Likely to Deceive or Confuse: The Pioneer Hi-Bred Test Under Section 25

1. What is a Section 25 citation?

A Section 25 citation is issued when the Intellectual Property Office of New Zealand (IPONZ) determines that a trademark application conflicts with a prior trademark belonging to a different owner.

Under Section 25(1) of the Trade Marks Act 2002, the Commissioner must not register a trade mark if it is:

• Identical to a registered trade mark (or earlier-priority application) belonging to a different owner, for the same goods or services,
• Identical to such a mark for similar goods or services, where use is likely to deceive or confuse, or
• Similar to such a mark for the same or similar goods or services, where use is likely to deceive or confuse.

Unlike some jurisdictions that leave conflicts to opposition proceedings, IPONZ examines relative grounds ex officio — examiners proactively search the register and cite conflicting marks during examination.

2. The legal standard: "likely to deceive or confuse"

The touchstone of New Zealand practice is whether use of the applied-for mark would be likely to deceive or confuse a substantial number of persons in the relevant market.

The leading authority is Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1979] RPC 410, where the New Zealand Court of Appeal held that the question is not one of "hypothetical possibilities" but of "practical business probabilities." The assessment considers all the circumstances of the trade: the nature of the goods, how they are sold, and the kind of customers who buy them.

"Deceived" and "confused" capture two different states of mind: a consumer is deceived when led to believe the goods come from the wrong source, and confused when left wondering whether there might be a connection. Either is enough to block registration.

3. Imperfect recollection: not a side-by-side comparison

A critical feature of the New Zealand test is that marks are never compared side by side. Consumers in the real world encounter marks separately, often days or weeks apart, and carry only an imperfect recollection of the first mark when they meet the second.

This has several practical consequences:

• Two marks may show many differences when examined closely, yet still leave the same idea or impression in the consumer's mind — and therefore conflict.
• The comparison focuses on the dominant and distinctive elements of each mark, not on minor details.
• Visual, aural (spoken), and conceptual similarity are all weighed — a mark ordered verbally over the phone or in a bar is judged heavily on how it sounds.

4. How the strength of the prior mark affects the analysis

The distinctiveness of the cited mark directly influences the scope of protection it receives:

• Highly distinctive or invented marks (e.g., coined words) receive broad protection — even moderate similarity may be enough to cause confusion.
• Descriptive or commonplace elements receive narrow protection — the more descriptive a shared element, the less likely the average consumer will assume a connection based on it alone.
• In crowded fields where many traders use similar wording, small differences between marks may be sufficient to avoid confusion.

5. Similarity of goods and services

Section 25 requires both similar marks and the same or similar goods/services. When comparing specifications, IPONZ considers factors such as:

• The nature and intended purpose of the goods or services,
• The channels through which they are sold,
• Whether they are in competition with, or complementary to, each other, and
• The likely customers for each.

Goods and services can be similar across different classes, and goods in the same class are not automatically similar. IPONZ publishes a "conflicting class table" as a guide, but the assessment is always made on the actual specifications.

6. What happens when IPONZ cites a prior mark

If the examiner considers Section 25 applies, the citation is raised in a compliance report, and the applicant is given the opportunity to respond within the response deadline. The application cannot proceed to acceptance until the citation is overcome or withdrawn.

The main routes to overcoming a citation are:

• Argument — submissions that the marks are not confusingly similar, or that the goods/services are not similar.
• Letter of consent from the owner of the cited mark — under Section 26(a), consent compels registration (a uniquely powerful route in New Zealand).
• Honest concurrent use or special circumstances under Section 26(b).
• Amending the specification to remove the overlapping goods or services.
• Removing the obstacle — seeking revocation of the cited mark for non-use under Section 66 if it has not been genuinely used for 3 years, or seeking a partial revocation to narrow its specification.
• Negotiating an assignment or coexistence arrangement with the prior owner.

7. Choosing the right strategy

The best response depends on the commercial facts:

• If the cited mark appears dormant, investigate its use — a non-use revocation action (or the credible threat of one) is often the fastest lever.
• If the prior owner is not a competitor, a consent request is inexpensive and, if granted, decisive under New Zealand law.
• If your business has traded alongside the prior mark in New Zealand for years without confusion, honest concurrent use evidence may support registration.
• If the overlap is narrow, a specification amendment may resolve the citation without contact with the prior owner.

8. Section 25 in oppositions and beyond

Even after an application is accepted, the same likelihood-of-confusion principles arise in opposition proceedings (where third parties may oppose within the opposition period after acceptance) and in invalidity proceedings after registration. Owners of well-known marks may also invoke additional protections. Clearing the examiner's citation is therefore necessary but not always sufficient — a proper availability search before filing remains the best protection.

9. Best practices before filing in New Zealand

• Run a full availability search of the New Zealand register, including phonetic equivalents and te reo Māori variants, before adopting a mark.
• Assess the dominant elements of your mark against prior marks — shared descriptive words matter less; shared distinctive elements matter more.
• Draft specifications strategically — cover what you genuinely trade in, but avoid unnecessary overlap with known prior marks.
• Document your use in New Zealand from day one — that evidence underpins both honest concurrent use claims and defences to any future challenge.

10. Summary: Section 25 and the Pioneer Hi-Bred test

Key takeaways:

• IPONZ examines relative grounds ex officio and will cite prior registrations and earlier-priority applications.
• The test is whether use of the mark is likely to deceive or confuse as a matter of practical business probabilities, judged on the imperfect recollection and overall impression of the average consumer — never side by side.
• Distinctive prior marks enjoy broad protection; descriptive shared elements carry little weight.
• New Zealand offers unusually strong escape routes: binding letters of consent, honest concurrent use, specification amendments, and non-use revocation of the cited mark.

Understanding how IPONZ applies Section 25 allows applicants to anticipate citations before filing and to choose the most efficient strategy when one arrives.