FLUJO SANGUINEO HOLDINGS PTY LIMITED v MERISANT COMPANY & ORS

 

High Court of New Zealand

Woolford J

19-23 April, 1 June 2021

[2021] NZHC 1505

Passing off – Misleading or deceptive conduct – false or misleading representations – Get-up of competing natural sweetener products – alleged to be confusingly or deceptively similar – No misrepresentation - plaintiff failing to show its get-up was exclusively associated with it – Trade Mark infringement – similar mark – no likelihood of deception or confusion – Counterclaim for unjustified proceedings dismissed – Fair Trading Act 1986 (NZ) ss 9, 13(e) and (f); Trade Marks Act 2002 (NZ) ss89(1)(c), 105

Facts:

The plaintiff was a manufacturer of natural sweetener products derived from stevia leaves as a sugar substitute.  Its product, NATVIA, was marketed in packaging with a distinctive get-up.

The first defendant was a US company and the controlling entity behind the worldwide Merisant group of companies.  The second defendant authorised the defendants’ range of natural sweetener products called NATURALS to be distributed in New Zealand by the fourth defendant. 

Images of the two boxes are reproduced in the judgment. 

The plaintiff sued the defendants for passing off and breach of ss 9 and 13(e) and (f) Fair Trading Act 1986.  It alleged that the defendants’ get-up, focusing particularly on the NATURALS’ Stick Box (containing sticks of the stevia-based product) was confusingly similar to its NATVIA get-up because of use of a series of visual elements on the packaging, including the colour scheme.

Separately, the plaintiff alleged the defendants’ activities constituted infringement of its NATVIA registered trade mark under s 89(1)(c) Trade Marks Act 2002 (NZ).  The claim was that the defendants’ NATURALS trade mark on its 2016 get-up was similar to the registered trade mark for NATVIA registered in respect of natural sweeteners and that the defendants’ use was likely to deceive or confuse. 

The defendants counterclaimed under s 105 Trade Marks Act alleging that the proceedings were unjustified. 

The parties each called expert witnesses in marketing who had conferred and produced a Joint Expert Report.  The experts agreed on many issues but set out in the Report the areas and bases for disagreement. 

Held, dismissing both the claims and counterclaim.

Passing Off; Fair Trading Act

(i)            Although the impression of labelling was of most significance, it was still necessary for the Court to analyse the individual features, without according primacy to any one feature [39].

(ii)          The Court was not satisfied that the plaintiff had proven that its get-up had become associated in the minds of substantial numbers of the purchasing public, specifically and exclusively, with it [59].

(iii)         The Court was not satisfied that the plaintiff had proven any misrepresentation on the part of the defendants.  The NATURALS and NATVIA products were distinctly different [59].

(iv)         The two products had dramatically different visual appearances [40].  While the plaintiff had identified the primary feature leading to alleged confusion as being the large and centrally present descriptor “a 100% natural sweetener”, the two brands’ treatment of that could not be more different [40].  The most significant element in a consumer’s overall impression was that of contrasting major colours – the plaintiff’s box being bright green, while the defendants’ box was predominantly mid-beige [42].  Overall the two packages were distinctly different [43]. 

(v)          Since proceedings had first been issued five years earlier the plaintiff had not produced any reliable evidence of consumer confusion [44].  The same three instances of confusion that had been considered in a failed interlocutory injunction application had been relied on again [45]. 

(vi)         As to the plaintiff’s concerns as to a dramatic fall in sales when the defendants introduced their new packaging, a more cogent explanation was that the average price of the plaintiff’s product had increased which led to a sales drop.  When its average price dropped back, sales rebounded [54].

(vii)        There was an important distinction between an intention to copy and an intention to deceive.  The former did not establish the latter.  Competitors are entitled to copy the get-up of others provided the end result does not deceive.  The defendants’ packaging did not deceive or mislead [58]. 

Verrochi v Direct Chemist Outlet Pty Limited (2016) 247 FCR 570 at [104] referred to.

Infringement of Trade Mark

(viii)       There was no likelihood of deception or confusion between the two marks in terms of s 89(1) [62].  The marks were different visually and phonetically [63].  The plaintiff had provided no credible evidence of confusion between the NATURALS mark and the NATVIA mark since the NATURALS product had come on to the market in 2013 [66]. 

Counterclaim for Unjustified proceedings

(ix)         The trade mark infringement cause of action would be justified if the plaintiff could show it had acted in the genuine belief, held on reasonable grounds and after taking legal advice, that there had been or might have been an infringement [68].  The Court had no doubt that the plaintiff’s executive genuinely believed its trade mark had been infringed.  The legal advice to the plaintiff had not been produced but the plaintiff’s expert had included the trade marks in his analysis of the comparative get-ups of the two products.  In those circumstances the counterclaim for unjustified proceedings was dismissed [71].