IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2009-485-2594

UNDER	the Trade Marks Act 2002

BETWEEN	HIGGINS COATINGS PTY LIMITED Appellant

AND	HIGGINS GROUP HOLDINGS LIMITED Respondent

Hearing:	3 May 2010

Counsel:	B Brown QC and M Yates for Appellant
M T Lennard for Respondent

Judgment:	30 June 2010

JUDGMENT OF SIMON FRANCE J

Introduction

[1]       Higgins Coatings Pty Limited appeals the refusal to register two proposed trademarks, namely HIGGINS COATINGS, and

[2]       Opposition to the registration came from Higgins Group Holdings Limited. It is the parent company for Higgins Contractors Limited, Higgins Concrete Limited and Higgins Aggregates Limited.  They own the trademarks HIGGINS, and

[3]       The primary opposition was based on s 17(1)(a) of the Trademarks Act 2002. This section prohibits registration if the use of the proposed trademark

would be likely to deceive or cause confusion.

HIGGINS COATINGS PTY LIMITED V HIGGINS GROUP HOLDINGS LIMITED HC WN CIV 2009-485-
2594  30 June 2010

[4]       Higgins Group is reliance on this section reflects the fact that whilst it has only very recently acquired the trademarks, it has operated under the mark of HIGGINS  for  more  than  50  years.    It  is  one  of  New Zealand’s  biggest  road contractors, and so its vehicles are prominently in the public’s eye whenever road works are being done.  That is not to say its work is limited to roadworks – it has a ready mix concrete business, lays driveways and offers services in the subdivision area.  This latter work can involve the initial earthworks right through drainage and roading to effectively presenting an area ready for building construction.

[5]       Higgins Coatings Pty Limited is a painting company.   It has operated in

Australia for many years.  Its trademark application was limited to:

painting; painting of any surface, interior or exterior; painting maintenance and repair; programmed painting services; painting residential and commercial premises; painting industrial installations, infrastructure, submarines, ships, motor vehicles, or aircraft.

Likely to deceive or cause confusion?

(a)       Decision under appeal

[6]       The Assistant Commissioner addressed the standard questions asked in this area.  The primary market for the appellant’s work was found to be commercial.  The Assistant Commissioner described it as:

commercial, construction, and various industry clients, and other organisations (for example in the public sector) whose buildings, infrastructure, installation, constructions or ships ... require painting services for their interior or exterior surfaces.

[7]       A secondary market were the owners of residential properties.

[8]       The Assistant Commissioner found that Higgins Group Holdings Limited, through its marks, are likely to have been well known in the relevant market.  This conclusion  was  based  on  the  size  of  the  Higgins  Construction  enterprise,  its longevity, and its advertisement/sponsorship profile.  The sponsorship profile came from the Manawatu rugby team, and from the common description of a particular

corner of the Manfield motor racing circuit as “Higgins corner”, a label developed because of the prominence of Higgins advertising at that point.  It was also noted the Higgins brand was high profile because the nature of its work placed it in the public eye.

[9]       The  next  step  was  a  comparison  of  the  marks.     Here  the  Assistant Commissioner concluded that the dominant theme of all the marks was the family name Higgins.  This meant that the addition, for example, of “COATINGS” as in the present application would have little impact as a point of distinction.  Visually, the style of HIGGINS and HIGGINS COATINGS was obviously the same.  As for the logos, the Assistant Commissioner considered that despite the obvious differences in style, the name would dominate regardless of the different appearances.

[10]     A crucial area, at least for the appeal, is the issue of the degree of similarity in the goods or services offered.  Not surprisingly these were held to be different, but the Assistant Commissioner spoke of them being “complementary”.  This possibility arose because Higgins Coatings might paint something that Higgins Group had been involved in, such as a bridge.  It was concluded:

the use of the relevant marks by [Higgins Coatings] in relation to complementary  painting  services  would  be  perceived  by  a  substantial number of persons in the relevant market(s) as having a connection in the course of trade with the opponent (through some form of endorsement, a licensing agreement, or even a joint venture).

[11]     The Assistant Commissioner similarly noted Higgins Group might provide the concrete for a commercial building or installation which Higgins Coatings would then paint.

[12]     Finally the  Assistant  Commissioner  considered  the  evidence  provided  by Higgins Group Holdings Limited of several instances of actual confusion.   This involved calls from members of the public seeking Higgins Coatings, invoices from hire centres charged to Higgins but in relation to Higgins Coatings work, a complaint about poor driving by a person wrongly thought to be driving a Higgins Group van, and persons approaching Higgins Construction for work in response to job advertisements placed by Higgins Coatings.

[13]     Weighing these factors, the Assistant Commissioner concluded a substantial number of persons in the relevant markets will be caused to wonder if there is a connection in trade, and so rejected the application.

Decision on likely to confuse

[14]     I prefer to address counsel’s submissions within the context of my decision rather than separately summarise them.  I begin by observing the case does seem to illustrate the dangers that can arise in allowing registration of a trademark for what is a not uncommon family name.  HIGGINS has very little to distinguish it, although it was  obviously  considered  to  be  sufficiently  distinctive  at  the  time  that  the Higgins Group obtained its marks.  Once registered, and accepting as the Assistant Commissioner did the dominance of the concept of the name, it is difficult to see how a new application will avoid its clutches.  Of course one can always imagine retail areas so far removed from construction and roading that an applicant could succeed, but the potential ambit of the monopoly in a common surname is great.

[15]     This observation leads to the primary challenge advanced by Mr Brown QC. In his submission, when the starting point is a mark that involves only a common surname it is necessary to be more aggressive in analysing the ambit of the goods and services meriting protection.  What has happened here, wrongly he submits, is that a non-distinctive surname mark – Higgins – has been accorded a very wide area of coverage by virtue a new concept of “complementary” services.  Put together the obstacles presented to any subsequent applicant become impossible to overcome.  A passage  cited  by Mr Brown  from  a  judgment  of  Hill J  in  the  Federal  Court  of
Australia usefully captures the point:

Just  as  the  distinction  between  descriptive  and  fancy  names  is  not  a distinction of law so too it is wrong to see the distinction in black and white terms.  The reality is that there is a continuum with at the extremes purely descriptive names at the one end, completely invented names at the other and in between, names that contain ordinary English words that are in some way or other at least partly descriptive.  The further along the continuum towards the fancy name one goes, the easier it will be for a plaintiff to establish that the words used are descriptive of the plaintiff’s business.  The closer along the continuum one moves towards a merely descriptive name the more a

plaintiff will need to show that the name has obtained a secondary meaning, equating it with the products of the plaintiff (if the name admits of this – a purely descriptive name probably will not) and the easier it will be to see a small difference in names as adequate to avoid confusion.

[16]     I am in broad agreement with Mr Brown’s submission.  Higgins Coatings and Higgins Group Holdings Ltd (through its various entities) do not do the same work, nor in any way offer the same services.  It is true they might occasionally work on the same building, possibly but less likely at the same time, and occasionally Higgins Coatings could be painting a house on a subdivision when Higgins Construction was still working there.  But these are still occasions of providing very different services to the same site.

[17]     In my view a “complementary” service is not sufficient, of itself, to create a real risk of confusion.  Mr Brown submitted that the idea of a complementary service is novel, and certainly no other case was cited to me where it had been recognised. Whether or not it is novel, I consider it is too tenuous here.  In policy terms it is a concept  that  broadens  the  scope  of  the  Higgins  monopoly too  much.    Further, regardless of those policy concerns, I consider the fact that Higgins Coatings only offers painting services, and Higgins Group never does, must be given considerable weight.

[18]     Mr Leonard emphasised, fairly, that s 17(1)(a) does not require there to be similar goods.  It is but a factor and so it is appropriate to consider as a whole the risk of confusion.

[19]     The first and obvious factor is that there has been confusion – from trade suppliers, from members of the public inquiring, and from job seekers.  The evidence filed by Higgins Group legitimately makes a point, but I am reluctant to overweight it.    Certainly it  is  proof  that  some  confusion  will  happen,  but  it  falls  short  of deterring me from concluding that Higgins Coatings has discharged its onus.  Some of the errors are repeated seemingly by the one person.  For example, the Hirepool invoices all record that the same person entering the same wrong account number. That he did so several times does not mean other than that it is the same mistake repeated until fixed.

[20]     Some confusion is inevitable if one accords trademark status to a surname, and as found by the Assistant Commissioner, HIGGINS has established a degree of prominence over the years.  However, the primary market is those who have need for commercial painting services.  These are not low cost decisions, and a degree of due diligence is inevitable.

[21]     I have some concerns that the Assistant Commissioner’s assessment of a potential association in trade by way of “endorsement, a licensing arrangement or even a joint venture” is too speculative.   The only evidence of joint ventures by Higgins Group relates to large scale projects – for example, a joint venture with a bridge building company as part of building an expressway.  Endorsement is really no more than saying people may suspect a link.  I have not overlooked that “cause to wonder” is an applicable test, but nevertheless consider that it is not likely that a substantial part of the relevant market will be confused.

[22]     I disagree with the Assistant Commissioner, and do not accept Mr Lennard’s submission in support of her decision, primarily because  I do not consider that painting is really a complementary service to the work that Higgins Construction, Higgins Concrete and Higgins Aggregates do.  I would give much more prominence to the fact that they provide different services, and in policy terms I am hesitant to see  a  mark  which  is  solely  a  common  family  name  be  accorded  too  broad  a penumbra.  The evidence of confusion that has been tendered certainly establishes some confusion will be created, but it is not of an extent or nature that suggests it meets the test of a substantial portion of the relevant market.

[23]     The parties were agreed that if I favoured the appellant’s case on s 17(1)(a), the respondent could not succeed on its cross-appeal based on claims under the Fair Trading Act and passing off.  They therefore are dismissed without further analysis.

Other challenges

(a)       Section 25(1)(c) of the Act

[24]     The Assistant Commissioner held that the opponent, Higgins Group, had also successfully made out this challenge.   I have some reservations as to whether the opponent’s  reputation  in  its  mark  meets  the  necessary  level  for  this  section. However, since under s 17(1)(a) I have rejected the likelihood of confusion it follows I would also reject a claim under this section.

(b)       Section 18(1)(b)

[25]     This is a cross-appeal by Higgins Group against the decision of the Assistant Commissioner  that  the  marks  have  sufficient  distinctiveness.    Section 18(1)(b) prohibits registration of a mark that has “no distinctive character”.

[26]     When writing the judgment this aspect of the case troubled me sufficiently to request further submissions, which have now been received.   Those submissions raise preliminary matters which I need to first address.

[27]     On behalf of Higgins Coatings, Mr Brown queries on two fronts the capacity of the cross-appellant to rely on s 18(1)(b).  The first challenge is a pleadings point. The notice of cross-appeal stated:

The Assistant Commissioner (para 59) erred in fact and/or law in finding that the relevant marks are inherently distinctive and registration of the trade mark would thus not contravene section 18(1)(b) of the Act, because the relevant marks are not capable of distinguishing the appellant’s services as they   will   always   be   confusingly   associated   or   connected   with   the respondent’s services.

[28]     It can be seen that the focus of the appeal point is on the similarity between the marks of the two parties, and capacity of the applicant’s marks to distinguish. Mr Brown submits, and I agree, that this is a point to be made under other provisions such as s 17.   It is a repetition of the confusion argument addressed earlier in this judgment.

[29]     The  decision  under  appeal  does  not  assist  in  terms  of  where  the  cross- appellant might have focussed the appeal.  The decision records the applicable test and then immediately thereafter the Assistant Commissioner concludes:

… I consider that each of the relevant marks, when considered as a whole, has qualities that mark it out as distinctive.  Accordingly I find that neither of the relevant marks is caught by s 18(1)(b).

[30]     Mr Brown  rightly  discerned  that  the  Court’s  interest  in  seeking  further submissions was on the inherent distinctiveness of the marks.  Mr Brown submits, however, that since the inherent distinctiveness was not the cross-appellant’s focus, it was not therefore a topic that should be entered into.

[31]     The Minute I issued inviting further submissions did not specify any focus. The parties agreed on a sequential approach to filing.  The cross-appellant went first, and took, as discussed, a somewhat comparative focus, assessing the distinctiveness of the proposed marks against its own existing trademark.  However, it did squarely identify a claim that the use of a common surname lacks distinctiveness.  I do not consider the Court can be limited by the particular focus of the cross-appellant’s objection.  Both at the initial hearing and on appeal a challenge based on s 18(1)(b) is advanced, and the Court must address that.  In my view assessment according to the applicable tests must be regarded as always being in issue once the section is specifically appealed.  Further, my invitation to file further submissions provided an adequate opportunity to be heard.   I intend therefore, to determine the s 18(1)(b) challenge in light of the correct tests.

[32]     Second, Mr Brown made what I would loosely term an estoppel objection.  It is said that Higgins Group, having obtained trademarks in HIGGINS and in the stylised logo form of the word, cannot object on the basis of lack of distinctiveness to the applicant’s very similar marks.   I do not accept the point.   I agree that a decision that the present applications fall foul of s 18(1)(b) would inevitably say something about the Higgins Group trademarks, but sobeit.   Whether or not Higgins Group  rightly  obtained  trademarks  cannot  mean  that  Higgings  Coatings  should benefit from the same error, if there be one.  Again, therefore, I consider the correct approach is to proceed to determine the objection.

[33]     The   test   used   by   the   Assistant   Commissioner   was   that   set   out   in

W & G du Cros Ltd for the registration of Trademarks:

The question is, therefore, is whether the mark itself, if used as a Trade Mark, is likely to become actually distinctive of the goods of the persons so using it.  The applicant for registration in effects says,  “I intended to use this mark as a Trade Mark, i.e., for the purpose of distinguishing my goods from the goods of other persons,” and the Registrar or the Court has to determine, before the mark be admitted to registration, whether it is of such a kind that the applicant, quite apart from the effects of registration, is likely or unlikely to attain the object he has in view.  The applicants’ chance of success in this respect must, I think, largely depend upon whether other traders are likely, in the ordinary course of their business and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connection with their own goods.

[34]     As is noted in the judgment under appeal, the test was recently endorsed by the Court of Appeal in Intellectual Reserve Inc v Sintes, and had been applied many times previously.

[35]     Here there are two trademarks in issue – HIGGINS COATINGS and the stylised  Higgins  logo.    Whilst  there  is  no  absolute  prohibition  on  a  surname obtaining a trademark, it must not be so common a surname as to have no distinctive character.  Higgins Coatings asserts that Higgins “is not a name which is so common as to have no distinctive character” but I do not agree.  Indeed the appellant’s point on this is somewhat contrary to its submissions under s 17 in which it criticised the scope of monopoly accorded Higgins Group by the granting of a trademark HIGGINS.  Whilst the focus of those submissions was on the unacceptable effect of combining a surname with a wide ambit for services, an underlying criticism was of the trademarking of a not uncommon surname.  In its original written submission the appellant observed:

The principal and common feature in both the Respondent’s Mark and the Appellant’s Marks is the word Higgins.  Higgins is, we submit, commonly known  as  a  surname  e.g.  Henry  Higgins,  Hurricane  Higgins.     The commercial use of Higgins as a trademark therefore indicates a familial connection more so than a connection of a particular trader.

[36]     I agree with the thrust of this and consider that Higgins standing alone does not have any distinctiveness.  It is just a name, not so prevalent as Smith but by no means unusual or distinctive.  By itself it has no capacity to distinguish in relation to the goods and services for which it is sought.  The issue would therefore seem to be whether the additions to each of the two trademarks assist.

[37]     In  Intellectual  Reserve,  Baragwanath J  reviewed  a  series  of  decisions  on distinctiveness.   There is little point in repeating that exercise, but I note that I have considered His Honour’s assessment of them.  In Intellectual Reserve, the context for discussing those cases was an issue as to whether the device that was added to the term FAMILYSEARCH was sufficient to give the word a distinctiveness that it otherwise lacked.

The Court of Appeal agreed that the logo, with this added device, had sufficient distinctiveness.   All decision makers agreed that without the device the words standing alone could not have been registered.

[38]     The  first  trademark  to  be  considered  here  is  HIGGINS  COATINGS, expressed just like this in block capitals.   The addition of COATINGS does not appear to me to add any distinctiveness.   The context is painting services and the question is how the mark is likely to be perceived by the average consumer.  There is no suggestion that the coating applied by Higgins, as opposed to any other painter, marks it out;  the word “Coatings” achieves no more, and arguably less, than would “Higgins Painters”, and does not add distinctiveness.

[39]     Turning  to  the  stylised  form,  it  is  inevitably  a  matter  of  degree  and impression.  The essence of the logo is weaker from a distinctiveness viewpoint than “HIGGINS COATINGS” because in terms of words, all one has with the logo is the surname standing alone.  What is added to the name are two lines underneath and italics.

 

[40]	In one of the cases discussed by Baragwanath J, In the matter of an application by Fanfold Ltd to register a trademark, the enhancement of “Fanfold”

by a faint scroll pattern trebly folded at each end was insufficient.	In Stargate

International Limited the Assistant Commissioner upheld objections to

and

EASE

on  the  basis  that  they  lacked  distinctiveness.	Similarly,  the  Federal  Court  of

Australia rejected

because the mark was not capable of distinguishing the applicant’s goods from those of other persons.    Branson J considered that the use of upper case letters, and an oval device, did not have the capacity to set the mark out.

[41]     When one considers the stylised version of Higgins, I do not consider that the addition of italics and a couple of lines with a kink in them really makes a difference. It  is,  to  quote  Kitto J  in  Bayer  Pharma  Pty  Ltd  v  Farbenfabriken  Bayer Aktiengellschaft, just “a fancy method” of presenting the surname Higgins but in terms of distinctiveness it has no greater aptitude than the name itself.

[42]     These are inevitably matters of impression and are subjective assessments.  I recognise that the device in Intellectual Reserve was regarded as sufficient, but I conclude, nevertheless, that the cross-appeal should be allowed.   I have found the issue more finely balanced as regards the stylised logo, but if I am right about the lack of any distinctiveness in the surname Higgins, I do not consider italicising it and underlining it twice really changes matters.

[43]     I  am  conscious  of  the  oddity  that  the  respondent  is  left  to  enjoy  its trademarks,  and  I admit  to  surprise over  the registration  of  HIGGINS  in  block capitals with nothing else.   However, had there been objection at the time that trademark was sought, it may be that Higgins Group would have sought to rely on the exemption in s 18(2), given its long history of using these marks.

Conclusion

[44]     The appeal and cross-appeal are both allowed.   The end result is that the outcome reached by the Assistant Commissioner is confirmed and the trademark applications 751301 and 751302 are not to be registered.

[45]     If the parties cannot agree on costs, memoranda may be filed.  To assist the parties I observe both have had success in relation to their appeal points, and the determining factor in favour of the cross-appeal was one not particularly relied on by
the cross-appellant.

Simon France J

Solicitors:
B W F Brown QC, Thomas More Chambers, PO Box 5161, Wellington 6145,
email:  Brendan.brown@xtra.co.nz
M Yates, Quigg Partners, PO Box 3035, Wellington 6140, email:  mattyates@quiggpartners.com
M T Lennard, Barrister, Wellington, email:  mike.lennard@xtra.co.nz