New Zealand: Australia and New Zealand are not always similar
A recent New Zealand High Court decision (Pharmazen Limited v Anagenix IP Limited  NZHC 1520 (July 1 2019)) serves as a reminder of the subjective nature of the comparison of trademarks, with the court finding the marks “Actazin” and “ActiPhen” too similar, while on the same facts and evidence, an Australian hearings officer had decided the opposite.
What happened – a crisis of kiwifruit
The case involved the marks “Actazin” and “ActiPhen”, both covering kiwifruit powder. The applicant argued forcefully, but ultimately hopelessly, that the marks were to be applied to dissimilar goods. Unfortunately, neither the law nor common sense permitted this argument.
The applicant argued, perhaps surprisingly, that its goods, which included “kiwifruit powder (not for medical purposes) for use as an ingredient in dietary supplements” were not similar to the opponent’s goods, which included “kiwifruit extract powder as …an ingredient adapted for human health …use including dietary… supplements”. Its reasoning was that the actual goods sold by the parties were different due to their manufacturing procedures, additives, and water and enzyme activity. It further argued that there could be no likelihood of confusion because the opponent’s goods were not for sale in New Zealand.
The judge looked over the case law in this area, and reaffirmed that the comparison of goods in a specification is a purely notional exercise, and when considered on their face, the respective specifications were obviously similar, if not identical.
This meant the matter came down to a comparison of marks.
In each of the New Zealand and Australian decisions, the decision-maker was presented with a table breaking down the marks into their constituent parts, and was asked to analyse the similarities/differences between the marks in detail.
In the Australian decision, this review resulted in the marks being considered different aurally and visually.
In New Zealand, the hearings officer noted that the comparison is between the marks as a whole, having regard to their essential features; it is not a side-by-side comparison, and allowance must be made for imperfect recollection.
However, the hearings officer then made what might be considered a side-by-side comparison and held that the marks were similar because they both began with the prefix “act”, they had three syllables, and they ended with the letter “n”.
On appeal, the judge also noted the artificiality and inapplicability of such a side-by-side comparison, but still agreed with the hearings officer; the deciding factor being that the similarities occurred at the start of the marks. In so doing, the judge was mostly swayed by the similarity of the first syllable, opining that the first part of the mark is the most important because of the tendency of consumers to slur the second part.
The respective analyses at first instance and appeal both effectively applied an imperfect recollection test, but arguably such a test should not be applied without careful consideration of the likely customer. In neither case was there particular regard to the types of customers who would purchase the kiwifruit dietary supplements covered by the marks. Such health conscious customers of nutraceuticals are likely to be more sophisticated, and demonstrate a higher level of attention when making purchasing decisions. A lot was made of the aural similarities between the marks, whereas perhaps the visual comparison is more important because of the way the products are likely to be purchased off the shelf in a pharmacy, or online.
This case is somewhat of a departure from previous recent cases in New Zealand, which have taken a fairly robust approach along the lines of that seen in Australia, to the comparison of pharma or nutraceutical names, generally on the basis that relevant customers seem to be well versed in differentiating brands with common (often ingredient-based) prefixes.
In this case, the prefix “act” was chosen by both parties to indicate the active ingredient “Actinidin”, but because this was not yet commonplace on the register the descriptive nature of this prefix was not taken into account, leaving the first-comer Anagenix with a broader scope of protection than perhaps was warranted.