In The North Face Apparel Corporation v Sanyang Industry Company Limited [2014] NZCA 398, the New Zealand Court of Appeal ruled in favour of Sanyang Industry Company Limited by dismissing the appeal by The North Face Apparel Corporation, putting an end to an extended trade mark dispute between the two parties involving goods in class 25.

New Zealand Court of Appeal

Judges: Randerson, Harrison and French JJ

Judgment: 15 August 2014

Appeal from: The North Face Apparel Corp v Sanyang Industry Co Ltd [2012] NZHC 2259

Sanyang Industry Co. Ltd (Sanyang) filed trade mark application for “” TM number 782886 (Sanyang’s mark) on the 22 January 2008 (priority date) in classes 7,16,35 and 25 covering clothing; swimsuits; shirts; beachwear; vests; tee-shirts; coveralls; coats; liveries; footwear; scarves; neckties; headwear; earmuffs; socks; mittens; waistbands.

The North Face Apparel Corp (North Face), a well established clothing apparel company opposed Sanyang’s trade mark application in class 25. North Face relied on the following marks:

““(S Device Mark) and ““(Composite Mark) with goods in class 25 including Clothing, namely, jackets, parkas, coats, bib overalls, pants, vests, one-piece shell suits, shells, mittens, gloves, hats, rainwear, wind resistant jackets, shorts, shirts, t-shirts, thermal underwear, and sweaters; boots, namely, hiking and trekking boots; shoes, namely, climbing, hiking, trail running, athletic, sneakers, and slippers, and climbing slippers.

North Face nominated six grounds of opposition including s 32(1) the mark was not owned by Sanyang due to North Face’s prior use. North Face elected to focus on this ground of opposition before the Assistant Commissioner. 

The Assistant Commissioner found evidence of use of the Composite Mark on jackets, parkas, pants, gloves and mittens in North Face’s catalogue before the 22 January 2008 but did not find evidence of use of S Device Mark alone. 

The Assistant Commissioner took the view that Sanyang’s mark and North Face’s Composite Mark were not substantially identical and differed from North Face’s Composite Mark in that Sanyang’s mark was 3-dimensional and depicted a badge of motor vehicle and had a metallic and therefore industrial appearance. It was also found that the words ‘Summit Series’ added context to the mark – S Device’s centre represented the peak of a mountain. The Assistant Commissioner dismissed the opposition by North Face and directed Sanyang’s mark to registration. 

North Face appealed and the matter was brought before The High Court. Justice Collins found evidence of use of North Face’s Composite Mark for mitten and gloves before 22 January 2008. Justice Collins, contrary to the Assistant Commissioner took the view that North Face’s mark could be decoupled – S Device and word marks. From the evidence tendered, Justice Collins found evidence of use of the S Device Mark for gloves and mittens in catalogues dating back to 2007. However, Justice Collins held that North Face’s S Device Mark was not substantially identical to the Sanyang mark. Collins J upheld the Assistant Commissioner’s decision and was satisfied that Sanyang owned the mark and dismissed the appeal by North Face.

The Court of Appeal (CA) had to determine the nature and extent of North Face’s use of its Composite and S Device marks before 22 January 2008 and whether North Face owned Sanyang’s mark. Sanyang cross appealed against the Judge’s threshold finding that North Face had used one of its unregistered marks for some items within the class 25 before Sanyang applied for registration. 

Nature and extend of North Face’s use of its “Composite” and “S Device” marks

The CA found evidence of public use of S Device Mark in New Zealand before 30 October 2007 for mittens. The Fall 2007 catalogue featured other products bearing North Face’s marks. The CA agreed with Justice Collins that distribution of the catalogue did happen before 22 January 2008. 

Although the Counsel for Sanyang contended the S Device Mark that purported to appear on the mittens were too small to be made out and be used as a badge of origin, the CA found evidence of the S Device marks displayed on at least three pairs of gloves and thus acted as a badge of origin. There was also evidence of use of the Composite Mark for other goods including jackets, pants, ski, suits, vests and gloves in the catalogue. There was also clear evidence of the words “Summit Series” and the S Device Mark used in the catalogues showing connection between the goods and North Face. 

Was the S Device Mark used on goods in class 25 other than gloves and mittens?

The CA did not find evidence of use of the S Device Mark on any other goods in class 25 apart from mittens and gloves and did not accept that the argument that the use of the Composite Mark was the use of two separate components of the mark – “S Device” and “Summit Series” as well.

The test is whether the individual component creates a “separate and distinct commercial impression” from the other components so that it might be said of the distinct component that it performs a trade mark function.

While the CA agreed with the Assistant Commissioner and the Judge that the words “Summit Series” gave the S Device context by implying that the centre of the device is a summit. The device could be read as a highly stylized “S” possibly representing “Summit” or “Series”. The CA was satisfied that the components of the Composite Mark were not divisible and concluded that the S Device did not create a separate and distinct commercial impression from the words “Summit Series” which appeared below the S Device in the composite mark.

The use need not be sufficient to establish a reputation in New Zealand. While the issue is a question of fact, as little as one order for sale and dispatch of goods by the foreign trader to New Zealand, or an offer to trade in the goods, such as an advertisement of the goods after a decision to offer the goods in New Zealand, can be sufficient to show proprietorship of the trade mark in New Zealand. …

Laws of New Zealand Intellectual Property: Trade Marks (online ed) at [38]

This finding concluded that S Device Mark was only used on mittens and gloves in class 25.

The CA also rejected claims from the North Face’s use of the S Device Mark for mittens and gloves can be extended to ‘same kind of thing’ in the same class. The S Device Mark must be confined to goods that were identical to mittens and gloves. 

The CA did not find conclusive evidence that the S Device Mark was identical to Sanyang’s mark and concluded that North Face’s ground of opposition that it owned Sanyang’s mark must fail.

Even if the test of substantial identity was made, the CA would have taken the view that the S Device Mark and Sanyang’s mark were not substantially identical. 

The CA ruled that Assistant Commissioner, upheld by Justice Collins was right to direct Sanyang’s application to registration.

Disclaimer: The above is provided to assist in the understanding of the decision by the New Zealand Court of Appeal. 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.