No monopoly in the words 'co-op' or 'co-operative'

Article  \  4 Jun 2015

In Co-Operative Bank Limited v Anderson [2014] NZHC 2686, the Co-operative Bank Limited (TCB) unsuccessfully sought an interim injunction to prevent a credit union (NZACU) from using certain names that included the words 'co-op'.

Both TCB and NZACU operate as co-operatives, meaning that they consist of a union of members for the production or use of services, where the profits are shared by the members.  TCB operates as a bank. NZACU does not, but its members do offer some financial services.

The NZACU wanted to rebrand to use the names CO-OP MONEY NZ, CO-OP SERVICES NZ and CO-OP INSURANCE NZ. TCB objected to this, and commenced proceedings against NZACU to prevent it rebranding to names that used the word 'co-op', on the basis that the new names would be deceptively similar to its own name 'The Co-operative Bank' and would cause confusion.

TCB based its case on the law of passing off,  the Fair Trading Act 1986 and infringement of its registered trade marks for THE CO-OPERATIVE BANK in stylised and logo form.

In response, NZACU argued that 'co-operative' and 'co-op' were descriptive terms describing a type of organisation which it was entitled to use, and that the threshold for granting an interim injunction was not met.

The Court held that, although TCB had established some reputation and goodwill in the name 'The Co-operative Bank', terms such as 'co-op' and 'co-operative' were generic and descriptive. Consequently, they could not give rise to a claim in passing off, in the absence of a secondary meaning. 

The Court found that no such secondary meaning had been established by TCB and no substantial risk of confusion would arise if NZACU was allowed to use the words 'co-op' in its branding. The possibility of some initial confusion did not prove there was a misrepresentation that would mislead customers. 

TCB therefore failed to show a seriously arguable cause of action in passing off or under the Fair Trading Act. 

The Court also held there was no serious question to be tried in relation to trade mark infringement. Given the low level of distinctiveness of the TCB's trade marks, the names NZACU intended to use were not similar and likely to cause deception or confusion. Further, any use by NZACU of its proposed names would be in accordance with honest commercial practices and so would not amount to infringement.

 

An edited version of this article first appeared in the February 2015 issue of Managing IP.