COML308 EXAM - Lecture notes. PDF

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FAIR TRADING ACT 1986:-FTA: regulating how you sell things, can and can’t do to sell things.-s 1A Purpose (1) The purpose of this Act is to contribute to a trading environment in which— (a) the interests of consumers are protected; and (b) businesses compete effectively; and (c) consumers and busine...

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FAIR TRADING ACT 1986: -FTA: regulating how you sell things, can and can’t do to sell things. -s 1A Purpose (1) The purpose of this Act is to contribute to a trading environment in which— (a) the interests of consumers are protected; and (b) businesses compete effectively; and (c) consumers and businesses participate confidently Therefore... A. protects consumers B. to ensure that businesses can compete effectively because if one of them cheats and lies to consumers it makes it hard for you to compete without also cheating, therefore this creates a level playing field C. allows all of us to participate confidently in the market and allows us as consumers to buy very freely and trust what we are being told therefore good for the economy. Compare this with ™ and passing of: So ™ are registered property, same with tort of passing off protecting unregistered property. Prohibits: misleading and deceptive conduct: 9 Misleading and deceptive conduct generally No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. s 10 Misleading conduct in relation to goods No person shall, in trade, engage in conduct that is liable to mislead the public as to the nature, manufacturing process, characteristics, suitability for a purpose, or quantity of goods. s 11 Misleading conduct in relation to services No person shall, in trade, engage in conduct that is liable to mislead the public as to the nature, characteristics, suitability for a purpose, or quantity of services. Note: S9: Civil liability meaning everyone can bring a case under this section. s10/11: Criminal liability: only the crown can bring case and the penalties are much higher. Key definitions: 1.Persons: -s2 person includes a local authority, and any association of person whether incorporated or not. -NB. application of common law vicarious liability: -s 45(2) Any conduct engaged in on behalf of a body corporate—

(a) by a director, servant, or agent of the body corporate, acting within the scope of that person’s actual or apparent authority; or (b) by any other person at the direction or with the consent or agreement (whether express or implied) of a director, servant, or agent of the body corporate, given within the scope of the actual or apparent authority of the director, servant or agent— shall be deemed, for the purposes of this Act, to have been engaged in also by the body corporate. 2. In trade: -s 2(1) trade means any trade, business, industry, profession, occupation, activity of commerce, or undertaking relating to the supply or acquisition of goods or services or to the disposition or acquisition of any interest in land -anything you can imagine should be -Includes when you buy and sell land because real estate agents known to be dodgy and likely to deceive to sell property. -business means any undertaking— (a) that is carried on whether for gain or reward or not; or (b) in the course of which— (i) goods or services are acquired or supplied; or (ii) any interest in land is acquired or disposed of— whether free of charge or not Includes charities 3. engage in conduct -s 2(2) In this Act, a reference to engaging in conduct shall be read as a reference to doing or refusing to do an act, and includes,— (a) omitting to do an act; or (b) making it known that an act will or, as the case may be, will not be done. -This section says it also includes negative behaviour, so also refusing or failing to do something, or omitting something, covers active AND negative conduct, as possible that you failed to say something which therefore is misleading. -Half truths Examples engage in conduct: Collins M ltd v Henjo ltd (1987) -case about restaurant -agent told potential buyers of rest that it can seat 128 customers, which was a half truth as only licensed to seat and service 84 people.

Hiecher v Bargoot (1996) -agent selling apartment on auckland waterfront -agent failed to disclose that another building about to be built in front blocking view -knew this but didn’t disclose therefore court held this was engaging in misleading conduct 4. Liable Mislead or Deceive: Taylor bros v Taylors group (1988) -Because this legislation should be easy to read by everyone we shouldn’t overthink what the words mean, take the ordinary meaning: -Mislead: [t]o lead astray in action or conduct; to lead into error, to cause to error. Therefore lead/cause someone to error, lead in a wrong direction or into a mistaken action or belief even if you are telling the truth. -Deceive: cause to believe what is false, to mislead as to a matter of fact, to lead to error, to impose upon. Deliberately cause (someone) to believe something that is not true, especially for personal gain. -But… only need to fall under 1. Example: Commerce commission v trustpower ltd (2016) -says unlimited broadband for $48 a month… -but 24 month term… and increases to $70 charge after a yr in a lot smaller font with exit fees, -therefore telling the truth, but it's in a misleading way (smaller font). 5. likely: Example: Bonz group v cooke (1994): coming under s9 -made nz theme sweaters for years -in 1994 mrs cooke starts making similar kinds of nz theme sweaters -bonz sues her saying you are misleading or deceiving consumers as they’ll think made by bonz -court asks does it or likely mislead/deceive: 1. What magnitude does it have to be to ^..... -Does not have to be 100%, but around 75%=a real risk that it will m/d the average consumer, so more than possible. -in this case the court decided no its not likely. 6.liable -court says its lower standard than likely, around 50%: Example: Commerce commision v pacific dunlop holdings (nz) (1997) -plum rose sold canned ham, who labeled their hams correctly, 95% and 90% fat free, and light and healthier eating, factually correct -but its not actually that good, lots of other hams have less fat. -brought to court because maybe the average consumer doesn’t know this^ AND “light” and

“healthy eating with Plumrose” which is also misleading. Combo of both things. -so court held that public is liable to be misled.

C.c v griffins food ltd (1997) -case about the word “slims”. -c.c brought case against this packaging bc average consumers might think its healthier alternative, therefore liable to mislead consumers that this is a diet chip -court said this is not liable to mislead consumers to think its diet form of chippies -they were physically slim chips as well.. -S9: Civil liability meaning everyone can bring a case under this section s10/11 is against the public, have to be to the public, not one on one, e.g advertising. Examples: S9 general provision: Anheuser v Budweiser Budvar National corp (2003) Is it misleading or likely to?: -has to be a real risk that the average consumer would be misled or deceived? -court said no breach of s9, S10 in relation to goods: Commerce Commission vTopline International Ltd [2017]: -sold Pollen with NZ made tm/certification ™ -but Pollen made in China and put into the bottle in nz -s10 requires its expression to the public -liable: lower standard than likely, easier to show: obvious lie, therefore liable to mislead public Enforcement of the act: Commerce commission: -S6 Functions of Commission in relation to dissemination of information 1. Receive complaints, investigates etc. 2. Can instigate an investigation 3. Enforcement – Compliance advice letter – Warning letter – Infringement notice – Settlement – Bring suit Therefore…. -the c.c receives complaints and think its important then will investigate -can instigate investigation themselves -enforcement: If they think you’re contravening act they will:

1. Send compliance advice letter 2. don’t^ they’ll send a warning letter 3. Ignore 2, they’ll send an infringement notice 3. Settlement 4. Bring suit

COMPARATIVE ADVERTISING: Content: • What is comparative advertising • FTA 1986 • Trade Marks Act 2002 • Passing off Example: -dunkin donuts: using starbucks ™ -burger king: using mc donalds golden arches, and factual claim: is it true?

THE FTA 1986: The comparison made: 1. Must be accurate 2. Should clearly indicate what comparison is being made 3. Must be of “like” product or services available in the same market If you satisfy 3 things, comparative advertising allowed under FTA. 1. Accuracy: Commerce Commission v Bond & Bond Ltd (1997) 7 TCLR 70 0Newspaper ads incorrectly stating manufacturers recommended retail prices. -You can’t lie, tell the truth 2. Comparison: Eveready v Gillette (No4) (2000) - “Duracell lasts four times longer” 0Alkaline batteries cf. zinc-carbon batteries -than what though? -satisfied 1 but not two. -zinc is cheaper than alkaline 3. “Like” products or services: Gillette v Energizer [2002] FCAFC 223 -Duracell Alkaline lasts three times longer than Eveready -Heavy Duty Batteries-duracell alkaline lasts 3 times longer than eveready battery, satisfies 1

and 2. -doesn’t satisfy 3 because eveready argued that our batteries are a lot cheaper, therefore not like products. -court held that these are like products and price doesn’t matter, the point is they’re both batteries on same market Puffery: -deception -Not provable or disprovable: “Wellington’s Best Juices” or “Juice with Cancer-Curing Properties” -Subjective v objective – “Best Pizza” – “Two out of Three people Prefer Our Pizza -therefore it is not misleading or deceptive as we know it's an exaggeration -puffery if not provable or disprovable: i.e wellingtons best juices -its subjective -in law, puffery is a promotional statement or claim that expresses subjective rather than objective views, which no "reasonable person" would take literally. Puffery serves to "puff up" an exaggerated image of what is being described

TRADEMARK ACT 2002: TMA 2002, s 94 No infringement for comparative advertising of registered trade mark: -A registered trade mark is not infringed by the use of the registered trade mark for the purposes of comparative advertising, but any such use otherwise than in accordance with honest practices in industrial or commercial matters must be treated as infringing the registered trade mark if the use, without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark. -Therefore okay if it’s... 1. Actually comparative advertising 2. in accordance to honest practices, not lying 3. not take unfair advantage of the distinctive character or repute of the mark 4. Not be detrimental to the distinctive character or the repute of the ™, not harm that mark. Mitre 10 v Benchmarket (2004) -so 2000s B took M brochures and stuck their prices over it Decision: 1. court said this is comparative advertising 2. the court said they are being perfectly honest, making a direct comparison 3. What bunnings did was not unfair, yeah they took advantage of it but no unfair. 4. Not detrimental to mitre 10 but beneficial to bunnings, court said: rather than harming mitre 10, and its rep, doing this depends on mitre 10s reputation, if they actually harmed mitre 10 it wouldn’t work. Open comparison that is direct=therefore honest Intercity group (nz) vs naked bus (2014)

Court said: -deceptive, probably not 1 but if we're not 2. PASSING OFF: Could there be passing off?

1. Good will/rep attached to service/good: presumed yes 2. Misrep: of source, or association?: no? Because why would you go and say you’re better than them 3. Causing actual or likely damage:

RIGHT TO USE YOUR OWN NAME: - Includes TMA, passing off, FTA Issues: – Company’s splitting – Expansion into new geographical areas – Concurrent use -Own name: natural name or company name. -Is there an “own-name” defence to trade mark infringement, passing off, or FTA 1986 misleading or deceptive conduct? -Do you have a right to use your own name in trade, or by using your own name you could be infringing someone, passing off, or fta, or is their an exception? Therefore.. 3 ways that 2 entities using same or similar name: 1. Company splitting up 2. Two companies, one wants to expand into new geographic areas. 3. When you have 2 entities same time using the same or similar names, and for some reason there's an issue.

TRADEMARK LAW: Names: -s 5 sign includes—(a) a brand, colour, device, heading,label, letter, name, numeral, shape, signature, smell, sound, taste, ticket, or word; and -it’s in the list: yes possible, david jones, acquired distinctiveness, very normal name, but its trademarked: -but what if your name is also david jones and wants to trade with this name, maybe for your law or accounting practice: allowed: AND: -s 95 No infringement for honest practices A person does not infringe a registered trade mark if, in accordance with honest practices in industrial or commercial matters, the person uses— (a) the person’s name or the name of the person’s place of business; or (b) the name of the person’s predecessor in business or the name of the person’s predecessor’s place of business; … -This says that if a person in accordance with honest practices uses their own name or the name of a place of business, this is not infringement, then you won’t be infringing the registered ™.

A. name or name of persons place of business example: 1. Individual's name: Liz Comics: -change name from liz comics to marvels comics therefore this is not honest because: has to be your own name, can’t change it legally to take advantage of Harvey norman: -harvey normans tool shed would be okay because it's actually your birth name -but change font to same as harvey norman: not okay as it's obviously done on purpose to be confusing 2. Company name: -Interpretation Act 1999, s 29: “person includes a corporation sole, and also a body of persons, whether corporate or unincorporated. -therefore, persons include a company so you'd think it would be included in s95. -but ™ act 2002, s91: says it's not a defence to say this is our registered company name, company name and tm ‘s are registered on different registers. Place of business Anheuser busch v budweiser budvar (2003): -argued that s95 not an offence that registered company name -but courts decided they can use this defence, they'd come under this

-court says s91 means name that is registered is not automatically a defence, but you have to use it in accordance with honest practices. -loss on argument bc it wasn’t even their name -but then they argued s95 a, but loss because they used the adjective, not the actual place name, e.g using japanese vs japan. Used the adjective like the american one. -therefore has to be the ACTUAL name and place of business in accordance with honest practices, non deceptive way

PASSING OFF: Cases: Jj craig ltd v AE craig and HR craig (1922) -ran a transport company -3 brothers had falling out (split) -2 left and created own company -jj sued his brothers for passing off, I have rep and goodwill in my company, and by forming the new company “Craig transport”, consumers =confused=divert business -court has to decide, AE and HR have right to use own name?: Court addressed own name defence for: 1. Individuals: there is a defence for passing off for individuals using your own name 2. Partnership: -court said there is a defence but doesn’t apply as craig transport isn’t their own name 3. Company names: no defence for using company names: this is because you pick your company name and you can always just choose another name, but its reasonable to want to trade with your birth name. NZ farmers co ltd v farmers trading co ltd (1979): -farmers the department wanted to expand into south island, christchurch -plantiff sued them for passing off. -farmers department lost as no own name defence for company for passing off. Newer nz case: Taylor bros ltd v taylors group ltd (1988): -all started from the same family, and some point they split off -taylor bro in welly, taylor group everywhere. -taylor bros wellington sued taylor group for passing off: but they argued using their own name for years, just expanding into welly. -court looks at: 1. Individuals: yes there is an own name defence if its your actual name 2. Bit of confusion is okay but can’t deceive. 2. Companies: court of appeal confirmed that there is no own name defence for companies, can’t choose your own name. FAIR TRADING ACT 1986:

s 9 “No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. -Is there an exception to s9: im just using my own name?

Neumegen v Neumegen & co (1998)

-using own names in partnership name -earnest passes 1973 away and goes to his son, carl dies in 1973 -1983 it becomes neumegen & co -1983: mark N and peter N =set up law firm n&n -original company sues them for s9: likely to mislead -there is no own name defence under FTA 1986 and court refused to add one in even if you’re using actual birth name

IMAGE RIGHTS AND PRIVACY: Outline: Fictional characters and images o TM law o Passing off o CR law - somewhat relevant Famous personalities o Tm law o Passing off o FTA o Breach of confidence o privacy Everyday individuals

Fictional characters and images: Trademarks: Protection of characters? -Marvel characters -Disney characters are all Trade marked: Mickey mouse, donald duck -TMs can go forever - just renew it -Sign capable of graphical representation and distinguishing one traders goods from anothers -You cannot make a t shirt with mickeys image on it --> s89 Infringement: use as a TM? o Badge of origin o Mickey mouse on a shirt would be a badge of origin -S89(1)(c) similar to the registered trademark in relation to any goods or services that are identical with or similar to any goods or services in respect of which the trade mark is registered, if that use would be likely to deceive or confuse; or Therefore, s89 similar mark that would be likely to deceive or confuse: -Prevents other coys from making poor imitations of characters -What about use in an ironic or sarcastic way? ? A spoof Not covered by s89(a) -Disney is associated with children, so people probably won't be deceived or confused that these things come from disney - If you saw this, you wouldn't be deceived into thinking these things are made by disney -However, Disney don't like these kinds of - Could affect their reputation because they’re a child friendly p Disney are also very controlling and dont like people using their images s 89(1)(d): -identical with or similar to the registered trade mark in relation to any goods or services that are not similar to the goods or services in respect of which the trade mark is registered where the trade mark is well known in New Zealand and the use of the sign takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the mark -This section is only about famous marks in NZ - If its a well known mark in NZ, you cant use something that identical or similar in relation to any goods or services that are not similar -Must be used for non-similar goods, in different class than what's been registered o Clothing would fail this bold section o Hard to think of things that Disney hasn't registered for - Use is harmful of the mark and affects the reputation Passing off: Tot Toys Ltc v Mitchell [1993] · Buzzy bee · T owns right to make toy

· Classic buzzy bee was invented by Ransay brothers and TMd buzzy bee · Sold company to tot toys in 1988 and manufactured in China · Were Not manufactured as well in China · Mitchell didn't like that they were made in China in a cheap way, and made her own buzzy bee called 'kiwi bee' o She designed her kiwi bee based on the original buzzy bee · T sued M for passing off of the character (couldn't sue for TM because she didn't use the words 'buzzy bee') Have to show: Classic Extended "false association" Goodwill/reputation In the "get up" • The way the entire thing looks In the "get-up" · E.g. Clear that Spalding balls had sufficient reputation OR a word · E.g. 'Champagne' In the 'get-up' OR word Misrepresentation Deception of source (manufacturer) · Two products that look similar that confuse you about where the product came from Goods of a different quality/class · You think you're getting a higher quality of products than you actually...