Metalman New Zealand Ltd v Scrapman Bop LTD [2014] NZHC 2028 [26 August 2014]

The High Court of New Zealand has recently held that a single newspaper advertisement was sufficient use of a trade mark to defeat an application for revocation of a New Zealand trade mark registration.  The decision overturns that reached by the Assistant Commissioner of Trade Marks and provides a practical assessment of the specific facts relating to this case.

The Assistant Commissioner of Trade Marks's decision

Metalman New Zealand Limited is the owner of the registered SCRAPMAN composite mark shown below, which it acquired from D&R Trucking Ltd in December 2012, and was registered in class 40 for "recycling of metals, scrap":

Scrapman BOP Limited applied for revocation of the trade mark registration, alleging that there had been no use of the trade mark by its registered owner at the time between 20 November 2009 and 20 November 2012.  As D&R Trucking was the owner of the trade mark during that period Metalman needed to prove that D&R Trucking had made genuine use of the trade mark in New Zealand in relation to the services for which the mark was registered during that period.  Scrapman also applied to have the registration declared invalid.

The issue before the Assistant Commissioner was whether a single advertisement published by D&R Trucking in the Waitaki Herald newspaper on 11 March 2011 amounted to sufficient "genuine use" of the trade mark to defeat Scrapman's revocation action, as Metalman could not provide any other evidence of use of the trade mark by D&R Trucking.

The Assistant Commissioner considered that the newspaper advertisement was insufficient.  She was critical of the fact that no evidence was provided as to the circulation or frequency of the newspaper and whether it was distributed free of charge, and why only one advertisement was placed during an entire three year period.  Consequently the Assistant Commissioner found that Metalman had not discharged its onus of establishing genuine use of the mark during the non-use period.

The High Court decision – how much use is sufficient to establish "genuine use"?

The Court carefully went through a number of authorities regarding assessment of "genuine use" as opposed to "token" use and concluded that the single advertisement was sufficient in this case to establish genuine use and thus defeat the revocation action.

The Court was able to distinguish its assessment from two other High Court decisions – namely Royal New Zealand Yacht Squadron v Daks Simpson Group Plc [2002] NZAR 187 [HC] and Sambbasivam v Chetty (2011) 94 IPR 214, in which the sale of 11 jackets and two isolated sales of saris, respectively, was not enough bona fide use to defeat revocation actions lodged against the relevant registrations. 

In the present case the Court placed what seems to be appropriate weight on the fact that the trade mark was registered by the owner of a small business in a rural town and that the registered mark  did not lend itself to general use on office stationary, clothing etc. The Court felt that  the advertisement constituted actual use in the relevant field of trade, as it was placed for the purpose of promoting D&R Trucking's business and occurred well before the dispute between Metalman and Scrapman arose.  Consequently the Court concluded that

in the absence of any evidence to suggest that an advertiser may have an ulterior motive, however, a person who goes to the trouble and expense of placing a business advertisement in the business section of a local newspaper can generally be taken to want to use the advertisement to promote his or her business".

Court’s common-sense assessment of “genuine” trade mark use

This assessment is one which very much stands on its own facts.  The Court concluded that whilst there was no evidence as to the circulation of the Waitaki Herald the Court considered that the frequency with which the newspaper was published had

little or no relevance, because the evidence in the present case is that publication only occurred on one occasion". 

The Court was also prepared to presume the newspaper circulated within the Oamaru district and that

any person who places an advertisement in a local newspaper does so in the hope that it will be read by persons within the community"1

Whilst the Assistant Commissioner was concerned that there was no evidence to establish clearly that the services covered by the registered mark had been provided during the relevant non-use period, the Court concluded that the mark is an advertisement and the nature of the mark is such that it would largely be inappropriate for it to be used on office stationery or staff uniforms.

Scrapman's related action towards Metalman

Scrapman had also sought to have Metalman's trade mark registration declared invalid.  This action was dismissed by the Assistant Commissioner and was not cross-appealed to the High Court.

Take home lessons for trade mark owners

Trade mark owners should be cautious in concluding that a single advertisement is all that is required to maintain a trade mark registration in New Zealand, if challenged under a revocation action.  The decision appears to reflect the specific circumstances of the case in that the trade mark is owned and used by a small business in a rural town.  The trade mark in question is also one which does not lend itself readily to use on office stationery, which partially explained why further evidence could not be provided (ie. invoices, product packaging, in-store signage, etc.).  Depending upon the circumstances it will be open to the Assistant Commissioner or a court considering a similar action to find in a future case that a single advertisement is not sufficient to establish genuine use to defeat a revocation action, notwithstanding the outcome of this decision.