NV Sumatra had argued that, in the light of the Supreme Court’s allowance of Wild Geese in the face of opposition from Wild Turkey in the Stichting Lodestar decision, its two marks should be allowed registration. However, the Court of Appeal refused registration and reaffirmed some well established principles as to comparison of marks.   In terms of opposition based on earlier reputation (s16 1953 Act and s17 2003 Act), the Court of Appeal clarified that the evidential onus is still on an opponent to show “awareness, cognisance or knowledge” and nothing higher. Although the appeal was determined under the 1953 Act, the decision is equally relevant to the 2002 Trade Marks Act.

BAT owned the registered trade mark LUCKY STRIKE in class 34 in respect of (inter alia) cigarettes. This had been registered in New Zealand since 1913. It also owned the word mark LUCKIES and other logo marks in class 34 incorporating the words LUCKY STRIKE. 

NV Sumatra applied to register the word marks LUCKY DRAW and LUCKY DREAM in respect of cigarettes and other cigarette related products in class 34. BAT opposed the application relying on s17(1) Trade Marks Act 1953 (and its prior registered LUCKY STRIKE trade marks) and s16(1) (confusion or deception arising from use and awareness of its LUCKY STRIKE trade mark). At first instance, the Assistant Commissioner allowed registration but this was overturned on appeal. The High Court held that BAT had made out its opposition under s17(1) but that its s16(1) opposition failed because BAT had not established the required “necessary substantial reputation”.
  
NV Sumatra appealed the refusal to register under s17(1). BAT in turn cross-appealed the decision under s16(1).  The Court of Appeal dismissed the appeal and allowed the cross-appeal:

(1)   Section 17(1) Trade Marks Act 1953

(a)  “Lucky” followed by a single syllable word - created a reasonably significant risk of confusion even though neither “draw” nor “dream” sounded like “strike”.

(b)   Conceptual similarity

The issue of conceptual similarity is one for the judge taking into account any relevant evidence. There was conceptual similarity in the idea behind the respective marks. The weight to be accorded to the idea of a mark will depend on the circumstances. The judge had not given too much weight to it given his finding of some possibility of confusion or deception from look and sound alone.

(c)   Although the focus is on the totality of the mark applied for the Court can properly look at common or essential feature in both marks as being key. The first syllable of a mark or the first word of a composite mark i.e. “Lucky” is usually the most important for comparison.

(d)   Applying the tests of look and sound and imperfect recollection, consumers were likely to remember the essential feature “Lucky” in the respective marks. The fact of consumer abbreviation of Lucky Strike to “Luckies” reinforced this conclusion.

(e)   The Smokefree Environments Act increased rather than decreased the likelihood of confusion or deception because the retail persons involved in the purchase (i.e. bringing the pack to the purchaser) were increasingly likely to be non-smokers unfamiliar with brands. The fact that any deception might be corrected at point of sale was irrelevant.

(f)   Co-existence in other countries

The fact that the marks might co-exist in other countries was not of assistance.  Apart from Australia (where the mark was being opposed), the countries where the marks co-existed did not generally speak English as their first language. 

(g)   Comparison with other cases

With marks that are highly distinctive, the Court would show little tolerance of deception or confusion as to the origin of the goods in issue. Where marks contain elements that are descriptive, some level of confusion may be inevitable. Here the LUCKY STRIKE word marks and logo marks were at the fancy end of the continuum of marks with no descriptive connotations in respect of tobacco and cigarettes.

(h)   Overall onus

NV Sumatra had not discharged the onus under s17(1).

(2)   Section 16 Trade Marks Act 1953:

(a)   The initial evidential onus

Although in the Pioneer case, Richardson J had held that the opponent must first establish a sufficiently substantial reputation, it is clear that this is a relatively low threshold. All that an opponent needs to show is awareness, cognisance or knowledge of the opponent’s mark. What will amount to a substantial number of persons depends on the relative size of the market and is relevant both to the number of persons involved and their impact on that market. Given the brand was offshore and its longevity, it was safe to assume a level of spillover reputation in New Zealand. [81] BAT had discharged the evidential onus on it.

(b)   The overall onus

NV Sumatra had not discharged the overall onus on it and registration was refused.