What should you do if your trade mark is used on the internet?

As commerce moves away from traditional physical stores and onto the internet, it becomes increasingly difficult to know when the actions of another trader on the world wide web are an actionable breach of your trade mark rights.

While the factors involved in this assessment are best worked through with the guidance of an IP professional, we note below some of the key points to consider:

How do I know if the use infringes my trade mark registration?

You need to think about what is actually covered by the trade mark registration:

  • Is the trade mark the same?
  • Are the goods and services the same?
  • Are there obvious sales in the country in which the trade mark is registered?

In some cases, it is quite clear that the trade mark is in use in a way which directly conflicts with your registered trade mark rights and this will probably be your main avenue for attack.

But what if the use does not look like it falls within the registration coverage?

Fear not, just because the case for trade mark infringement may not be strong does not mean you do not have any grounds for redress.

You may still be able to establish a case under fair trading legislation and/or for the tort of passing off.

What do I need for fair trading breaches and/or passing off?

The rule of thumb for a fair trading breach or passing off is that you have a reputation in a brand which is being adversely and unfairly affected by the activity of another trader. The use must be in the course of commerce.

What about if I have rights in New Zealand, but the company using my brand is based somewhere else?

It is important to look closely at the use and identify each country where you could say the brand is being used to see if you can choose a country where you have best rights.

If a website offers the option to purchase products you should look at the country where the product is packaged and offered for sale. You should also think about whether product can be shipped to New Zealand direct from the seller. Drilling down into the supply chain may help you choose the best jurisdiction in which to take action.

The Private International Law (Choice of Law in Tort) Act 2017 summarises many years of case law on the topic of choosing a jurisdiction for tortious action and confirms that the general rule is that the country in which the tort is committed is the country whose laws will apply.

For the purposes of passing off, if part of the act is in one country (for example, order received and shipping) and the rest of the act is in another country (goods delivered and released to market) the tort can be pursued in the country in which “the most significant element … of those events occurred”.

This Act confirms you no longer need to be eligible to have an action in both countries involved in order to pursue your rights in one country.

Do I have to send a formal letter?

Laws are constantly being developed to place obligations on internet-based sales platforms to ensure the rights of trade mark owners are recognised and respected.

In many cases international sites such as Ebay, YouTube and Alibaba have IP protection clauses which help trade mark owners control potentially infringing use by dealing directly with them.

In less straightforward cases, it is likely formal cease and desist correspondence will be necessary.

In all cases, your best first step is to review your options with your legal advisor as early as possible.

New Zealand’s New Grace Period

On 30 December 2018, New Zealand will implement a grace period for disclosures by an inventor or applicant made in the year before a patent application is filed.

This follows from New Zealand ratifying the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on 25 October 2018, and the CPTPP being scheduled to enter into force on the same day.

This article discusses how the new New Zealand grace period will work.

Current situation

Currently, any public disclosure of an invention could prevent an applicant obtaining a New Zealand patent for that invention. There are only very limited situations in which disclosure can be disregarded (such as being in breach of confidence). This change will align New Zealand with countries like Australia, the United States, and Japan.

Many jurisdictions (notably Europe and China) still have limited, or no, grace periods for disclosures. A disclosure before filing a patent application can therefore still be damaging, and should be avoided if possible.

The new law

From 30 December 2018, the Patents Act 2016 will have a new grace period provision in section 9(1)(f). This will provide:

(1) For the purposes of section 8, the disclosure of matter constituting an invention must be disregarded if 1 or more of the following applies:

    (f) that disclosure occurred during the 1-year period immediately preceding the patent date and the disclosure was made by any of the following persons:
        (i) the patentee or nominated person:
        (ii) any person from whom the patentee or nominated person derives title:
        (iii) any person with the consent of the patentee or nominated person:
        (iv) any person with the consent of any person from whom the patentee or nominated person derives title.

Which patent applications can use the grace period?

A patent application must have a patent date within 1 year of the disclosure. The disclosure must have occurred on or after 30 December 2018 (future Schedule 1AA(4) of the Patents Act 2016).

The patent date is the date a complete specification was filed (s 103(1)(a)) or that the PCT application was filed (s 46). The filing date of a provisional specification, or any other priority date, is not the patent date.

The provision is not retrospective. Any disclosures that occur before 30 December 2018 are not covered by the grace period.

If you wish to take advantage of the grace period, a complete specification must therefore be filed within one year of the disclosure. It may be worth filing a PCT application in the first instance to use the grace period in multiple countries at once.

Who can disclose?

The new provision expressly covers disclosures made by the patentee (or nominated person who will receive the granted patent, if different) (s 9(1)(f)(i)), the inventors (or anyone else the patentee derives title from) (s 9(1)(f)(ii)), and anyone else with consent of these parties (s 9(1)(f)(iii)–(iv)). This seemingly covers anyone directly involved in a patent application.

This complements the existing provisions which provide a 1-year grace period for disclosures made unlawfully or in breach of confidence (s 9(1)(a)–(b)).

What about third parties?

If a third party receives the inventor’s public disclosure, then on-discloses the information they received, would this third party on-disclosure be covered by the grace period?

Maybe not. A strict reading of the provision would suggest third party on-disclosures are only covered if the third party has the consent of the patentee or inventor. How this works in practice is unclear. Can an unknown party in unknown circumstances receive consent? Does the act of making the information available to the public give implied consent to the public generally for on-disclosure? Would a copyright notice that the information is not to be copied be equivalent to an express lack of consent?

For example, a common scenario would be when an inventor discloses their invention publicly at a conference, and a third party (unknown to the inventor) then publishes a summary of the invention. It is unclear if the third party summary is covered by the grace period or whether it would be prior art.

This exposes a potential hole. Some disclosures may not have consent (and therefore cannot use the new s 9(1)(f) grace period) but are not in confidence or obtained unlawfully (and therefore cannot use the existing s 9(1)(a)–(b) grace period). These disclosures will therefore still be prior art.

Whether third party on-disclosures are covered by the grace period may need to be settled by the courts. Interestingly, the underlying text of the treaty contains no reference to consent being required for the grace period to apply. Instead, the treaty requires that disclosures by “a person who obtained the information directly or indirectly from the patent applicant” must be disregarded (Trans-Pacific Partnership Agreement art 18.38). Depending on the interpretation by the courts, it may therefore be that New Zealand law is not fully in compliance with this part of the treaty.

In the meantime, to mitigate the potential risk of third party on-disclosure, patent applications should be filed as soon as possible after a public disclosure.

How does this compare with Australia?

Australia has had a 1-year grace period since 2002.

The Australian grace period provision is worded differently. The Australian grace period covers information made publicly available by or with the consent of an inventor or applicant (Patents Act 1990 (AU) s 24(1)(b)). The Australian provision therefore focuses on the information disclosed, rather than who made the disclosure. This side-steps the issue of whether a third party needs consent for the grace period to apply to on-disclosure, as long as the initial disclosure was made with consent.

It appears the New Zealand provision was based on the Australian provision. But the change in wording to focus on the person disclosing rather than the information disclosed may be meaningful. It may suggest an intention from Parliament that unconsented third party on-disclosures are not covered by the grace period, and therefore should still be usable as prior art. It remains to be seen how this is applied by the courts in practice.

UKIPO Update on Brexit

As the Brexit date approaches, recent reports indicate that the UK Government will offer automatic and free conversion of EU registered trade marks into UK registered trade marks.

But how accurate is this?

White Paper on Future Relationship issued by UK and EU 12 July 2018

The UK Government continues to negotiate with the EU as the Brexit date approaches and confirms a desire to minimise disruption to businesses.

This does not go so far as to confirm free and automatic conversion of trade marks.

The White Paper rather proposes that the UK should continue to have an active relationship with the EU to support EU and UK rights holders. It still remains to be seen which option will be followed.

What Should You Do Now – August 2018?

We caution against relying on conversion of rights by the UK Government. In order to put your business in the best position, we recommend following the same steps noted in our previous article:

  • Identify your true market and make sure your protection covers that market.
  • Keep your UK and EU trade marks in force. If you have a trade mark registration which is due for renewal, and the registration reflects what you are using, then we recommend you renew your registration and do not allow it to lapse.
  • Update any out of date Register rights. This could mean new UK or EU applications, either national filings or under an application under the Madrid Protocol system.
  • And finally, do not forget about third party agreements – review what you have and update what you need to update now!

And throughout all these steps, remember that we are here to help!

Ellis Terry Overturns Restrictive Amendment Practice

Applicants in New Zealand have been suffering under a restrictive amendment practice adopted by IPONZ that would have left applicants unable to remedy potentially fatal deficiencies. Ellis Terry recently took a case1 to a hearing that has overturned this practice.

New Act and Regulations

Under the new Patents Act 2013 it is a requirement that all claims must be “supported” by matter disclosed in the specification. The regulations governing the process for amendment of the specification also use the word “support”.

IPONZ Practice

IPONZ interpreted the regulations to require “support” (as used in the Act) for any amendment to either the description or claims. This practice was adopted despite the fact that the Act specifically provides for the post-dating of amendments; post-dating could clearly only occur in the case of unsupported amendments.

The issue in question

It is uncertain under the new Act whether classical inutility (where a claim is invalid if it fails to meet the objects of the invention) still exists, although the IPONZ website says that classical inutility does still apply, as is the case in Australia by virtue of an explanatory memorandum to a similar section.

In the case in question an amendment was requested to amend objects of the invention by adding the alternate object “to at least provide the public with a useful choice”. Such amendment had been routinely allowed under the previous Act.

IPONZ objected that there was no “support” for the added words. It is true that there was no wording that could be pointed to that provided “support” (as used in the Act) for this wording. Failure to allow such an amendment could have left the applicant with an incurable flaw that could render its patent invalid with no way to remedy the situation. This would have put foreign applicants, unaware of this arcane ground of invalidity, in a perilous position.

Decision

Upon reviewing the statutory context the hearing officer ruled that the regulations did not impose a substantive requirement for specific support for every amendment. Rather, the regulations are procedural and are intended to expedite the examination process; an applicant relying on support in the original specification for an amendment should point to support so an examiner does not have to ‘go hunting’. The hearing officer indicated that support may not be required for deletions or amendments to improve conciseness. The addition of ‘or to at least provide the public with a useful choice’ was allowed.

This is a welcome decision that will relieve applicants that have been faced with exasperating support objections.

Trade mark protection – What should you register?

Picture this; you develop a trade mark for a hat, do some due diligence, find it is clear and secure a trade mark registration for “hats”. Fast forward five years, and business is going well. You’re thinking about expanding your product range into “belts” and invest a lot of money into the new product. Then on launch day, you find out someone else is using just about the same trade mark on “belts”. Worse still, these other people have a trade mark registration and they are now suing you for trade mark infringement.

What could you have done to avoid this situation?

Under New Zealand law there is no requirement for the filer of a trade mark application to show that it has used its trade mark in New Zealand in order to gain registration. This allows applicants to claim an area of exclusive right which is actually broader than the area where the trade mark is currently being used and to mark out areas of potential future growth.

A key benefit in spending the time and money in securing a broad registration at the outset is the fact you do not need to show evidence that your trade mark is in use before you sue for trade mark infringement. This means you could use your broad trade mark registration rights to stop other traders encroaching into your future growth areas.

By comparison, an action under the Fair Trading Act or for passing off requires that you have a reputation in trade before you assert your rights. By their nature, these actions are limited to the area where you are actually using your trade mark. A broadly scoped registration will therefore mean you could sue on more rights than if seeking to sue under the Fair Trading Act and/or for passing off.

The next question is how broad is too broad?

The fact that you have a registered trade mark does not mean that it is invulnerable to attack by third parties. If you file for goods where you have no real intention to the trade mark, the registration may be immediately vulnerable to removal from the Register.

Further, once a trade mark registration is more than 3 years old, it is vulnerable to removal in relation to all the goods and services described in the registration where no use has been made.

If your registration is obviously too broad, an attempt to sue for trade mark infringement could result in a counter-suit for removal of the trade mark registration.

A good rule of thumb therefore is focus your trade mark on your goods and services, and cover what you are using, but to also bear in mind the option to seek more rights.

The skill in crafting application descriptions which allow the owner to focus rights to their best advantage is developed through years of reviewing the Register, the market place and recent trends in examination for trade mark applications, removal actions and infringement action.

Our recommendation is to always take advice before filing applications. Extra outlay in the early stages of a filing strategy could avoid litigation and argument in the future.

Ellis Terry features in 2018 Managing IP Results

Ellis Terry is, in 2018, once again ranked by Managing IP as one of New Zealand’s preeminent firms for patent prosecution.

For more information see here.

Brexit Trade Mark Changes Update

State of Play So Far

  • 23 June 2016 referendum held in the United Kingdom (UK) to decide whether to leave the European Union (EU) was held – 52% majority to depart.
  • 29 March 2017, Article 50 of the Treaty of the EU was invoked and started the ball in motion.
  • 29 March 2019 due date for UK to leave.

Current Trade Mark Laws

For many years a cost-effective way to secure trade mark protection across all Member States of the EU has been to file a European Trade Mark (EUTM) application.

Not only is the cost of filing a EUTM much less than filing separate National trade mark applications in 28 countries, use in any one Member State is deemed sufficient to support the entire EUTM. This means traders did not need to show use throughout all Member States to benefit from a Register right throughout the EU.

Under current timetables, following 29 March 2019 the UK will no longer be part of the EU and will not benefit from rights as an EU Member State.

Effect on Validity of Current EUTM Registrations

Once the UK is no longer an EU Member State there will be certain immediate impacts on EUTM registrations:

  • Registered rights in an EUTM will no longer cover the UK.
  • Use in the UK will no longer be enough to support an EUTM registration.
  • Seniority claims in EUTMs based on UK registrations will no longer have effect.
  • Reference to the EU as a legal jurisdiction will no longer extend to include the UK.

What Could Happen

Laws to manage what will happen to UK rights previously encompassed by EU laws are still being drafted, so there is still much uncertainty around the EUTM. Recent reporting envisages three possible options for current EUTM rights:

  • EUTM registrations could automatically be translated to corresponding UK registration rights; or
  • Having an EUTM registration could create an option for the applicant to seek UK registration using the EUTM as a priority base. UK registration will issue after examination of the UK application under the UK trade mark laws; or
  • EUTM registration rights in the UK could simply cease to have effect in the UK, with no provision to translate those rights to a UK registration.

What Should You Do Now?

Identify your true market.

You should first identify where your market is situated. You should ask yourself if your business is truly European in its spread, or focussed on the UK.

If you are focussed on the wider European market, you must consider whether your current use is enough to support an EUTM. For example, can you show use of your trade mark in EU Member States outside of the UK which will continue to support your EUTM?

Keep your UK and EU trade marks in force.

If you have EUTM or UK trade mark registrations due for renewal in the next year or so, and assuming the trade mark and the coverage is current, we recommend you do not let these listings lapse.

While there are indications that there will be an opportunity to create UK register rights out of EUTM registrations, nothing has been released regarding process, cost or effect. Until it is clear what will happen, we recommend you keep your current registrations to ensure you retain valuable priority claims.

Update any out of date Register rights.

If your current trade mark coverage is out of date because the trade mark is “old” or the goods and services are not current, think about filing now in the UK and EU to give you a “belts and braces” approach in advance of new laws being enacted.

Do not forget about third party agreements.

Many legal documents such as co-existence or settlement agreements will refer to the EU where the actual market interest may include or be factually limited to the UK. Separate provisions for the UK may not have been included. After 29 March 2019, there is no automatic extension into the UK of obligations and restraints that are effective in the EU.

Any EU agreements should be reviewed to see whether clarification is required to ensure the UK is covered.

Geographical Indications for Wines and Spirits now Registrable in New Zealand

The Geographical Indications (Wine and Spirits) Registration Act 2006 (“the Act”) and the associated regulations came into force on 27 July 2017.

The Act creates a Register where geographic locations in New Zealand can now be registered as Geographical Indications (“GIs”) and where GIs registered overseas can be recorded. Use of the registered GIs are then reserved for wines and spirits from those areas.

Applications for GIs are made at the Intellectual Property Office of New Zealand (“IPONZ”). The Act provides tools to allow IPONZ to determine if a location is geographically indicative of the wine or spirits from a particular area. This includes an assessment of the impact the terroir of a location has on wine or spirits from that area. Since 27 July 2017, applications for registration have been lodged for a number of well-known wine regions as GIs.

The most obvious impact registration of GIs will have on wine retailers is the restriction that will be imposed on the way in which GIs can be used on wine labels. If a wine is made from grapes sourced from a variety of different locations, use of a GI on the label may breach the new Act.

There is also the potential for branding based on locations to become less distinctive over time because of the development and registration of new GIs.

It is worth noting that the Act does not limit the registration of New Zealand GIs to locations identified on a standard map. New areas can be identified as significant for a style of wine or spirit. Provided those areas meet the criteria set out by the Act, those areas can then be registered as GIs.

The registration of new GIs over time means that limitations on wine retailers and producers will also change.

We recommend that all wine producers and retailers review their current labelling as well as their plans for brand development to ensure that branding steers clear of potential breaches of the Act.

With a wealth of experience in working with renowned New Zealand wineries, Ellis Terry is well-placed to assist in identifying limitations to use of geographic names in New Zealand and in identifying and protecting strong trade mark rights for importers and exporters alike.

NZ joins Global Patent Prosecution Highway

New Zealand joined the Global Patent Prosecution Highway (GPPH) pilot programme on 6 July 2017. The GPPH is an agreement between patent offices around the world that provides a means to expedite examination on the basis of one or more allowed claims of a corresponding application allowed by another participating patent office.  The patent offices participating in the GPPH pilot programme include some of New Zealand’s largest export partners including Australia, Canada, Japan, South Korea and the United States.  At present the European Patent Office (EPO) and China (SIPO) are not part of the GPPH pilot programme.  Both are members of the IP5 Patent Prosecution Highway (EPO, JPO, KIPO, SIPO and USPTO) so they may join the GPPH at a letter stage.

Expedited examination may lead to the earlier grant of a patent, this is particularly advantageous in some of the participating counties that have traditionally been slow (5 – 10 years) to examine patent applications.  While GPPH does not guarantee grant of a patent in a participating office, GPPH speeds up examination for the patent application and an allowance or grant in one of the offices gives an earlier indication of the scope of protection that will likely be allowed in other participating countries.  Such information is valuable when making decisions with respect to overall commercialisation strategy.  If filing a GPPH request in New Zealand, IPONZ is usually respectful of other offices and is likely to apply findings of other offices unless there is good basis to find otherwise.

Examination in the New Zealand Patent Office is usually reasonably fast compared to other countries.  Overseas and New Zealand based applicants, can use the accepted claims of their New Zealand patent application and the GPPH to expedite examination of corresponding applications in other participating countries.  Alternatively, overseas applicants can use accepted/allowed/granted claims of a corresponding application from a GPPH member country to expedite examination of their New Zealand patent application.

Should I use GPPH?

The decision to use or not to use the GPPH program depends on your IP and commercial strategy and your current patent portfolio. The use of the GPPH provides another tool that can be integrated into your overall IP strategy.

The requirements of New Zealand and Australia are similar and so the GPPH can be used cost effectively for both countries through one agent, as both countries require similar concordance tables and an application prepared for New Zealand could be applied in Australia with minimal adjustment allowing the same work product to be used in both countries.

For more information and expert commentary, go here.

China’s Official Trade Mark Fees Reduced by 50%

As of 1 April 2017, the Chinese Trademark Office has reduced a number of official trade mark fees by 50%. It has done this as part of the Chinese government’s effort to encourage entrepreneurship and innovation.

The 50% reduction in fees covers:

  • Filing trade mark applications
  • Renewing trade mark registrations
  • Opposing trade mark applications
  • Cancelling trade mark registrations
  • Recording updates to existing owner details on the Register
  • Recording assignments of trade mark rights on the Register

New Zealand brand owners may perceive the fee reductions to be relatively modest, and not particularly advantageous. However, they should be aware that the reduction in fees may incentivise trade mark squatters to file trade mark applications in bad faith, which is an ongoing problem in China. This problem is exacerbated by the fact that China’s trade mark system is based on a ‘first to file’ rather than a ‘first to use’ principle.

We recommend you review your existing trade mark portfolio in China, with a view to filing new applications and/or updating Register details for your existing Chinese trade mark registrations.

We also refer you to a previous Ellis Terry article which contains helpful information about protecting your trade marks in China.

If you are interested, please contact us to discuss how you can protect your trade marks in China in more detail.

Disclaimer: This article is intended to provide general information only, and is not legal advice. You should seek advice from your IP professional if you require advice particular to your situation.