Market conditions influence decision on likelihood of deception or confusion
In Geneva Marketing (1998) Limited v Johnson & Johnson [2009] NZCA 591, 18 December 2009, the New Zealand Court of Appeal considered whether use of a mark which included an element almost identical to the whole of a prior registered mark, in relation to personal lubricants, would lead to deception or confusion. The decision raised some interesting points regarding the likelihood of deception or confusion, where the market for the products concerned was deemed to be careful and discerning.
Background
Since October 1999, Geneva Marketing (1989) Limited (“Geneva”) has owned a registration for the trade mark SYLK in class 5 for “pharmaceutical preparations, namely personal lubricants”. The SYLK mark is used in connection with the marketing and sale of personal lubricant products.
Johnson & Johnson has, since 2006, owned a registration for the trade mark K-Y SENSUAL SILK in classes 3 and 5 for “massage oils” and “personal lubricants” respectively. As with the SYLK mark, the K-Y SENSUAL SILK mark is used in relation to a personal lubricant. Greater emphasis was placed on the word “SILK” than on the other elements of the K-Y SENSUAL SILK mark.
Geneva objected to Johnson & Johnson’s K-Y SENSUAL SILK mark. As use of a registered trade mark does not infringe rights conferred by another trade mark registration, Geneva challenged not only the use of K-Y SENSUAL SILK, but also its registration. It claimed that: i) the K-Y SENSUAL SILK registration should be revoked or declared invalid; and ii) use of K-Y SENSUAL SILK by Johnson & Johnson infringed its SYLK registration. For all these causes of action, there is a general requirement of deception or confusion.
High Court
At the initial hearing before the High Court, Harrison J observed that the market for personal lubricants was “characterized by a significant degree of customer loyalty, care and discernment.” Evidence was also brought forward suggesting that the “K-Y” brand acted as the driver for products which bear the “K-Y” mark, with “SENSUAL SILK” playing the role of sub-brand.
Given that the lubricant products in question are similar, the key issues to be decided by Harrison J were whether the SYLK and K-Y SENSUAL SILK mark are similar and, as a follow on, whether there is a likelihood of deception or confusion.
Ultimately, Harrison J found in favour of Johnson & Johnson. He noted that, while there are similarities between the words “SILK” and SYLK”, on a global assessment, the marks concerned are visually and phonetically distinguishable, and “create significantly divergent impressions”. Harrison J was also influenced by the discerning nature of the market for personal lubricants, which lessened the likelihood of deception or confusion.
In respect of the invalidity claim, Harrison J made the following comments:
“[31] Taking all the relevant evidence into consideration, I am not satisfied there was a likelihood, even a reasonable possibility, that a significant number of buyers in this small market would have been deceived or confused by Johnson & Johnson's fair and proper use of the ‘K-Y Sensual Silk' mark in late 2006. Registration of the composite phrase ‘K-Y Sensual Silk', where K-Y had long been associated with Johnson & Johnson, would not be likely in late 2006 to create an incorrect belief or mental impression among buyers in this market that the particular product was the same as another product sold under a different mark. The mark would not have been likely to perplex or mix up the minds of purchasers.
[32] The relevant customer associations were with the distinctive products and their respective manufacturers. The addition of the words ‘sensual silk' to the existing ‘K-Y' mark would not be likely to materially affect existing brand loyalty to or preference between either of the principal brands. The additional ‘sensual silk' words would not cause any visual deception or confusion with a product of the same generic nature but with distinctively different physical characteristics and apparently directed towards a different section of the buying public. A purchasing decision for this particular product would be much more influenced by a visual than an aural impression, and the phonetic similarities between one word among four in the new mark and the one word existing mark would be of little import: compare the Heineken case at 139-141.”
As to the infringement claim, Harrison J stated:
“[54] The result of this cause of action is largely dictated by my previous findings on invalidity and s 93. However, a comparison of the marks in the form in which they are used reinforces my conclusion. Without doubt the words ‘SYLK' and ‘Silk' sound the same; and they apply to goods of a similar but not identical type: Pianotist (1906) 23 RPC 774, per Parker J at 777.
[55] But, as a matter of impression and context, any relevant similarities end there. In my judgment, when considering deception and confusion, the visual dissimilarities predominate. As already emphasised, ‘SYLK' is a stand-alone mark whereas ‘Silk' appears as the last word of four. The comparison, I repeat, is between the marks as a whole, not different components. The spelling and casing of the only common word differs. A broad focus is required. On a global appreciation, they create significantly divergent impressions.”
Court of Appeal
Geneva appealed to the Court of Appeal, which agreed that use of the SYLK and K-Y SENSUAL SILK marks would not lead to deception or confusion. The earlier decision of Harrison J was therefore upheld. Interestingly, and contrary to Harrison J’s finding, the Court of Appeal was of the view that SYLK and SILK – as used within the trade mark K-Y SENSUAL SILK – represented the same idea.
The Court of Appeal noted that Johnson & Johnson had marketed its product by placing more emphasis on the word “SILK” than on the other portions of the K-Y SENSUAL SILK mark. However, direct evidence of deception or confusion was limited.
In coming to its decision, the Court of Appeal accepted that “allowing for imperfect recollection and the reality that not all purchasers will be repeat purchasers, confusion on the part of at least some consumers is inevitable, at least to some degree”. It also acknowledged that use of a trade mark in a manner that emphasizes a particular element, where that element is almost identical to the entirety of another mark, may have the potential for deception or confusion.
Nevertheless, the Court of Appeal was swayed by the careful and discriminating nature of consumers of personal lubricants and the fact that the “K-Y” brand is distinctive and well-known in New Zealand. The Court of Appeal thus concluded that, in a “closely balanced” matter, the differences between the marks were of greater import than the similarities. These differences, particularly from a visual standpoint, were enough to mitigate against a likelihood of deception or confusion.
Comment
The findings of the Court of Appeal demonstrate the importance of market conditions when deciding whether there is a likelihood of deception or confusion. It appears that there will be circumstances where one trader will be able to legitimately use another trader’s mark as part of its own mark – provided that the second trader’s mark also includes a distinctive and familiar mark such as “K-Y” and the relevant market is of a discerning nature.
February 2010
