Regulation 85 of the Trade Mark Regulations 2003 provides that:
An opponent to an application for registration may, if the applicant has filed evidence, file evidence strictly in reply within 1 month after the opponent has received a copy of the applicant's evidence.
Given the clear wording of regulation 85, it comes as no surprise that two recent judgments of the High Court (Merial v Virbac SA  NZHC 3392 and The Scotch Whisky Association v The Mill Liquor Save Ltd  NZHC 3205) have held that:
- such reply evidence is to be strictly confined to evidence that responds directly to something said in evidence from the applicant; and
- the practice of attempting to bolster an opponent's case at the last minute by slipping in evidence that could have been included in the opponent's initial evidence in opposition is impermissible and will result in such evidence being ruled inadmissible.
The Merial case
In the Merial case, the opponent had filed evidence in support of its opposition in December 2010. That evidence consisted of two statutory declarations which recorded the deponents' respective beliefs that use of the relevant trade mark would be likely to cause confusion or deception. Ellis J described both declarations as brief and containing "little by way of objective corroboration for the expressions of belief contained in them".
As is usual, the applicant for the trade mark (Virbac) then filed its evidence in support of its application for registration.
Merial then filed further evidence – purportedly in reply.
That "reply" evidence largely related to a market survey that it had undertaken after Virbac had filed its evidence. The survey was intended to ascertain the likelihood of consumer confusion that would be caused by the trade mark in issue.
The evidence consisted of 3 statutory declarations.
The first was from a representative of the firm that had carried out the survey and it outlined the objects of the survey, the methodology used and its findings.
The second was from an expert marketing witness who had analysed the results and deposed, among other things, that there was a high risk that a significant number of consumers would confuse Virbac's and Merial's respective trade marks.
The third was from a representative of Merial who referred, among other things, to the market survey evidence and to the fact that it had successfully opposed registration of the mark in issue in Argentina and Costa Rica. He also deposed that Merial's mark was well-known in New Zealand, while Virbac's was not.
Before the Assistant Commissioner of Trade Marks, Virbac objected to this purported reply evidence on the ground that it was not evidence "strictly in reply". In upholding Virbac's objection the Assistant Commissioner stated that:
- Although the survey evidence went to the central issue of the whether there was likely to be confusion or deception, it did not respond to a specific factual matter put in evidence by Virbac;
- One of the stated purposes of the survey was to uncover the level of recognition of the Merial's trade mark even though Virbac's evidence did not address this awareness issue; and
- The evidence in relation to the position in Argentina and Costa Rica did not relate to the specific countries that had been referred to in Virbac's evidence.
Before Ellis J, counsel for Merial submitted that the fact that its reply evidence raised new matters did not mean it was not evidence in reply and that the evidence in question, in a broad sense, clearly responded to issues raised in Virbac's evidence and that was sufficient for the purposes of regulation 85.
Ellis J did not agree.
The Scotch Whisky case
In reaching her Honour's conclusion that Merial's "reply" evidence should be excluded, Ellis J carefully considered Kós J's recent judgment in the Scotch Whisky case, which had (in part) dealt with a materially identical issue.
In that case, Kós J had outlined the relationship between the burden of proof and the order in which evidence is filed in trade mark opposition proceedings.
His Honour had pointed out that although the primary evidential burden in such cases lies throughout on the applicant for the trade mark and that normally in commercial litigation the party bearing the primary onus of proof will file its evidence first and be able to reply to that filed against it, the Trade Mark Regulations 2003 require the opponent in trade mark opposition proceedings to file its evidence first (see regulation 82).
His Honour also noted that:
- in practice an opponent's initial evidence is not confined to the very limited matters on which it bears the onus and that it is normal for it to file detailed evidence in opposition at the outset, including of market deception and confusion.
- in most cases the opponent is in the best position to lead evidence of alleged deception and confusion and, if it does not do so, an applicant would have to anticipate the nature of the alleged confusion "in something of a vacuum, without the benefit of seeing the opponent's substantive evidence".
- the reason why evidence filed by an opponent pursuant to regulation 85 must be restricted to evidence strictly in reply is because the applicant does not have a right to file evidence by way of rejoinder.
- if such evidence was not restricted to evidence strictly in reply, an applicant could file its evidence of non-confusion and then be unable to respond to an "avalanche of reply evidence which essentially makes out the grounds for opposition", which would "distort the onus and give the opponent an unfair advantage".
Kós J then outlined what he considered to be the real test for admissibility under regulation 85. His Honour held that evidence filed pursuant to regulation 85 will be "strictly in reply" if:
- it could not have been filed in support of the notice of opposition as part of an opponent's initial evidence in opposition filed pursuant to regulation 82; and
- its dominant purpose for being adduced in reply is to respond directly to something said in evidence from the applicant.
Ellis J's decision in the Merial case
When Ellis J applied Kós J's test to the case before her, she held that the Assistant Commissioner was correct to conclude that Merial's "reply" evidence should be excluded.
Her Honour also made it clear that to allow an opponent to file evidence that could have been adduced in its initial round of evidence and which does not respond directly to an applicant's evidence in support of registration of a trade mark, would create "the opportunity for opponents in trade mark matters to 'game' the system, by keeping their forensic powder dry until after an applicant has fired its best (and only) evidential shot".
Hopefully the impact of these two High Court judgments will be far-reaching and signal the end of the lax approach taken by some practitioners in trade mark matters to the rules governing the admissibility of evidence.
These judgments send a clear message, namely that an opponent in trade mark opposition proceedings will not be allowed to improve the state of its evidence by including material that could have been adduced at the outset by slipping it into reply evidence.
This will no doubt mean that some practitioners will need to give significantly more thought and effort to the evidence that is filed by an opponent at the outset and that is to be welcomed.