The plaintiff owned a variety of trade marks registered in New Zealand incorporating the word ZONE including ZONE IP, and carried on businesses as intellectual property advisers under the trade marks TRADE MARK ZONE and ZONE IP variously providing online trade mark registrations and intellectual property advice.

The defendant was part of the American Express commercial entity. In April 2011, the defendant launched the website www.ipzone.com in beta phase (meaning that it was in the course of being developed), to signal the development, using the trade mark IP ZONE, of an online marketplace for trading in intellectual property assets. The defendant proposed including on the website a referral listing service for IP professionals and advisers to promote their services. The defendant’s marketing materials indicated that the full launch of IP ZONE was anticipated for late 2011. As part of this initiative, the defendant applied in New Zealand for the trade mark IP ZONE in classes 35, 36, 41, 42, and 45.

There was substantial overlap between services listed in the specifications of the plaintiff’s registered trade marks for ZONE and ZONE IP, and the services to be provided on the defendant’s website and sought under the defendant’s trade mark application.

As to the defendant’s intentions in respect of New Zealand, an affidavit from the defendant stated that “after the beta phase concludes, there will be no impediments to New Zealand companies or individuals in New Zealand in general utilising the IP Zone platform.”

The plaintiff’s application was argued primarily on a quia timet basis. Its claim therefore related not just to the present conduct of the defendant, but also to infringement that would occur if the defendant’s IP ZONE initiative resulted in commercial activities between the defendant and businesses or individuals in New Zealand.

The plaintiff expressly confined the relief sought to conduct occurring or likely to occur within the New Zealand jurisdiction and sought orders restraining the defendant from:

1. Infringing the plaintiff’s registered trade mark IP ZONE in New Zealand.
2. Facilitating or offering within New Zealand, under the trade mark IP ZONE, or by use of the website “www.ipzone.com”, services falling within the plaintiff’s registrations; and
3. Including New Zealand in any list of countries able to be displayed and selected on the website “www.ipzone.com” including in any country drop down box.

Dobson J granted the interim injunction.

Preliminary point

The defendant argued as a preliminary point that activities based on its website could not constitute trade in New Zealand since the website, while internationally accessible, did not focus in any specific way on New Zealand.  Dobson J considered that it was at least strongly arguable that once contact with customers in New Zealand was generated from the IP Zone website, which led to business for the defendant, that activity would constitute use of the mark IP ZONE by the defendant in New Zealand. In this regard it was relevant that the plaintiff acknowledged in its affidavit that the promotion of its services would be accessible to persons visiting its website from New Zealand, and that New Zealand was not excluded from the jurisdictions it would canvas for business.

Comparison of marks – identical marks: s89(1)(a)

Dobson J considered it seriously arguable that ZONE IP and IP ZONE were identical marks for the purposes of s89(1)(a) based on current New Zealand caselaw (in particular the Court of Appeal decision in Budweiser [2003] 1 NZLR 472, 498).  However the Court noted that the authorities cited by the plaintiff did not necessarily require the acceptance of subtly differently worded marks as identical merely because they share the same first or dominant word.  It was also seriously arguable that the defendant was using its mark in relation to services in respect of which the plaintiff’s marks were registered.

Comparison of marks – similar marks - confusion and deception: s89(1)(c)

The Court then tackled an issue that has been little considered by New Zealand courts – the likelihood of confusion and deception arising in New Zealand as a result of business conducted by way of a website hosted in a foreign country.

Discussion focused on the question of what would occur if someone aware of the plaintiff’s services by word-of-mouth recommendation conducted an Internet search for the terms “IP Zone” or “Zone IP,” and a number of hypothetical scenarios were discussed. 

The defendant’s arguments included that confusion might not arise if an Internet user confined a search to pages from New Zealand, and that decisions by customers on retaining skilled assistance with trade mark or intellectual property services would not be made on the spur of the moment or cursorily – such consumers would persist until they found what they were looking for. 

The plaintiff contended that Internet searches confined by country require a positive step on the part of the user so that the default position is for a search to reflect websites worldwide.  The plaintiff’s key concern was that businesses or individuals who were aware of the plaintiff through verbal recommendation would run a generalised search and would not persist long enough to find the plaintiff’s website, or would be diverted or influenced by references to the services of the defendant – including its trade directory of IP specialists in various jurisdictions including New Zealand.  It was also argued that “initial interest confusion” might occur in this context, by which confusion and deception sufficient to infringe registered rights may arise even if such confusion did not persist up to the time of a sale.

Dobson J, citing the leading UK case 800-Flowers [2000] FSR 697, observed that the extent to which maintenance of a website outside the jurisdiction might constitute infringement of a mark within the jurisdiction is fact dependant.  On the facts he was satisfied that on the there was a seriously arguable case for infringement under s89(1)(c) but noted that this was not the strongest part of the plaintiff’s case.

Considerations relevant to the granting of an injunction

The following considerations were among those relevant to Dobson J’s decision that the situation warranted interim relief:

1. While damage caused by virtue of the defendant generating business in New Zealand might be calculable in an account of profits sense, it was virtually impossible to measure how much business might be deflected away from the plaintiff by the defendant’s website.
2. The orders were sufficiently certain in that the defendant was only prevented from making use in New Zealand of its mark and services. Mere maintenance of a website that was internationally accessible from outside New Zealand would not constitute use in New Zealand. However electronic dealings between that website and persons in New Zealand, and dialogue with persons in New Zealand, would amount to use of the mark and services in New Zealand.
3. Restraint on the defendant in relation to activities with entities in New Zealand was of substantial importance to the plaintiff, but could only constitute disruption on a relatively insignificant scale to the larger global business initiatives planned by the defendant.