The Co-operative Bank Ltd v Anderson & Ors

High Court of New Zealand

Asher J

8, 30 October 2014

Passing off – descriptive terms ‘co-operative’ and ‘co-op’ – no exclusive reputation or secondary meaning – where descriptive words used, small differences sufficient to distinguish – no substantial risk of confusion – courts unsympathetic to monopoly claims to descriptive words

Misleading or deceptive conduct – insufficient reputation to give rise to misrepresentation – some confusion may have to be tolerated where descriptive names chosen

Trade mark infringement – common use of words and marks – no serious question that defendant’s signs likely to deceive or confuse – defence in s 95(c)(i) likely to apply – Trade Marks Act 2002 (NZ) s 89(1)(c), 95(c)(i)



The Co-operative Bank Ltd (TCB) was a co-operative registered under the Co-operative Companies Act 1996.  In October 2011 it changed its name to The Co-operative Bank and formally registered as a bank.  It registered THE CO-OPERATIVE BANK in logo forms as registered trade marks.  Its application to register the word mark was not accepted by IPONZ.

The defendant was the New Zealand Association of Credit Unions (NZACU).  It was an entity co-operatively owned by 17 member credit unions and building societies and operated as an industry body formed to represent those credit unions and building societies and to provide advisory and support services for them.  The 17 members were not banks but financial co-operatives offering a range of savings, loans and insurance products to their members.  Each of the financial co-operatives was itself co-operatively owned by its customer members.

NZACU proposed to introduce new branding, reflecting the co-operative nature of the operation of both it and its members.  For its advocacy role on behalf of its members, it proposed to use CO-OP MONEY NZ.  For its business-to-business trading, it proposed to change its name from FACTS Limited to CO-OP SERVICES NZ.  For its insurance services, it proposed to change its name from Credit Union Insurance Ltd to CO-OP INSURANCE NZ.  NZACU’s trade mark applications for these marks in logo form had been accepted by IPONZ but were being opposed by TCB in opposition proceedings.

The individual members of NZACU had used the term “co-operative” and promoted themselves as “co-operatives” for some time before TCB changed its name in October 2011.  NZACU itself had used logos and marks emphasising its role as a co-operative and representative of co-operatives.  Its insurance arm had a registered trade mark for COVERING YOU CO-OPERATIVELY from July 2011, four months before TCB’s change of name.

TCB sought an interlocutory injunction to prevent NZACU from rebranding to names that used the word CO-OP.  TCB claimed that the new names proposed by NZACU would be deceptively similar to its name THE CO-OPERATIVE BANK and amounted to:  (i) passing off; (ii) breaches of ss 9, 11 and 13 Fair Trading Act 1986; and (iii) infringement of various of its registered logo trade marks for THE CO-OPERATIVE BANK under s 89(1)(c) of the Trade Marks Act.

TCB relied on four New Zealand High Court decisions where passing off claims relating to descriptive or generic terms had succeeded.

NZACU had postponed launch of its CO-OP rebranding pending the outcome of the interlocutory injunction application.  There was therefore no actual evidence of the effect of the proposed rebranding on customers and on the market.  NZACU opposed the relief sought.

In relation to the trade mark infringement claim, it also raised the defence contained in s 95(c)(i) of the Trade Marks Act 2002, namely that a person:

“does not infringe a registered trade mark if, in accordance with honest practices in industrial commercial matters, the person uses:
(c) a sign to indicate—
      (i) the kind, quality, quantity, intended purpose, value, geographical origin, or other characteristic of goods or services;”

Held, dismissing the application:

Passing off

(1) Although TCB had shown it to be seriously arguable that its new name had developed a reputation with some customers, that did not mean that use of CO-OP was associated with TCB by a significant group of customers [18].  TCB’s incorporation of “co-operative” began well after NZACU’s use of the word in its promotional statements and that of its members.  TCB chose to use the word ‘co-operative’ in its name against the background of competitors that were co-operatives promoting themselves using that word [21].


(2) The words “co-operative” and “co-op” were descriptive [35].  A word which is both generic and descriptive such as “co-operative” or “co-op” did not indicate the source of the service to be provided but rather a key feature of the service and the nature of the operation [37].

(3) On the facts no secondary meaning had been established.  TCB had not shown a seriously arguable case that it had developed a sufficient reputation in its name and the use of the word “Co-operative” so that in the area of financial services that word was exclusively associated with it.  While it could prove some developing brand recognition, that fell far short of showing a secondary meaning for its name [39].

(4) Even if there were to be secondary meaning in TCB, there were no two words used in the NZACU name that were the same as the TCB name [40].  Where highly descriptive terms are used, small differences are sufficient to distinguish brands, unless the facts show a serious risk of passing off.

Airport Rentals Ltd v Airport Car Rentals (Southern) Ltd (1993) 6 TCLR 664 at 665 applied.

(5) The four High Court decisions relating to descriptive words relied on by TCB were all distinguishable [31], [32] and [38].

New Zealand Insurance Ltd v New Zealand Insurance Brokers Ltd [1976] 2 NZLR 40; Hills Flooring Ltd v Carpet Corner Ltd HC Auckland A289/83, 3 May 1983; Airport Rentals Ltd v Airport Car Rentals (Southern) Ltd (1993) 6 TCLR 664; Shotover Gorge Jet Boats Ltd v Marine Enterprises Ltd [1984] 2 NZLR 154 distinguished


(6) TCB’s case for deception or confusion was weak, as the lack of identical words, the differences in the words used, the descriptive nature of the word ‘co-operative’, the number of persons using it, and the shallow rooted use by TCB of its new name, made it unlikely that a substantial number of persons would be seriously confused by the names [42].  The court did not consider that there was any substantial risk that confusion would arise if NZACU were allowed to use “co-op” in its branding.  NZACU and TCB would not be competing directly except perhaps in the insurance sector.  It was unlikely that consumers would be deceived into signing up with one believing it to be the other.  The possibility of some initial confusion did not give TCB a winning hand.  Given the obviously descriptive nature of the word and the lack of similarity in the names, there was very little risk of a customer being misled [43], [49].

(7) It was perfectly understandable that NZACU, given its history and nature, wished to use the word “co-op” in its name.  It should not be stopped just because it came to put the word in its brand less than 3 years after TCB.  In effect TCB was seeking a monopoly [44].  A company could not appropriate for itself a descriptive word used in trade by inserting it as part of its brand name [45].

The Cellular Clothing Co Ltd v Maxton & Murray [1899] AC 326, 339-340 referred to

(8) Even if contrary to the court’s expectations the odd consumer might sign with one thinking it the other, some risk of confusion was the price they both must pay for choosing to use a highly descriptive word in their brand [47].  Courts are unsympathetic to plaintiffs who seek to gain monopolies of descriptive words that are relevant in competitive sectors of commercial activity [48].

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 18 ALR 639, 648; DB Breweries Ltd v Lion Nathan Ltd (2007) 12 TCLR 25 at [36] and [37] referred to

Fair Trading Act

(9) Where an allegation of misrepresentation in a name is based on similarities, it must be shown that the plaintiff has a reputation in the name strong enough that consumers are likely to infer that the services of goods offered are those connected to the plaintiff.  There was not a seriously arguable question under this head, the reasons being the same as those set out in relation to passing off [52], [53].

Neumegen v Neumegen & Co [1998] 3 NZLR 310, 317 referred to

(10) In relation to descriptive words some confusion may have to be tolerated when traders chose to use them in names.  This consideration was relevant to Fair Trading Act claims as well as passing off claims [54].

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 18 ALR 639, 648 referred to

Trade mark infringement

(11) It was convenient to consider the issues of similarity and confusion together because the extent of a similarity is likely to inform the decision whether there is a likelihood of deception or confusion.  In considering the similarity of marks, the court must compare the marks as a whole [63].

Coco-Cola Company v Frucor Soft Drinks Ltd (2013) 104 IPR 432 at [146]-[153]; Specsavers International Healthcare Ltd v ASDA Stores Ltd [2012] FSR 19 at [52(c)] and [52(d)] referred to

(12) It could be assumed that because of the descriptive nature of the words (and IPONZ’s refusal to date to register a word trade mark) that TCB obtained trade mark registration because of the distinctive way in which it set out the various words in the context of the logo.  These included the type face, the way the words were joined and, when used, the logo.  None of those distinctive features was present in the NZACU’s marks [65].  The NZACU marks had different words and a different look and shape.  Comparing the marks as a whole, the court did not consider there to be a serious question to be tried that the goods were similar and likely to cause deception or confusion [66].

(13) By virtue of s 164 Trade Marks Act, where there is common use of words or marks in the trade, that use of those words or marks must to some extent be discounted in determining whether the marks are deceptively similar.  ‘Co-operative’ was common across all sections of the New Zealand commercial world, including the provision of financial services [68].

Wingate Marketing Pty Ltd v Levis Strauss & Co (1984) 28 IPR 193 at 229-230 referred to

(14) On the evidence before the court it seemed likely that the statutory defence in s 95(c)(i) would apply [70].  Given NZACU had members called co-operatives, was a co-operative itself and had used the word “co-operative” in its promotion over the years, its adoption and use of the three trade marks at issue could be seen as in accordance with honest commercial practice.  The inclusion of the word “co-op” in the three trade marks identified an important characteristic of the service that NZACU provided.  The credit unions that make up the NZACU were co-operatives and NZACU itself was owned by its members [72].

(15) There was no serious question to be tried under the trade mark infringement cause of action [73].

Balance of convenience

(16) The balance of convenience favoured declining the application for interim injunction [74]-[77].  The courts were hesitant to grant injunctions where they appeared to have anti-competitive motivation.

Telecom Directors Ltd v Ad Viser (NZ) Ltd (1992) 5 TCLR 60 at 62 referred to


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