Passing Off: Descriptive marks

Two universities fight it out for the use of the trade mark COL in relation to educational facilities in Universal College of Learning v ACP Computer Solutions Limited.

This case concerned a dispute surrounding the use of the plaintiff's (Ucol) and second defendant's (FutureCOL) brands. Both enterprises provide educational services in the tertiary sector.

Ucol alleged that FutureCOL's branding was similar to its own - to the extent that it misrepresented that either FutureCOL was Ucol, or that FutureCOL was in some way connected to or associated with Ucol.

The respective brands were marketed as:

• "Ucol" combined with the words "UNIVERSAL COLLEGE OF LEARNING" and



• "FutureCOL" combined with the words "The College of Future Learning NZ".

Ucol brought proceedings in the Napier High Court raising four causes of action, including:

• section 9 of the Fair Trading Act 1986 (Fair Trading Act) relating to misleading and deceptive conduct in trade;



• section 11 of the Fair Trading Act relating to misleading the public as to the nature, characteristics, suitability for a purpose or quantity of services;



• section 13(b) of the Fair Trading Act relating to false or misleading representations that services are of a particular kind, standard, quality, or quantity or that they are supplied by any particular person or by any person of a particular trade, qualification or skill; and



• passing off.

Fair Trading Act - the findings

The test of whether or not conduct is likely to mislead or deceive under the Fair Trading Act is not easily satisfied. Hammond J stated that "[T]he degree of likelihood of confusion must be that of a real risk - not a mere possibility".

His Honour also found that it is not sufficient simply for the court to look at the respective brands. The court should consider whether the rival brands are actually in competition, in the same geographical area, and what kinds of students and categories of courses are involved.

These factors were precursors to identifying those members of the public who were vulnerable or at risk of being misled or deceived by the conduct.

The court held that:

• Ucol had not made out that FutureCOL had misrepresented itself as Ucol, or was connected or associated in some way with Ucol. Hammond J was of the view that the plaintiff's "evidence falls a long way short of those marks";



• words like "college" and "learning" are common-speak of educational enterprises. They are in widespread and common use and thus cannot be appropriated;



• the heart of the dispute therefore was with the common suffix "col". Again, evidence was clear that "col" is a common abbreviation for college in the educational sector. The risk of branding with such common words would fall on the enterprise;



• visually, the brands were distinctive in colour. Their overall look and feel posed no risk of confusion "save in such momentary pause as is created by the use of the common element "col"; and



• consideration must be given to the relevant public/customers when assessing the risk of confusion. The decision to undertake study at a particular institution is "unlikely to be based simply on a name or just the look of a brand".

The court concluded it was clear on the facts that FutureCOL had evolved its own brand and there was neither any misleading conduct nor any real possibility of confusion or deception.

Passing off - the findings

Hammond J confirmed the established factors (from Reckitt v Colman Products Ltd v Borden Inc [1990] 1 All ER 873 (HL)) required for an action in passing off. In this case, those factors required that Ucol:

• establish a goodwill or reputation attached to the goods or services they provide in the mind of the purchasing public by association with the get-up under which they are offered to the public;



• establish a misrepresentation to the public by FutureCOL (whether intentional or not) leading, or likely to lead the public to believe that those goods or services are those of Ucol's; and



• demonstrate that they have or are likely to suffer damage as a result of the erroneous belief brought about by FutureCOL's misrepresentation.

Relevant factors to consider in relation to misrepresentation include:

• the circumstances in which the product is "sold";



• whether the product or service is likely to prompt enquiry over source;



• what labelling there is;



• whether the buyer or consumer is likely to be discerning.

Again, the court concluded that there was no evidence to conclude that FutureCOL had misrepresented itself as Ucol, or that it was connected or in some way associated with Ucol. An essential element of the tort of passing off was therefore not made out.

Decision

Judgment was for both defendants (including costs and reasonable disbursements).

Enquiries and information

For more information on trade mark law, please email or call Garry Williams on 64 9 916 8661.