Acting up: the implications of New Zealand’s new Trade Mark Act

Acting up: the implications of New Zealand’s new Trade Mark Act

In summary1

  • New Zealand’s new Trade Marks Act will come into force in mid-2003, introducing a number of new and, in most cases, welcome changes to trade mark law in that country
  • The new Act includes an “offensive marks” prohibition largely designed to protect the cultural heritage of New Zealand’s indigenous population, the Maori. The Intellectual Property Office of New Zealand will create an Advisory Committee to advise whether a trade mark derived from a Maori sign, text and images is likely to, offend Maori
  • One section of concern is a provision for the revocation of a registration if the trade mark has become generic in the eyes of the public, a significant departure from existing law, which referred only to use by people in the trade, and differs from current law in Singapore, United Kingdom and Australia
  • Other key changes concern provisions for “well known” marks, licenses and assignments, and comparative advertising

New Zealand trade mark law is about to receive a major revamp with the introduction of the New Zealand Trade Marks Act 2002. The Act received the royal assent on 4 December 2002, and should come into force mid 2003, once the requisite trade mark regulations have been drafted and a special Advisory Committee has been established.

The Act replaces the New Zealand Trade Marks Act 1953 and introduces some major changes to existing New Zealand law. These include:

  • Prohibition of the registration of marks which are likely to offend significant sections of the community (including Maori);
  • Creation of an Advisory Committee to advise the Commissioner whether the proposed use or registration of a trade mark that is, or appears to be, derivative of a Maori sign, including text and imagery, is, or is likely to be, offensive to Maori;
  • Infringement of "Well Known" trade marks;
  • The ability to remove trade marks which have become generic through general public use;
  • Comparative advertising will not constitute trade mark infringement2;
  • Multi-class applications;
  • Abolition of Parts A and B of the Trade Mark Register;
  • Introduction of a presumption of registrability;
  • Restricted ability to amend pending trade mark applications;
  • Abolition of the ability to amend registered trade marks;
  • A 10 year renewal period;
  • Reduction of the non-use period from five years to three years;
  • Abolition of defensive trade mark registrations. All existing defensive registrations will be converted into ordinary trade mark registrations;
  • Abolition of "associated" trade mark registrations and existing "associations" cease to have effect.

Of the above changes brought in by the Act, most significant are outlined below.

Offensive marks

The Act prohibits registration of a trade mark if "its use or registration would be likely to offend a significant section of the community, including Maori"3. Whilst this prohibition relates to all sections of the community, the reference to Maori in particular illustrates the New Zealand government's concern to prevent the inappropriate registration of Maori language, signs, symbols or imagery as trade marks.

Maori language and imagery are part of Maori cultural heritage, and should be respected and used in appropriate ways4. As such, the inappropriate use or registration of Maori language and imagery as a trade mark may be offensive. The increasing importance of Maori intellectual property rights has been identified as possibly the most important set of issues that New Zealand intellectual property law will face over the coming years5. Examples of Maori images or words which are currently incorporated into New Zealand trade marks include the following:

      

In practice, a third party who has no awareness of Maori language, symbols or imagery may find that the mark which it is seeking to register is in fact a Maori word or symbol, and may subsequently encounter this ground for refusal.

In order to assist in determining whether or not such a trade mark is indeed "likely to offend", the Intellectual Property Office of New Zealand (IPONZ) is in the process of creating an Advisory Committee, whose sole task is to advise whether a trade mark that is, or which appears to be, derivative of a Maori sign (including text and images) is, or is likely to, offend Maori. The committee will be made up of a selection of persons/individuals who must have knowledge of te ao Maori (Maori worldview) and tikanga Maori (Maori protocol and procedure)9. IPONZ has been aware of the need to protect Maori words or imagery for some time and has, under the current Trade Marks Act, previously objected to registration of trade marks which contain Maori text or imagery, on the basis that the mark contained "scandalous matter" or that use of the mark would be "contrary to morality". However, the new ground for refusal goes further than simply codifying the current practice. It directly provides for the need to consider the different cultures, races and religion which make up the New Zealand community. The creation of a specific Advisory Committee to deal with trade marks which may offend Maori removes from the Examiner some of the responsibility for determining whether such trade marks are offensive. Trade mark owners and practitioners will monitor this development with interest, and in particular, the determinations of the Advisory Committee. It will also be interesting to see how in practice such an objection can be overcome10.

Generic use

The Act provides for revocation of a trade mark registration if the trade mark has become a common name in general public use for a product or service in respect of which is registered, as a consequence of the acts or inactivity of the trade mark owner11. This is a significant departure from the existing law, which referred only to use by people in the relevant trade12.

This controversial shift from generic use "in trade" to generic use by the "general public" is likely to concern many trade mark owners. It is also a departure from the current law in Singapore, United Kingdom and Australia, all of which refer to the "trade"13. Trade mark owners will face the need to actively monitor use made of their marks in dictionaries, newspapers and magazines and on the Internet, and make liberal use of the symbols ® and ™.

The Act requires that the generic use of a trade mark is "in consequence of acts or inactivity of the owner". Accordingly, if a trade mark owner has taken steps to use its mark correctly, has widely publicised the fact that the mark is a trade mark and has attempted to address misuse of a mark by third parties, then, in practice, this may avoid revocation of the registration.

Well known marks

The Act includes a new class of infringement to cover "well known"14 marks, which brings New Zealand trade mark law in line with its obligations under TRIPs. This will allow the owner of a registered trade mark to take action against an unauthorised use of an identical or similar trade mark in relation to goods or services which are not similar to those covered by the trade mark registration. The Act requires the trade mark to be well known in New Zealand and that the unauthorised use of the mark "take unfair advantage of, or is detrimental to, the distinctive character or the repute of the mark".

This section does not require the trade mark owner to establish that use of the allegedly infringing mark is likely to cause confusion, or that the use of the mark indicates a connection with the trade mark owner. However as with all other actions for infringement of a trade mark registration, a well known mark can only be infringed if the allegedly infringing sign is used in such a manner as to be "likely to be taken as being use as a trade mark"15.

Licenses and assignments

The Act provides for recordal of licensees, in relation to any of the goods or services in respect of which the trade mark is registered16. Current "registered users" under the Trade Marks Act 1953 are deemed to be (registered) licensees under the Act.

The Act departs from current New Zealand law, as it does not prevent a registered licensee from assigning their right to use the trade mark to another party, without obtaining the trade mark owner's permission17. However, the trade mark owner's consent would be required to record the new party as a licensee18. This power to assign a licensee's interest in a trade mark to a third party increases the importance of ensuring that any license agreement dealing with New Zealand trade mark registrations specifically addresses rights to assign the licensee's interest.

As with the current law in New Zealand, it is not mandatory to register a licensee on the New Zealand Trade Marks Register. Use of a registered trade mark by a third party will constitute use by the trade mark owner if that use is authorised by and subject to the owner's control, irrespective of whether or not the third party is registered as a licensee.

Comparative advertising

The qualified use of a registered trade mark for the purposes of comparative advertising will not constitute trade mark infringement under the Act19. This is a departure from the existing law in New Zealand, which did not directly address issues regarding comparative advertising.

It is worth noting that whilst a registered trade mark is not infringed by use of the mark for the purpose of comparative advertising, "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"20. This contrasts significantly with the corresponding section of the Australian Trade Marks Act 1995, which does not include any qualifications on the nature of the comparative advertising, in order for that use not to infringe an Australian trade mark registration21.

As a significant number of Australian advertisements are also distributed, broadcast or published in New Zealand, trade mark owners (and their attorneys) in particular will need to be cautious when embarking on a comparative advertising program in Australia, if there is a possibility that those advertisements will also appear in New Zealand. However in practice, it may be difficult for a trade mark owner to establish that use of a trade mark in comparative advertising does constitute trade mark infringement, due to the number of elements which the mark owner must establish in order to make out a case for infringement.

Criminal Offences

The Act introduces a range of criminal offences relating to unauthorised use of a trade mark, including counterfeiting a registered trade mark, falsely applying a registered trade mark, or importing, selling or exposing for sale any goods to which a registered trade mark has been falsely applied22. The introduction of specific criminal offences for certain types of trade mark infringement will be a welcome amendment to the existing law in New Zealand.

Conclusion

The Act promises to bring a number of new and welcome changes to New Zealand trade mark law. As IPONZ and the New Zealand courts have always demonstrated a willingness to forge their own path in interpreting and applying the current New Zealand Trade Marks Act, the next few years should bring a range of interesting developments.

Endnotes

  1. This article has been reviewed by Simon Gallagher, Team Leader (Trade Marks), Intellectual Property Office of New Zealand, whose assistance is gratefully acknowledged by the author.
  2. Subject to compliance with certain conditions, as discussed below.
  3. Maori are the indigenous people of New Zealand and make up approximately 14.3% of the total New Zealand population.
  4. Maori and Trade Marks, A Discussion Paper, Maori Trade Marks Focus Group, 1997, p20
  5. Susy Frankel and Jeff McLay, Intellectual Property in New Zealand (2002) pages 99-100.
  6. New Zealand Trade Mark Registration Nos. 629736-74, the "toi iho" mark, owned by Creative New Zealand – Arts Council of New Zealand Toi Aotearoa and used to promote and market authentic quality Maori arts, crafts, exhibitions and performances.
  7. New Zealand Trade Mark Registration Nos 221407/8/9/10/11/12/13 AUCKLAND WARRIORS & device trade mark, owned by the New South Wales Rugby League Limited. This is the trade mark formerly used by the Auckland Warriors professional rugby league team, which played in the Australian National Rugby League Championship in Australia.
  8. TÄNE-TOA rugby boot, made by Canterbury of New Zealand Ltd (Canterbury"). This is one of a number of Canterbury rugby boots sold under a trade mark which consists of a Maori word or Maori-derived image. Further examples of such use can be found on Canterbury's website, www.canterburynz.com
  9. Section 179
  10. e.g. whether consent from the particular Maori group said to be "offended" will overcome this kind of objection
  11. Section 66.
  12. Section 24, Trade Marks Act 1953
  13. Bryan Thompson, AJ Park, paper dated 7 September 2002: "This mark is so attractive – it should be free for all to use".
  14. Subsection 89(1)(d)
  15. Subsection 89(2)
  16. Section 83
  17. Section 85.
  18. Section 86.
  19. Section 94.
  20. Section 94.
  21. Section 122, Australian Trade Marks Act 1995
  22. Sections 120, 121, 124