Storm in a cereal bowl
Australasian Conference Association Ltd v A Little Bit of Britain Ltd  NZHC 2501
How much do 108 boxes of Weetabix (the British cereal) cost? Answer: approximately $500. How much do four lawyers and three days in the High Court cost? Answer: far more than 108 boxes of Weetabix.
Apparently 54% of us like Weet-Bix. Some of us prefer Weetabix, especially if we hail from the United Kingdom.
In New Zealand, the Weet-Bix brand is owned by Sanitarium, which is owned by Australasian Conference Association Ltd. In the United Kingdom the Weetabix brand is owned by a different company and is a different formulation to the New Zealand product produced by Sanitarium since 1928.
This storm in a cereal bowl was started by the New Zealand Customs Service detaining an importation of 108 boxes of Weetabix destined for a British specialty store in Christchurch called UK Foods and owned by a company called A Little Bit of Britain Ltd.
Sanitarium did not seek to stop the sale of the Weetabix product itself, but wanted it sold under another name or over-stickered. A Little Bit of Britain refused, on the basis that “I don’t think that Weetabix is a trade mark infringement of Weet-Bix”. This is a practice A Little Bit of Britain does with Marmite imported from the United Kingdom – it over-stickers the Marmite brand with the name “Blightymite”.
In this case, the High Court was required to decide whether:
- The importation of Weetabix infringed Sanitarium’s trade mark registration, under both the border protection provisions, and the general infringement provisions of the Trade Marks Act 2002, and as part of that consideration, whether Weetabix and Weet-Bix are identical trade marks and if not identical, similar enough to cause deception and confusion;
- Because the Weetabix boxes feature the registered trade mark symbol ®, the boxes are false and misleading; and
- Customs acted lawfully in its detention of the detained goods, refusing to release them, and extending the time for Sanitarium to serve proceedings.
When is identical not the same?
What does identical mean? Trade mark lawyers like to make this more difficult than it ought to be. According to the dictionary, it means “similar in every detail” or “exactly alike”. Trade mark lawyers have argued, unsuccessfully, that LEAFSCREEN and LEAFSCREENER and ORIGIN and ORIGINS are identical, and successfully that INTERCITY and INTER CITY and WEBSPHERE and WEB-SPHERE are.
It might seem quite obvious that Weet-Bix and Weetabix are not identical and pursuing such an argument seems futile. Such an argument, if successful, has a huge advantage under the Trade Marks Act 2002, however. If successfully argued, and the trade mark owner can show the goods or services used by the defendant are the same or similar, a bit like strict liability, trade mark infringement will be proved. If the trade marks are only similar, and not identical, the trade mark owner will have to take the extra step of showing that deception or confusion will ensue.
Gendall J had no difficulty in finding that Weet-Bix and Weetabix are not identical.
Deception and confusion
By a slimmer margin Gendall J found that there would be deception or confusion amongst a substantial number of the general public.
Gendall J rejected A Little Bit of Britain’s argument that there would be no deception or confusion because the Weetabix product is only sold in its stores and on its website and the British consumers know the difference between the – presumably disdainful – New Zealand Weet-Bix and British Weetabix.
Sanitarium produced an online survey of 500 people in New Zealand who purchase breakfast cereal and had lived in the United Kingdom at some point for at least six months over the past 10 years. Those surveyed were shown the Weetabix trade mark and then asked who is responsible for the product. Thirty five percent of participants responded by naming Sanitarium.
The survey was attacked for not adequately reproducing real world conditions, as well as posing questions that put things in the consumer’s mind that would not naturally occur to them.
Gendall J did acknowledge however, that it was the only information close to independent evidence before him, and despite not exactly replicating the purchasing scenario, it had to be given some weight.
A Little Bit of Britain also argued that the context in which it sold the goods, namely at its British speciality store and online, no deception or confusion would result, because its customers know that it is the British Weetabix. Gendall J rejected that narrow view of the market context because A Little Bit of Britain is not limited to selling the products in that way. The market context was the entire market for cereal.
Different infringement test
The New Zealand Customs Service offers a regime under the Trade Marks Act 2002 where goods can be detained at the border if Customs suspects they infringe a registered trade mark. Trade mark owners have to register a notice with Customs in order to activate this service.
The service aims to act as a deterrent to the importation of counterfeit goods. In this case the Weetabix product is not counterfeit, but is caught by the Sanitarium trade mark.
The legal question under the border protection provisions was whether the Weetabix trade mark was used in such a way as to cause deception and confusion. Gendall J framed the question as whether the average consumer would see the Weetabix sign on the product box and be deceived or confused as to whether it is a Weet-Bix product.
He found that most people in New Zealand would not be familiar with Weetabix. The Weetabix product was found to be sufficiently similar to the Weet-Bix trade mark that, given they are relatively low-cost, low-engagement purchases, there was a significant risk of deception or confusion with the Weet-Bix trade mark.
Under the “ordinary” trade mark infringement provisions, the question is whether use in the course of trade would be likely to cause deception or confusion. Gendall J found that by a reasonably fine margin, the proportion of people who would fall into the group of being confused or deceived reached the threshold for trade mark infringement to be made out.
Did Customs act unlawfully?
A Little Bit of Britain argued that Customs acted unlawfully in detaining its goods because the Weetabix product does not infringe Sanitarium’s trade mark. Given that Customs can detain products if they “appear” to infringe, Gendall J found the detention was lawful.
Fair Trading Act
Sanitarium also alleged that because the Weetabix boxes bear the registered trade mark symbol ®, next to the word Weetabix, this wrongly represents that it is a registered trade mark in New Zealand. Sanitarium said this is false and misleading under the Fair Trading Act 1986.
Gendall J was not convinced that when purchasing cereal the public pays much attention to symbols on the box such as ® and ™; ® denoting that a trade mark is registered and ™ simply indicating it is a trade mark. Consumers were said to be unlikely to place reliance on the fact that any trade mark registration may or may not refer to a New Zealand trade mark registration.
As the Weet-Bix website says “simple is good”. Gendall J came up with a practical solution. Sanitarium had given consent to Customs releasing the goods provided A Little Bit of Britain over-stickered the Weetabix trade mark. Gendall J therefore granted a conditional injunction where A Little Bit of Britain can import and sell Weetabix, but only at its retail store and website and only if over-stickered, as Sanitarium had originally proposed, and as A Little Bit of Britain does with British Marmite.
Given the near identicality of Weet-Bix and Weetabix, it is hard to see how a finding of infringement would not be made. An offer to infringe, but only in a limited way, is still infringement, and the offer to over-sticker is somewhat gracious given that Sanitarium is the rightful owner of the Weet-Bix trade mark in New Zealand and has been producing its product in New Zealand for 90 years. At least peace has been restored, with both New Zealand and British “bix” lovers being able to buy their favourite breakfast cereal.
As for the detained 108 boxes of Weetabix, they are destined for the dumpster, being past their use-by date.
Kate Duckworth is a lawyer and patent and trade mark attorney specialising in intellectual property law. You can find her at www.kateduckworth.co.nz.
Last updated on the 9th November 2018