Advantage fails to quash ruling

By PETER GRIFFIN

Listed tech company Advantage Group has failed in an Appeal Court bid to overturn a ruling that may cost more than $1 million to fight.

During a three-year battle over use of the Advantage name, Palmerston North-based Advantage Computers has reaped the benefits of trademarking its brand in the early nineties, before Advantage Group existed.

Advantage Group now faces an injunction, effective immediately, from using the Advantage name in relation to a wide range of goods and services, including computers, computer software, computer hardware, software designs, computer consultancy and computer programming.

Advantage Group actively operates in many of those areas.

For example, Advantage Group would be barred from displaying the Advantage name on a website advertising computer programming.

Advantage Computers managing director Mark Ward said the company had been awarded costs and would chase its larger namesake for damages, although he could not put a figure on how much he would ask for.

"We're going to pursue to the fullest extent we can the mechanisms available to retrieve damages and loss of the brand suffered," he said.

Part of that process would involve Advantage Computers submitting a damages report to the court. A forensic accounting investigation may be necessary to calculate the effect Advantage Group's use of the name has had on Advantage Computers.

Advantage Group's managing director, Tony Bradley, said the company had put aside a provision in its last financial accounts of $1.25 million for outstanding legal issues, including the spat with Advantage Computers.

He would not say how much the legal action had cost, but damages have yet to be calculated and will push up the amount Advantage Group will have to pay.

The injunction would not force Advantage Group to change its name, but other brands may have to go.

"It's not changing trading activities in any way, we're still selling the same products to the same customers," said Bradley, who described the legal action as an "unfortunate distraction".

Chris Patterson, a barrister specialising in information technology and telecommunications, said it was likely that a defeated Advantage Group would look to do a deal with its namesake to continue using its existing brand.

"If you work out the cost of rebranding plus damages I suspect they'll probably do a deal with [Advantage Computers] to allow them to use the intellectual property."

Patterson said it would be difficult to quantify the damage Advantage Computers had sustained from Advantage Group's using the name.

"I suspect the small company would have difficulty showing that the Advantage Group has diluted the value. It will be hard to quantify what the damages are."

Despite sharing the same name, the two Advantage firms existed in harmony until 1999, when Advantage Group embarked on a tech acquisition spree, which led to the two becoming confused in the marketplace.