Facts:

This was an appeal by Planet Fitness Limited against a decision of an Assistant Commissioner of Trade Marks upholding the respondent’s opposition to a trade mark application to register the word mark PLANET FITNESS in class 25 (clothing, footwear and headgear) and class 41 (gym services). 

The application was opposed by PFIP International, LLC a wholly-owned subsidiary of Planet Fitness, Inc, an international gym operator principally located in the northern hemisphere.

The Assistant Commissioner upheld the respondent’s first ground of opposition under s17(1)(a) Trade Marks Act 2002, namely that use of the mark applied for would be likely to deceive or cause confusion.  The Assistant Commissioner held there was ”not insignificant” evidence of awareness of the respondent’s PLANET FITNESS mark in New Zealand as at the relevant date.  As the applicant’s mark was identical and the goods and services applied for were very similar, there could be no doubt that New Zealanders would be confused or deceived in the sense of being likely to wonder whether there was some relationship between the gym services marketed under the opposed mark and the respondent’s gym franchise.  The appellant had not discharged the onus on it of showing no likelihood of confusion or deception.  As a result, the Assistant Commissioner directed that the application not proceed to registration.

The Assistant Commissioner dismissed the respondent’s further ground of opposition, namely bad faith under s17(2) Trade Marks Act 2002. 

The appellant appealed against the Commissioner’s decision upholding the opposition under s17(1)(a).  The respondent appealed the Commissioner’s dismissal of its s 17(2) bad faith ground of opposition.

Held,  dismissing the appeal and allowing the cross-appeal.

(i)          The Court’s approach on appeal.

(1)         The appellate court must be persuaded that the decision under appeal is wrong, but must make its own assessment on the merits of the appeal.  It is a matter for the appellate court to decide how much weight it places on the first instance decision [10]-[11].

Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, (2007) 74 IPR 452 applied: Crocodile International Pte Ltd v Lacoste [2017] NZSC 14, (2017) 131 IPR 511 at [65]-[66] referred to.

(ii)         The Appeal: s17(1)(a) ground.

(a)         The test for likely to deceive or cause confusion under s17(1)(a)

(2)         The statutory language of s 17(1)(a) should be the starting point rather than judicial glosses on that language [16].

Sexwax Inc v Zoggs International Ltd [2014] NZCA 311, (2014) 109 IPR 131 at [49] referred to.

(3)         The enquiry began with whether the mark relied on by the opponent had a reputation in New Zealand at the date of the application.  Such a reputation need not be widespread as it all depended on the nature of the mark and the goods to which it was applied [19].

Sexwax Inc v Zoggs International Ltd [2014] NZCA 311, (2014) 109 IPR 131 at [48] applied.

(b)        Was there a sufficient level of awareness in this case?

(4)         The evidence as a whole established sufficient awareness of the respondent’s trade mark to engage s17(1)(a) [38].  The evidence was that the respondent’s PLANET FITNESS brand was one of the largest, fastest growing and most recognised gym brands in North America.  Evidence had been provided of extensive sponsorship and advertising in North America, extensive brand promotion over social media and the internet generally, and its recognition in North American media as a leading franchise.  There was evidence that a large number of New Zealanders travelled to the United States on an annual basis.  In those circumstances, a reasonable inference could be drawn that a proportion of those travellers would have become aware of the PLANET FITNESS brand [45].

(5)         There was evidence from six New Zealand gym goers and one gym working professional that they were aware of PLANET FITNESS as a large North American gym brand through either viewing online fitness content or through travel to the United States.  This evidence, in combination with the evidence of the website and YouTube channel visits, the availability of online and magazine content, and the potential for exposure through travel to North America, met the threshold of “sufficient” evidence of reputation or awareness to engage s17(1)(a) [48].

(c)     Risk of deception or confusion

(6)         The evidence in the case, having regard to the practical business probabilities, all the surrounding circumstances and the degree of similarity of marks meant that the appellant had not established that there was no reasonable likelihood that the mark would cause deception or confusion [50].

Sexwax Inc v Zoggs International Ltd [2014] NZCA 311, (2014) 109 IPR 131 at [48] applied.

(iii)       The cross-appeal:  Bad faith – s17(2) ground

(a)         The onus or burden of proof

(7)         The primary legal onus (as with other grounds of registrability) was on the appellant to establish that its application did not offend against the requirements for registration.  However, this starting position did not provide a shift in the onus in respect of allegations of bad faith [60] and [65].

(8)         The Court had no difficulty in accepting that an allegation of bad faith was serious, required clear evidence and careful analysis and the presumption of good faith must be displaced by cogent evidence.  These propositions could be consistent with placing an evidential burden on the party alleging bad faith rather than a strict burden of proof.  An evidential burden that required clear and cogent evidence was likely to be practically indistinguishable to proof on the balance of probabilities [65].

(9)         Where the objective circumstances gave rise to a prima facie case of bad faith, the presumption of good faith was displaced and the evidential burden shifted to the applicant [66].

Lidl Great Britain Ltd v Tesco Stores Ltd [2024] EWCA Civ 262 at 173] referred to.

(b)        The test for bad faith

(10)     A purposive approach to bad faith was supported by recent European and UK authority.  It was consistent with the purpose in s3(e) Trade Marks Act 2002 of ensuring ”that New Zealand’s trade mark regime takes account of international developments”.  It was consistent with the New Zealand High Court’s previous reliance on UK authority in formulating its approach to bad faith [69].

Rob Batty: Bad Faith: A Section Whose Time has come” (2024) 2 NZLR 261 referred to

Valley Girl Co Ltd v Hanama Collection Pty Ltd (2005) 66 IPR 214 (HC):  Neumann v Sons of the Desert, SL HC Auckland CIV-2007-485-212, 5 November 2007 referred to.

(11)     The test to be applied was whether there was clear and cogent evidence that the appellant filed its trade mark application with the intention of impeding or taking advantage of the interests of the respondent using its mark, or to use the registration regime for purposes other than protecting a genuine intention to use the mark.  In other words, whether the appellant’s intention was to abuse the trade mark system.  This essentially came down to whether there was a clear and cogent inference that the appellant’s intention was to impede the respondent’s use of its mark in New Zealand rather than a genuine intention to use the mark [75].

(c)         Was bad faith established in this case?

(12)     A combination of objective circumstances led to the clear and cogent inference that the purpose of the appellant’s application was attempting to prevent the possible expansion of a competitor into New Zealand rather than an intention to use the mark.  There was therefore a prima facie case of bad faith that required a response [81-83].

(13)     A statutory declaration from the owner of the appellant, Mr Patchell-Evans, did not deny a 2007 meeting with the respondent parties and that the owner of the appellant had requested an agreement that the parties not compete.  Nor did it provide an explanation for why Mr Patchell-Evans would want to provide gym services in New Zealand using the same name as one of the most well-known gym brands in North America in circumstances where he already ran an established gym chain in New Zealand modelled on that brand.  The declaration did not even contain a bare statement of an intention to use the mark made under oath [85].

(14)     The appellant had provided no alternative explanation let alone a convincing one, for why it applied to register the mark.  There was clear and cogent evidence of objective circumstances that established a prima facie case of bad faith, which shifted the evidential burden to the applicant to “explain his intentions at the time of making the application”.  The appellant failed to do so.

Lidl Great Britain Ltd v Tesco Stores Ltd [2022] EWCA Civ 1433 at [173] applied.

Appeal

This was an appeal and cross-appeal against a decision of the Assistant Commissioner of Trade Marks.