Facts:

Mars New Zealand Limited (“Mars”) and Roby Trustees Limited (“Roby”) both sold pet food, including dog food rolls.  Mars owned device marks comprising OPTIMUM and OPTIMUM NUTRITION FOR LIFE, and the word marks OPTIMUM and OPTIM-ATE, all in class 31.  Mars had used words and phrases incorporating or comprising “Optimise”, “Optimize” and “Optimum” in conjunction with its trade marks in promoting its petfood products.

On 16 July 2009, Roby applied to register a device mark comprising OPTIMIZE PRO together with the less prominent tagline “Lead the Pack”.  Mars opposed Roby’s application under ss 17(1)(a), 17(1)(b), 25(1)(b) and 25(1)(c) of the Trade Marks Act 2002 (“Act”). 

The Assistant Commissioner dismissed the opposition holding that (among other things) the marks were visually, aurally and conceptually dissimilar. 

On appeal to the High Court, Venning J overturned the decision of the Assistant Commissioner of Trade Marks.  He found that the visual, aural and conceptual similarities between the marks were such that, when taken together with the developed brand and consumer awareness of Mars’ marks, it was inevitable that the proposed mark would deceive or cause confusion to a substantial number of persons in the relevant market. 

There was no challenge to the Assistant Commissioner’s finding that Mars enjoyed a substantial reputation in its marks in relation to dog food in New Zealand.

On further appeal, the central question was whether, having regard to Mars’ use of and reputation in its OPTIMUM marks, fair use of the appellant’s OPTIMIZE PRO “Lead the Pack” mark for chilled dog roll was likely to deceive or confuse consumers for the purposes of 17(1)(a) of the Act. 

The appellant, Roby, submitted that:

(a)  The decision under appeal had failed to examine the proposed mark in its entire and composite form but rather dissected it, dropping the “Lead the Pack” phrase which was an integral part of the mark and focusing incorrectly on the remaining similarities. It was wrong to assume that “PRO” would also be dropped.  Further, such dropping of parts of the mark could occur only in aural use, which overlooked the visual and conceptual similarities and differences;

(b)  The word “Optimum” was descriptive.  That matter had to be taken into account in the Court’s overall assessment.  The Court did not lightly confer a monopoly on the use of a descriptive word.  Rather, quite small differences should render the proposed mark immune from action.  “Optimum” or “Optimise” did convey the same concept, but the concept was commonplace or descriptive so its use need not cause confusion. [36] and [37]

Mars contended that the dominant element of the proposed mark was very close, and conceptually identical, to the two Mars’ OPTIMUM brands.  Regarding the submission that the courts were wary of conferring monopoly on a descriptive word, Mars accepted that “Optimum” and “Optimise” were descriptive words and accepted that the descriptive quality of the Mars’ marks was relevant notwithstanding that the marks had been registered.  However it submitted that the decision under appeal correctly recognised that such words were registrable where they are not, in normal use, descriptive of the particular goods. In this case, “Optimum” had become associated with Mars animal food products. 

On appeal, the Court admitted further evidence that after the relevant date a third party (Nestlé) had been permitted to register OPTISTART and OPTIHEALTH in class 31. [43]

Held, allowing the appeal:

Applicable principles under s17(1)(a)

(1)  The opponent must first establish a substantial reputation in its mark.  The onus then shifts to the applicant to show that any fair and proper use of its mark is not likely to cause confusion and deception among a substantial number of consumers of the goods in question.  That assessment assumes fair use of both marks, and is made from the perspective of the consumer and others involved in such a purchase.  [44]

Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 (CA) followed.

(2)  Marks are to be compared using the principles in the Pianotist case.  Attention must be paid to the whole of each mark, the look and sound of the marks, the kind of customer likely to buy the goods, the surrounding circumstances in which the marks will be used, the impact of imperfect recollection, the idea of each mark, and any descriptive quality of the marks.  [45] and [46]

Pianotist Company’s Application (1906) 23 RPC 774 applied.

(3)  The actual use of an opponent’s mark may be the best guide to its fair and normal use.  It was noteworthy that Mars used the complete OPTIMUM “Nutrition for Life” device mark in all of its advertising and packaging (i.e. with no abbreviation).  The “Nutrition for Life” tagline was therefore important and visual impact was an important reference. [49], [50]

Comparison of marks

(4)  The Court should consider the impact of any essential feature of the proposed mark.  The first part of a mark was generally the most important for the purposes of comparison.  However that was not always so.  It had to be borne in mind that there were other marks in the same class that began with OPTI.  In such a case, consumers may pay more attention to the other features of the respective marks.  The proposed mark was also a device mark and so had to be considered as a whole.  [53]

Hannaford & Burton Ltd v Polaroid Corporation [1976] 2 NZLR 14 (PC); Harrod’s Application (1935) 52 RPC 65 applied.

(5)  When the marks were considered as a whole, they were visually different.  Particular importance was to be placed on the addition of the word “PRO” and the phrase “Lead the Pack”.  The latter phrase was striking and likely to be remembered by customers in distinguishing the proposed mark from the Mars mark.  The marks were also aurally different.  The aural difference extended to shortened versions, since the Roby mark was likely to be shortened to OPTIMIZE PRO not OPTIMIZE. [54], [55]

Nature of purchasers and circumstances of purchase

(6)  Given that most retail purchases would be made in supermarkets after the competing products were viewed, the visual impact of the mark was most significant.  Roby’s dog rolls were essentially the same product as Mars’ dog rolls, both occupying the lower end of the pet food market, such that consumers were likely to buy it casually or on impulse, increasing the risk of confusion and deception. [57], [58]

Dr Martens Australia Pty Limited v Figgens Holding Pty Limited (1999) 44 IPR 281 referred to. 

(7)  Imperfect recollection also had to be taken into account, particularly when Mars was discontinuing its product so that consumers would not view the competing products side-by-side.  The features of the proposed mark most likely to be recalled were the words OPTIMIZE PRO and the phrase “Lead the Pack”. [58]

(8)  While the idea of each mark was much the same, a quality or premium product, there was nothing inherently distinctive about the idea.  “PRO” did not add anything material to the idea. [59]

Descriptive quality of the opponent’s mark

(9)  Courts were wary of granting a monopoly in the use of descriptive words.  The evidence did not establish that the word “OPTIMUM”, as opposed to the existing device marks, had become so associated with Mars’ products as to lose its ordinary meaning. [62], [63]

European Limited v Economist Newspaper Ltd [1998] FSR 283 (CA); Cooper Engineering Co Pty Limited v Sigmund Pumps Limited (1952) 86 CLR 536 referred to.

Conclusion on s17(1)(a)

(10)  Viewed as a whole, the marks were distinctly different.  Even in aural use PRO was not likely to be dropped, so the marks were aurally distinctive too. The idea of OPTIMUM and OPTIMISE PRO were the same, but the latter was not the complete mark and not an inherently distinctive idea.  Viewed overall, it was not likely that the proposed mark would deceive or cause confusion to a substantial number of persons in the market for dog food.  Rather, PRO and “Lead the Pack” together clearly distinguished the marks from Mars’ marks.   The decision under appeal ultimately attached too little weigh to the visual and aural dissimilarity of the marks when considered as a whole.  [63], [64]

Section 25(1)

(11)  The conclusion in respect of s17(1)(a) applied also to s25(1). [66]