The Trade Marks Bill 2002

The September 2001 issue of IP Forum contained a report on the Trade Marks Bill 2001.  The Bill has now been reported back from the Select Committee and is awaiting its third reading debate.  There have been a number of reasonably significant changes to the Bill during the Select Committee process. 

Shape Trade Marks

As introduced, the Bill contained detailed provisions on shape trade marks which mirrored section 3(2) of the UK Trade Marks Act 1994.  These provisions prohibited registration where the shape resulted from the nature of the goods, the shape was necessary to obtain a technical result or the shape gave substantial value to the goods.   These UK and European tests (which have been difficult to apply in practice) are now deleted in favour of the general test of distinctiveness as with other marks.  This aligns the New Zealand legislation with that applying in Australia. 

The Protection for Well-Known Trade Marks

The provisions in the Bill dealing with well-known marks have been further strengthened and amended to fully comply with TRIPs - in particular to allow a mark which is well-known for goods to prevent registration for dissimilar services (and vice versa).  There is a prohibition on registration “if the use of the mark applied for, would be taken as indicating a connection in the course of trade between those other goods or services and the owner of the [well-known trade mark] and would be likely to prejudice the interests of the owner”.

The infringement provisions now contain protection against dilution of well-known trade marks.  Clause 89(1)(d) provides that it is infringement to use an identical or similar sign on dissimilar goods or services where the registered trade mark is well-known in New Zealand and the use of the sign takes unfair advantage of or is detrimental to the distinctive character or the repute of the mark.

A further change to the infringement provisions now makes it clear that infringement arises only where the sign is used in such a manner as to render it “likely to be take as being use as a trade mark”.  This reinforces a long established feature of trade mark infringement which was in danger of being overlooked. 

Defensive Trade Marks

With the shoring up of the protection for well-known marks, it had been intended that defensive marks would be abolished and that any defensive registrations would simply lapse.  There was a split on the Select Committee. The Government favours the abolition of defensive marks and a transitional provision whereby existing defensive registrations will be converted to ordinary registrations. This view seems certain to prevail.

Non-use

At present the New Zealand Trade Marks Act provides for removal of a mark if there is a continuous period of five years’ non-use (from the date of actual registration).  The new Bill changes this to three years in line with the Australian provisions.  Under a proposed transitional provision, existing registered trade marks, where the owner has not yet commenced use or has suspended use, cannot be revoked for non-use until after a period of five years from the actual date of registration or until the mark has been suspended for an interrupted period of five years. Following the lapse of those initial periods, then the three year period of non-use will again apply. 

Generic Marks

One of the most contentious provisions in the Trade Marks Bill has been the test for removing a mark for genericism.  At present the test is whether the trade mark has become a common name in trade use.  The new Bill allows revocation if the mark has become a common name in general public use.  This change was strongly challenged during the Select Committee hearings but has been retained on the grounds that “if a mark is used generically by the public it ceases to be able to function properly as a trade mark as it is no longer able to distinguish the owner’s goods and services from those of other persons”.  As a result, trade mark owners will need to be increasingly vigilant to prevent generic use. No longer will trade mark owners be able to rely on the fact that the trade still knows the sign as a trade mark.