Honey New Zealand (International) Limited v Director General of The Ministry For Primary Industries

 

Court of Appeal, Randerson, Cooper and Winkelmann JJ, 4 February 2016, 20 April 2016, [2016] NZCA 141

 

 

Trade Marks – whether trade mark MANUKA DOCTOR for honey is an implied health claim in breach of Australia New Zealand Food standards Code – whether trade mark is also a therapeutic claim.

This decision is of interest to intellectual property practitioners because it considers the interpretation of the Australia New Zealand Food Standards Code as it applies to food labels, including its application to trade marks used on food labels. Standard 1.2.7 of the Australia New Zealand Food Standards Code prohibits the making of “health claims”, on or in relation to food.  This issue has not previously received judicial consideration in New Zealand, and only very minor attention in Australia where a trade mark application was unsuccessfully objected to on the basis that it breached the Food Standards Code. 

The case concerned the trade mark MANUKA DOCTOR applied to honey products. The Ministry for Primary Industries in New Zealand alleged that MANUKA DOCTOR was an implied health claim, and could not be used, effectively banning the use of a registered trade mark through a unilateral decision.  The High Court of New Zealand agreed that MANUKA DOCTOR was an implied health claim, stating that it implied that the honey was “good for you”.  Had the High Court not been overturned on appeal, this could have had serious implications for trade marks used in the food industry.  It is easy to think of trade marks that could have potentially been banned under this approach such as SO GOOD milk, HEALTHY CHOICE, VITAWHEAT, DR PEPPER and many others. 

The Court of Appeal did not discuss the trade mark context in determining that MANUKA DOCTOR was not an implied health claim. However it must be the case that consumers are used to trade marks and puffery and would view any trade mark such as MANUKA DOCTOR through this lens. 

Facts:

In 1995, the governments of Australia and New Zealand had agreed to operate under a single food standard code. The Food Act 1981 was amended in 1996 to reflect this.  The New Zealand (Australia New Zealand Food Standards Code) Food Standards 2002 came into force in December 2002.  From that date the Australia New Zealand Food Standards Code had force of law in New Zealand.  Standard 1.2.7 of that Code provided that “health claims” were prohibited on or in relation to food, unless certain conditions were met.  A health claim was a “claim which states, suggests or implies that a food or a property of a food has, or may have a health effect”.  “Health effect” was separately defined.  Standard 1.2.7 also provided that traders could not make “therapeutic claims” on or in relation to food. 

The appellant (Honey NZ) had been producing and exporting honey under the trade mark MANUKA DOCTOR. It had owned a registration for the trade mark in New Zealand dating from 2010.  In May 2015, Honey NZ was forced to stop exporting honey under the trade mark because the respondent (MPI) refused to issue it with export certificates which were necessary for exporting to some countries.  This was because MPI contended that the trade mark MANUKA DOCTOR was an impermissible implied “health claim” and/or impermissible implied “therapeutic claim” under the New Zealand (Australia New Zealand Food Standards Code) Food Standards 2002.

Honey NZ sought a declaratory ruling in the High Court that its brand MANUKA DOCTOR, and an associated brand, MANUKA PHARM, were not in breach of the Food Standards Code. The High Court declined to make the declarations sought.  It found that the brand names implied that in an unspecified way, manuka honey had properties that would be “good for your health” and were therefore implied health claims. 

Honey NZ appealed to the Court of Appeal. Its central submission was that the term “health claim” in the Food Standards Code required that there be a claim to an identifiable or measurable “health effect” as that term was defined in the Code.  It did not pursue the appeal in relation to the brand MANUKA PHARM. 

It was common ground that MANUKA DOCTOR was a “claim” within the meaning of the Food Standards Code. The issue between the parties was whether it was a “health claim” as defined, and/or a “therapeutic claim” as defined. 

Held, allowing the appeal and granting the declarations sought:

Whether a “health claim” under the Food Standards Code could be a general claim to unidentified benefits

  1. A permissible health claim would always require an identified effect. That conclusion followed from the definition of “health effect”, and from the Court’s analysis of clauses 17 and 19 of Standard 1.2.7 of the Food Standards Code [22].
  2. A general claim about unidentified benefits was not a “health claim” [23], [26]. This was because:
  • The Food Standards Code was clearly aimed at claims of specific measurable health effects [26];

  • It was clear from the Final Assessment Report prepared by Food Standards Australia New Zealand that while a “broad capture” of claims was intended, there would be certain categories of claims that the Code would not cover, such as “this food is organic”, “halal food” or “farm fresh”. There were close parallels with the use of the description “farm fresh” and the High Court’s view that MANUKA DOCTOR implied that Honey NZ’s product would be “good for you” [27]; 

  • Any gap in the regulatory framework perceived by the High Court was filled by the existence of the Fair Trading Act 1986 and by s 10 of the Food Act 1981, which prohibited false and misleading statements in relation to food, including on labels [28];

  • While consumer protection was a statutory purpose of the Food Standards Code, the other statutory purposes of the Food Standards Code were not to be overlooked and these included the desirability of avoiding unnecessary restrictions on trade. If the Food Standards Code was interpreted so as to apply to general claims of unidentified effects, that aim would not be achieved [29].

     Application to facts

  1. In view of the Court’s conclusion on the first issue it was not strictly necessary to determine whether the Judge was correct to find that the words MANUKA DOCTOR amounted to an implied general level health claim that Honey NZ’s product would be good for a consumer’s health [30].

  2. While some members of the public might associate the word “DOCTOR” with health, healing and medicine, it was unlikely that a substantial number of relevant consumers exercising reasonable care would make that association [37].

    Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 applied.

  3. Consumers exercising reasonable care would have regard to the label as a whole, and due to a reference on the label to the producers of the honey being specialists, would conclude that the use of the words MANUKA DOCTOR related to the expertise of the producers and the assurance of the quality of the honey [39].

  4. Matters such as the price at which manuka honey was sold and the health benefits of honey as a wound dressing did not materially support the High Court’s conclusion. It was unlikely that a substantial number of the consuming public would make the connection between the health benefits of honey as a wound dressing and the words MANUKA DOCTOR so as to conclude that the words implied that the honey would be “good for you” [41].

  5. The fact that the impugned words were a registered trade mark did not materially assist the analysis [40]. 

    Therapeutic claims

     

  1. MANUKA DOCTOR was not a therapeutic claim within the meaning of clause 7 of Standard 1.2.7 of the Food Standards Code. This was because it made no reference, express or implied, to any disease, disorder or condition, or the prevention, diagnosis, cure or alleviation of the same; and because there was no express or implied comparison between Honey NZ’s product and any other good [45].

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