ENERGY BEVERAGES LLC v FRUCOR SUNTORY NEW ZEALAND LTD
Court of Appeal of New Zealand
Cooper, Brown and Courtney JJ
30 November, 1 December 2021, 11 November 2022
 NZCA 536
Trade Marks – colour trade mark – colour swatch provided on application – Pantone shade designated – wording of description – ‘predominant colour’ required by Commissioner – during digitization of paper records by Commissioner different colour image from designated Pantone shade uploaded to register – Commissioner admitting error and willingness to rectify.
Application for declaration of invalidity – claim that registration comprised a sign that did not qualify as a ‘trade mark’ because ambiguous and covering multiple signs – invalidity application brought almost 9 years after deemed date of registration – owner relying on s75 presumption of validity after 7 years – invalidity application dismissed because of s75 presumption of validity.
Although obiter for this appeal, findings on colour registrations using ‘predominant’ formulation – clarity and precision are important features of registration – ‘predominant’ too subjective and imprecise – registered trade mark must always be perceived unambiguously – ‘predominant colour’ was ambiguous and covered multiple signs.
Interpretation of registered trade mark – wrong colour uploaded to register during digitization – written description of mark using Pantone shade must prevail in the event there is any inconsistency on face of the register – properly understood the registration was not ambiguous even though wrong colour uploaded by Commissioner.
Trade Marks Act 2002 (NZ) ss 5, 17, 18(1)(a), 18(2), 73, 75, 182(g) - Trade Mark Regulations 2003 (NZ) reg 42(1)(b), 44(g), 129.
Frucor was owner of a registered trade mark 795206 registered on 23 June 2012 (with a deemed date of registration of 29 August 2008) comprising a swatch of green colour with the explanation:
“The mark consists of the colour green (Pantone 376c), as shown in the representation attached to the application, applied as the predominant colour to the goods, their packaging or labels. Section S18(2) of the Trade Marks Act 2022 applies”.
When IPONZ scanned the green metal specimen attached to the paper application filed by Frucor, this generated a different shade of green from Pantone 376C. In a written statement filed with the Court of Appeal, the Commissioner stated that:
“(a) when the application was lodged IPONZ was transitioning to a paper-less system. As part of that process the application (including the metal specimen) was scanned.
(b) the application was examined on the basis of the application as it appeared digitally on the IPONZ online system after scanning and in conjunction with the other material provided, including the Pantone reference for the colour in the metal swatch.
(c) Frucor submitted evidence in support of the registration. The evidence included a physical sample of Frucor’s aluminium can packaging featuring the colour to be registered as a trade mark along with print outs of photographs and other printed promotional materials. The examiner was satisfied that the evidence of acquired distinctiveness demonstrated use of Pantone 376c or a colour closely approximating it.”
Almost nine years after the deemed date of registration EBL applied for removal of Frucor’s trade mark from the register in two applications:
(a) an application for revocation of the registration on the ground of non-use of the colour green appearing on the register; and
(b) for a declaration that the registration was invalid on the ground that it comprised a sign that did not qualify as a “trade mark”.
The applications were dismissed by the Assistant Commissioner of Trade Marks after a hearing. EBL’s appeals to the High Court were dismissed. EBL then appealed on both of its non-use and invalidly applications. These were heard together.
In respect of the invalidity application Frucor relied on s 75 Trade Marks Act 2002 which creates a presumption of validity seven years after the deemed date of registration unless –
“(a) the registration was obtained by fraud; or
(b) the trade mark should not have been registered on any of the grounds set out in section 17(1) or (2); or
(c) the registration maybe recovered on any of the grounds set out in section 66”.
Frucor contended that both ss 73 and 75 used the term “the registration of a trade mark” as the qualifier and should have the same meaning in both provisions. The former provides a mechanism to challenge the validity of a trade mark registration while the latter prevented that mechanism from being used after seven years (except in the three listed circumstances)  - .
EBL asserted that s 75 deemed valid “the registration of a trade mark”. If what had been registered was not a “trade mark”, there was nothing to deem valid .
In relation to the alleged ambiguity of the mark caused by the Commissioner uploading to the register a wrong scanned image, Frucor relied on the fact that the written description of the trade mark on the register correctly identified the Pantone shade of the mark (Pantone 476c).
Held, dismissing the appeal
Issue 1: Did the judge err in holding that the time bar in s 75 prevented a challenge to the Registration under s 18(1)(a)?
(i) The meaning of the statutory provision was to be ascertained from the text of the enactment and in light of its purpose and context .
Commerce Commission v Fonterra Cooperative Group Ltd  NZSC 36;  (3 NLZR 767 at  applied; Legislation Act 2019, s 10(1)
(ii) Adopting an interpretation which would involve reading the same significant phrase differently in ss 73 and 75 was strained. Parliament could not have intended that s 73 should extend to address the erroneous registration of s 18(1)(a) signs, while s 75 did not. The result would be an internal inconsistency in a small group of provisions which together address the concept of invalid registrations. If that had been Parliament’s intention a much more obvious course would have been to include s 18(1)(a) in the list of exceptions in s 75 (which had not occurred) .
(iii) The legislative history of s 75 including the Departmental report to the Commerce Select Committee assisted in providing cross-checking of the legislative interpretation and tended to indicate that the purpose of s 75 aligned with how the Court had construed its meaning .
(iv) The New Zealand Act was based on the UK and Singapore trade marks statutes. The deliberate retention by the New Zealand Parliament in 2002 of the presumption in s 75 some eight years after the 1994 UK Act and 1998 Singapore Act (neither statutes having such a presumption) lent support to Frucor’s argument (that because of s75, s 18(1)(a) was not a valid ground of challenge) and the Court’s conclusion .
Issue 2: Did the use of the phrase ‘predominant colour’ cause the Registration to be unclear if for more than one sign?
(v) If the Court’s conclusion on Issue 1 was correct, there was no need to consider Issue 2. However, it was appropriate to consider Issue 2 for the further reason that there should be clarity for the future concerning the registrability of colour as trade marks. While, as a consequence of the Court’s conclusion on Issue 1, the validity of such registrations (which had been on the register for longer than 7 years from the deemed date of registration) might not be open to challenge, a decision on Issue 2 might be of relevance for future similar applications .
(vi) Clarity and precision were important for all statutory intellectual property rights, but particularly so in the case of registered trade marks, given the significance of the distinction between identical and similar signs .
Crocodile International Pte Ltd v Lacoste  NZSC 14,  1 NZLR 679 at referred to.
(vii) Although the trade mark as originally sought comprised merely the colour swatch as a representation, in its final form the subject matter of the application comprised the colour swatch as a sample of the colour, the specified Pantone shade and a verbal description . the verbal description required a form of explanation and this had been finally agreed to by Frucor  – .
viii) The word “predominant” in the written description could convey both quantitative and qualitative notions . The use of the adjective “predominant” to qualify the colour comprising a trade mark rendered the description too subjective and imprecise. Actual or potential competitors were entitled to know the scope of the mark applied for and registered. It was the function of the register to provide that information. The information which the register should convey to an enquirer should not be dependent on the “particular circumstances” . Absent further particularity either by way of a written description or appropriate visual representation, the description of colour trade mark by means of the phrase “the predominant colour” (albeit accompanied by the requisite reg 44(g) description) would generally be an insufficient mode of identification of a trade mark .
(ix) The Court endorsed the proposition that a mark must always be perceived unambiguously if it is to fulfil its function as a trade mark. If the authorities and the public were left in a state of uncertainty or confusion as to the nature of a sign, then it was insufficiently clear to be registered as a trade mark. Frucor’s registration offended in that respect .
Société des Produits Nestlé S.A. v. Cadbury UK Ltd  EWCA Civ 1174,  RPC7; JW Spear & Sons Ltd v Zynga Inc  EWCA Civ 1175,  1 All ER 1093; Glaxo Wellcome UK Ltd v Sandoz Ltd (Number 2)  EWCA Civ 335,  FSR 33 referred to.
(x) Traders wishing to monopolise colours should take pains to be clear and not vague as to the boundaries of the registrations which they intend should preclude use by others of the full spectrum of colours. An obvious way to do so is to include in the application a representation of the spatial application of the claimed colour .
(xi) Had the Court reached a different conclusion on Issue 1, it would have ruled that the registration was invalid both because in its use of “predominant” it was insufficiently clear and because in its terms it extended to cover multiple signs .
Issue 3: Did the Judge err in holding that the Registration should be interpreted as being defined by the written description of the colour on the register, namely Pantone 376C?
(xii) With this registration two sources were provided as a means of identification of the colour, namely the colour swatch physically attached to the paper application form and the Pantone code . Regulation 44(g) ensured that, if the trade mark was a colour or colours the applicant was to provide a description acceptable to the Commissioner. This was to ensure certainty and consistency in the identification of the relevant colour. Such a description was not suspectable to deterioration, fading or erroneous transposition. In the Court’s view that was the form of identification of the relevant colour which should prevail in the event that there were any inconsistency on the face of the register . It would make no sense for a description of the colour to be specifically required by the regulation as a fixed point of reference and then not to be treated as a prescribed matter for the register . This attack on the conclusions of both the Assistant Commissioner and the Judge concerning the interpretation of the registration failed .
Issue 4: Did the difference between the darker shade of green and the image on the register and the written description Pantone 376C mean the Registration was ambiguous and too imprecise?
(xiii) Although the colour image for TM 759206 on the register was different from the nominated Pantone code, that ambiguity was resolved in favour of the Pantone code because the description of the colour required by reg 44(g) must prevail. Properly understood, the registration would not be ambiguous and was not suspectable to an invalidity challenge on that ground .