Mahvash Ikram
In what’s shaping up to be a David-and-Goliath courtroom battle, Uber Group Ltd – a tiny Whangarei-based broadband provider – is taking on rideshare giant Uber Technologies in a bid to prevent the global taxi giant from moving into Northland and offering internet services to its customers in partnership with One New Zealand (formerly known as Vodafone).
Clive Elliott KC
Uber Group and its lawyer Clive Elliott KC fronted up in the High Court in Auckland this morning, seeking an injunction preventing Uber Technologies from offering internet services nationwide which, Uber Group alleges, breaches an “undertaking” made after the rideshare company entered the New Zealand market in 2014. Under the terms of this “undertaking”, Uber Technologies said it would not enter the broadband market.
Justice Mathew Downs has reserved his decision until 5pm on 31 October.
Uber Group was established in 2003 and supplies wireless and fibre broadband to nearly 6000 Northland customers. It claims Uber Technologies’ entry into broadband market through its deal with One New Zealand risks adding to customer customers. Uber Group says for years it has fielded calls from customers who think they have called the rideshare company, Uber Technologies, and are looking for a cab.
Significant confusion
Elliott said confusion between the two brands had been “significant”, with about 3,000 people contacting Uber Group in error over the past decade. That level of confusion, he said, was “unacceptable under the fair trading regime”.
He said the local company had built nearly two decades of goodwill under its trademark, serving customers in north Auckland and Northland.
“In that region, there can be no dispute that Uber Group was the first mover,” he told the court. Roughly 47% of the company’s new customers came through word-of-mouth referrals and many others found the business through Google, which still remains the dominant search engine for most people.
The situation escalated, Elliot said, after a LinkedIn post three months ago by One New Zealand, announcing a new partnership with Uber Technologies. Uber Group acted to seek an injunction within days. He said the LinkedIn post signalled a shift from the long-standing understanding that each company would operate within its own sector.
Elliott also pointed to previous “undertakings” given by Uber Technologies not to open new marketing channels in Northland. But along with Uber rideshare and Uber Eats, Uber Technologies now offered another product called Uber One – a paid membership service that offers savings on both Uber rides and Uber Eats deliveries for a fixed monthly or annual fee.
Elliot said this further added to the confusion. “Now we have three Ubers – Uber Technologies, Uber One and Uber Group.”
He also said there was a promise not to run radio advertising but “radio ads [about Uber Technologies] are still occurring”.
The nitty-gritty
At issue, Elliott said, was the use of the Uber trademark for telecommunications services and what an average consumer would make of it.
“Uber Technologies wants it both ways,” he submitted. “They’ve authorised One New Zealand to use the trademark and accepted how One New Zealand uses it.”
The co-branding, promoted as a partnership, tells the world: “We are together, but also we are apart.” The offer of One NZ broadband as a benefit of the Uber App was actually akin to a service provided by Uber Technologies, he said.
Elliott said Uber Technologies’ disclaimer that the broadband was a third-party offer that was not provided by Uber Technologies failed to resolve the problem. “The mere fact that you need a disclaimer means you have a problem,” he said.
He said Uber Technologies’ argument that it was merely facilitating services provided by One New Zealand was “irrelevant”. The partnership amounted to provision of telecommunications under the Uber name. The result, he said, was “fertile ground for error”, with Uber Group on the receiving end. In the past two months alone, there had been 55 examples of confusion.
Elliott said the defence had sought to downplay Uber Group’s profile, but it was as a “significant player” with a large segment of the local market. Uber Technologies, by contrast, had “ignored the provinces for a long time”, with Uber Eats launching in Whangarei only last year and rideshare services at the beginning in July.
Elliott argued the case illustrated reverse confusion around trademark, where a new user’s reputation overpowered that of the (much smaller) senior user. “Uber Group is the senior user,” he said.
“If there is reverse passing off, the court must intervene.”
“The question for the court,” Elliott concluded, “is whether Uber Technologies is using the Uber mark for telecommunications services. Look at it through the eyes of the consumer – can they really pick that technical distinction?”
No infringement
Counsel for Uber Technologies, Earl Gray of Sangro Chambers, said the case did not involve an infringement under s 93 of the Trademarks Act. Rather, it was about an activation that occurred via a specific cross-promotion between his client and One New Zealand. The promotion was for Uber drivers who were being given access to third-party products. They, rather than the general public, were the real consumers for the internet service being provided by the collaboration.
“It’s not an infringement to use your own trademark,” Gray said. “We have a major player using its own trademark.”
Uber Group did not have any objections to a partnership Uber Technologies had with another telco, 2 degrees, for five and a half years, he said. “Cross- promotions are what happen in the marketplace.”
For One New Zealand, Tim Mahood, a partner at Hudson Gavin Martin, said no reasonable consumer would have been confused by the LinkedIn post that announced its partnership with Uber Technologies.
Information about the cross-promotion was not available on One New Zealand’s landing page, indicating the service was not available to the general public. Based on the limited scope of the partnership and collaboration, there was no chance of confusion, Mahood said.
“It’s clear One [New Zealand] does internet; Uber does rideshare,” he told the court, and the promotion was not a breach of the Fair Trading Act.
This was a problem of Uber Group’s own making and there would be significant loss to Uber Technologies and One New Zealand if the injunction were granted.
Uber Group was “having their lunch cut by Starlink”, Mahood said.
In response, Elliott said there had been a significant drop-off in new broadband connections for Uber Group since March this year when the defendant entered the market, and this was “a huge concern”.
“Without interlocutory relief, it’s quite difficult for my client to withstand this attack on its market, using an identical mark on its patch.”
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