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Declaration of Use for Trade Marks — Why and Why Not?

In an increasing number of countries, a declaration of use must be filed either before a trade mark is registered or at renewal. However, declarations of use are not a requirement under New Zealand trade mark law. This raises the question – is implementing a declaration of use requirement the right way to go?

The Current Situation in New Zealand

Under New Zealand law, an application for a trade mark is filed based on current, or intended, use of a trade mark. The action of filing a trade mark is considered enough to support a claim to use or an intention to use. No extra declaration or evidence to show use is required, so registrations can be obtained for broad goods and services. In addition, at renewal, a trade mark can be secured for a further 10-year term on payment of a fee without any requirement to show use on all the goods and services covered.

For this reason, unless a third party seeks to revoke a registration for non-use, trade mark registrations can exist for years without the trade mark ever being used.

The Effect of a Declaration of Use Overseas

Countries requiring a declaration of use during the application phase also necessarily require that an application is limited to the goods and services where use can be demonstrated before registration. Owners who file for wider goods or services must limit the application to area of use to secure final registration, or otherwise risk losing the entire register right under attack on the ground the claimed use was fraudulent.

Declarations of use before or at renewal also provide the trade mark owner an opportunity to review the register right and keep it relevant to current use. In this way the register is “cleaned” of trade marks no longer used on the goods/services covered by the registration without requiring third-party intervention.

In Favour of a Declaration of Use Requirement

With the increasing ease of the trade mark application process, comes the increase in risk of speculative trade mark applications.

Reduces Burden on Businesses: If legislation does not require proof of use before applications mature to registration, or at renewal, then the burden necessarily falls on businesses to “clean” the register of potentially spurious trade marks that bar their own trade mark applications.

Businesses must then factor into branding strategy the cost and delay of oppositions, invalidity actions and non-use actions, increasing cost and complexity.

Encourages Careful Branding: The additional requirement of a declaration of use before registration would encourage traders to consider the application more than a “tick-box” matter. Having an extra hurdle between application and registration should discourage speculative registrations and encourage considered decisions around branding.

Increased Weight in Enforcement: A registration secured after filing a use declaration, or a renewal supported by a use declaration, will provide at least initial demonstrable use. The underlying registration can then be assumed to be valid at the time of the declaration and this would add weight to the impact of a registration in an infringement action.

Ongoing Audit: On-going renewal declarations would also incentivise traders to keep their trade marks in use matching the trade marks on the register, and vice versa.

Against a Use Declaration Requirement

A system requiring declarations of use may stifle brand expansion given the economies of re-filing for each new iteration of a brand.

Continual Need for Registration Review: Filing for limited goods may also result in unworkably narrow register rights that do not allow for reasonable expansion of products or services offered over the lifetime of a business. Each new use could require a new trade mark application, meaning traders must bear in mind future expenditure in keeping the register up to date.

Risk that Register Rights are Sacrificed: The cost of needing to continually update trade mark registrations may mean registration of trade marks is not pursued as an avoidable expense. This could be to the detriment of the business’s ability to protect its interests in the future.

Encourages Complicated Fair Trading Litigation: If a registration for broader goods/services than those in use at the time of filing is not allowed, business owners may also be forced to adopt a litigious position through fair trading legislation or other commercial avenues because the deterrent value of a narrow registration is also less.

Excessive Legislative Hurdle: Current legislation already provides means through opposition, invalidity action and revocation for non-use where third parties can keep the register clear of trade marks unsupported by use or a genuine intention. Adding an extra legislative requirement during the application/renewal stage may be an excessive hurdle for genuine businesses.

Burden of Action Sits with Trade: Where there is no requirement under legislation to file additional documents, the costs of keepings the register clean sits with businesses who will benefit from the outcome. Public costs (through portioning of taxes) will not need to accommodate extra administrative steps at the Government level to ensure compliance with law.

Our View

While there is a risk of a cluttered register where proof of use before registration is not required, a registration limited by actual use is arguably too inhibitive.

A registration that covers an area of bona fide intended use broader than the current use provides trade mark owners with the margins of exclusivity necessary to develop a business over time. Overly restricted trade mark registrations run the risk increasing compliance cost in securing registered trade mark protection. Faced with increased cost at early stages, businesses may well decide to forego registered trade marks, leaving themselves open to uncertainty and potential cost in the future by relying on common law rights.

A good compromise may be to require a use declaration at renewal. This will allow for normal business growth and will prevent un-used trade marks remaining on the Register where the owner has no use to justify the monopoly granted by a registration.

Recommendations

The best way to ensure a wide sphere of rights is to identify a trade mark which is wholly distinctive for goods/services to be covered.

A distinctive trade mark is not only easier to register, but it is also typically easier to enforce under the Trade Marks Act and under common law rights.

Having identified a strong brand, owners should recognise that there is an art in crafting a description for trade mark applications which reflects intended use and is broad enough to provide a good sphere of rights. A well-filed trade mark will meet the bench-mark of current laws and will also be able to translate to accommodate any new requirements in the future, such as use declarations.

Your IP professional is the best person to assist you – talk to us today for assistance.

Trade Mark Renewal Reminders — Should You Act?

Trade mark owners are receiving an increasing number of offers from agents to renew registered intellectual property for New Zealand and overseas. While some of these agents look like they are offering a good deal, it is important to check that you will be getting the service you need.

Some claim: Renewal is due in the next couple of months and if you don’t instruct now you will lose your register rights.
The truth: Often the date noted is more than 12 months before renewal is due. You have plenty of time to instruct.

Some claim: They can renew for much less cost than our services.
The truth: The initial fee may be less, but having agreed to the service, the agent may issue several invoices to finalise renewal in addition to the first estimate. The overall cost is then much higher.

Some claim: The renewal will be processed once they receive your money.
The truth: The money disappears, and the renewal is never processed.

What to do: Don’t instruct without checking first!

If you filed through an attorney firm, your IP provider should have register rights and renewal dates noted on its records. If you receive a reminder and it is not from your provider, we recommend you make contact so that details can be checked, and a trusted agent can confirm what action you should take (if any).

Geographical Indications, European Trade and Indigenous Rights – a Fair Exchange?

Earlier this year the Ministry of Foreign Affairs and Trade (“MFAT”) held consultation workshops discussing the inclusion of mutual recognition of geographical indications in negotiations for a free trade agreement with the European Union (“EU”). In this forum, questions were raised around the equity of the proposed exchange. While this article discusses some of these concerns, and proposes an alternative basis for negotiation, the contents are not part of the MFAT negotiation process.

What are Geographical Indications?

The term “geographical indication” refers to a place that is recognised as the origin for product containing special characteristics. This can be a special tang to the wine, or bite to the cheese, or a special method of manufacture that lends the crystal that extra gleam.

The EU has a well-developed portfolio of produce indicative of the place of origin developed from centuries of farming and industry. Laws to identify and protect these geographical indications are already developed and recognised throughout the EU.

In the current negotiations there are over 2000 identified European geographical indications for wine, spirits and food goods.

By comparison, New Zealand (NZ) is a young country. While NZ produce is fast becoming known for its own flavours and styles, formal recognition of geographical indications is still a relatively new concept in law. NZ recognition of geographical indications is at present limited to the Geographical Indications (Wine and Spirits) Registration Act 2006 and registration has only been available since 2018.

NZ currently has 25 recognised local geographical indications for wine – including Marlborough and Matakana.

The Current Proposal

Put simply, the proposal is for mutual recognition of registered geographical indications. In exchange for recognising the EU geographical indications, the EU will provide trade advantages to NZ to make it easier to trade into Europe.

Detail around a regulatory framework is needed and will be subject of a further negotiation if the negotiation has a satisfactory outcome. It is proposed that an agreement could include recognition of future geographical indications pertaining to food and beverages.

MFAT’s Position

MFAT recognises that there is an imbalance of size and power that makes trade into Europe difficult. The impression the writer was left with after the consultation meeting, was the MFAT considers the provision of reciprocal recognition of geographical indications was a small part towards achieving an agreement with significant financial benefits for NZ.

What this Means in Practice

Many terms that may be considered a geographical indication in the EU function more as an indicator of style in NZ – for example, cheese types like camembert and feta, or effervescent wines like prosecco.

Under the current proposal EU geographical indications will be recognised in NZ unless there is a successful objection to recognition of any one term. The onus therefore is on New Zealanders to review the proposed list of over 2000 geographical indications and raise an objection to inclusion.

If NZ recognises EU listed geographical indications, producers and traders will also need to review the list of geographical indications and consider any adjustments to their use. This may mean adopting new “style” terms and taking steps to change the way consumers approach and recognise produce.

Where will NZ “miss out”

Nothing in the current scope of negotiations allows NZ to propose indigenous terms unrelated to geography for recognition by the EU.

NZ holds high cache in its Maori language term for aspects of tapu and taonga and equally for noa terms that carry with them connotations of origin and quality.

Maori words are often exploited by overseas producers, including prominent use of the word HAKA, ta moko and pukana, with seemingly no thought as to whether use of these terms is offensive.

In the event of a successful negotiation on the current grounds, NZ will recognise EU geographical indications, but the EU will not be compelled to recognise NZ’s own special linguistic terms.

A Workable Alternative?

Mis-use and offensive use of Maori terms and images often makes the news headlines. NZ provides a framework to some degree to allow for objection to use of Maori terms as a trade mark. However, in the writer’s opinion, formal recognition in a searchable register would go a long way towards enabling consumers in NZ and abroad to identify and recognised special terms.

International negotiations require a firm frame of reference in order to recognise rights with clarity. So once a register of special Maori terms exists, surely there is an ability to enter this as framework for negotiations?

What Should You Do

The benefits to NZ traders in establishing free trade into EU needs to be carefully weighed up against the potential downfalls of the proposed framework currently under negotiation. As well as questioning whether we should sacrifice the ability for local traders to continue to use terms they’ve used for years, like FETA, we should ask whether these negotiations risk being a missed opportunity to introduce means to prevent the EU from using words significant to NZ such as Maori words which arguably act as GIs.

For NZ food and wine producers: Understand the implications of recognising EU geographical indications and get advice now about your current use of style-based terms. Are these terms likely to be identified as geographical indications? Do you need to adjust your use?

For those who are keen to protection NZ’s special identity: Have your say! Not just for lawyers and producers to weigh in on negotiations – we all need to have a say when invited. Look out for opportunities to be involved in consultation process.