ACTAZIN v ActiPhen – A Tale of Two Cities or In The Ear of the Beholder

The New Zealand Court of Appeal has issued a decision that upholds decisions by the Trade Marks Office and High Court, finding that concurrent use of the trade marks ACTAZIN and ActiPhen is likely to cause confusion.

 

In Australia, a Trade Marks Office decision found that the marks are not deceptively similar.

Is this just a case of differing views or does it tell us something more about differences between assessments in the two countries?

The New Zealand Decisions

Both the ACTAZIN and ActiPhen trade marks were used, or intended to be used, in relation to nutraceuticals containing kiwifruit. The botanical name for kiwifruit is Actinidia, which is relevant to the parties’ decisions to use trade marks containing the prefix ACT-.

In the case of ActiPhen, the applicant, Pharmazen, indicated that the suffix “Phen” is a reference to phenolic compounds, being phytonutrients that are naturally occurring in plants.

The decision of the Assistant Commissioner of the Trade Marks Office was based on a view that the marks are visually similar and have a substantial degree of similarity in their likely pronunciation.

The High Court found that the marks look similar and are “phonetically extremely similar”.

The Court of Appeal was persuaded to uphold the decision of the High Court on the basis that:

  • both marks are invented words and so do not convey dissimilar ideas;
  • they are of a similar length (seven vs eight letters), have three syllables, share the first syllable “ACT” and conclude with the letter “N”, resulting in significant visual similarity;
  • there was no persuasive evidence to indicate that “ACT” is a recognised abbreviation of Actinidia, or is otherwise descriptive, generic or a common part of trade marks for the specified goods;
  • while there was no independent or expert evidence as to pronunciation, and accepting that the marks in question may generate a variety of pronunciations, the Court found “a substantial degree of similarity”;
  • the first part of the trade marks was considered the most important for the purposes of comparison – this principle is derived from the decision in Re London Lubricants (1920) Ltd’s Application (1925) 42 RPC 264 at 279.

Interestingly, while all three decisions expressed the view that there is a substantial degree of phonetic similarity between the trade marks, they all differed slightly on the most likely pronunciations of the marks:

  • The Assistant Commissioner considered the most likely pronunciations to be “Act-a-Zin” and “Ac-te-Fen”;
  • The judge of the High Court considered the most likely pronunciations to be “Act-i-zin” and “Act-i-fen”;
  • The Court of Appeal thought that ActiPhen would most likely be pronounced “Act–teh-fayrn”, and that both ACTAZIN and ActiPhen would be pronounced with a falling inflection and primary emphasis on the first syllable “Act”.

The case was unusual in that the owner of the ACTAZIN trade mark was only using its mark for export. This led to argument being presented on behalf of Pharmazen that there can be no likelihood of confusion if the products will not be competing in the New Zealand market. However, the Court of Appeal confirmed that the assessment required under section 25 involves consideration of notional use.

In passing, it is worth noting that use for the purposes of export protects a registered mark against cancellation for non-use.

The Australian Decision

While only at the level of the Trade Marks Office, in Australia the opposition to registration of ActiPhen was unsuccessful because the Registrar’s delegate found that:

  • while the trade marks “share the same three letter prefix ACT- and the last letter ‘N’, there exist such differences in spelling that there is a clear picture of dissimilarity between the trade marks”;
  • the trade marks contain very different aural and visual structures within the trade mark being “-iPhe-“ in comparison to “-azi-“ which are very different in look and sound”;
  • the trade marks are likely to be pronounced in a number of different ways by the general monolingual Australian consumer particularly when the suffixes of the trade marks are so different. I do not believe that ActiPhen would be pronounced in so similar a fashion as ACTAZIN by a significant number of consumers. The differences in spelling between the trade marks is simply too great”.

The sharp “eye” or “ee” sound at the end of Acti in ActiPhen was noted, as was the fact that the representation of the mark makes it clear how the word would be broken for the purposes of pronunciation. The difference in the central syllable and the importance of the “zee” sound was noted in ACTAZIN.

Comments

The Court of Appeal in New Zealand was referred to the Australian Office decision; however, this was not considered persuasive. Separate from jurisdictional differences, the Court noted that there is a difference in the onus between Australia and New Zealand. In Australia, the opponent bears the onus of establishing that there is a likelihood of deception or confusion, while in New Zealand the onus rests with the applicant to demonstrate that there is no likelihood of deception or confusion.

Significantly also, the New Zealand accent can give rise to differences in aural similarity. The New Zealand accent tends to clip vowels so that, for example, “e” tends to become like “i”, so “sheep” can sound like “ship”, and “i” tends to become like “u” so “fish” sounds like “fush”.

Allowing for accents is difficult since accents vary across a population. However, while accent differences do not usually make a significant difference, the present case demonstrates that they can. The difference in the New Zealand accent helps explain the different view taken on phonetic similarities between the trade marks.

The present case can be seen as demonstrating that while the principles to be applied in an assessment of similarities between trade marks are generally consistent between Australia and New Zealand, differences in decisions are possible due to:

  • The difference in onus which, in Australia, requires the opponent to establish a likelihood of confusion, while in New Zealand the applicant needs to demonstrate that there is no likelihood of confusion;
  • Differences in the pronunciation of words;
  • The simple fact that comparing trade marks often involves no clear dividing line between names that are, or are not, too similar. Consequently, it is quite possible for different decision-makers, faced with the same facts, to make different findings.

The New Zealand decision also demonstrates that if a party wishes to argue a ground, such as dissimilarities in pronunciation, evidence supporting such claims is likely to strengthen their arguments.