IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2012-485-2481 [2013] NZHC 1494

UNDER	The Trade Marks Act 2002

IN THE MATTER OF	an appeal from the decision of the Assistant Commissioner of Trade Marks dated 15 October 2012

BETWEEN	ZOGGS INTERNATIONAL LIMITED Appellant

AND	SEXWAX INCORPORATED Respondent

Hearing:	1 May 2013

Counsel:	J O Upton QC and T A Huthwaite for Appellant
N J Robb for Respondent

Judgment:	20 June 2013

JUDGMENT OF SIMON FRANCE J

ZOGGS v SEXWAX [2013] NZHC 1494 [20 June 2013]

Introduction

[1]       The  appellant,  Zoggs  International  Limited,  appeals  the  decision  of  the Assistant Commissioner of Trade Marks to decline its application to register the trade mark:

ZOGGS

[2]       The application was successfully opposed by the respondent, which is the proprietor of unregistered trade marks, the most prominent of which is:

[3]       The respondent is owned by a Mr Frederick Herzog III, who is commonly referred to as Zog.  Mr Herzog deposes that he has used the name Zog in connection with his business for 38 years.  His primary product is a surfboard wax, the Mr Zog’s Sex Wax referred to in the logo above.  It seems to be the largest selling board wax. There can be no doubt that Mr Zog’s Sex Wax and the accompanying logo has a reputation in the surfing market in New Zealand.

[4]       The appellant was founded in Australia in 1992.   Its original product was swimwear goggles, and the name Zoggs is an adaptation of that, or more particularly of the abbreviation of the word – “goggs”.  The goggles were sold in New Zealand from 1994 through the Warehouse chain.  The company then started manufacturing swimwear aimed primarily at the recreational swimming pool market.  These items were marketed in various countries including New Zealand under “Zoggs Toggs”, but around the year 2000 there was a decision taken to combine the brands into Zoggs.    The  present  application  to  register  ZOGGS  in  class 25,  to  replace  the existing Zoggs Toggs registration, reflects that branding move.

[5]       Class 25 covers:

... clothing, footwear, headgear, swimwear, swim caps, warm-up suits, t- shirts, jackets, beachwear, leisure wear, ski wear, sports clothing and wet suits.

[6]       The Assistant Commissioner upheld  the respondent’s objection to  Zoggs’

application on the basis that:

(a)       it was made in bad faith (s 17(2) of the Trade Marks Act 2002); (b)       there is likely to be confusion (s 17(1) of the Act); and
(c)       the applicant had no sufficiently definite intention to use the mark

(s 32 of the Act).

Background

[7]       Mr Herzog’s business began in California around 1970.  He sold surfboards. In 1972 he decided to manufacture and sell a surfboard wax.  It was marketed under the brand MR ZOG’S SEX WAX, a brand that has remained unchanged, as has the logo into which it was incorporated.

[8]       His company was originally named Zog Industries.  It formally changed its name  in  1978  to  Sexwax  Incorporated  (the  name  of  the  respondent)  but  has continued to use the name Zog Industries.   It is this name that appears on all its business forms – invoices, statements, sales and purchase orders etc.

[9]       Mr Herzog deposes that his name Zog is integral to the wax, which will be referred to, and ordered, as either “a bar of sex wax” or “a bar of Zogs”.   The company has and does sell other products, although it is fair to say the surfboard wax and accompanying products dominate.  For the period November 1997 to June 2010, these wax and board related products accounted for 65 per cent of Zog Industry’s sales to New Zealand.  The bulk of the balance of sales was made up of t-shirts – about 27 per cent.  The t-shirt images that have been included in the evidence almost always have either the complete logo, or a dominant reference to Sex Wax.   The

label, in whatever form, is prominent and often occupies the whole of the front or back of the t-shirt.

[10]     Sexwax Incorporated has never sought or held trade mark registrations in

New Zealand.

[11]     As noted, Zoggs started in 1992 and began selling in New Zealand in 1994. When the company expanded into swimwear under the label “Zoggs Toggs”, it registered  that  mark  in  various  countries,  including  New Zealand,  in  1996. However, due to oversight this was not renewed at the appropriate time.   Zoggs claims to be the largest leisure swimming brand in Australia, New Zealand and the United   Kingdom.      It   has   been   selling   in   New Zealand   since   1995,   with approximately 17,000 items sold between April 2006 and February 2011.  It targets the pool swimmer market and its primary retail outlets are aquatic centres, swim schools and small aquatic retailers.

The finding that the application was made in bad faith

[12]     Section 17(2) of the Act obliges the Trade Marks Commissioner to reject an application that is made in bad faith.   In assessing this ground of challenge the Assistant Commissioner identified the relevant test as being:

... whether the knowledge of the applicant (a subjective element) was such that its decision to apply for registration would be regarded as being in bad faith by persons adopting proper standards.

[13]	This test was taken from Neumann v Sons of the Desert SL,1 which itself sourced the test from the English and Wales Court of Appeal decision in Harrison’s
Trade Mark Application.2

1	Neumann v Sons of the Desert, SL HC Auckland, CIV 2007-485-212, 5 November 2007 per
Andrews J.
2	Harrison v Teton Valley Trading Co [2004] EWCA 1028, [2005] FSR 10 at [23]–[26].

(a)       Facts underlying allegation of bad faith

[14]     When Zoggs first contemplated an Australian registration for its goggles, it approached Mr Herzog to seek agreement that he would not oppose it.  Mr Herzog deposes that the then owner of Zoggs (it has since been sold) verbally promised to:

limit the products of what he described as his “small Australian company” to
just swimming goggles.

It was for that reason that he did not oppose the initial registration, which was for ZOGGS  in  class 9,  being  optical  apparatus,  eyewear  and  goggles,  and  class 28 (gymnastic and sporting articles).   The deemed date of registration for this trade mark was 14 November 1991.

[15]     The history of communications between the two parties subsequent to this point is not agreed.  There are different recollections.  Mr McConnochie, the son of Zoggs’ owner who had the initial 1992 conversation with Mr Herzog, says there has been occasional contact since 1992, and that he and Mr Herzog have spoken several times.  Specifically he says Mr Herzog was approached in 2004 to see if agreement could be reached because an application to register ZOGGS in the United States was being prevented by Mr Herzog’s existing registrations.  However, agreement could not be reached before the application lapsed.  Mr McConnochie also comments on an email that he sent in 2009.  It contains statements about what Zoggs intends to do. Mr McConnochie’s evidence is that it related only to a current United States trade mark application.

[16]     The evidence from Mr Herzog is somewhat different.  He says that following the initial 1992 conversation, he did not learn until 2007 of the attempt to register Zoggs Toggs, and ultimately Zoggs.  He then for the first time, following research, discovered that Zoggs had registrations in many countries in which Mr Zog’s SEX WAX also held active registrations.  He continues:

Furthermore,   despite   both   verbal   claims   (a   meeting   in   Carpentaria, California with Zogg’s, Leo Gestetner) and written claims (an email from Zogg’s  Neil McConnochie)  that they had  no interest  in  the surf  market whatsoever, I readily found Zogg’s swimwear being marketed on the web as “Board shorts” for surfing.

[17]     The two key differences that emerged following Mr McConnochie’s evidence

were that:

(a)       there were discussions in 2004 about registering Zogg’s in class 25 in the United States.   Mr Herzog said he did not know anything about Zoggs Toggs, or an expanded use of Zoggs until 2007; and

(b)       the 1999 McConnochie email relied on by Mr Herzog was, according to Mr McConnochie, solely in relation to the United States market, and had no broader context.

[18]     Mr Herzog filed reply evidence.   In that evidence he confirms his earlier evidence, with a particular reference to the original paragraph which said he only became aware in 2007.  This appears to be a denial of Mr McConnochie’s claims of
2004 discussions, but there is no  express reference by Mr Herzog to the claim. Mr Herzog restates that he has not consented to the registration of the trade mark ZOGGS for swimwear or clothing, nor to the use of ZOGGS for swimwear and clothing.

[19]     It is necessary finally to turn in more detail to the 2009 McConnochie email. The email was written a few months before the New Zealand application was made. It is an important plank in the decision under appeal.   If cited in full it is largely self-explanatory. The emphasis in the email is that of the Assistant Commissioner:
Subject:  Zog & Zoggs [emphasis added] Dear  Zog, [emphasis added]

It was nice to speak with you again a few weeks ago and apologies for my belated reply as I have been on the road travelling and then on holiday for a week with the family.

Further to our discussions in respect to the Zoggs Class 25 license.  As we discussed and I outlined we previously had the name ZOGGS TOGGS registered in Class 25 which was registered in 1992 when we also registered ZOGGS in classes 9 and 28.   As you rightly remember their [sic] was a coexistence agreement put in place at the time and my father one of the founders and President at the time agreed with you coexistence for ZOG in Class 28 for Ear Plugs.

I worked in the brand for 12 years and remain in the engine room of the brand however now have my own business in Hong Kong (Blue Fuzion Group Limited) which I established last year which is a global development and sourcing provider for several sporting goods brands including Zoggs.

In  2003  the  decision  was  made  that  as  we  were  marketing  the  brand primarily under the ZOGGS brand that we would migrate the ZOGGS TOGGS trademark to ZOGGS so as to standardize our branding.  We were advised that this was no more than a formality as the current mark ZOGGS TOGGS was up for renewal which was just again a formality of renewing and that a new application for ZOGGS would be layered over the top to move this across to ZOGGS.

For some reason this did not transpire and the examiner sited [sic] the market against  your  current registration  which  was  somewhat  of a  shock to  us however hence my call when I was in the US as the matter did not seem to be progressing with our IP representatives.   Sometimes these matters are better dealt with directly and I appreciate your time when I called.

As outlined when we spoke our only interest for Class 25 is swimwear for recreational and fitness swimming purposes in the pool as the brand has no aspirations or intentions to enter the Surf category in terms of wetsuits, casual wear or other surf wear. [emphasis added]

If you have a look at www.zoggs.com this will give you a better understanding of the brand positioning.

Attached is a draft proposed Coexistence agreement as discussed for your review  which  takes  [sic]  details  the  defined  product  categorisation  of products and also a financial consideration.

Similarly if you would like to re-establish a coexistence in Class 9 (eyewear) which may be of commercial benefit to you in the future this would be open to discussion.

If you would be interested in meeting to discuss further please let me know as I will be in the US for Interbike in Las Vegas in late September and also in LA for  a  night  on  the  13th.    Aside  from  this  matter  there  may  be  an opportunity to discuss how we may be able to assist you with any requirements of sourcing, development, compliance in the Far East.

I look forward to hearing from you soon.

(b)       Ruling under appeal

[20]     The Assistant Commissioner first set out the competing positions.  Sexwax Incorporated’s submission was that despite assurances by the appellant that ZOGGS was to be used only on swimming goggles, and that it would not be used in the surf category for wetsuits, casual wear or other surf wear; the application and further

investigations by Sexwax Incorporated show that this is not true.  This conflicting position amounted to bad faith.

[21]     Zoggs’ position was that the 1992 discussion related to Australia, the 2009 email related to the United States application, and no formal agreement ever existed that:    (i)  Zoggs  would  be  limited  in  its  goods;  (ii)  Mr Herzog  would  be  kept appraised of developments; or (iii) Zoggs would not expand its business.

[22]     The Assistant Commissioner reached a series of factual conclusions that led to the conclusion of bad faith. The key findings appear to be:

(a)       Zoggs was aware, from 1992, that the nickname Zog was incorporated into the branding for the surfboard wax.  This is why it felt a need to contact Mr Herzog in the first place;

(b)	Mr Herzog’s evidence is the only direct evidence of what was said in

1992 and it was that Zoggs would limit its products to swimming goggles.   Further, until 2007 Mr Herzog believed the applicant had continued to limit its ZOGGS trademark to swimming goggles in accordance with this 1992 agreement;

(c)       in  2009  Mr McConnochie,  shortly  before  filing  the  New Zealand application,  had  indicated  that  the  ZOGGS  brand  (not  the  United States  trade  mark)  would  not  be  used  in  relation  to  some  items covered by class 25.

[23]     From these conclusions, without additional reasoning, it was held that for Zoggs to now seek a registration contrary to this understanding amounted to bad faith.

(c)       Decision

[24]     The appellant’s first challenge is to the conclusion that Mr Herzog did not know until 2007 of the development of Zoggs Toggs, the sale of swimwear, and the intended use of ZOGGS.  Mr McConnochie had deposed that there were discussions

in 2004, and it is submitted by the appellant that it was not open to the Assistant

Commissioner to resolve this against Zoggs in the absence of cross-examination.

[25]     I accept this point.  There is no extrinsic material that settles the dispute, and such material as there is, favours Mr McConnochie.   Zoggs applied in 2004 for registration, and failed in its efforts because the existing SEX WAX registration was an obstacle.  This context would make it surprising if no approach was made at that time  in  2004  by  Zoggs  to  Mr Herzog.    I  do  not  consider  it  was  open  to  the Commissioner to conclude on the papers that Mr Herzog’s recollection was to be preferred.  It must be noted, however, that there is some uncertainty as to whether this is what the Assistant Commissioner did.   In  the preceding paragraph there appears to be a finding of fact that Mr McConnochie’s version is also accepted.  The position is unclear, but for reasons to be discussed I doubt it matters either way.  I do accept the appeal point, however, that it was not open on the untested evidence to prefer Mr Herzog’s view.

[26]     The second factual challenge relates to the reliance placed on the 2009 email. The Assistant Commissioner notes the appellant’s position was that the email offer was limited to the United States market and the then current trade mark application. However, the way the Assistant Commissioner’s factual conclusion is worded, particularly the emphasis on the words in the parentheses:

the Zoggs brand (not the US trade mark)

points to a conclusion by the Assistant Commissioner that the email had a wider import than the United States trade mark application.

[27]     Before me there is a disputed application to file further evidence on the point. The appellant wishes to put into evidence the draft agreement that was attached to the 2009 email.  It is said to make it plain the email related to the United States trade mark application.  Its admission is opposed on the basis that it is not fresh, and does not add anything.  Reliance is then placed on the well known reluctance of appeal courts to accept evidence expanding the record.   It is submitted by the respondent that there was no confusion – the Commissioner was plainly aware of the appellant’s position  in  relation  to  the  email,  but  rejected  it.    If  the  appellant  thought  the

agreement supported its position, it should have filed it at the time in accordance with the rules.  Having failed to do so, the appellant must live with its decision.

[28]     Resolution  of the dispute does  not  require a review of authorities.   The context is a finding of bad faith, which remains a serious allegation.   The draft agreement should have been included in the first place, but there can be no prejudice to the respondent in its inclusion now.  It stands on its own and does not necessitate any further evidence.   It is a document known to the respondent.  The respondent submits that if admitted it will not alter matters.   This is not, with respect, a compelling basis  on  which to  oppose  admission,  absent  other concerns  such as broadening the inquiry or delaying the hearing.

[29]     Consideration  must  always  be  given  to  respecting  and  supporting  the procedures in place for the initial hearing.  Too ready a willingness to allow fresh evidence runs the risk of undermining the initial processes.  But it is a consideration, not an absolute ban, and here proper resolution of what is a serious allegation made by the respondent requires consideration of the document.  The application to admit the further evidence is allowed.

[30]     That said, the matter could be resolved without it.  I am not in agreement with the weight placed on the email in the ruling under appeal.   The Assistant Commissioner in her findings  emphasises the use of “brand”, and regards it  as meaning the email commitment was wider than the United States trade mark application.  However, the sentence need not be read as doing more than stating the brand’s intended focus in the United States.   The paragraph which precedes the highlighted paragraph expressly refers to the difficulty Zoggs’ intellectual property representatives were having in progressing the current United States application. That sets the context for what follows.   It is, I consider, going too far to use this communication, which is written as part of seeking to achieve an agreement that will progress the current United States application, as undermining the legitimacy of a subsequent New Zealand application.

[31]     When one looks at the agreement itself, an advantage not available to the Assistant Commissioner, there can be no doubt.  It is a co-existence agreement for the United States, and is limited to that.  It expressly defines its scope as being the United States and says nothing about any other territory.  Mr Robb sought to place weight on the preamble within the draft agreement which describes Zoggs as focussing on swimwear for the swimming pool.   He notes the preamble does not limit this focus to the United States and submits this omission supports the Assistant Commissioner’s conclusion that the email was not limited to the United States trade mark but represented a statement of its intended brand  marketing  anywhere.   I cannot accept that, as it simply ignores the express scope of the agreement, and the plain context of the email which is the United States application.

[32]     There is a further reason why the email is irrelevant.   It led to nothing.   It annexed a proposed agreement that was never concluded.  Mr Herzog did not agree. He did not withdraw his opposition.  There has simply been no reliance on it by him. An offer made in the course of negotiations, and which was never accepted, cannot be held to be binding on Zoggs’ so as to support a finding of bad faith for acting contrary to it, even if it did at the time have the wider ambit contended for.

[33]     Without the email of 2009, little is left.  There is a reference in Mr Herzog’s evidence to  a verbal  commitment made by a Mr Leo Gestetner but  no  detail  is provided and no weight can be attached to it.  The evidence was too vague to require a response from Zoggs International.

[34]     Finally, there is the original arrangement in Australia in 1992.   Mr Herzog does not in his evidence say that this was to have unlimited worldwide effect.  There is no reason to read his evidence as establishing an agreement that went beyond that Australian application.  Further, although it seems that Mr Herzog was unaware of these developments until sometime in the 2000s, Zoggs had been expanding in the interim.  It has registrations for ZOGGS in classes 9 and 25 in numerous countries since the 1990s.  ZOGGS TOGGS class 25 registrations seem to run from the mid to late 1990s, and ZOGGS in class 25 since 2005.  There is nothing in this pattern to suggest the 1992 arrangement went beyond Australia.

[35]    The evidence does not support a conclusion that there was any sort of arrangement between the parties of which the present application might be a breach. Indeed, it has been difficult, in my view, to actually identify exactly what the bad faith is alleged to be.  The ruling under appeal does not clearly articulate what it is. Mr Robb said it was a history of saying one thing and doing another.  In particular: saying that there was no interest in the surf market, yet seeking unqualified registrations in class 25; and, marketing some products in a way that is relevant to the surfing market, such as advertising board shorts, despite disclaiming such an interest.

[36]     In my view, the evidence does not establish the type of arrangement needed between the parties before it could make the trade mark application one made in bad faith.  At most, the evidence shows communications made between the parties on which there has been no reliance, or alteration of position, other than the original
1992 registration.  The evidence falls well short of making good on an allegation of bad faith and I accept Mr Upton QC’s submission that it should not have been made. The fact that the bad faith test may be satisfied by something less than dishonesty3 should not mask the fact it remains a serious allegation, requiring clear evidence and careful analysis.  Ultimately, the standard of proof is the balance of probabilities but I  consider  there  remains  value  in  the  words  of  Mr Thorley QC,  the Appointed Person, in Royal Enfield Trade Marks,4 where of a bad faith allegation he observed:

It should not be made unless it can be fully and properly pleaded and should not be upheld unless it is distinctly proved and this will rarely be possible by a process of inference.

[37]     The appeal against the finding of bad faith is allowed.

The finding that there was no definite intention to use the registration in all the class 25 goods

[38]     It is convenient to address this aspect next because it flows directly from the preceding discussion.  Section 37 of the Act provides that a person claiming to be the owner of a mark may apply to register it.  Two of the trade mark issues that can arise
under the concept of ownership are:

3	Valley Girl Co Ltd v Hanama Collection Pty Ltd (2005) 66 IPR 214 (HC).
4	Royal Enfield Motorcycles v Holder [2002] RPC 24 at [31].

(a)	whether the applicant has a sufficiently definite intention to use the mark in the relevant class of goods; and

(b)	whether  there  is  any  fraud  or  breach  of  duty  involved  in  the application.

[39]     The Assistant Commissioner found against Zoggs International on both of these  grounds.    A finding  of  fraud  was  said  to  flow  directly  from  the  earlier conclusion of bad faith.   For the reasons already given, the appeal against that finding must be similarly allowed.

[40]     The other finding is that there was no definite intention to use the mark.  The process for such a challenge is that an intention to use is presumed from the fact of application.   However, if the opponent can point to evidence that disturbs that presumption, then the onus is on the applicant to prove an intention to use.   The evidence said to disturb the presumption was the 2009 email.  It was suggested by the appellants that the Assistant Commissioner had incorrectly reversed the onus, but I do not accept that.   On the opponent’s reading of the email, accepted by the Assistant Commissioner, the applicant was disclaiming any intention to use the trade mark in relation to some of the goods for which it sought registration.   The Commissioner was therefore correct on this interpretation to require the applicant to establish an intention to use.

[41]     It   was   from   the   following   passage   in   the   email   that   the  Assistant Commissioner concluded there was no clear evidence of an intention to use the opposed mark in all the goods (her emphasis):

As outlined when we spoke our only interests for Class 25 is swimwear for recreational and fitness swimming purposes in the pool as the brand has no aspirations or intentions to enter the Surf category in terms of wetsuits, casual wear or other surf wear.

The Assistant Commissioner held that the applicant had succeeded in establishing an intention only as regards swimwear and swim caps.

[42]     I accept the appellant’s  submission that the presumption in favour of an intention to use was not displaced by the 2009 email.  First, for reasons discussed, it related only to the United States trade mark application and not to intended activity in New Zealand.   Second, the discussion within the email is about branding and target markets, not what class 25 products will be produced and sold.  The evidence before the Assistant Commissioner showed that Zoggs, under its Zoggs Toggs label, already produced many of the class 25 items.  For example, the deponent Rick Perry noted the company made rash vests, float suits, sun protection suits for children, and wetsuits.  Indeed, in his evidence Mr Herzog complained that Zogg Industries was marketing board shorts, which he said were plainly a beachwear item.

[43]     The evidence before the Assistant Commissioner, through Mr McConnochie, was that the Zoggs trade mark was intended to be used for what was currently being sold under Zoggs Toggs.  So although there was no evidence of the use of ZOGGS in class 25, there was relevant evidence of how the new trade mark would be used and on what.  Indeed, Mr Herzog (exhibit 17) appends photographs of Zoggs being used on board shorts, wetsuits, rash vests, rash vests – surf, and hats.

[44]     Accordingly, I conclude the Assistant Commissioner erred in holding that the evidence displaced the presumption, and erred in the assessment of the evidence available to support an intention to use.  The conclusion was based on a reading of the email which is, in my view, not correct.   It also gave too little weight to the evidence that the trade mark being sought was to replace one being used on a range of relevant products and to evidence, supported by both parties, of those products presently being made and sold.

[45]     The appeal against the finding that the application fails the requirements of s 32 of the Act is allowed.

The finding that allowing registration would be likely to deceive or cause confusion

[46]     Zoggs  International  finally appeals  the  conclusion  that  its  application  be rejected because, contrary to s 17(1)(a) of the Act, the use of its mark would be likely to deceive or cause confusion.

[47]	The opponent, Sexwax Incorporated, relied on six unregistered marks: (a)	the logo set out above at [2];
(b)	MR ZOGS SEXWAX; (c)	ZOGS SEXWAX;
(d)	MR ZOG; (e)	ZOGS;
(f)	ZOG.

(a)       Judgment under appeal

[48]     The   Assistant   Commissioner   concluded   the   relevant   market   for   the application  was  the  general  purchasing  public  of  New Zealand  and  any  others involved in those purchases such as retailers.  The relevant market was described as being “very large in size and not a specialist market”.

[49]     The  next  required  step  is  to  assess  if  the  opponent  has  established  an awareness of its mark in the relevant market.  This was noted, based on NV Sumatra Tobacco, to be a low threshold.5    The Assistant Commissioner found a sufficient awareness in the logo mark, but none of the five others.  The opponent (respondent) has not appealed that aspect of the decision so the focus from here is only on the awareness of the logo mark amongst the general purchasing public of New Zealand.
The factors that informed the Assistant Commissioner’s reasons for concluding that a reputation had been established in the logo device were:

(a)	the established history of Sex Wax sales in New Zealand, and that it is sold in stores such as Billabong, Quicksilver, R&R Sport, Rip Curl
and Amazon;

5	NV Sumatra Tobacco Trading Company v British American Tobacco (Brands) Incorporated
[2010] NZCA 24, (2010) 86 IPR 206 (CA) at [17].

(b)	the advertising in surf oriented magazines in the 1980’s and 1990’s,

some of which were circulated in New Zealand;

(c)	the reference to the wax in general magazines and films.

[50]     That established, the Assistant Commissioner then undertook a comparison of the marks.   They were held to be visually and aurally dissimilar, but as having a strong conceptual similarity.  This was because of the centrality of Zog, a made up word, in the competing marks.  It was noted that the logo used the name “Mr Zogs”, which is unusual and is likely to set in the mind of the relevant market. An imperfect recollection may well then regard Zoggs as linked.

[51]     Against that background, the Assistant Commissioner assessed the likelihood of confusion, allowing for how the applicant mark might fairly be used in the future. Whilst surfboard wax and class 25 goods were not similar, purchasers of wax were also likely to purchase many of the items listed in class 25.  It was also a fair use to envisage Zoggs’ goods being sold in surf oriented shops.   Persons in the surfing industry familiar with the logo might be caused to wonder if Zoggs is a new clothing line of Sexwax Incorporated. Accordingly, the opposition was upheld.

(b)       Submissions on appeal

[52]     The appellant first challenges the finding that the opponent had a sufficient awareness in the relevant market.   The opponent’s mark is only known in a small specialist area of what is a large relevant market.   Further, the reputation is in surfboard wax, a product that is not itself part of the relevant market.  It is noted that where the logo is used on relevant goods such as t-shirts, the SEX WAX concept is always prominent, thereby highlighting the product’s link  to the surfboard wax. Accordingly, it is submitted, if there is a New Zealand reputation in the SEX WAX logo, it exists only in the specialist surfing market.

[53]     A related submission is that it is incorrect, within New Zealand, to place emphasis on just the Zogs or Mr Zogs part of a complex logo.  There is no evidence of a separate reputation in New Zealand for Zogs, and almost all references to that standing  alone  are  overseas  based.     The  respondent  holds  no  New Zealand

registrations, has not carried out any New Zealand specific marketing and has led no evidence of New Zealand focussed advertising.  All that can be pointed to are the usual references to a product one finds in any retail catalogue or shop display.  It is submitted that where there are references to the products, the Sex Wax concept dominates.  Further, there is no consumer evidence to say that Zogs is recognised in New Zealand by anyone as a trade mark.

[54]     Turning to the comparison of the marks, the appellant submits that the lasting impression is not in the name of Zogs but of the Sex Wax component.  It is what is striking, the more so given it relates, unexpectedly, to surfboards.  It was a label that was designed to be funny and provocative, and different from anything else in the surf market.   Effectively the appellant submits the opponent succeeded in its aim, and the Assistant Commissioner was wrong to focus on the Zogs component.

[55]     Finally, it is noted that Zoggs has been in the New Zealand market since 1995 and the respondent led no evidence of confusion in that time.  It is submitted this is to be expected given the factors already traversed.  Accordingly, it was incorrect to conclude there was any likelihood of confusion should registration be allowed.

[56]     The respondent begins with two general points.  The first is to emphasise the need to consider any possible fair use that might be made of the applicant’s trade mark.  The goods covered by class 25, and indeed the goods for which Zoggs are best known, could legitimately be sold through retail stores aimed at the surfing market.  This lessens the significance of Zoggs current marketing which is through shops associated with aquatic centres.

[57]     The second general submission is that the appellant pays insufficient attention to the relevant date.   For example, it is noted that the claim of 17,000 items sold covers   a   period   ending   in   February 2011,   whereas   the   relevant   date   is
9 December 2009.  Likewise, it is submitted there is a lack of clarity in the evidence about what has been sold under ZOGGS, and what has been marketed under Zoggs Toggs.

[58]     Turning to the specific points, it is submitted the Assistant Commissioner was correct to focus on the dominant impact of Zogs.   It is a made up highly unusual name,  and  is  an  integral  prominent  part  of  the  logo.    Reference  is  made  to Mr Herzog’s  evidence  that  the  wax  is  often  referred  to  as  “a  bar  of  Zogs’. Concerning reputation in the relevant market, reliance is placed, somewhat faintly, on a spill-over reputation.   This is said to flow from the international nature of surfing, and the prominence of the two or three movies that featured the Sex Wax.

[59]     The respondent’s primary argument, which is not weaker for its conciseness, is that Zog is a well-known name in surfing circles.   The applicant’s goods are equally capable of being sold in surfing focussed stores, and people familiar with Zogs and Mr Zogs are likely to be caused to wonder, on seeing ZOGGS, if he has extended into a new product range.  That is sufficient to meet the test of confusion, and the Assistant Commissioner’s decision should, therefore, be upheld.

(c)       Decision

[60]     The Assistant Commissioner concluded that of the six marks relied on by the respondent, the only one in which a reputation existed in the New Zealand market was the complex logo.  I consider this decision, which has not been challenged by the respondent, is significant because it means that no independent reputation was found to exist in Zog’s, Mr  Zog’s, Mr Zog, Zog’s Sex WAX, or Mr Zog’s Sexwax.

[61]     Reduced solely to an issue of whether the registration of ZOGGS is likely to cause confusion because of an awareness in the New Zealand buying public of the complex logo, I consider the answer must be no.  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.

[63]     That is enough to dispose of the appeal in favour of the appellant, but for completeness I briefly address the challenge to the finding of reputation.  I consider that aspect finely balanced but again I prefer the appellant’s position.

[64]     First, the evidence did not justify a finding of spill-over reputation from overseas.  The general magazines relied upon involved five isolated references, four of which occurred more than ten years before the relevant date.   The movies are dated  –  Fast Times  at  Ridgemont  High  (1982);  and  Point  Break  (1991).6     The Television shows appear to involve isolated episodes on shows concerning which no viewing figures are provided, and which anyway are sporadic.  None of this justifies a  conclusion  that  the  2009  general  buying  public  of  New Zealand  would  have awareness of the logo.

[65]     Next,  there  has  been  no  actual  advertising  in  New Zealand.    There  are references to the products being listed in retail catalogues, but that is it.7     There seemingly has been the odd promotion but the reality is that the product has sold itself.  This is because it is of undoubted quality, and is possibly even iconic, within the very specialised market in which it exists.  It is for this reason that I also consider the overseas advertising in specialist magazines does not advance matters.  Almost all the New Zealand readers of those publications will know of the product anyway,
or soon would if they remained interested in surfing.

6           In Ridgemont High, at some point, Sean Penn wore a Mr Zog’s sex wax t-shirt.  In Point Break at one point there was a close up of a bar of sex wax.
7           A deponent claimed that there was newspaper advertising, but on analysis this proved to be disappointingly careless in its accuracy, a point I addressed at the hearing and mention again only to formally note that I have not ignored the evidence, but rather rejected it.

[66]     This leads to the question of whether awareness of the logo in the surfing community is enough to meet the low threshold.   In this case it is fair to say that most, if not all of those, in the surfing community will also be part of the relevant market  –  which  is  the  swimwear  buying  public  of  New Zealand.    In  Sumatra Tobacco the Court identified the following as the relevant approach: 8

... the opponent will first have to identify the relevant market, then point to evidence showing a substantial number of persons in that market have awareness, cognisance or knowledge of its mark ... What is a substantial number of persons depends on the nature and size of the market and is relative both to the number of persons involved in and their impact on that market ...” (authorities omitted)

[67]     There is no evidence how big this specialist group is. My sense is that one would say the surfing market is not insignificant in itself, but relative to this very large market in issue here, it is doubtful it meets the low threshold.  There is, as I have observed, no evidence on the point and I do not consider it is so obvious as to make the decision straight-forward.  Based on the conclusion that any reputation in the logo is limited solely to the specialist surfing market, I conclude on balance that is not enough to establish awareness of the brand in the relevant market.

Conclusion

[68]     I am satisfied on the evidence the applicant established that there was no likelihood of confusion with the opponent’s mark if registration were allowed.  This is because the only mark of the opponent which had a sufficient reputation is quite different from the trade mark being sought.  With less conviction, but on balance, I would also have allowed the appeal against the finding of a sufficient reputation.

[69]     The ruling under appeal found two other impediments to the registration – bad faith, and a lack of demonstrated intention to use the marks.   For the reasons given, I disagree with both conclusions and so allow the appeal.  The applicant was
entitled to registration of its trade mark.

8	NV Sumatra Tobacco Trading Company v British American Tobacco (Brands) Incorporated, above n5.

[70]	The  appellant  is  entitled  to  costs.	If  agreement  cannot  be  reached,

memoranda may be filed.

Simon France J

Solicitors:
J O Upton QC, Wellington
Baldwins Law Limited, Wellington
AJ Park Law, Wellington