Fredco Trading Limited v Robert Peter Miller

Venning J, High Court, CIV 2004-404-000895, 16 December 2004

This is the first decision at High Court level to deal with shape trade marks under the Trade Marks Act 2002. The judgment also contains a useful consideration of distinctiveness required for registrability under s18 of the new 2002 Trade Marks Act 2002. 

This case involved an application under s73 of the Act by a trade competitor to revoke a trade mark registration for the shape of a horticultural plastic vine tie. 

The registered proprietor had sold over 1 billion vine ties of the trade mark shape since the early 1980s.  These were sold under the brand name KLIPON.  The applicant for revocation entered the market in June 2002 selling vine ties of a virtually identical shape to the Klipon tie.  The shape mark was registered by Fredco as a trade mark from 25 July 2002.  Evidence of distinctiveness through use had been required by IPONZ before registration.  (Prior to these events, the registered proprietor had only one serious competitor who sold ties of a different shape.)

The registered proprietor had commenced various proceedings against the applicant including proceedings for infringement of the shape trade mark.  In response, the applicant challenged the validity of the trade mark registration. 

The applicant alleged that the registration was invalid as:

(a) The sign was not a trade mark (s18(1)(a));

(b) The trade mark had no distinctive character (s18(1)(b));

(c) The trade mark  consisted only of a sign or indication that may serve in trade to designate the intended purpose or other characteristics of the goods (s18(1)(c)); and

(d) The trade mark consisted only of a sign or indication that it had been customary in the bona fide and established practices of the trade (s18(1)(d)).

The judge accepted that the onus of proof was on the applicant for revocation but, although registration is prima facie evidence of validity, it did not create a presumption of validity. 

The applicant adduced expert evidence to the effect that the trade mark shape was purely functional and devoid of brand significance.  In response, the registered proprietor presented evidence from a marketing expert, and from within the trade, that although the vine tie shape was primarily functional, the fact that other products on the market had different shapes suggested that some characteristic features of the shape were not functional and that they served to distinguish the product from others at least to informed members of the industry. 

Venning J was satisfied that the registered shape met the criteria set out in s18(1)(a) and was a trade mark i.e. it was able to be graphically represented and capable of distinguishing the goods or services of one person from those of another.  The latter requirement was found to be met as the registered shape was different from that of competing products and was shown by the evidence to be used by the trade to distinguish the Klipon tie from its competitors. 

Venning J ruled that the requirement under s18(1)(b) for a mark to have “distinctive character” is different from that of being “capable of distinguishing” under sub-section (1)(a).  This conclusion was based on the varying uses of those phrases elsewhere in the Act and on the conclusion that otherwise paragraph (b) would be redundant. 

It was held that although some features of the trade mark shape were not solely determined by its function, the essential shape characteristics were.  Despite there being different ways to achieve the same functional result, this was insufficient to establish inherent distinctive character on its own.  Prima facie, therefore, the shape was not registrable. 

S18(1)(c) was noted as applying to trade marks that consist only of signs or indications that serve to designate the intended purpose of the goods.  This clearly did not apply to the Klipon shape as that shape was not wholly determined by its function - some features of it were atheistic.  Similarly, s18(1)(d) was dismissed as applying only to purely descriptive words. 

Given that the mark was prima facie unregistrable under s18(1)(b), the final consideration was whether there had been sufficient use of the mark for it to have acquired distinctive character pursuant to s18(2).  Venning J held that there had been such use given the following facts:

(a) The sale of over 1 billion units over 24 years;

(b) The fact that, apart from the brief use by the applicant, only the registered proprietor had sold ties of that particular shape;

(c) The trade mark shape was promoted and marketed as an identifying characteristic of the goods;

(d) The evidence established that consumers in fact used the shape to identify the product and its source both before and after sale;

(e) Alternative shapes are available with which to perform the same function;

(f) The shape had an aesthetic component; and

(g) Although the product was also marketed under the KLIPON brand name, the evidence showed that consumers first identified the product by its shape, and then related that shape back to the brand name. 

The registration was therefore allowed to stand. 

Comment

This decision makes it clear that even a largely functional shape mark is registrable in New Zealand as long as the shape has some aesthetic, non-functional characteristics and the shape has been used and promoted in such a way that consumers can, and do, identify the origin of goods from that shape alone. 

The decision in Fredco can be usefully compared with the contemporaneous judgment of the UK Court of Appeal in Re Bongrain SA [2004] EWCA CIV 1690.  In this decision, the Court of Appeal gave a clear explanation as to why a shape mark will almost never have sufficient inherent distinctiveness to be registrable.  Neither the shape in Fredco nor the shape in Bongrain (the shape of a French cheese) was found to have inherent distinctiveness.  Jacob LJ also explained why it is usually difficult to prove distinctiveness in a shape mark through use.  This difficulty stems from the fact that consumers simply do not expect that the shape of certain goods will be an indication of the trade origin of them. 

The mark in the Bongrain case, was held to not be registrable.  Evidence of use of the mark, and the public and trade perception of it, was flimsy. The Court was also swayed by the fact that cheese is almost invariably sold under a word or device mark upon which consumers will rely as an indicator of trade origin.   The shape had therefore not acquired the required distinctiveness.

The type of evidence of distinctiveness through use in Fredco on the other hand was much stronger.  It can be seen from these two cases that when attempting to register a shape trade mark or defend such a registration, evidence ought to be provided to demonstrate that:

(a) The shape mark has been used extensively;

(b) Consumers either:

(i) have been educated that, in the case of the particular shape mark, the shape denotes the trade origin of the goods to which it is applied; or

(ii) are accustomed to identifying the trade origin of goods of the relevant type by their shape; and

(c) Consumers in fact identify goods of the trade mark shape as originating from the applicant, by reason of that shape alone. 

As both cases discussed above emphasise, it is the perception of the consumer of the trade mark that is most important.