Ellis Terry is proud to be named as an excellence awardee in the Intellectual Property Speciality Law Firm of the Year Category for the 2022 New Zealand Law Awards.
The annual New Zealand Law Awards is the leading independent awards event in the legal profession in New Zealand, recognising New Zealand’s leading law firms, in-house legal teams, individuals and dealmakers across a variety of categories over the past year.
The winners will be announced at an awards evening on 10 November 2022.
A full list of excellence awardees for the 2022 New Zealand Law Awards is available here.
https://ellisterry.com/wp-content/uploads/firework-small.jpg18722808Ellis Terryhttps://ellisterry.com/wp-content/uploads/Transparent-ET-1-300x82.pngEllis Terry2022-08-24 13:06:182022-08-24 14:48:07Ellis Terry Named as Excellence Awardee 2022
Before embarking on an action for infringement of your trade mark rights, you need to properly understand the scope of your own rights.
This includes:
registered trade marks
unregistered trade marks
copyright in logos, artistic works and images
business get-up and market place reputation
awareness of weak points in your own position, such as trade marks not in use, or established co-existence of the offending trade mark in the market place
First, Put Your Own House in Order
You should assess your own registered trade mark rights to make sure the right trade marks are registered for the rights goods and services to support an action for trade mark infringement. You should also make sure the correct entity owns the registration and can take the legal action.
A trade mark registration in the wrong owner name may mean that not only will an action for infringement fail, the registration itself could be vulnerable to removal.
Routine review in conjunction with your IP advisor of ownership structures, changes to goods or services, and the scope of registered protection will help ensure that you are always in the best position to assert your rights if and when you need to.
Assess your Rights and Identify the Best Path of Attack
As a rule of thumb, use of a trade mark may constitute infringement under the Trade Marks Act if:
A trade mark registration exists; and
Someone other than the registered owner uses a trade mark which is the same as or similar to the registered trade mark on the same or similar goods or services;
And in the case of similar but not identical overlap, there is the likelihood for consumers to be confused.
Where the scope of a registered trade mark does not quite match the offending trade mark in use, succeeding in an action for trade mark infringement along might not be straightforward.
However, if your registered trade mark rights might be insufficient to take action for trade mark infringement, you might have a reputation in trade, and be able to show the offending trade mark conflicts with that reputation. In that case you may be able to sue for breaches of the Fair Trading Act and/or for the tort of passing off, either as a stand-alone action or in conjunction with an action for infringement of registered trade mark rights.
In addition to your trade mark rights, you should not forget copyright. Logos and other original artistic material that form part of your business identity may also attract inherent copyright that does not require any registration. An action for copyright infringement can be bundled together with other heads of action to allow you to fully assert your rights.
Partnership for Success
Creating registrable intellectual property and keeping registrations up to date are key elements of carving out an area of exclusivity for a business.
The right IP advisor will be able to take a holistic view of your intellectual property rights, both registered and un-registered, to maximise your ability to carve out an area for exclusive rights, and then assist with safeguarding those rights.
Working with an IP advisor at the early stages in trade mark creation and protection, as well as ongoing review throughout the life of your business, will help you ensure you have the best registered trade mark rights.
Like to talk more about how we can help you? Contact us today.
https://ellisterry.com/wp-content/uploads/courthouse.jpg450845Emily Ellishttps://ellisterry.com/wp-content/uploads/Transparent-ET-1-300x82.pngEmily Ellis2022-08-09 13:54:202022-08-09 14:02:41So You Want to Sue
Of concern was the need for producers to stop using certain terms now confirmed as EUGIs which had been in use in New Zealand for many years by many producers, without objection. A new GI alternative will need to be adopted.
While the original list of over 2000 EUGIs tendered in the earlier stages of negotiation has been trimmed back, the newly signed EUFTA still contains many EUGIs which could impact on New Zealand food and wine producers including “FETA” for cheese, “PORT” for fortified wine or “ELIA KALAMATAS” for olives.
Time-Frames for Change
Signing the EUFTA is the first step on the path towards ratification, but there is a lot of groundwork required before the EUFTA is entered into New Zealand law, including legislature changes to ensure compliance with terms in the EUFTA. The quickest likely time-frame for this to be completed is by 2024.
Following this, New Zealand producers will have between 5 and 9 years to phase out use of EUGIs.
Geographical Indication vs Trade Mark vs Descriptor?
Typical wine labelling will include a trade mark and a descriptor, and may also include an EUGI[1]:
Before launching into a re-branding exercise, producers need to understand which elements need to be changed because of EUGIs and which elements can be retained and freely used.
An Opportunity not to be Missed
Once producers have confirmed what needs to be done, a strategy should be put in place to develop new terms that can replace references to EUGIs. These GI alternatives might be descriptive terms, new trade marks, or industry accepted terms yet to be developed.
Producers should then ensure they have a plan in place address the mandatory changes within the allocated time-frame so that the phase out period is a smooth as possible.
This is an excellent time for producers to assess ways to create new trade marks and maximise exposure with a new brand story. Throughout this process producers should remain aware of the relevant intellectual property and advertising laws to ensure good decisions and avoid unnecessary disruption to business.
Help Starts Now
An IP Advisor is a valuable first port of call. The right advisor will help identify where change is required and work options for GI alternatives which will maximise the value for the business.
Talk to us today to see how we can help.
[1]The label used in this example is entirely fictitious. No identification with an actual product is intended or should be inferred.
https://ellisterry.com/wp-content/uploads/cheese.jpg450845Emily Ellishttps://ellisterry.com/wp-content/uploads/Transparent-ET-1-300x82.pngEmily Ellis2022-07-07 14:49:202022-07-07 14:49:20Signed, Soon to be Sealed, and Delivered: European Union Geographical Indications
Some key aspects to developing an effective filing strategy apply to all types of intellectual property. You and your IP advisor should work closely together to:
understand your key markets now
identify how to maximise coverage
identify where you want to be in five years’ time
know what protection is time-critical for application
know which countries should be prioritised, and which can wait
Identify the elements that maximise protection by registration
Trade marks can be registered in many different formats with differing levels of scope of exclusive rights. For example, use of a logo containing a word may infringe a standard character registration for the word where it would not infringe a logo registration also including the word. Therefore, while a logo can be easier and cheaper to secure, it might not provide the best rights for your business.
Cover your goods and services as well as the law allows
Trade mark applications in most countries are filed into one or more of 45 different classes which group together similar goods or services. For many products, such as “wine” or “shoes”, a single class will stand out as the right class for registration. For other products or services, for example “camping equipment”, several classes might be involved.
An experienced IP advisor will be able to help you develop a filing programme that is broad enough to cover your key goods in a cost-effective way, maximise your ability to sue for infringement, and avoid a registration so broad that it may be vulnerable to attack.
Make sure your key geographies are covered
Because trade mark registrations are only enforceable in the country in which registration is secured, you need to consider whether you should register your trade mark overseas. If your business is likely to expand internationally, you may want to have the registration process underway to reserve your position on the Register for your key trade marks. In some countries trade mark rights can only be secured by registration (such as China), or there is a significant risk of third party registration of international brands (again, China).
Your IP advisor will be able to work through filing schemes, such as claiming Convention Priority or using the Madrid Protocol International Registration, to maximise bang for your buck.
Keep an Eye on your Competitors
A successful launch is the end of the first stage – but you must keep on top of your market: do not rest on your laurels!
Regular review of your key markets and competitor activity will help alert you to other traders encroaching upon your business and trade marks.
A sudden bump in trade mark applications can be the first sign of a trader preparing to enter a new market, or expanding its range of goods and services in a way that may have some impact on your business. In addition to your own review of market place developments, your IP advisor can craft special watching programmes to help identify when trade marks are accepted for registration in your key markets either lodged by named competitors, for a particular product or service range, or for trade marks the same as or similar to your key trade marks.
With this surveillance information to hand you can move swiftly to address any potential infringement of your registered trade mark rights.
Keep your registered protection up to date
The value of a good portfolio of registered trade mark rights is usually realised in a strong defensive position that allows your business to grow. This ultimately results in a high IP valuation that increases the net worth of your business.
As your business grows, any new developments should be identified early and assessed for potential trade mark registration. An up to date trade mark registration portfolio will allow you to focus on retaining a competitive advantage of enforceable exclusivity.
While holding registered trade mark rights is not all about litigation, a robust portfolio of rights that are well filed and clearly claimed communicates to your competitors that you take your rights seriously. The potential for an expensive Court case and costly damages awarded due to infringement of registered trade marks is a serious deterrent to many potential infringers.
A robust portfolio of registered trade marks can often warn off a large number of copycat businesses who would otherwise seek to ride the coat-tails of your success.
Be prepared to try again
As you review your business development and growth, you should keep your IP advisor in the loop. If you find a path of action is not paying off, re-assess your options. Working with your IP advisor you can review earlier iterations of trade marks to identify the best way to leverage your registered trade mark rights for success, and avoid the unnecessary cost in retaining trade mark registrations which are no longer valid or needed.
As with most achievements in life, the first steps towards success are preparation and planning.
Registering a portfolio of trade marks without a clear business plan can be costly and may not give your business the advantage that you need. Before undertaking steps for trade mark registration, the impact of each trade mark element for your business and your goods and services should be carefully considered from the stance of where your business is now, and with a view to your plans for the future.
Having a good idea of what you want to achieve will help you decide the best way to invest in valuable and long-standing trade mark rights through registration.
An experienced IP advisor will be the best person to provide an overview of your trade mark position and assist in the formation of a strong trade mark portfolio. But there are preliminary steps you can and should consider when choosing potential trade marks for your business.
An Early Stage Checklist
Is your trade mark going to help your business stand out from the crowd?
Is your trade mark free to use in your key markets?
Can you register your trade marks in your key markets?
Will the right entity own the trade marks and enable you to maximise your value for money spent in registration?
Make it distinctive!
An effective trade mark will allow your business’s goods and services to stand out from the crowd. As a rule of thumb, the more distinctive your trade mark, the wider your area of exclusivity and the better you can prevent other similar trade marks being used.
A trade mark that leans heavily on descriptive references to a particular product will be more limited than a wholly invented and distinctive brand. While these trade marks could be registered, you may find you cannot stop other traders using the similar branding with the same descriptive reference.
This assessment should also encompass all the ways you might use trade marks in your business, including sub-brands, logos and by-lines.
Is your trade mark free to use?
Having settled on what sounds like a good trade mark, you should check that it is free to use before you commit to it.
Trade mark searching is specialised and it takes experience and knowledge of case law trends to provide a good assessment of risk. Therefore, a trade mark search conducted by a proper advisor is the first and most valuable step in creating a trade mark portfolio.
A search of the Register will alert to any risks of trade mark infringement through existing registrations, but must be broad enough to alert to possible infringement of similar trade marks covering similar goods and/or services, without being so broad that the information is unwieldy and hard to analyse.
A trade mark search should also cover a variety of market place sources to assess the risk in countries that recognise unregistered trade mark rights (often called “common law rights”) developed through use, such as including New Zealand, Australia, the United Kingdom and the US. Having a good knowledge of the tests applied in case law is essential to assess the risk that a trader with a reputation may be able to stop your use and possibly successfully take action under fair trading legislation or for passing off.
Can you register your trade mark?
Once the first hurdle has been overcome, and a trade mark is found that is free to use, the next step is to establish if the trade mark is registrable.
Most IP Offices will object to a trade mark if it is not capable of distinguishing your goods or services, or if it is so similar to an existing registration or application that consumers may be confused.
If you have conducted searches before application, your IP advisor will already be able to advise you on these points.
Will the right entity own all IP created?
You cannot benefit from rights which you do not own, so it is vital to ensure that you understand the chain of title.
Often the bright mind behind a business will need to bring in a team to help actualise the vision. This may involve people outside of the business or may result in IP developed before any formal company structure is in place to hold those rights.
From the outset, the terms on which parties work together should be clearly understood, communicated, and documented. This should include consideration of about copyright ownership for any artistic material, including logos, that may need to be assigned to the entity who will own the trade mark registration. Further, whether the registered owner is an individual or a company should be decided early on and any necessary licences or written authorities settled and agreed at the outset.
Expenditure at the early stages in proper enforceable contracts, assignment of rights, and setting up the correct ownership structure can avoid expensive problems down the track.
The short answer, trade marks are important for two main reasons:
To ensure you can use what you want to use with minimal risk of being sued; and
To ensure you have an exclusive right which allows you to freely advertise and sell your game in all your key countries.
Below we answer some questions that are often raised by game developers and studios when considering what to do about trade marks.
First, what are trade marks?
In its most simple form, a trade mark is a sign that connects a product or service with the person or company that has provided that product or service.
The term “trade mark” is often used interchangeably with the term “brand”. Reference to trade marks can also mean registered trade marks protected under Statute in the relevant country[1], or unregistered trade marks in those countries where rights through use and reputation are recognised[2].
Traditionally, registered trade marks were limited to words and logos, but elements such as colours, sounds, shapes and even smells are now recognised as registrable trade marks in many countries.
Registered trade marks are a valuable and well-recognised part of the assets attached to traditional “bricks and mortar” store-based businesses as a means to establish and protect a reputation and retain an exclusive sphere of operation.
For game developers and studios, the name of the game is what operates as a trade mark.
Because downloadable and mobile games reach the market through a very different avenue to traditional products and services, the need to have a registered trade mark can be less obvious. However, while the virtual world of online and mobile games seems far removed from traditional forms of business, understanding the implications of registered trade marks is still critical for success.
How can registered trade marks impact on game developers and studios?
A registered trade mark provides the owner with an exclusive right to use that trade mark in the country covered by the registration for the goods and services described.
Trade mark development for a new game often starts well before the game is released onto the market. If you choose a game name without conducting any searching, there is a risk of choosing a name that is the same as or similar to a registered trade mark. Use of this name may result in having to deal with an action for trade mark infringement as soon as you launch your game.
Managing an infringement action could involve Court action and may mean you need to develop a new name for your game. These time-consuming and costly actions necessarily divert attention and resource from a successful game launch.
Conducting trade mark searches in key markets before finalising your own trade mark name will let you identify potential risks early on, and allow you to choose a trade mark with minimal risk of infringement.
Why register and not just use?
There are many advantages to having a registered trade mark including:
Suing a third party on a registered trade mark right is more straight forward, less cost, and typically more successful, than suing on unregistered trade mark rights.
Some countries do not recognise trade mark rights through use and reputation so having a registered trade mark is the only way to ensure you have enforceable rights in your trade mark.
A registered trade mark is a recognised business asset that adds value to the business.
A registered trade mark is a key way to show you have exclusive rights in your trade mark and crucial when valuing a business (or game) for sale.
Trade mark registration gives you the best control of your trade mark, allowing you to control the way the trade mark is used in the market place and in collaborative projects with others.
Is it too soon to spend money on trade marks when the game is early in development?
While it is not mandatory to have trade mark registrations in place before using your trade marks in the market, the rule of thumb is that earlier is always better.
In most countries there is no requirement that a registered trade mark is used for at least three years from registration, so you can secure a trade mark registration before the trade mark is in use without risk of having the registration attacked or removed for non-use.
Further, if two trade marks are in conflict in a country that recognise unregistered trade mark rights, a first unused trade mark covered by a registration will usually be deemed a better claim to rights than a second trade mark in use, if the use started after the first trade mark was registered.
Much as early clearance searches allow you the flexibility to develop a trade mark that is free from other claims, registering your trade mark early allows you to reserve a position for your trade mark while further developing the game without risk of losing rights in the name.
What about game characters – are those trade marks?
Yes, central characters in games can often develop into stand-alone trade marks.
If a key character is likely to take on a life of its own, then trade mark registration for the character can be a valuable asset, especially if you intend to produce merchandise or spin-off games with a central character.
It is important to remember that copyright also exists as a right in original artistic works. Original artistic representations of characters will benefit from inherent copyright, and in some countries copyright can be registered as part of a strategy for robust protection of your trade marks.
Does a New Zealand game developer really need to search or register trade marks overseas?
The nature of online and mobile games means that a successful game will be taken up around the world. While you may be based in New Zealand, your potential market will be global.
In order to gain the maximum advantage from a global market, considering your trade mark position early on in your key markets is crucial.
It is important to take into account language considerations when developing your trade marks. You should consider whether the name or character would be internationally acceptable as a trade mark. You should consider translations and transliterations, and whether you should search for these elements to understand any cultural sensitivities overseas that could impede the game’s success.
It is also valuable to understand in which countries you may be able to take the risk and rely on your unregistered rights. You should also understand which countries do not recognise unregistered rights, have a reputation for opportunistic trade mark registrations (aka trade mark squatters), and early trade mark registration should be considered.
Is it possible to search and register trade marks internationally without breaking the bank?
Registered trade mark rights take effect in the country in which they are registered, so each country of interest should be separately considered[3].
Conducting a proper trade mark search that gets you the information you need across multiple countries is specialised and not something that should be done without proper training. Trade mark applications should also be prepared by someone who understands the differences in law in each jurisdiction and the balancing game between maximising your rights and minimising the risk of objection to registration.
Both exercises necessarily incur costs, but a carefully chosen service provider can help you plan to suit your budget and appetite for risk.
In the right hands, effective searching can be customised to fit the budget of a new game developer or fledgling studio. The right service provider will also understand how to manage costs for international trade mark registrations using the Paris Convention Treaty[4], and the Madrid Protocol system[5].
What now?
Understanding the strength of your trade marks and the value in registration is an important consideration when developing a successful game. Where possible, searching and registration should be key tools to ensure a solid trade mark base on which to grow your game.
Ellis Terry is well experienced in assisting game developers and studios at every stage from trade mark identification and clearance searches, to developing and implementing a trade mark filing programme including copyright considerations, through to helping enforce your trade mark rights with third parties.
Talk to us today to see how we can help you.
[1] Such as the Trade Marks Act 2002 in New Zealand.
[2] These rights can be recognised in consumer protection legislation such as the Fair Trading Act 1986 in New Zealand, or through the tort of passing off.
[3] One notable exception here is the European Union where a registration covers all 27 Member States.
[4] The Paris Convention provides a 6-month window to file overseas in any other country which is also a member of the Convention following a base New Zealand application while retaining the New Zealand filing date as a first date for priority.
[5]The Madrid Protocol system allows an application designating countries which are members of the Protocol to be filed in a single International Registration for typically lower cost than filing separate National applications.
https://ellisterry.com/wp-content/uploads/virtual-person.jpg9001600Emily Ellishttps://ellisterry.com/wp-content/uploads/Transparent-ET-1-300x82.pngEmily Ellis2022-03-07 16:39:402022-06-01 12:28:27IP in the Virtual World: Why Registered Trade Marks for Game Names are Important
Trolls first make an appearance in old Norse mythology and poetry dating from around the 9th Century[1]. They are depicted as mythical creatures who live in a family group and by and large stick to themselves. Trolls in this first form are often cast as mountain dwellers or ghosts and are known for being shambling and stupid.
Over time the representation of trolls in literature evolved and trolls began to interact more with the human world around them. Trolls are now often a trope for trickery in fiction – doing their best to outwit the humans they encounter.
Perhaps the most well-known troll is the one that lives under the bridge in the story of The Three Billy Goats Gruff[2]. In this fairy tale we follow the trials of a group of three goats trying to cross a bridge to greener pastures.
The first and smallest goat is challenged by a troll living under the bridge who threatens to eat him. The goat escapes by assuring the troll that larger and meatier goats are following soon. The second goat soon follows, and escapes using the same argument: “don’t eat me, the next goat is much bigger!”.
The troll’s greed for a bigger meal means the first small goat and second middle-sized goat are allowed to pass.
The third and largest goat now arrives and is stopped by the troll who intends to make a well-deserved meal of this goat. In a move unanticipated by the troll, the billy goat presents its horns and goes on the attack.
Having butted the troll off the bridge, the goat continues to the rich fields beyond to live happily ever after, leaving the troll bruised and just as hungry as ever.
We wonder: what lessons can the intellectual property rights owner learn from The Three Billy Goats Gruff?
The IP Troll
First, we need to re-define the troll for the world of intellectual property (IP).
The IP troll comes in a variety of guises:
The trade mark troll is known to register trade marks without ever intending to use the trade mark for themselves. This troll then sues other genuine businesses who use its trade mark. The trade mark troll is also found in first-to-file countries like China and Taiwan. These specialised trade mark trolls take the opportunity to register trade marks well known in other markets before the genuine owner can take that step. The genuine owner then finds they cannot use their trade mark in troll’s countries without payment of an exorbitant fee to the trade mark troll.
The patent troll focusses on its patent rights in inventions that are often incorporated into products or means of making products. The patent troll will secure patent rights and then wait until its patent is used by other traders. The troll then seeks to enforce its patent rights by suing for far beyond the patent’s actual value. The patent troll can seek damages for years of patent infringement by waiting until the timing is right to sue traders who have built up a business oblivious to the fact someone else holds patent rights for key technological elements.
The copyright troll tries to enforce copyrights it owns purely for the purposes of making money through litigation. The copyright troll is particularly tricky as the IP rights it claims are often not registered and cannot be searched. Copyright exists as a right in artistic and literary works. Often those works can be accessed from online platforms and are used by other traders for their businesses. The copyright troll is known to be opportunistic and will sit on its rights without any intention to sell them. Instead, the copyright troll waits until the copyright work is used and then aggressively sues for infringement.
What’s so Bad About the IP Troll?
An IP troll impedes innovation and progress by limiting expansion opportunities for genuine businesses and tying up time and resources in litigation.
As a general rule, registered IP rights are meant to provide commercial entities with protection for elements, such as trade marks or inventions, so that the owner can operate a business with the security of exclusivity in these elements.
Registered IP rights which are not used in connection with a business, and which have been secured with no intention that they will ever be used in connection with a business, clutter the register. These unused registered IP rights offer no benefit for anyone other than the IP troll who is occupying a space purely to keep other traders out.
How to Build a Bridge to IP Success and Defeat the IP Trolls
Step One: Know your enemy!
The IP troll’s power comes from invisibility until you are challenged with its rights.
The best way to know whether an IP troll could be in your future is to conduct proper searching of relevant IP Registers. A search will let you identify what relevant rights already exist. Being able to plan your path knowing what rights are already established will allow you to avoid trouble.
Found IP rights that might be an issue? What next?
Step Two: Decide what sort of approach would work for you.
Risk Avoidance (aka – the smallest goat) – Finding registered rights that cross over what you want to do also provides a good idea of the scope of rights to avoid in order to minimise the risk of objection. Changing focus to something outside of the scope of existing registered IP rights, or making an effort to design around what is already registered, may allow a trader to avoid attack entirely by simply not being in the IP troll’s path.
Risk Management (aka- the middle-sized goat) – Having found potentially conflicting register rights, there is also the option of taking steps to mitigate risk rather than avoid it entirely. Tools to consider early in a business plan to mitigate risk could include setting up defences in anticipation of objection or investigating licencing schemes with the registered owner. It may be that a bit of money early in the business on proactive negotiating an agreement will mean that you will end up on the right side of the IP bridge, and not a meal for the IP troll.
Going on the Attack (aka – the biggest billy goat gruff) – For the aggressive, finding registered IP rights in the hands of what looks like IP troll may result in a call to arms. If you are committed to your business path, you can always take the IP troll head on. In many countries you can take action to remove trade marks for non-use, or file for invalidation of trade marks or patents. If the IP troll no longer holds any rights, then it cannot impede your progress.
Step Three: Don’t forget your own original ideas and unregistered rights.
It is important to investigate and understand the scope of your own rights and ideas early on in a business in order to plan for the future.
Copyright exists in original works and is typically owned by the creator of those works, or the party who has commissioned it. If you have created your own original work, then a claim to copyright infringement should not succeed.
What to Take Home about IP Trolls
A unifying feature of the IP trolls is ownership of IP rights with the intention to aggressively attacking other traders.
The IP troll makes money by holding what it owns to ransom.
Defeating the IP troll starts with originality and diligence. By being true to your own business path, creating and understanding your own IP, and most importantly checking your path is free to follow, IP trolls can be defeated and you can cross the bridge to IP success.
https://ellisterry.com/wp-content/uploads/bridge-1690x900-1.jpg9001690Rachael Koelmeyerhttps://ellisterry.com/wp-content/uploads/Transparent-ET-1-300x82.pngRachael Koelmeyer2021-07-08 13:31:302022-06-01 12:28:30Trolls and Your Intellectual Property
As COVID-19 continues to affect economies around the world, an increasing number of individuals are trying their luck as business owners.
For the new business owner, or one expanding into a previously unknown area, reviewing what works for other traders can be a natural first step. But creating a business that imitates too closely the look, feel and trade marks of an already established trader can lead to problems – even if that other trader is not operating in your market.
Copyright and the 10% Myth
Copyright is an inherent right that covers original artistic works, including but not limited to logos, trade marks, photographs, images and in some cases product design.
The most obvious form of infringement is making a direct copy of someone else’s logo, but you need to be aware that there is still risk associated in copying any part of an original work.
There is no hard-and-fast rule that sets out how much of a copy is too much. For example, there is no rule that says a 10% difference is enough to escape copyright infringement. Each potential copyright infringement is assessed by looking at the original work, the extent of copy, and any link between the original and the copy.
Not being in the same country is also not a defence to copyright infringement.
Countries that are members of the Berne Convention[1] recognise copyright across borders. By virtue of the Berne Convention, if you copy a logo originating from one country and use it in another country, you may still be infringing.
Fair Trading Breaches may arise even when the trader is not physically in your market
The absence of a first trader’s bricks-and-mortar store in your location does not necessarily mean that you are free to use that trader’s look and feel.
Even without sales in your local market, that first trader could establish a reputation with your local consumers through advertising or a reputation overseas. If those consumers are likely to be confused or deceived by your activities, you could be at risk of breach of fair trading legislation and/or liable under the tort of passing off[2].
Registering Company and Domain Names
Incorporating trade marks which you do not own into your company name or domain name is another risky action.
Company and domain name registrars do not review trade mark rights as part of their compliance work. Successful registration does not necessarily mean that you are free to use that company name or domain name.
If your company name or domain name incorporates another trader’s trade mark, you could face legal action for trade mark infringement, breaches of fair trading legislation or for passing off.
If your domain name includes another trader’s trade mark, the domain name could be subject to domain name retrieval processes.
Having to resolve an objection to your company name or domain registration can tie up valuable time and resource better spent establishing a business.
Trade Mark Rights and True Ownership
Like many countries around the world, the New Zealand Trade Marks Act provides that the applicant for trade mark registration must be the owner of the trade mark.
If you apply to register in entirety a first trader’s trade mark, or a trade mark which incorporates the first trader’s trade mark, you may face an opposition to registration by that first trader. If the first trader can show it owns the trade mark, be it through copyright or earlier use overseas, it could prevent your own application progressing.
Even if you successfully register the trade mark, the resulting registration could be immediately vulnerable to attack by the first trader on the grounds that you are not and will never be the proper owner of the trade mark [3].
Trade marks can be an enormously valuable business asset, and an inability to secure valid registered trade marks can greatly affect the worth of your business in the future.
David v Goliath is not about the size of the business, it’s all about the right
Being a small business, or family owned, a young entrepreneur, or starting with a really compelling back-story does not give you an inherent right to copy the look and feel of an overseas business, without permission. However, a small new business does not need to roll over simply because someone with more money than you objects to what you are doing.
The narrative of David v Goliath is often recalled as shorthand for a small trader winning out over a large trader. But the story is not one about the differences in size for size’s sake, but about how to level the playing field for the smaller player by ensuring they have right on their side, the correct weapons in hand, and the best focus and aim.
Your business will be in the best position if you are original, have the right intellectual property free from any claim by other traders, registered in the best way, and targeted to maximise business advantage.
Be inspired but be original
The safest way to start a new venture is to make it your own as much as possible. Taking inspiration is great, but developing original trade marks, look and feel can be the key to long-term success.
It is imperative, therefore, that you get the right advice so that you are aware of the rules, any limitations to what you can do and the best way to make your intellectual property work for your business.
[1] Berne Convention for the Protection of Literary and Artistic Works – 179 signatory country as of March 2021
[2]Muzz Buzz Franchising Pty Limited v JB Holdings (2010) Limited [2013] NZHC 159 at paragraphs 74 – 74 discusses the globalisation of the marketplace and a reputation for an Australian-based business recognised by New Zealand consumers.
[3]The North Face Apparel Corp v Sanyang Industry Co Ltd [2014] NZCA 398 at para 17 “A person cannot claim to be the owner of the mark if another person has previously used that mark … as a trade mark and the use was public”.
https://ellisterry.com/wp-content/uploads/mirror-845x450-1.jpg450845Emily Ellishttps://ellisterry.com/wp-content/uploads/Transparent-ET-1-300x82.pngEmily Ellis2021-04-08 13:14:112021-05-05 13:57:22The Risky Business of Copying Established Traders' IP
New Zealand does not have any requirement for the owners of trade mark registrations to prove continued use. As a result, many trade marks remain on the Register without being used, and can present a hurdle to incoming businesses. Filing an application for revocation on the basis of non-use is one of the simplest ways to remove a trade mark from the Register where it has fallen into disuse.
But the apparent ease of filing an application for revocation can be deceptive. There are a few crucial points to consider when deciding if a revocation action is the right option for you, and if it will achieve the outcome you desire.
Consider Bob: Bob is interested in using a trade mark, but has found that it is already on the Register. Bob can’t see that the trade mark is in use and wants to know what he can do so that he can register the trade mark for his business.
The Effect and Date of Successful Revocation
First, and most importantly, Bob needs to identify his desired outcome from a whole-business perspective. Bob should be sure that a successful revocation for non-use action will give him what he needs for his business to progress.
If a registration has been raised as a citation and is only partially vulnerable to removal – that is, is in use for some goods but not all goods covered by the registration – removing the directly overlapping goods in a revocation action can seem a simple answer. But the Intellectual Property Office will still consider any remaining goods and assess if they are sufficiently similar that confusion is likely.
Partial removal may not mean that Bob’s application will progress.
The date on which a registration will be revoked is also important. When a trade mark is revoked, it ceases to have effect as a registered trade mark from the nominated date of revocation. Many revocation actions nominate a date three years before the application for revocation is lodged as the effective date for revocation.
But if Bob has been using the trade mark before than this three year date there a risk that Bob could be sued for infringement for that earlier use during the period where the revoked trade mark is in force. The case of Ziploc[1] also raises a potential problem regarding ownership. If the registration remains in force on the filing date for Bob’s trade mark application, no matter for how brief a time, Bob could find his ownership of the trade mark is under attack on the grounds that at the time of filing, he was not the true owner.
A careful consideration of the similarity of trade marks, the potential overlap in market and the risk of infringement is necessary when nominating the effective date for revocation to minimise the risk of other challenges after the revocation action has concluded.
Having established that Bob has a date for revocation in mind, the next hurdle – has Bob got the right standing to apply for revocation?
Aggrieved Party
Section 65(1) of the Trade Marks Act states that “an aggrieved person” may apply for revocation. Traditionally, the benchmark for who counts as an aggrieved party has been relatively low. As confirmed over years of case law, if Bob is likely to face a real legal or practical impact on his business through continuance of a trade mark registration – be it potential impediments to use, or a citation holding up a trade mark application – then Bob is likely to be aggrieved.
The recent decision of Nitro AG vNitro Circus[2]usefully goes one step further to confirm that the liberal interpretation of the term “aggrieved person” means that the existence of a registration as one of a number of hurdles is sufficient – there is no need for the registration under attack to be the crucial and only impediment facing the applicant.
The bottom line to achieve standing as an aggrieved person is an element of impact on a commercial business. Irritation that a trade mark is registered but isn’t being used, and hasn’t been for years, is not enough to establish you are an aggrieved person for the purposes of a revocation action.
Bob can definitely apply for revocation and the best date for effective revocation has been identified, but has Bob done enough investigations into use?
Genuine Use
It is well established in New Zealand through the oft-cited case of Metalman[3]that there is no de minimis principle involved in the assessment of genuine use. That is, a single genuine use of a trade mark in the course of business can be enough to defend a trade mark registration under attack.
Under the Trade Marks Act 1953, the Commissioner had discretion when assessing whether a trade mark could be supported by the use file. For many years since the implementation of the replacement Trade Marks Act 2002, a certain level of leniency in assessing use was applied. The Commissioner in cases could be found to apply a residual discretion when assessing use. Therefore, evidence of a trade mark that was quite like the registered trade mark, being used on associated goods or services, could be enough to defend a revocation action.
That leniency came to an abrupt halt in 2017 with the Lacoste case[4]. It was confirmed in Lacoste, and in every case since then, that no discretion regarding an assessment of use is provided for under the 2002 Act. The trade mark as registered must be used on the goods and services described in the registration.
Therefore, while Metalman establishes that there is no minimum amount of use required, it is clear that however meagre the evidence it is, it must show use of the trade mark on the goods and services.
Things are looking good – Bob has grounds to apply for revocation, a date, and hasn’t found use in the relevant period but there is one more hurdle to consider – could the owner have a good reason for pausing use?
Special Circumstances
Section 66(2) of the Act provides a second line of defence for a registered trade mark owner where genuine use cannot be shown where “non-use is due to special circumstances that are outside the control of the owner of the trade mark”.
As confirmed in Manhaas Industries[5] where a business should reasonably be able to anticipate difficulties and plan an alternative action to manage factors – such as a new source of product – the reasons for non-use may not be considered “special circumstances”.
It is also not enough for Bob to simply look at potential disruptions in normal trade channels. As confirmed in the case of Fokker Bros[6], occurrences not in trade can also constitute special circumstances – for example difficulties suffered during a breakup coupled with actions of the company director not on behalf of the company could constitute “special circumstances”.
A good rule thumb to apply is: if a business should be able to anticipate and manage an interruption, bearing in mind the nature of the business and its usual operating parameters, then the cause of that interruption probably isn’t a “special circumstance”.
Special Note for 2020!
Bob should bear in mind that while businesses not using their trade mark now might be able to point to the impact of Covid-19 as a special circumstance, the situation may be quite different for businesses set up now and not using their trade marks in three years’ time. Where a business has been set up during a pandemic, interruptions due to the pandemic should have been considered as part of the factors in normal running of that business. Future delay may not be able to point to Covid-19 as a “special circumstances”.
What Next?
Revocation for non-use can be a good tool in the right hands, but there are other options which should be considered before launching into proceedings that, if contested, could take years to resolve.
Have a potentially problematic registered trade mark interfering with your business? Talk to us today.
[1]International Consolidated Business Proprietary Limited v SC Johnson & Son Incorporated [2020] NZSC 110 wherein the Supreme Court considered an attack by ICB on the grounds that because the revocation did not take effect until 22 April 2013, as at the date of application by Johnson of 19 April 2013, it was the owner of an identical trade mark on the register so Johnson could not be the true owner. The Court in this case held that the simple fact of registration was not enough to thwart a claim to ownership.
[2]Nitro AG v Nitro Circus IP Holdings LP [2020] NZIPOTM 23 at para [16]
[3]Metalman New Zealand Limited v Scrapman BOP Limited [2014] NZHC 2028
[4]Crocodile International Pte Ltd v Lacoste [2017] NZSC 14 confirms that while Commissioner’s discretion existed under the Trade Marks Act 1953, on consideration of the sections relating to non-use in the 2002 Act, no residual discretion remains.
[5] Manhaas Industries (2000) Limited v Fresha Export Limited [2012] NZHC 1815 the Court agreed with the Assistant Commissioner’s conclusion that sourcing fish, and managing difficulties in supply and quality of fish, should have been a routine challenges for the business. Therefore non-use due to these factors was not a special circumstances.
[6]Fokker Brothers Limited v Fokker Brothers Inc Limited [2019] NZIPOTM 2 confirms that the “in trade” requirement in the Trade Marks Act 1953 was not part of the current 2002 Act. Special circumstances could any be external forces rather than voluntary acts of the owner.
https://ellisterry.com/wp-content/uploads/abandoned.jpg6851030Emily Ellishttps://ellisterry.com/wp-content/uploads/Transparent-ET-1-300x82.pngEmily Ellis2020-12-03 12:36:022022-06-01 12:27:46Revocation for Non-Use: Not for Busybodies
…The best laid schemes o’ mice an’ men Gang aft a-gley, An’ lea’e us nought but grief an’ pain, For promised joy!.. 1
Discovery of legacy errors in trade mark registration ownership can be the bane of the trade mark attorney as well as the trade mark owner.
Review of a robust portfolio can quickly descend into clammy realisation that action is needed to ensure the true and current owner can rely upon its register rights.
The usual way to update ownership in New Zealand is to record an assignment. However, sometimes the first owner on the Register should never have held the registration. This article considers whether an assignment of rights in this circumstance is an appropriate action.
Hornby Mall Ltd v Shopping Centre Investments Limited2
The 2020 decision of Hornby Mall Ltd v Shopping Centre Investments Limited (“Hornby Mall”) considered an update of owner through either assignment or alternatively a request for rectification of the register.
History of Hornby Mall
In 2005 Shopping Centre Investments Limited (SCIL) sought registration of Hornby Mall’s logo. The application was initially filed in the name of “Hornby Mall”. On request from the Intellectual Property Office to properly identify a legal entity as the owner, the attorney instructed that the owner should be Hornby Mall Limited.
Hornby Mall’s logo
This is where the wheels start to wobble.
Hornby Mall Limited (HML) was in fact an entirely separate legal entity in no way connected with SCIL or the mark. Entry of HML as the owner of the 2005 application was not noticed by SCIL.
In 2007, a replacement application was filed for THE HUB Logo. This fresh application was lodged in the name of HML. Again, SCIL did not notice entry of the wrong owner details. This application then matured to registration in the name of HML.
In 2017 on request for renewal instructions, SCIL noticed the owner name was wrong. By this time, HML was no longer in existence, having been struck off the Companies Register in 2015.
The two hurdles facing the attorneys were:
How to enter SCIL as the owner; and
How to ensure the registration is valid from the date of application.
The Legislation
New Zealand Trade Marks Act 2002, section 32, states the applicant for registration must be:
(1) A person claiming to be the owner of a trade mark …”
Section 76 of the New Zealand Trade Marks Act further provides for “rectification of an error or omission in the register” with the restriction that “an application for rectification of the register may not be made in respect of a matter that affects the validity of the registration of trade mark”.
Meanwhile in Australia – Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd3
In 2017 in Australia an opposition case Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (“Pham Global”) was decided. One of the grounds of opposition was that the applicant for registration was not the true owner of the trade mark.
Australian Trade Mark Act 1995 section 27 is broadly equivalent to the New Zealand section noted above. Section 27 of the Australian Act states the applicant for registration “…claims to be the owner of a trade mark…”.
The applicant, an individual named Mr Pham, sought to defeat the opposition grounds that the applicant was not the true owner by assigning the application to the company Pham Global Pty Limited.
On consideration of the assignment and the opposition ground the Court held that “Mr Pham did not have any legal or equitable interest in the IR composite mark. Mr Pham made the applicant claiming to be the owner when he is not”4. Therefore, “Mr Pham could not assign that which he did not own”5.
For this reason, an assignment could not be recorded to update the owner and the opposition succeeded.
Same-Same but Different
Like Pham Global, in Hornby Mall the attorneys were faced with a situation where the applicant on record, HML, had no legal or equitable claim to ownership of the trade mark. The issue to consider is whether an assignment to SCIL would ever be able to be effected.
However, there are a key difference in the cases. In Pham Global:
The applicant Mr Pham made an explicit claim around ownership by lodging the application.
Mr Pham knew the company who should have owned the application.
In Hornby Mall:
HML was not involved in the application and was in fact entirely ignorant of rights entered on the register in its name.
SCIL was able to demonstrate clear use rights in the trade mark as well as ownership of copyright in the logo.
Evidence clearly showed that entry of HML as owner was as a result of an error in 2005.
The Commissioner’s decision rested on the fact that “there is no evidence before me that HML had any substantive ownership rights … HML has never had any rights or interest in the name The Hub Hornby or the relevant mark”6.
The Commissioner stated that Hornby Mall is not “a case where SCIL should have sought an assignment from HML. First and foremost, by the time… the error was discovered, HML had been removed from the companies register. Secondly… HML appears to have had no ownership rights in the relevant mark that it could assign”7.
Therefore, while an assignment was briefly considered, the Commissioner agreed in this case rectification of the register was preferable.
Should an Assignment be considered as an option to update ownership in cases like Hornby Mall?
In the writer’s view where the applicant on record is a legal entity but has no legal or equitable interest in the trade mark, the position of the Court in Pham Global is correct and an assignment to update owner cannot be effected.
Intellectual Property is not the same as Real Property
The Torrens principle of indefeasibility of registered owner’s title for real property is confirmed in Frazer v Walker8. The Privy Council in that case confirmed that a registered owner will obtain an indefeasible title to an interest or estate upon the act of registration. While the Land Transfer Act 2017 confirmed judicial discretion exists to cancel an owner’s registration of title in cases of “manifest injustice”, as far as land law is concerned, the position reflected on the register is king.
The effects of incorrect register details parties with interests in land are therefore immense and correction of errors on the register not something easily achieved.
However, intellectual property is not real property.
One of the main differences is the acknowledgement that intellectual property rights can exist in purely equity. To then allow that an assignment could be possible from a party who has no equitable claim to ownership of a trade mark seems to mis-apply the Torrens real property principle to intellectual property and allocate the register a status potentially in conflict with common law ownership.
Take Home Lessons
In the writer’s view, where an applicant has no claim to a trade mark, the only proper avenue to ensure those trade mark rights can vest with the true owner is to seek a rectification of the register. Where rectification of the register is not possible, the registration must be fatally flawed.
The Commissioner in Hornby Mall raised concerns regarding the extreme delay in notice of errors in the application and the errors then made in the declarations supporting the request for rectification. While ultimately the decision went in the applicant’s favour, there is no guarantee the facts will always be so overwhelmingly supportive for rectification of the register. Careful and diligent attention to detail is key:
Check and double-check ownership details at application, acceptance and registration.
Fully consider corporate structure and ownership of intellectual property including trade marks before lodging applications.
Advise your attorney immediately of any changes to corporate structure.
Trade mark attorneys and trade mark owners both should be alive to the potential for extreme loss of rights where errors in owner details remain on the register. Review of details at routine intervals can help avoid the worst-case scenario.
https://ellisterry.com/wp-content/uploads/nametag-scaled.jpg17072560Rachael Koelmeyerhttps://ellisterry.com/wp-content/uploads/Transparent-ET-1-300x82.pngRachael Koelmeyer2020-05-14 12:33:262022-06-01 12:27:51Can and Should an Incorrect Owner Name be Corrected by Assignment in New Zealand?
