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What is a trade mark?

Businesses use trade marks to distinguish their goods or services from the goods or services of rival businesses.  Trade marks act as a ‘short cut’ way for businesses to tell customers that ‘goods or services with this sign on them come from this source’. They also signal to customers qualities like excellence, reliability and innovation. Apple, Coca-Cola, Google and Mars are all trade marks which do an excellent job of communicating to customers source and many other messages about the brand. Because they are distinctive and not descriptive trade marks they stand out, are memorable and competitors don’t have any reasonable explanation for using them.

What is the difference between a registered and unregistered trade mark?

Trade marks can be registered on the New Zealand trade marks register which is administered by the Intellectual Property Office of New Zealand (IPONZ).

Once a trade mark is registered it gives the owner of the mark a ‘cut and dried’, exclusive right to use the mark in New Zealand for the goods and/or services for which the mark is registered. This means that if someone else uses the same or confusingly similar mark for the same or confusingly similar goods they are committing trade mark infringement.

By contrast businesses which have not registered their trade marks cannot rely on trade mark infringement rights. Instead they are restricted to relying on unregistered “use” rights which limit the owner to passing off and breach of the Fair Trading Act 1986 causes of action. These are often messy solutions requiring the owner to prove the existence and extent of its reputation and confusion. So, for instance, where a competitor uses the same mark in another part of the country the owner of a prior mark will have to prove nationwide reputation. This can be expensive and the results are far from certain.

Importantly trade mark applications are dealt with on a ‘first-come first-served’ basis. They can be registered where the business applying for the registration merely proposes to use the mark. A business applying for a trade mark registration does not have to do show that it has in fact used the mark in New Zealand. This means that a ‘first to register’ business can ‘trump’ the rights of a rival by gaining priority on the trade marks register over a competitor that has been using its trade mark for years but has not taken the precaution of obtaining a trade mark registration. This means that the ‘first to register’ business can rely on trade mark infringement to stop a rival business using the same mark.

The ‘takeaway’ here is that it is much cheaper to register a trade mark in the first place than to deal with the lengthy and costly process of resolving trade mark infringement situations.

Are there any other advantages of trade mark registration?

Trade mark registration also:

  • Gives the owner the right to use the ® symbol with the trade mark;
  • Appears on the searchable trade marks register to discourage other businesses from infringing your trade mark;
  • Is a tangible asset which adds value to your business that can increase over time as the mark becomes established in the market;
  • Can be sold or assigned on the sale of the business. It can also be licensed for use by others. It prevents rival companies from obtaining registration of the same or a confusingly similar mark.
What do I do if someone else opposes my trade mark application?

Once a trade mark application is accepted by IPONZ for registration it will be advertised in the IPONZ journal for any opposition. Other businesses interested in the mark then have a 3 month window of opportunity to file a notice of opposition.

Trade mark opposition grounds include that the advertised trade mark:

  • is descriptive and has no distinctive character
  • conflicts with an earlier application or registration.
  • is likely to deceive or cause confusion given the reputation of an already established unregistered trade mark already in use in New Zealand.

Trade mark oppositions can be technically difficult and strict time limits apply. It pays to seek legal advice from an experienced trade mark lawyer on how to deal with them. The good news is that many trade mark oppositions are settled on commercial terms which enable similar trade mark registrations to coexist on the register and in the market.

What can I do if someone else has already obtained a trade mark registration for the trade mark that I want to register?

Sometimes businesses apply to register a trade mark with IPONZ only to find out that someone else has already obtained registration for the same mark.  Where another business gets in first and secures a trade mark registration the earlier registration will block the registration of a subsequent trade mark application made by another business for the same or similar mark.

This is a difficult situation but, as any experienced trade mark lawyer will tell you, it happens quite often. If it happens to you you still have some options. One of those options is that you can apply to revoke the prior registered trade mark.

Non-use is one of the main grounds for trade mark revocation.  There are many trade marks on the IPONZ trade mark register which have not been used for years. If you can show that an earlier conflicting trade mark registration has not been used for more than 3 years you can apply to IPONZ to have the registration revoked for non-use. If the revocation application is successful the prior registration will be removed from the trade marks register. This will then clear the way for your application to be registered.

Another option is to apply to IPONZ to have a prior trade mark registration invalidated. There are several grounds for invalidating a prior trade mark registration. If you have used your trade mark before another trade mark is registered you can apply to have the subsequent registration invalidated.

What is trade mark infringement?

A registered trade mark gives the owner the exclusive right to use the trade mark in respect of the goods or services for which it is registered. This means that the owner of a registered trade mark can use the trade mark registration to stop anyone else using the same or a confusingly similar mark in relation to the same or confusingly similar goods or services because of trade mark infringement.

There is an exception to trade mark infringement where use by the alleged infringer began before the date of the trade mark application or the date that the owner of the registered mark first used the mark, whichever is the earlier.

If you think that someone else is infringing your trade mark or you receive a letter accusing you of trade mark infringement it pays to get legal advice early on from an experienced trade mark lawyer so that you know where you stand.

Trade mark infringement disputes often involves arguments about whether marks are confusingly similar.  There are a list of factors that are considered in such cases, namely:

  • The look and sounds of the marks
  • The goods/services
  • The nature and kind of customer
  • The surrounding circumstances if each mark used in normal way
  • The “idea” of each mark