No BULL - ЯED is not confusingly similar to RED in NZ
This headline is slightly misleading in itself, because the Court was only making a preliminary decision prior to the substantive hearing set down for 31 October 2016. In fact, my bet is that the substantive hearing will go the other way. Find out why below.
Drink Red markets and sells in NZ an RTD containing an energy drink and vodka and also an energy drink (without vodka). Here is an example of one of the cans:
My guess is that all readers will recognise the word “RED” from another energy drink company, Red Bull. This is what Red Bull’s flagship product looks like:
Red Bull wasn’t happy with Red Drink’s choice of the word “RED” in its branding and they commenced proceedings against Drink Red.
Red Bull first sought an interim injunction that would prevent Drink Red from selling its products. It was acknowledged that should Drink Red lose at the interim hearing and be deprived of selling its products pending a substantive hearing, Drink Red would go out of business before the substantive hearing. Red Bull would in effect win the case without having to proceed to a substantive hearing. Due to the serious potential outcome on Drink Red, the judge required Red Bull to demonstrate a strong “prima facie” case. This meant that Red Bull had to go further than the normal requirement of proving there was “a serious question to be tried”.
To me, trade mark infringement was and is the core issue. The focus of the enquiry in this case was on section 89(1)(c) of the Trade Marks Act. This requires Red Bull to prove that:
ЯED (as used by Drink Red) is similar to Red (as registered by Red Bull);
Drink Red’s goods are the same or similar to Red Bull’s registered goods; and
Drink Red’s use of ЯED would be likely to deceive or confuse.
Although the judge acknowledged there were similarities between ЯED and Red, the judge was not satisfied that use of ЯED was likely to deceive or confuse. The judge appeared to be heavily influenced by the fact that an adverse decision against Drink Red would put them out of business. The judge found that Red Bull would have met the normal requirement of proving there was a serious question to be tried. However, the judge felt that Red Bull had not proved a strong “prima facie” case in the circumstances.
But I would not be surprised if the decision goes the other way at the substantive hearing in October. I accept that Drink Red’s cans don’t look too much like Red Bull’s cans. But for trade mark infringement, if previous NZ case law is followed, the enquiry should focus on use of the word ЯED as a trade mark in itself (rather than taking it in conjunction with other indicia used with it). On that basis, to me, ЯED is similar to Red and its use would be likely to deceive or confuse, in that consumers are likely to believe Drink Red’s product is Red Bull’s product, or an extension of it.
I struggle to believe that Drink Red didn’t choose ЯED deliberately to piggy back off Red Bull’s reputation in RED (they had lots of other colours and words to choose from!), and in my view they are sailing too close to the wind.
But let’s see what happens at the substantive hearing in October …
Here is a link to the preliminary decision: http://www.nzlii.org/nz/cases/NZHC/2016/531.html