The Risky Business of Copying Established Traders’ IP

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”.

Revocation for Non-Use: Not for Busybodies

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 v Nitro 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.

Can and Should an Incorrect Owner Name be Corrected by Assignment in New Zealand?

…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 not4. Therefore, “Mr Pham could not assign that which he did not own5.

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.

6 Good Reasons to Use a Trade Mark Professional

A question often raised by brand owners is why use a trade mark professional to file an application for registration when you can do it yourself? But like trimming your fringe with the nail scissors, just because you can, doesn’t mean you should.

At first glance, filing a trade mark seems a relatively simple exercise and one where the Office is at pains to make it easy. However, the wisdom of using a trade mark professional is often not realised until there is a dispute and your register rights are not quite what you need.

When making the decision whether to file your own trade mark application directly at the Office, there are multiple factors to consider.

  1. Trade marks are a business asset and should be created with care and knowledge of underlying laws.
  2. Knowledge of laws involves not just having a passing familiarity with the technical workings of the Trade Marks Act, but also knowing and understanding how the Act works in fine detail. Knowledge of law includes being up-to-date with trends in examination and case law. This mix of subjective and objective knowledge necessarily takes focused reading, working experience and time to develop.
  3. Pre-application searching is best done by a trade mark professional to gauge the risk of trade mark infringement, and the risk of breach of common law rights created by unregistered trade marks in use. The Intellectual Property Office pre-application search function does not include an assessment of unregistered trade marks in use. The Office search may also not account for misspellings or phonetic equivalents. All these rights can seriously affect your freedom to use and protect your trade marks and must be considered at the outset.
  4. A well-filed trade mark will meet the benchmark of current laws and will also accommodate any new business requirements proposed for the future.
  5. A well-filed trade mark gives a business the room to grow under the trade mark with broadest protection while not leaving the trade mark registration vulnerable to removal for being excessively broad.
  6. Filing through a trade mark professional means register rights and renewal dates should be noted on its records. You do not have to bear the risk of forgetting to renew, or being sucked in by one of the many spam renewal agents who charge extortionate fees.

It’s Not Too Late!

Trade mark applications can be filed at any time during the branding process.

If you have doubts that your current registered trade mark is what you need, or want to review your strategy for protection of trade marks, talk to us today.

Fee Changes for NZ Patents and Trade Marks

IPONZ has announced new official fees for patents and trade marks in New Zealand. These will come into force on 13 February 2020.

Trade Marks

For trade marks, many fees are dropping.

The Good News

The fee reduction encourages applicants to use the IPONZ preliminary search and advice option and pre-approved specifications for goods and services.

This encourages small businesses to develop registrable trade marks in conjunction with IPONZ guidance, and there should be fewer applications on the register which are flawed at filing and have little prospect of success. The reduction in IPONZ’s workloads should in turn speed examination, meaning more registrations issue without objections.

The Not so Good News

There is a potential down-side to embracing these services.

IPONZ’s preliminary search and advice is not a comprehensive search. It does not guarantee that an approved application will not conflict with third party rights.

IPONZ does not consider rights in trade marks outside their limited search or any unregistered trade mark common law rights. This may give small businesses a false sense of security that trade marks are free to use without proper considering all potential risk areas.

The pre-approved list may also not provide protection necessary for a strong trade mark right or may result in applicants simply selecting all goods in a class without tailoring an application to fit their business plans.

The Potentially Bad News

We anticipate that the relatively cheap application process will result in an influx of applications that overclaim the area of interest or are simply speculative filings. Applicants will lodge to reserve a position on the register with no true interest in use.

Trade mark registers internationally are already seeing a dramatic increase in applications from fast-growing economies like China, and this is likely to increase even further when filing is cheap and easily done.

As the register becomes cluttered, trade mark owners will have to negotiate a larger number of trade marks when developing new brands. This can mean an increase in branding costs as oppositions, non-use and invalidity actions may be needed to clear the register of trade marks that aren’t used or that are filed without proper consideration of common law rights and existing reputations.

Overseas brand owners should also be wary of an influx of opportunistic applications endeavouring to trade off overseas reputation and take advantage of a cheap and easy filing process.

What Should You Do Now?

Filing now may save you costs in the long run.

For overseas companies, assess if New Zealand is a potential future market. Are you in Australia already and thinking about neighbouring markets?

If you are expanding or re-branding your business, think about whether you should file for your new trade mark now while others hold off waiting for cheap fees to come into effect. You may well avoid increased risk of citations by getting in early.

As always, the first step in deciding what do to is taking advice from the right person. Talk to our trade marks team today.


For patents, many fees are increasing.

2013 Act cases

Any application filed after 13 September 2014 is made under the 2013 Act. Almost all pending applications are 2013 Act cases.

For 2013 Act cases, there are two key changes.

The request for examination fee increases from $500 to $750. To avoid this increase, applicants should request examination before 13 February 2020.

IPONZ is also introducing an excess claims fee. This applies to each 5th claim from claim 30 onwards. It is due after acceptance, but is calculated based on the maximum number of claims at any point between requesting examination and acceptance. The excess claim fee can be avoided by having 29 or fewer claims during examination. Since other countries already charge excess claim fees (notably Australia and the United States), most applicants shouldn’t have too much difficulty avoiding this fee.

1953 Act cases

Divisionals of applications filed before 13 September 2014 are made under the 1953 Act.

The key change for 1953 Act cases is the doubling the filing fee to $500. IPONZ hopes this will dissuade further divisional from being filed.

Patent renewals

Patent renewal fees are increasing hugely. All the fees are at least doubled, and the 15th to 19th year fee is almost tripling to $1000 per year.

Unfortunately, there is no way to avoid this increase: renewal fees cannot be paid more than six months in advance.

The Effect

On their face, these fee changes do not seem good for New Zealand businesses. Who wants to pay more?

But, there may be a silver lining to this. Foreign competitors may avoid filing in New Zealand or may allow their patents to lapse earlier to avoid the increased costs. This is particularly likely with foreign entities who apply for patents in New Zealand purely to disrupt New Zealand-based competitors.

The fee changes could therefore actually benefit businesses in New Zealand in the long run.

What Should You Do Now?

Requesting examination now will help to minimise costs.

But the decision on when to request examination goes beyond simply saving a few dollars now. Talk to our patents team to decide how to best manage your patent portfolio.

Trade Marks Over the Breakfast Bowl

A recent application by Kellogg Company (“Kellogg”) to register its NUTRIGRAIN BOLT shape for cereal in New Zealand has been successfully opposed by Société des Produits Nestlé S.A. (“Nestle”) (“the Kellogg case”)1.

The Assistant Commissioner held that the evidence did not demonstrate on the balance of probabilities that this shape operated as a distinctive badge of origin for Kellogg.

Shape trade marks are one of a group of branding elements often referred to as “non-traditional trade marks”. This group also includes colours, smells and sounds. Nestle’s successful opposition and the comments made by the Assistant Commissioner in this decision highlight some of the difficulties faced when attempting to register shape trade marks.

What is Needed for a Shape to be Deemed Registrable as a Trade Mark?

The rule of thumb for all trade marks, including shapes, is that the trade mark must be capable of acting as a badge of origin for goods or services.

This means in practice that shape on its own must be sufficiently distinctive that consumers would connect the product to its source.

Registrability standards change overtime, however under current criteria a high level of recognition from consumers and independent traders can be required to support registration of a shape as a trade mark.

Some Shapes can be Quite Easy

Some product shapes can easily be seen to operate as trade marks. For example, specially shaped bottles and containers can be recognised as coming from certain suppliers long after all other identifying labels are removed.

As confirmed in the Kellogg case:2

While it is not necessary for the mark to be unusual or extraordinary, the more unusual the connotation or juxtaposition that the mark has in relation to the goods in question, the more likely it is that the mark has inherent distinctiveness.

But Functional Shapes and Common Shapes are Usually Hard

If a shape performs a function, for example coffee capsules that are designed to work with a particular coffee machine, then the applicant must be able to show that the same function can be performed by other shapes. The more common a shape is, the harder it will be to show that the shape connects to one trader to the exclusion of all others.

Similarly, if the Examiner can find that other traders are using the same or similar shape for goods or services, then immediately doubt is raised that this element can operate as a trade mark for a single trader.

The Assistant Commissioner in the Kellogg case confirms:3

the simple shape of the opposed mark, coupled with evidence of some actual use of a very similar shape by other traders, points towards other traders being likely to want to use a similar shape to the opposed mark for their own breakfast cereals.

Showing the Shape Operates as a Trade Mark can be Hard

The evidence necessary to secure acceptance must show that the shape operates to identify the trader. This identification must then relate to the goods covered by the application.

Bottles or other shaped packaging are usually easily able to have that connection because the consumer experiences the shape as part of the purchasing decision. But is much trickier to make this connection where product reaches the market in a cardboard box which also shows other brand elements like logos:

Following a wealth of precedent, the Assistant Commissioner in the Kellogg confirmed that it must be clear the shape alone acts as a badge of origin: “[the] manner in which the goods are presented for sale is relevant when assessing whether the shape mark is likely to be perceived as a badge of origin”4. The Assistant Commissioner acknowledges “[it] can be more challenging to establish that the public perceives a shape as a badge of origin when use of that shape has been accompanied by another distinctive and well-recognised mark”5.

Advertising which emphasises the shape can be vital, but evidence that shows the shape alongside other distinctive trade marks may not be enough to support registration.

But With The Right Evidence You Could Do It

J H Whittaker & Sons Limited successfully defended its accepted application to register the SANTE bar shape from attack by Empire Confectionery Limited (“the Whittaker case”)6.

The shape is undeniably simple, yet the Assistant Commissioner found it operated as a trade mark.

Some of the key points resulting in success in the Whittaker case were the evidence of exclusive use from the 1950s, factual evidence to show the shape was developed specially for Whittaker’s, and heightened recognition of the shape by consumers because of packaging which hugs the bar allowing the shape to operate as an immediate badge of origin.

Whittaker was able to point to its long use and established reputation to successfully argue that no other traders would have good reason to use the same or similar shape without necessarily taking advantage of Whittaker’s reputation.

Ultimately, evidence of market share and long-standing use overwhelmed any inherent lack of distinctiveness because of the simplicity of the shape.

What Should I do about my Shape Trade Marks?

If you are developing a specially shaped product that is not yet in the market place, think about design registration as an alternative to trade mark protection. Design registration will cover your shape for up to 15 years.

For other shapes which are already in use, we recommend a review of ways these shapes operate to distinguish your goods and services.

Some elements may be registrable as trade marks now. For others, a careful marketing strategy could set you up to support an application for registration of your shapes as trade marks and provide you with valuable exclusive rights to those shapes for your goods and/or services.

Careful review with an IP professional is the first step towards protecting valuable shapes for your goods. Talk to us today to see how we can help.

1 Kellogg Company v Société des Produits Nestlé S.A. [2019] NZIPOTM 17.

2 Ibid at p 24.

3 Ibid at p 29.

4 Ibid at p 35.

5 Ibid at p 36.

6 J H Whittaker & Sons Limited v Empire Confectionery Limited [2015] NZIPOTM 4.

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.


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).

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.

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!