Metalman New Zealand Ltd v Scrapman BOP Ltd
High Court of New Zealand, Auckland, 20 August 2014, 26 August 2014, Lang J
 NZHC 2028
Trade marks – appeal – revocation – non-use – precedential standing of rulings of the European Court of Justice - Trade Marks Act 2002 – s 66(1)(a)
This decision overturned a finding by an Assistant Commissioner of Trade Marks that a single use of a trade mark as an advertisement in a local newspaper was not sufficient “genuine use” to deflect an action for revocation for non-use. It also contains an interesting obiter comment on the precedential standing in New Zealand of decisions of the European Court of Justice.
The appeal arose out of a dispute between rival scrap metal dealers.
The appellant, Metalman was the owner of a registered trade mark comprising an advertisement. The trade mark, registered in class 40 for “recycling of metals, scrap” included the text “CALL THE SCRAPMAN TODAY!” together with additional text imagery and contact details. Metalman had acquired the trade mark from the original owner D & R Trucking Limited in December 2012.
Scrapman applied for revocation, including on the basis that the owner (Metalman) had failed to use it during the 3 year period prior to application – namely 20 November 2009 – 20 November 2012.. The Assistant Commissioner of Trade Marks granted the application for revocation. Metalman appealed.
Evidence showed only one instance of use of the trade mark during the relevant period, namely publication by D & R Trucking Limited (Metalman’s predecessor in title) of the trade mark as an advertisement in a local newspaper, The Waitaki Herald. This followed an earlier publication of the same advertisement in the same newspaper in May 2008, well before the mark was registered. There was no evidence from D & R Trucking Limited as to the context of the advertisement.
In the decision under appeal, the Assistant Commissioner found that:
(a) The evidence provided was not sufficient to discharge Metalman’s onus to demonstrate genuine use of the mark.
(b) There was no evidence regarding the context or circumstances in which the single advertisement was placed. No reasons were given for the fact that only one advertisement appeared during the entire 3 year period;
(c) There was no evidence that the specified services were actually provided under the trade mark.
Scrapman argued that the placing of the single advertisement during a 3 year period constituted “token” use of the mark. It did not suggest that D & R Trucking Limited had placed the advertisement for the sole purpose of protecting the trade mark from revocation on the grounds of non-use (a concession described as “appropriate” in the High Court).
Metalman submitted that the Assistant Commissioner had erred by placing too much weight on the fact the advertisement had only been published on one occasion. The issue of genuine use was a matter of qualitative rather than quantitative judgment. The essential issue was whether the owner had used the mark in a manner showing genuine commitment
to it as a badge of origin. The earlier publication prior to registration demonstrated the owner’s initial commitment to use. The format of the trade mark demonstrated it was designed primarily for use as an advertisement to the owner’s business. The placement of the advertisement in the business pages of a local paper was appropriate in context.
Held, allowing the appeal and setting aside the revocation of the trade mark:
(1) The decision of the European Court of Justice in Ansul as to the meaning of genuine use is an important authority on non-use having been relied on in numerous cases in the United Kingdom and also in New Zealand.  and 
Ansul BV v Ajax Brandbeveiliging BV  ECR I-2439 and Tasman Insulation New Zealand Ltd v Knauf Insulation Ltd  NZHC 960 referred to.
(2) However rulings of the European Court of Justice need to be considered in a wider context. They are not the same as judgments of national courts that decide cases from which it is possible to discern a ratio. Rather, the Court’s rulings contribute to a body of jurisprudence relating to the interpretation of European Community legislation. This process differs from the common law method of building up a body of case law from binding precedents. The Court does not decide the cases coming before it. Rather, its judgments are part of a continuing conversation between the Court of Justice and national courts, in which the legal learning generated by the process flows from the Court of Justice into the national courts of member states. For that reason the judgments of the Court of Justice should not be read or applied too literally. They are, nevertheless persuasive authorities. 
La Mer Technology Inc v Laboratoires Goemar SA  EWCA Civ 978 followed.
(3) Genuine use must not be merely token, serving solely to protect the rights conferred by the mark. However where use cannot be regarded as token, it may still not be genuine. 
Ansul supra; La Mer Technology Inc supra, referred to.
(4) Scrapman did not argue that D & R Trucking Limited placed the advertisement in the newspaper solely to preserve the rights preserved by the mark (the “appropriate” concession). For that reason it could not be regarded as token. It was therefore necessary to consider whether other factors meant that the use was not genuine. 
(5) Although determination of whether there has been genuine use is an objective process, the objectively assessed intention of the user will often be an important indicator as to whether a particular use is genuine in its context. The owner’s intention must be directed to the object of using the trade mark in the course of trade as a badge of origin for the goods and services in respect of which the mark was granted. 
(6) In the absence of any evidence to suggest that an advertiser may have an ulterior motive, a person who goes to the trouble and expense of placing a business advertisement in the business section of a local newspaper can generally be taken to want to use the advertisement to promote his or her business.  No such ulterior motive was apparent in the present case strongly indicating the use was genuine for the purposes of s 66(1)(a). 
(8) The timing of the use was important. In the present case it occurred well before the dispute between Metalman and Scrapman arose.  The frequency of publication and extent of circulation had no relevance. Frequency was irrelevant because publication only occurred on one occasion.  As to extent of publication, a person who placed an advertisement in a local newspaper did so in the hope it would be read by persons within the community.There wasno guaranteehoweverof the extent to which that would occur, andthere wasno way of learningthe extentto which it hadbeen circulated. IfD&RTrucking Limited knew when it placed theadvertisementthatthe newspaper had an extremely small circulation,that would callinto question thegenuineness ofthe use, butthere was no such evidence here.
(12)As to the Assistant Commissioner’s concern thatthere was no evidence that D&R Trucking Limited had used the mark when it operated its business as a scrap metaldealer, the trade markin question wasin the form ofanadvertisement. It therefore did not lend itselfreadilytouse on office stationery or staffuniforms. Perhaps theonly meaningful way in which it could have been used otherthan an advertisementwas as signage on the company’s premises and vehicles. D&R Trucking Limitedcould have made greater useof the trade markin thatway.While there wastherefore force inthe argument that D&R Trucking Limitedhad mademinimal use ofthe trademark,nothing in the circumstancessuggestedusefor any reason otherthan the promotion of business in thecourse ofthe trade for which the mark wasregistered. 
(14)Although the use ofthe trade mark on a single occasion undoubtedly amounted to minimal use duringthe 3 year period, that is notthe statutory test.The use of thetrade mark in the newspaper advertisement amounted to genuine use in terms ofs66(1)(a) ofthe Act.
Royal New Zealand Yacht Squadron v Daks Simpson Group Plc NZAR 187;Sambbasivamv Chetty(2011) 94 IPR 214 referred to.