zogs”.

Mr Herzog states further that the phrase “MR ZOGS SEX WAX” is an integral part

of the mark used by the business. The business has engaged in other activities such

as publishing a newspaper, called the Zog Newsletter, and sells various other

products featuring the mark, of which T-shirts and caps are examples.

[10] Zog Industries sells surfboard wax using different formulas. For example, it

sells a product called MR ZOGS SEX WAX Quick Humps formula, and a hockey

wax using the logo “MR ZOGS SEX WAX Hockey formula”. Other products

include a drumstick formula wax using the same logo and a wide range of products

including T-shirts, sweat-shirts, rash guards, swimwear, wax combs and beach

towels, which are labelled or decorated with either the words

“MR ZOGS SEX WAX” and design mark or using the word “Zog”. The MR ZOGS

SEX WAX logo or the mark SEX WAX have been registered in a number of

countries throughout the world. No application for registration has been made in

New Zealand.

[11] Zog Industries began selling its products in New Zealand through a primary

distributor, Aerial Connection. The product is sold in retail shops all over New

Zealand and is also sold on TradeMe. For the period November 1997 to June 2010,

wax and surfboard related products accounted for 65 per cent of the product sales by

Zog Industries to New Zealand. The balance of the sales (around 27 per cent) was

made up mostly of T-shirts, which have either the complete logo or a dominant

reference to SEX WAX on them. The MR ZOGS SEX WAX label, in whatever form

it appears, is usually prominent and occupies the whole of the front or back of the

T-shirt.

[12] The respondent, Zoggs, was founded in Australia in 1992. The original

products sold comprised swimwear goggles, with the name Zoggs being an

adaptation of that word, or more particularly, of the abbreviation of the word

“goggs”. The goggles were sold in New Zealand through The Warehouse chain from

around 1994. Zoggs then began manufacturing swimwear aimed primarily at the

recreational and fitness/training pool swimmer market. These items were marketed

in various countries including New Zealand under the label “Zoggs Toggs”. In 1996,

that mark was registered in various countries, including New Zealand. This has

since expired and, due to an oversight, was not renewed.

[13] In 2000 a decision was taken to combine the brands into “Zoggs”. The

application to register the mark was intended to replace the existing mark

registration of Zoggs Toggs and reflected the branding development. Zoggs

International claims to be the largest leisure swimming brand in Australia, New

Zealand and the United Kingdom. New Zealand sales under the Zoggs Toggs label

commenced in the mid-1990s. Some 17,000 items have been sold between April

2006 and February 2011. The primary retail outlets in which its goods are sold

include aquatic centres, swim schools and small aquatic retailers.

[14] The application in December 2009 was to register the mark ZOGGS in class

25 of the Nice Classification of Goods (10th ed), comprising as follows:

… clothing, footwear, headwear, swimwear, swim caps, warm-up suits,

t-shirts, jackets, beachwear, leisure wear, ski wear, sports clothing and

wetsuits.

Assistant Commissioner’s decision

[15] Assistant Commissioner Walden accepted that an opponent of an application

to register a trade mark may rely on a name or an unregistered trade mark.6 She

considered awareness and reputation required an identification of the market, and

concluded the relevant market consisted of persons in New Zealand who are the

prospective or potential purchasers of the goods on which the opposed mark may be

applied and others involved in the purchase transactions.7 Having regard to the use

of the opposed goods on a fair, notional use basis, she concluded the relevant market

consisted of the general purchasing public and others involved in the purchase

transactions such as retailers. The relevant market was large in size and not a

specialist market.8 We address these findings later.

[16] As to the question of the reputation of the MR ZOGS SEX WAX mark, the

Assistant Commissioner noted the opponent (in this case, Sexwax) must establish

that the awareness of its mark is “sufficiently substantial” to lead to the possibility

that the opposed goods would be identified with the opponent.9 She found, in

applying that standard, there is likely to have been an awareness in the relevant

market of MR ZOGS SEX WAX mark in relation to surfboard wax. Her reasons for

this were:10

6 Assistant Commissioner’s decision, above n 1, at [24], citing The Council of Ivy Group

Presidents (t/as The Ivy League) v Pacific Dunlop (Asia) Ltd (2000) 66 IPR 202 (HC) at 210. 7 Assistant Commissioner’s decision, above n 1, at [25].

8 At [27].

9 At [31], citing Pioneer Hi-Bred Corn Company v Hy-line Chicks Pty Ltd [1978] 2 NZLR 50

(CA) at 62 [Pioneer Hi-Bred CA], although correctly noting this is a relatively low threshold. 10

At [34] (footnotes and emphasis omitted).

34.1 Initial wax sales were in June 1972 under the opponent’s [Sexwax’s]

mark, which have “remained basically unchanged since that date”.

34.2 The opponent’s wax has been sold in New Zealand since 1981 and

has established itself as the number one selling surf wax. Langdon

[the Director of the New Zealand distributor, Aerial Connections]

states:

4. In 1981, we began importing other surf accessories including

Mr Zog’s Surf Wax that complimented our own line of

surfing wax. Mr Zog’s SEX WAX is now our number one

selling surf wax. Aerial Connections imports approximately

20,000-30,000 blocks of Mr Zog’s Sex Wax every year.

5. Mr Zog’s Sex Wax has firmly and unarguably established

itself as the primary brand, and is available in retail shops all

over New Zealand. Mr Zog’s Sex Wax has been serving the

surf industry in New Zealand since 1981 and has established

itself as an iconic mark and product line. The name Zog is

understood to represent the finest and most popular and

widely available surfboard deck coating. Anyone who sees

the name Zog will connect it with Mr Zog’s Sex Wax. I

think any use of Zog or something similar would connect the

product to Mr Zog’s Sex Wax.

34.3 The opponent’s wax is sold throughout New Zealand including in

stores such as Amazon, the Billabong Store, Quiksilver, R&R Sport

and Rip Curl.

34.4 The advertising of the opponent’s wax was in surf-oriented

magazines such as Surfer Magazine in the 1980s and 1990s, which is

circulated in most countries, including New Zealand.

34.5 The opponent’s wax has also appeared or been referred to in general

publications such as Elle (May 1986), GQ magazine (June 1994),

GQ magazine (August 2009), Men’s Health (article – August 1997),

Wall Street Journal (29 August 1997), Vanity Fair (June 2010).

34.6 The opponent’s mark has also featured in the following films and

television dramas – Fast Times at Ridgemont High (1982) – a MR

ZOG’S SEX WAX t-shirt worn by Sean Penn; Point Break (1991) –

a close-up shot of a bar of the opponent’s wax; Charlie’s Angels:

Full Throttle (2003) – Sex Wax is mentioned by name; Smiley Face

(2007) – Anna Faris wears a t-shirt featuring the opponent’s mark in

multiple scenes; NCIS “Bikini Wax”; The Heartbreak Kid (2007) –

stickers bearing the opponent’s mark are used as props.

[17] Having regard to the totality of the two marks at issue and their essential

features (including their similarities), the Assistant Commissioner found they were

“visually and aurally dissimilar”. However she considered:11

11

At 40 (footnotes altered).

… there is a strong [conceptual] similarity in the marks as a whole

concerning the essential element: “Mr Zogs” in the case of the opponent’s

mark and “Zoggs” in the opposed mark. “Mr Zogs” appears to be a reference

to the name of the creator of the wax product. I consider that “Zoggs” could

also be perceived in the same way except in relation to the opposed goods. I

also consider that “Zoggs” might be perceived to be “Mr Zogs” without the

“Mr”. My main reason for this is that Mr Zogs is a very unusual name,

which is towards the fancy12

end of the continuum, and is likely to fix in the

mind of the relevant market, along with the other unusual term “Sex Wax”,

which is a reference to the opponent’s surfboard wax. Bearing in mind

imperfect recollection, I consider that the relevant market may remember

“Mr Zogs” as “Mr Zoggs” and “Zoggs” as “Zogs”.

[18] The core product of Sexwax is surfboard wax. The Assistant Commissioner

found:13

… surfboard wax and the opposed goods are clearly not similar. However, I

note that persons who purchase surfboard wax are also likely to purchase

swimwear, boardshorts, t-shirts, wetsuits, leisurewear, and beachwear. I also

note that the opponent’s surfboard wax is sold in the same kinds of stores

where these kinds of clothing items are sold.

[19] On the issue of likelihood of deception or confusion, the Assistant

Commissioner said:14

I am not satisfied that use of the opposed mark is not likely to deceive or

confuse because:

45.1 the opposed mark consists entirely of the word “Zoggs” and the

opponent’s mark includes “Mr Zogs” as an essential element of the

opponent’s mark:

45.2 bearing in mind imperfect recollection, “Zoggs” could be

remembered as “Zogs” and “Mr Zogs” could be remembered as

“Mr Zoggs”:

45.3 “Zoggs” and “Mr Zogs” are towards the fancy end of the continuum:

45.4 “Zoggs” might be perceived by some persons in the relevant market

as “Zogs” with the “Mr” component omitted:

45.5 although surfboard wax and the opposed goods are dissimilar, there

is overlap in the relevant markets and the opponent’s wax is actually

12

Higgins Coatings Pty Ltd v Higgins Group Holdings Ltd HC Wellington CIV-2009-485-2594,

30 June 2010 at [15], which cited with approval a paragraph from Equity Access Pty Ltd

v Westpac Banking Corp (1989) 16 IPR 431 (FCA) at 434 setting out and explaining the “fancy”

continuum. 13

Assistant Commissioner’s decision, above n 1, at [44] (footnote omitted), applying British Sugar

Plc v James Robertson & Sons Ltd [1996] RPC 281 (Ch) at 297. 14

At [45].

sold in the same kinds of retail stores where the opposed goods

would be sold on a notional fair use basis:

45.6 persons in the surfing industry might be caused to wonder if “Zoggs”

is a new clothing line for the opponent, which would explain why

the “Sex Wax” part of the opponent’s mark has not been included.

[20] We note in particular the references in 45.4 and 45.5 to “relevant market” and

“relevant markets”. The latter are said to be a subject of “overlap” between

surfboard wax and the opposed goods, a topic to which we return later.

[21] Based on the above findings, Sexwax’s opposition succeeded.15

High Court judgment

[22] Simon France J noted that Sexwax’s opposition to registration relied on six

unregistered marks, namely the logo at [1], as well as the phrases MR ZOGS

SEXWAX; ZOGS SEXWAX; MR ZOG; ZOGS; and ZOG.16

Yet the Assistant

Commissioner had only found there to be sufficient awareness of the logo, not the

five other unregistered word marks. There was no appeal in respect of the finding of

sufficient awareness only of the logo amongst the general purchasing public.17

As no

independent reputation was found to exist in any of MR ZOGS SEXWAX; ZOGS

SEXWAX; MR ZOG; ZOGS; and ZOG, the sole issue Simon France J identified

was whether the registration of ZOGGS is likely to cause confusion because of an

awareness in the New Zealand buying public of the “Sexwax complex logo”.18

[23] The reference to the “New Zealand buying public” is an endorsement by the

Judge of the Assistant Commissioner’s finding that the relevant market for the

application was the general purchasing public of New Zealand and any others

involved in those purchases such as retailers.19

The Judge repeated the Assistant

Commissioner’s finding that the relevant market was “very large in size and not a

specialist market”. Using this market, the Judge concluded there was no risk of

confusion between the “complex” SEX WAX logo and the ZOGGS mark, because:

15

At [46]. 16

High Court judgment, above n 2, at [47]. 17

At [60]. The Judge found this “significant” because it suggested Sexwax had no “independent

reputation” in the other five word marks. 18

Namely, the logo reproduced above at [1]. 19

At [61], and quoted at [48] of the High Court judgment.

[61] … First and obviously they are quite dissimilar. One is a single

block word; the other a complex circular device. Second, and deliberately

so, the predominant feature of the logo is the central Sex Wax band. Third,

and deliberately so, the concept of Sex Wax is attention grabbing.

Mr Herzog says it is unique, and was intended to be provocative, funny and

very different. If there is a single feature of the logo which would linger

with people, it is this sex wax aspect.

[62] To say more would be just to repeat my essential conclusion, which

is that the two marks are so different, no risk of confusion exists. Where I

depart from the ruling under appeal is on the emphasis given to the

“Mr Zog’s” component of the complex logo. I disagree for two reasons – I

do not consider isolating that feature is consistent with the earlier conclusion

that no reputation existed in any of those individual concepts; and I do not

consider it is a prominent feature of the logo.

[24] The Judge said these findings were enough to dispose of the appeal in favour

of Zoggs. But he went on to consider whether there was a sufficient reputation for

Sexwax, which he said was “finely balanced”.20

We do not need to traverse the

Judge’s reasoning. We observe only that the analysis contains implicit and explicit

references to the general buying public of New Zealand as the market the Judge was

using to test the finding of reputation and awareness of the Sexwax complex logo.

[25] The Judge concluded Zoggs had established that there was no likelihood of

confusion with the MR ZOGS SEX WAX mark if registration were allowed. This

was because the only SEX WAX mark with a “sufficient reputation” so as to invoke

s 17(1)(a) was quite different from the ZOGGS mark. As noted, the Judge would

also have allowed the appeal against the finding of a sufficient reputation in that

mark.21

Statutory framework

[26] Section 17 of the Act provides:

17 Absolute grounds for not registering trade mark: general

(1) The Commissioner must not register as a trade mark or part of a

trade mark any matter—

(a) the use of which would be likely to deceive or cause

confusion; …

20

At [63]–[67]. 21

At [68].

[27] This is a public interest provision, designed to protect members of the general

buying public in New Zealand as opposed to the commercial interests of

competitors.22

There is no dispute that the key question to be determined under s 17

is identified in Smith Hayden & Co Ltd’s Application, which concerned the

equivalent UK provisions.23

This Court, applying Smith Hayden in Pioneer Hi-Bred

Corn Company v Hy-line Chicks Pty Ltd, held the question to be answered under

s 17 is:24

Having regard to the reputation acquired by [the MR ZOGS SEX WAX

mark], is the Court satisfied that the mark applied for [the ZOGGS mark], if

used in a normal and fair manner … will not be reasonably likely to cause

deception and confusion amongst a substantial number of persons?

[28] Where, as here, the goods are available to the general public for purchase and

consumption or domestic use, the fact-finder is entitled to take into account his or

her own experience and reaction as a member of the public. As these are not

specialist products, there is no need to rely on evidence from persons engaged in that

trade or industry.25

[29] Where a likelihood of deception or confusion is alleged, the following

propositions discussed by this Court in Pioneer need to be considered:26

(5) In considering the likelihood of deception or confusion all the

surrounding circumstances have to be taken into consideration,

including the circumstances in which the applicant’s mark may be

used, the market in which his goods may be bought and sold and the

character of those involved in that market.

(6) But, it is the use of the mark in New Zealand that has to be

considered and association of a similar mark with another trader in

overseas countries or market is irrelevant, except in so far as it bears

on the likelihood of deception or confusion in the New Zealand

market.

(7) It is in relation to commercial dealings with goods that the question

of deception or confusion has to be considered, and the persons

whose states of mind are material are the prospective or potential

22

Pioneer Hi-Bred CA, above n 9, at 63. 23

Smith Hayden & Co Ltd’s Application (1945) 63 RPC 97 (HC) at 101. 24

Pioneer Hi-Bred CA, above n 9, at 57. 25

Pioneer Hi-Bred CA, above n 9, at 62, applying proposition 10 in the list therein. Indeed, in

many cases, such evidence has been considered to be irrelevant: see Lees & Son (London) Ltd’s

Application (1955) 72 RPC 75 (HC); In Re Edward Hack’s Application (1940) 58 RPC 91 (HC)

at 100; and Smith Hayden & Co Ltd’s Application, above n 23. 26

Pioneer Hi-Bred CA, above n 9, at 61–62 (footnote added).

purchasers of goods of the kind to which the applicant may apply his

mark and others involved in the purchase transactions.

…

(9) 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.27

…

[30] With respect to proposition nine above, the varying expressions emphasise it

is not always necessary that a large number of people are likely to be deceived or

confused. The requirement that a “substantial number” of individuals be at risk of

deception or confusion is a judicial gloss, establishing that the s 17 threshold

involves the exercise of judgment having regard to the commercial setting,

comprising those who will be exposed to the applicant’s mark and those who know

of the reputation the opponent’s goods enjoy.28

We return to this point below.

Issue one: the MR ZOGS SEX WAX mark

Submissions of the parties

[31] Sexwax contends the Judge was wrong to disregard the MR ZOGS element

as being part of the identity of the trade mark because there was no independent

reputation established for that part of the complex mark. Sexwax submits the

MR ZOGS feature of its trade mark is unusual and distinctive. Although it does not

constitute the entire identity of the trade mark, it is an integral, significant and

memorable component of the complex mark. Moreover, the mark itself is at the

“fancy end of the continuum” of trade marks.

27

Jellinek’s Application (1946) 63 RPC 59 (HC); Smith Hayden & Co Ltd’s Application, above

n 23; New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV [1964] NZLR

115 (CA); and Polaroid Corporation v Hannaford & Burton Ltd [1975] 1 NZLR 566 (CA). 28

A view emphasised by Cooke J in the Supreme Court in Pioneer Hi-Bred Corn Co v Hy-Line

Chicks Pty Ltd [1975] 2 NZLR 422 (SC) at 429 [Pioneer Hi-Bred SC].

[32] Sexwax also submits that the reputation of the trade mark is not crystallised

in the fixed visual form. Rather, it is the awareness, knowledge or cognisance of the

mark that constitutes the reputation acquired by it. That is informed not only by the

visual representation but also by the way it is used and referred to. The distinctive

elements, “Mr ZOGS” and “SEX WAX”, are used interchangeably, with the

MR ZOGS element being just as well-known as the brand SEX WAX. This is

evidenced by the various public and retail references to the product, which always

includes the term MR ZOGS. Further, MR ZOGS is part of the house brand or

indication of the origin of the wax itself.29

[33] For Zoggs, Mr Upton QC emphasises the Assistant Commissioner’s finding

that the opponent had a reputation only in the logo and not in any of the other marks

listed.30

While Sexwax may assert its reputation in this complex logo, there is no

separate or independent reputation in any other component of the SEX WAX device

– such as in MR ZOGS alone. Counsel submits almost all references to the

reputation in MR ZOGS itself are overseas references. Thus Sexwax cannot now

assert an independent reputation in MR ZOGS, arguing that whether or not

MR ZOGS is an integral part of the SEX WAX device is irrelevant for the purposes

of reputation. Sexwax either has a reputation in the SEX WAX device as a whole, or

it does not.

[34] In the alternative, Zoggs submits that, if this Court disagrees with the

approach of the High Court and considers that all of the appellant’s mark can be

reassessed, there are further reasons why the appellant has no reputation in the

elements MR ZOG and ZOGS:

(a) The SEX WAX mark consists of numerous devices and words in

telegraphic format. It also includes non-word elements such as

circles, lines and stars. Of all these elements, the predominant feature

is SEX WAX. This is due to the central nature of the words within the

round logo, the double-lined border around the words, the words

29

Sexwax points to an example being the reference to HOLDEN as the manufacturer or house

brand and BARINA as the car brand referred to in Mainland Products Ltd v Bonlac Foods (NZ)

Ltd [1998] 3 NZLR 341 (CA) at 349. 30

Assistant Commissioner’s decision, above n 1, at [34].

SEX WAX being in the largest font, and also the provocative nature of

the words themselves. In its colour format, the words SEX WAX are

the standout feature of the device.

(b) It is disingenuous for Sexwax to refer to the SEX WAX device as the

MR ZOGS or ZOGS logo. In all of the examples of alleged use,

SEX WAX is the crucial, central component of the appellant’s brand.

(c) By contrast, the use of MR ZOGS or ZOGS absent the SEX WAX

logo is very limited and does not establish an independent reputation

in those marks. The reality is that the brand created is SEX WAX.

Our analysis

[35] Sexwax does not seek to establish an independent reputation in the words

MR ZOGS. Rather, it seeks to challenge the Judge’s reliance on the fact that

MR ZOGS and SEX WAX are distinct and severable elements in the MR ZOGS

SEX WAX mark, emphasising instead the overall features of the MR ZOGS

SEX WAX logo itself.

[36] We agree with the Assistant Commissioner that MR ZOGS is a central and

essential component of that logo.31

It is clearly featured on the trade mark and is a

significant part of the reputation generated from the mark itself. It is true the

Assistant Commissioner made no attempt to distil a stand-alone reputation from the

mark MR ZOGS itself. That was because the key question was whether Zoggs could

establish the absence of a reasonable likelihood of deception or confusion on the

basis of the whole of the complex SEX WAX mark, including the MR ZOGS

element. A corollary of that question was an assessment of the trade mark in its

totality.

[37] We consider it artificial for Zoggs to attempt to sever the SEX WAX element

from the other components of the logo. As was noted by North P in New Zealand

Breweries Ltd:32

31

Assistant Commissioner’s decision, above n 1, at [45.1]. 32

New Zealand Breweries Ltd, above n 27, at 134.

… [W]hile it is true that it is necessary to have regard to “the totality” of the

proposed trade mark, yet often enough the real risk of confusion may lie in

some common feature in the two labels which is liable to linger in the minds

of persons requiring a particular kind of goods. Sometimes indeed it will be

a word appearing in the labels which either looks or sounds the same.

[38] Deception or confusion may arise by the use, not just of the whole of a mark

or logo, but by using one or more of its essential features.33

Moreover, identification

of an essential feature will depend partly on the Court or Tribunal’s own judgment

and partly on the nature of the available evidence, particularly with regard to the

goods in question. As Lord Radcliffe elaborated:34

A trade mark is undoubtedly a visual device; but it is well established law

that the ascertainment of an essential feature is not to be by ocular test alone.

Since words can form part, or indeed the whole, of a mark, it is impossible to

exclude consideration of the sound or significance of those words. … It is

more useful to observe that in most persons the eye is not an accurate

recorder of visual detail and that marks are remembered rather by general

impressions or by some significant detail than by any photographic

recollection of the whole.

[39] This was the approach the Assistant Commissioner adopted in her analysis,

comparing the whole of the MR ZOGS SEX WAX device, including the MR ZOGS

portion in that logo. The Judge did not do so. We consider he erred in not doing so.

[40] It is often the case that products carry marks with elements with a different

significance. The example of the Holden Barina is a case in point.35

Other examples

exist in relation to similar “house brands”: such as DOC MARTENS shoes, or

CONVERSE shoes. Each product has a specific name or brand attached to it, in

addition to the house brand. The reputation established in a mark should not be

assessed by reference only to the specific shoe type in question, to the exclusion of

the primary brand of DOC MARTENS or CONVERSE. To do so would view the

mark, and product to which it attached, narrowly and somewhat artificially.

[41] Assessing the MR ZOGS SEX WAX mark in its entirety requires reference to

the MR ZOGS element inside the mark as one of its essential features. We are

satisfied the MR ZOGS SEX WAX logo is recognised or remembered as a matter of

33

A proposition emphasised by Lord Radcliffe in relation to infringement of a trade mark in

De Cordova v Vick Chemical Co (1951) 68 RPC 103 (PC) at 105–106. 34

At 105–106. 35

As noted above at n 29.

general reputation by reference to the MR ZOGS element, not least because it

identifies the origin or source of the products concerned.

[42] Our own judgment and the available evidence support this conclusion.

Having regard to the totality of the complex mark, we now consider the next

question.

Issue two: reputation/awareness

Need for awareness of the opponent’s mark

[43] As noted, much of the argument before us focused on what, for the purpose

of analysis under s 17(1)(a), is the “relevant market”; and what constitutes

substantial awareness of the opponent’s mark in that market. This requires analysis

of the role market definition plays under s 17.

[44] Section 17 itself makes no reference to the concept of a “market”. Neither

does the section refer to products, goods or services. The part of the section dealing

with likelihood of deception or causing confusion is concerned, rather, with general

use of the trade mark, or any part thereof, for which registration is sought.

[45] The definition of “trade mark” in the Act explains what is meant by “use”.

Relevantly it provides:36

Trade mark—

(a) means any sign capable of—

(i) being represented graphically; and

(ii) distinguishing the goods or services of one person from

those of another person; …

[46] Section 17(1)(a) prohibits the Commissioner from registering an applicant’s

mark, the use of which would be likely to deceive or cause confusion by leading

people to wonder whether goods or services bearing the mark are those of the

36

Trade Marks Act 2002, s 5(1).

opponent.37

By focusing on use of the applicant’s mark, the legislation inquires

whether those exposed to the applicant’s goods are likely to be confused. It is

enough if members of the public are caused to wonder whether goods bearing the

applicant’s mark are related or connected in trade to the opponent’s goods.38

[47] Cases historically applying s 17(1)(a) and its predecessor under the Trade

Marks Act 1953 (and the earlier UK cases applying the legislation, on which the

1953 Act was modelled), do not require the individuals who may become deceived

or confused to be actual purchasers of products bearing the marks in question. Nor

do they require that use of the applicant’s mark must infringe a right held by the

registered proprietor of an opposing mark or cause loss to that person. Rather

s 17(1)(a) protects the public from the risk that similar marks or devices will deceive

or cause confusion.

The correct approach to s 17(1)(a)

[48] To shed light on how this section should be approached, we make the

following comments. 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.39

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.40

In other cases, a mark may be applied to

goods sold very broadly or applied to numerous different goods under a brand’s

37

Pioneer Hi-Bred CA, above n 9, at 62. 38

We discuss below at [48]–[65] the question of the number of persons required to make up the

class of persons likely to be deceived or confused, as discussed in proposition nine in Pioneer

Hi-Bred CA, set out at [29] above. 39

See, for example Pioneer Hi-Bred SC, above n 28, at 429 and 434 per Cooke J; see also

Re Transfermatic Trade Mark [1966] RPC 568 (HC) at 578. 40

Pioneer Hi-Bred CA, above n 9, at 60 per Richardson J.

penumbra.41

This is the initial inquiry into the “circumstances of trade”, against the

background of which the marks are regarded as notionally in use.42

[49] Next, the Commissioner assesses the likelihood of deception and confusion.

This is a fact-specific inquiry. It is a matter of assessing “practical business

probabilities”, having regard to all the surrounding circumstances and the degree of

similarity of the marks.43

Judicial decisions have established a materiality threshold

for confusion or deception, requiring the applicant to prove that registration will not

cause deception or confusion amongst a “substantial number of persons”.44

As

courts in subsequent cases have noted, however, the terminology used in the

judgments varies with the setting, and is ultimately a question of significance of the

numbers in relation to the awareness of the marks in question.45

[50] This relationship, between reputation and the substantial number of persons

who may be at risk of deception or confusion, can be illustrated by examples.

Re Transfermatic Trade Mark concerned assembly-line rotation and transfer devices

for machinery, sold to large-scale motor vehicle manufacturers.46

Buckley J

emphasised that the question for him was whether confusion might exist among “a

sufficient number” of those persons who might purchase such highly-specialised

machinery.47

The evidence showed the reputation of the opponent mark extended to

most of the major motor manufacturers in that industry.48

Even among the few

entities identified, the risk of deception created was enough to prevent registration.

[51] In Re Edward Hack’s Application the registered proprietor of the mark “Black

Magic” relating to chocolate successfully opposed the application of the mark

41

New Zealand Breweries Ltd v Heineken’s Bier Browerij Maatschappij NV, above n 27, for

example, concerned beer sold into the retail market to the public at large. The marks concerned

had broad recognition due to the widespread basis on which the products were sold: at 131.

Products featuring the brand name “MERCEDES” are an example of the latter category

mentioned above – the mark is applied to a wide variety of very diverse products and therefore

brand recognition is extensive. 42

Pioneer Hi-Bred CA, above n 9, at 63 per Richardson J, citing Gaines Animal Foods Ltd’s

Application (1951) 68 RPC 178 (HC) at 180. 43

Pioneer Hi-Bred CA, above n 9, at 76. 44

Smith Hayden & Co Ltd’s Application, above n 23, at 101. 45

Pioneer Hi-Bred SC, above n 28, at 429. 46

Re Transfermatic Trade Mark, above n 39, at 569. 47

At 576. In that case, in the United Kingdom market for the goods, the opponent to the

registration of the mark had sold only one such device; the applicant only six. 48

At 574–575.

“Black Magic” in respect of laxative products.49

The registered mark was said to

have become a “household word” in connection with chocolate products. A

sufficient reputation or cognisance of the registered mark was established. The

Court was satisfied that, even though the laxative and chocolate products would not

be sold at the same stores (and if they were so sold, these would be general stores),

and even though they were very different products, enough people would be caused

to wonder, upon seeing a laxative sold under the name Black Magic, whether it was

created by the opponent.50

[52] Another example is Lees & Son (London) Ltd’s Application.51

The registered

proprietor of the mark “LEESONA” successfully objected to the registration of an

identical word mark in respect of carpets, rugs and mats.52

The opponents

manufactured and sold textile-winding machines. The reputation of the opponent’s

mark in the field of textiles machinery was “very considerable”. The goods to which

these competing marks were to attach were dissimilar – heavy-duty textiles

manufacturing equipment, compared to the textiles products themselves.

Nevertheless, the Judge considered there was a “not inconsiderable part of the

population” whose daily work took them into the textile mills and factories where

there was machinery on which the mark concerned was displayed.53

Having seen the

machinery they would be familiar with that mark, and this would cause them to

wonder when seeing the applicant’s carpets, whether there was a trade connection

between the two.

[53] As already noted, Pioneer Hi-Bred Corn Co concerned the risk of confusion

among the very few members of the live poultry breeding industry. That was

considered sufficiently “substantial” by this Court to prevent the registration of a

competing mark.

[54] These authorities demonstrate that the risk of confusion is properly measured

by reference to those who may be exposed to the applicant’s goods and are aware of

49

Re Edward Hack’s Application, above n 25, at 94. 50

At 105–106. 51

Lees & Son (London) Ltd’s Application, above n 25. 52

At 79. 53

At 80.

the opponent’s mark. Absent exposure to goods bearing the applicant’s mark, there

will be no risk of confusion.

[55] Courts have occasionally reached for the concept of a market to assist when

inquiring whether a substantial number of persons are likely to be confused. Judges

identify awareness by pointing to a market, and attempting to place the potentially

confused persons within it. This approach was adopted in Pioneer Hi-Bred, first by

Cooke J in the Supreme Court, and then applied by Richardson J again in the Court

of Appeal. The opponent was a United States-based company with substantial sales

internationally, but none in New Zealand. An Australian-based company sought to

register a very similar mark in New Zealand. A central submission for the applicant

Australian company was that the US opponent could not point to a relevant

reputation, unless it had actually made sales in the New Zealand market. It was thus

sensible to examine what was occurring in the local market when deciding whether

the opponent had a relevant reputation there.

[56] Use of the concept of “the market” as the relevant frame of reference is,

however, context-specific. Establishing presence in the “local market” or the “New

Zealand” market was a necessary evidential hurdle for an internationally-based firm,

seeking to establish that New Zealand poultry-breeders knew of its goods.

[57] Notwithstanding the limited utility of the notion of the “market”, it has still

been employed in many subsequent cases in New Zealand.54

It may be a convenient

analytical tool through which to assess reputation and measure the risk of deception.

However, the legislation does not refer to or insist upon a market definition and the

exercise is not always required. It is most likely to assist where the goods of the

applicant and the opponent are identical or close substitutes, so as to clearly fall into

the same product markets. In other situations, a market reference may not be

necessary.

[58] This bears emphasis because the attempt to identify a single relevant market

encompassing all the goods with which the competing marks may be associated may

54

For example, NV Sumatra Tobacco Trading Co v NZ Milk Brands [2011] NZCA 264, [2011]

3 NZLR 206 (CA); NV Sumatra Tobacco Trading Co v British American Tobacco (Brands) Inc

[2010] NZCA 24.

lead decision-makers to underestimate either the reputation of the opponent or the

risk of deception or confusion. In seeking to register the mark in a number of

classes, applicants may wrongly require the opponent to establish a reputation in

every one of those classes – to demonstrate a reputation in the requisite “market”.

Further, the opponent could then be required to show a risk of deception amongst a

substantial number of persons in that market. In both cases the threshold is likely to

be high. This would allow the applicant, by choosing the nature and number of

items within the class, to dictate the market definition, necessarily excluding or

swamping the opponent’s goods and leading to registration of a mark that may

confuse a substantial number of those familiar with the opponent’s goods. This is an

incorrect application of s 17(1)(a) and would frustrate the public protection impetus

behind it.

[59] This analysis is supported by the cases discussed. For example, in Lees &

Son (London) Ltd and Re Edward Hack’s Application above, the competing marks

applied to significantly different goods which could not be fitted into a single

market. The Court’s inquiry was correctly framed by reference to the individuals

aware of the registered mark and exposed to the applicant’s goods. There was no

reference to a market – logically, no such common market would exist.

[60] Axiomatically the risk of confusion may be higher where the goods of the

applicant and the opponent are the same or similar.55

But s 17(1)(a) is not confined

to such cases. It is concerned with public confusion resulting from use of the

applicant’s mark, regardless of whether the goods are the same, similar, or entirely

different.

[61] In the present case, manifestly, surfboard wax and swimming goggles are not

substitutes or near-substitutes, although they might sometimes be sold through the

same outlets. Little is gained by trying to force them into a single market. A market

that included both surfboard wax and swimming goggles would need to be defined

so broadly as to include the entire New Zealand public.

55

There is a rebuttable presumption of an intention to use the mark applied for on all the goods

included in the application: Newnham v Table for Six (1996) Ltd (1998) 44 IPR 266 (HC) at

269.

[62] Although the range of goods sold under each of the competing marks before

us is not the same, there is some similarity. The evidence suggests they will often be

advertised to similar groups of people, through similar methods. They are sold in

similar large sport stores and other retail outlets. They relate to water sports and

water-related leisure activities. There is a connection in the use of the goods.

[63] Applying the approach described above, we are satisfied that the Assistant

Commissioner erred when, in purporting to apply proposition seven in Pioneer, she

described the relevant market as consisting of “the general purchasing public”. The

error comprises casting the relevant market so broadly to capture the different goods,

being the entire purchasing public of New Zealand. Even as a statement of the

market for the applicant’s goods, that is over-broad. The applicant sells swimming

apparel and other goods adapted for particular uses. Not everyone is a purchaser of

such goods.

[64] We consider the Judge too was in error when he adopted the Commissioner’s

finding, affirming this statement of the “relevant market”.56

This error was

compounded when the Judge referred to the next step as being “to assess if the

opponent has established an awareness of its mark in the relevant market”.57

Later in

the High Court judgment, there is further reference to whether the registration of

ZOGGS is “likely to cause confusion because of an awareness in the New Zealand

buying public of the complex logo”.58

Again, this is at odds with the methodology

we have suggested above. It also tends to skew the Judge’s analysis of the question

as to the opponent’s reputation, by framing the question so broadly.

[65] The correct focus is on the awareness of the opponent’s 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. We now turn to that question of reputation in this case.

56

High Court judgment, above n 2, at [48]. 57

At [49]. 58

At [61].

Submissions on reputation/awareness

[66] Sexwax contends that a reputation for its MR ZOGS SEX WAX mark can be

inferred from the existence of such reputation or awareness among:

(a) purchasers of surfboard wax;

(b) purchasers of t-shirts and other branded products of the applicant;

(c) purchasers of other products and browsers in outlets selling the

appellant’s products, due to counter displays, store signage and decals;

(d) people who have viewed the branding outside the retail outlets, on

t-shirts etc. worn by others, or stickers on cars;

(e) online viewers of the products for sale; and

(f) others who see the products on TradeMe, newspaper articles, and

passing references in motion picture and television including

spill-over reputation.

[67] Zoggs in response contends that Sexwax must prove its reputation among

ordinary consumers in a broad market with a substantial population and has wrongly

analysed its reputation from the starting point of the specialist surfing market.

Counsel for Zoggs contends, regardless, consumers in a specialist market are more

discerning and less prone to confusion, so a specialist market framework does not

assist Sexwax.

[68] Zoggs further submits the evidence of the reputation of the MR ZOGS

SEX WAX mark is exaggerated. There are few examples of advertising in this

country and the evidence offered by Sexwax is limited to the surfing market. This is

much more limited than the market for ordinary swimwear and clothing. Zoggs

points to the fact that all the deponents for Sexwax are active in the surfing industry,

that the evidence relates to surfboard wax and surf wear goods, and that the primary

avenues of sales, advertising and promotion are all within the surfing industry.

Our analysis

[69] Again, the submissions of the parties are largely couched in terms of the

“market”, as was the framework adopted by the Judge and the Commissioner below.

We consider this to be in error in the present case. We analyse the parties’ positions

rather in terms of the method we set out above.

[70] Further, we emphasise 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.59

[71] The Judge’s reasoning as to the inadequacy of the reputation of the

MR ZOGS SEX WAX mark relied on the following factors:

(a) insufficient evidence as to spill-over reputation from overseas (limited

isolated references in the magazines; movies that are outdated; TV

show references that are sporadic and viewing figures not provided);

(b) the absence of actual advertising in New Zealand because of the

iconic nature of the product in its specialised market;

(c) insufficient awareness in this specialised surfing community to meet

the threshold of reputation in the general New Zealand buying public

and there is no evidence as to the size of this specialised market; and

(d) insufficient reputation proportionate to the swim-wear buying

population of New Zealand generally.

59

As Pioneer Hi-Bred CA, above n 9, citing Gaines Animal Foods Ltd’s Application, above n 42,

at 180.

[72] Zoggs’ focus on the empirical evidence as to viewing numbers, the reach of

various movies and circulation or saturation of advertising of the particular product

is misplaced. This Court in Pioneer Hi-Bred emphasised “awareness” and

“cognisance” are used in a broader sense. There, it was sufficient for this Court that

a number of poultry keepers, and a grain and seed merchant knew of the opponent’s

business at the date of application, and inferences could be drawn from analysis of

the general standing of the opponent in international commerce and advertisements

circulated in New Zealand industry publications. There is no necessary requirement

that there be extensive advertising in New Zealand, targeted to the New Zealand

market. We noted earlier, at [50]–[52], other cases in which tangible risk of

confusion was sufficient, absent empirical or actual evidence of confusion.

[73] The facts before us support the existence of a reputation in New Zealand for

the MR ZOGS SEX WAX mark, particularly in surf and beach wear and accessories.

We refer in particular to the sale of between 20,000 and 30,000 units of surfboard

wax each year from more than 180 retail outlets. These comprise a wide range of

surf and sport outlets, including R&R Sports and Stirling Sports stores. Products

sold also include caps and T-shirts as well as rash-guards, swimwear and wax combs.

Promotional activities involve the use of stickers and merchandising such as

keyrings. We are also satisfied that there is likely to be some spill-over reputation by

virtue of sponsorship, including the international nature of surfing and through

media references such as in movies and television. We consider the MR ZOGS

surfboard wax is recognised generally as a popular and quality surfboard deck

coating.

[74] This reputation exists in New Zealand among those exposed to the mark,

including purchasers of the surfboard wax, purchasers of the T-shirts and other

Sexwax branded products and purchasers of other products or those browsing in

outlets selling Sexwax products. These would include counter displays, store

signage and decals. Moreover, there is evidence of people who view the branding

outside of retail outlets, such as on T-shirts worn by others and stickers on cars.

Other sources generating awareness of the mark include online viewers of products

for sale on TradeMe, as well as readers of newspaper articles, and the above-noted

references in motion picture and television programmes.

[75] Parts of the High Court judgment appear to accept that there is a relevant

reputation. For example, the Judge stated “[t]here can be no doubt that Mr Zogs

Sex Wax and the accompanying logo has a reputation in the surfing market in New

Zealand”.60

Later in the judgment the Judge found that the surf wax with the

MR ZOGS SEXWAX logo “basically sells itself”. This is because “it is of

undoubted quality, and is possibly even iconic, within the very specialised market in

which it exists”.61

[76] The Assistant Commissioner concluded that Sexwax had established that

there is likely to have been an awareness of the MR ZOGS SEX WAX mark as at

December 2009, for the reasons referred to at [16] above. We agree with those

findings.

[77] We conclude that Sexwax has established a reputation for the MR ZOGS

SEX WAX mark in New Zealand. When the Judge said that “none of this justifies a

conclusion that the 2009 general buying public of New Zealand would have

awareness of the logo”, he was answering the wrong question. There was no

necessity for him to determine that the reputation of the MR ZOGS SEX WAX mark

existed among a substantial number of the New Zealand buying public. Rather, the

question was whether, having regard to the reputation attaching to Sexwax’s mark,

and in light of the potential products bearing the ZOGGS mark being advertised and

sold in the classes for which it applied, there is a sufficient number of individuals

aware of the opponent (Sexwax’s) mark, and exposed to the applicant’s (Zogg’s)

mark, to engage s 17(1)(a). We are satisfied there is.

[78] We now turn to the final question as to the likelihood of deception or

confusion of those individuals.

Issue three: likelihood of deception or confusion?

Submissions of the parties

[79] Sexwax contends that, because the reputation of the MR ZOGS SEX WAX

60

At [3]. 61

At [65].

logo is established amongst people who visit and purchase goods from surf and sport

shops, there is a coincidence between the people who know of the appellant’s trade

mark and those who may be exposed to some or all of the respondent’s goods. The

likelihood of confusion is to be assessed in relation to any of the goods in ZOGGS’s

application, on a fair or notional use basis. This includes clothing, footwear,

headgear, swimwear, swim caps, warm-up suits, t-shirts, jackets, beachwear, leisure

wear, ski wear, sports clothing and wet suits. Sexwax submits it is likely that people

who know or are aware of the appellant’s trade mark will purchase beachwear,

swimwear, wetsuits, t-shirts, footwear such as sandals and shoes, headgear such as

caps or sunhats, clothing and snowboard wax.

[80] Counsel for Zoggs emphasises the Assistant Commissioner’s finding that the

SEX WAX and ZOGGS marks were visually and aurally dissimilar. Thus the marks

to be compared are not MR ZOGS and ZOGGS, but rather the SEX WAX device and

ZOGGS. The marks are not conceptually similar, as the Assistant Commissioner

held. They are conceptually dissimilar. Thus counsel submits there is no shared idea

in the two marks because the SEX WAX element of the device is dominant,

MR ZOGS is a reference to Mr Herzog, which is a nickname, as opposed to

ZOGGS, which is the name itself and ZOGGS was chosen due to its association with

the word “goggles” or “goggs”.

[81] Counsel submits that the fair and notional use of the ZOGGS brand will not

result in a reasonable likelihood of deception or confusion, because:

(a) Zoggs has a pre-existing reputation in the New Zealand market for

swimming-related goods, unlike other earlier cases. It is already

known by this name;

(b) any confusion which is likely to arise would already have arisen and

could have been produced in evidence. Zoggs has actively used its

ZOGGS mark for goggles and swimming-related goods for years, and

for subsequent various other goods. There is no evidence of actual

deception or confusion by consumers or prospective purchasers; and

(c) the potential for confusion amongst consumers of Sexwax products is

not sufficient to discharge the test. It must be “significant” amongst

the individuals in question, who constitute a “large and

non-specialist” portion of the entire purchasing public of New

Zealand.

[82] Accordingly counsel submits the ZOGGS and the SEX WAX device cannot

be associated with the same idea, given the lack of shared origin or real-world

meaning of their marks.

Our analysis

[83] As already noted, in the High Court the Judge approached the question of

likelihood of deception or confusion with regard to the purchasing public of

New Zealand generally. He determined this question by assessing the surfboard

owning or surfing community as a proportion of New Zealand’s total population, and

asking whether that amounted to sufficient awareness to constitute relevant

“reputation”.

[84] We consider this approach to be erroneous. It would significantly reduce the

utility of s 17(1) as a public interest protection measure. There are few products

outside very large international brands that could occupy a position in terms of

awareness that, proportional to the entire population of a country, constitutes

sufficient awareness in this manner. That arguably rules out the protection from

deception or confusion afforded by s 17(1)(a) for any niche brand, or any niche area

of the market that cannot command a requisite popularity or size. On that basis,

some brands may never reach that level of awareness.

[85] For the purposes of assessment it is necessary to take into account all the

likely circumstances of trade.62

We agree with Sexwax’s submission, that the

possibility of confusion could extend not only to the sale of Zoggs products from

surf shops, but also to people being aware of its mark, having encountered

Zoggs-branded products in other retail outlets, particularly sports and beachwear

62

Mainland Products Ltd v Bonlac Foods (NZ) Ltd, above n 29, at 348.

stores. Given the similarities between the MR ZOGS element and the ZOGGS mark,

there is a clear potential connection between the brands. Any retention of the

SEX WAX element in the purchaser’s mind would not be enough to cancel out the

ZOGS connection.

[86] We agree with the findings of the Assistant Commissioner on the issue of

likelihood of deception and confusion set out at [19] above. Conceptual similarity

does not need to evince a shared origin of the brands. Rather, the use of the

MR ZOGS element in the complex mark and ZOGGS is enough to tie the brands

together and spark a connection in the minds of consumers.

[87] There is an overlap or confluence in products sold in surf shops, sports shops,

and surf retail outlets selling beachwear. Given the awareness of the MR ZOGS

SEX WAX mark by the individuals concerned, we are satisfied there is a reasonable

likelihood those individuals will be confused or deceived by the registration of the

ZOGGS mark for goods falling within that intersection. Thus, individuals would be

caused to wonder whether there is some connection between the two marks at issue.

Zoggs has accordingly not established that there is no reasonable likelihood that the

ZOGGS mark would cause deception or confusion.

Relief

[88] Following the hearing counsel for Zoggs filed a memorandum discussing the

particular categories of class 25 for which this Court might consider registration of

the ZOGGS mark. The memorandum repeated the full list in the specification set

out at [14] above. Zoggs referred to the power in s 27(5) of the Act by which the

Commissioner (and this Court on appeal) may grant registration “subject to

conditions or limitations”.

[89] We reject that course of action. We consider that the findings we have made

on the three issues require the appeal to be allowed. This is particularly so given our

concerns at the approach to applying s 17(1)(a) taken by both the Assistant

Commissioner and the Judge.

[90] If Zoggs wishes to seek registration of the ZOGGS mark for particular goods

in certain categories in class 25, it should do so by filing a fresh application. That

application can then be assessed by the specialist Tribunal in the light of the

evidence filed in support and an analysis of the legal issues applying the principles

set out in this judgment.

Result

[91] The appeal is allowed. The direction given in the High Court that Zoggs was

entitled to register the ZOGGS mark is quashed. The determination of the Assistant

Commissioner that Sexwax’s opposition based on s 17(1) of the Act succeeds is

reinstated.

[92] The respondent must pay the appellant costs on a standard appeal on a band A

basis and usual disbursements.

[93] In the absence of agreement, any question of costs in the High Court is to be

determined by that Court.

Solicitors: A J Park Law, Wellington for Appellant Baldwins Law Limited, Wellington for Respondent