The High Court of New Zealand in Flujo Sanguineo Holdings Pty Ltd v Merisant Company [2021] NZHC 1505 handed a decision against the plaintiff for trade mark infringement and passing off claims.
High Court of New Zealand Judge: WOOLFORD J Judgment Date: 23 June 2021 Plaintiff: Flujo Sanguineo Holdings Pty Ltd (“Flujo”) Defendants: Merisant Company (First Defendant) Merisant Australia Pty Ltd (Second Defendant) New Zealand Sugar Company Limited (Fourth Defendant)
Flujo is an Australian company that owns the IP rights to a range of natural sweetener products branded as Natvia. The Natvia products are produced from the leaves of the Stevia plant and sold as a substitute to sugar for health conscious consumers.
Merisant Company controls Merisant Australia Pty Ltd (Collectively known as “Merisant”). Merisant Australia Pty Ltd authorizes the distribution of “Naturals” branded products in New Zealand through New Zealand Sugar Company Ltd (“NZ Sugar”).
Dispute
Flujo alleged that the defendants had in using a re-designed get up that incorporated combination of key features of the Natvia get up:
- passed off its 2016 Naturals products as the plaintiff’s Natvia stick box products, or as authorized or endorsed owner by the owner of and/or originating from the same source as Natvia products;
- engaged in misleading and deceptive conduct contravening s 9 of the Fair Trading Act 1986 (“FTA”) and that the 2016 Naturals stick box and other Naturals products had sponsorship and/or approval of Flujo or that Merisant was sponsored, approved, or affiliated with Flujo contravening s 13(e), (f) of the FTA.
- “Naturals” trade mark infringed the Natvia trade mark
Naturals Get-up v Natvia Get-up
The defendants counterclaimed and argued that the allegation of trade mark infringement constituted unjustified proceedings and had caused the Merisant loss and damage under s 105 of the Trade Marks Act 2002 (“TMA”).
Passing Off/Breach of Fair Trading Act
In order to establish an action in passing off, Flujo must demonstrate it suffered and/or is suffering loss or damage, or was and/or is likely to do so. For Flujo to establish breach of the Fair Trading Act, it’s sufficient to prove conduct by defendants that were misleading or deceptive.
The New Zealand High Court considered there’s little difference between the passing off and breach of Fair Trading Act in the context of the present proceedings, except to prove actual and potential damage in passing off.
WOOLFORD J noted Flujo’s claim to use the phrase “the 100% natural sweetener” (“the phrase”) exclusively. However, the New Zealand High Court did not find evidence that goodwill existed in the Natvia get-up due to its scanty evidence and inconsistencies in its marketing and promotional narrative (or lack thereof). There was also lack of comprehensive consumer survey evidence to support its claim. The New Zealand High Court concluded that the phrase did not acquire secondary meaning and therefore could not function as source identifier.
The New Zealand High Court also took the view that although both products use green, brown and beige; the two products have different visual appearances when viewed as a whole. The standout being contrasting major colours. The Natvia stick box was predominated by green while the Naturals stick box was predominantly mid-beige.
The descriptors used by both products were depicted in different contrasting colours as well and on balance, the two packages were held to be distinctly different. There was also no reliable evidence of consumer confusion.
The New Zealand High Court found that Merisant redesigned its get-up to rival Flujo’s Natvia products for genuine commercial reasons and the Naturals packaging did not deceive or mislead.
The New Zealand High Court concluded that Merisant did not engaged in misleading or deceptive conduct. There was also no misrepresentation and any sales that Flujo had suffered was a result driven by price of the products. The allegations of passing off and breach of Fair Trading Act were dismissed.
Trade Mark Infringement
WOOLFORD J took the view that Naturals and Natvia were visually and phonetically different.
Depicted in cursive form with the leaf forming the cross bar for the “t” in Naturals, it looked distinctively different from Natvia, depicted in print script with a distinctive stylized “V” with a bud contained within it. Naturals has the meaning of being opposite to “artificial” while Natvia appeared to be a portmanteau word comprising “Nat” from Natural and “via” from the Stevia leaves. Natvia would not be readily related to consumers. There was no credible evidence of confusion since Naturals was introduced into the market in 2013. Concluding that there would be more attention paid by consumers when choosing a healthier choice of product, WOOLFORD J held that, on balance, the likelihood of confusion between the two products would be low and accordingly dismissed the claim of trade mark infringement.
Merisant’s Counterclaim for “Unjustified Proceedings”
The trade mark infringement cause of action would be justified if Flujo could show it had acted in genuine belief. Flujo had reasonable grounds to pursue the claim having sought legal advice that there had been or might have been an infringement. The analysis of the respective get-ups conducted by the plaintiff’s witness supported its cause of action. Merisant’s counterclaim was thus dismissed.
Disclaimer: The above is provided to assist in the understanding of the decision by the High Court of New Zealand. It should not be relied upon as legal advice. Any errors or omissions are the author’s. For queries related to the article, please contact the author here.
An old-fashioned Teochew engineer who prefers writing with fountain pens to the use of smart phones, he discovered his love for writing in mid-life. He became a pescatarian a few years ago after a life-changing event. An avid reader, he is piqued by the satisfaction of tackling difficult issues in life.