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20 October 2008
On September 8 2008 Parliament introduced the Trademarks (International Treaties and Enforcement) Amendment Bill. The bill contains provisions amending both the Trademarks Act 2002 and the Copyright Act 1994. It will be split it into two separate bills before the committee of the whole house stage.
The bill’s two main purposes are to: (i) amend the Trademarks Act so that New Zealand can join and comply with the Singapore Treaty, the Nice Agreement and the Madrid Protocol; and (ii) add provisions to both acts as part of the battle to crack down on counterfeiting and piracy. The provisions will give enforcement powers to both the Ministry of Economic Development and Customs, in respect of the criminal provisions of both acts, including the appointment of national enforcement officers by the ministry.
A common aim of the international treaties is to simplify the trademark application process and reduce time and compliance costs for applicants.
The Singapore Treaty
The treaty sets out IP offices’ administrative requirements, providing consistency for applicants. New Zealand already complies with many provisions of the treaty. The few required changes are purely procedural. For example, at present only the new owner of a trademark may apply for its reassignment, but the bill makes provision for either the previous or the new owner of a trademark to apply.
The Nice Agreement
The Nice Agreement relates to an international system for the classification of goods and services into 45 classes. Eighty-one countries are members of the Nice Union (including New Zealand’s main trading partners). This consistency in classification enables users to search specific classes of interest to monitor potentially conflicting trademarks and to undertake clearance searches before launching in markets of interest.
In order to adhere to the agreement, 1,300 registrations classified before New Zealand began using the Nice system in 1941 need to be transferred. These ‘third schedule’ registrations, which refer to the regulations in force at the time, are classified into 50 classes that bear no relation to the Nice system. For example, a trader interested in beds would search Nice Class 20, but would also need to search third schedule Class 41 to find registrations relating to beds. Class 20 under the third schedule relates to dissimilar ‘explosive substances’. Unless the trader knew to search additional classes, he or she might miss a crucial registration that could prevent him or her obtaining a national registration in New Zealand, or lead to an unknowing infringement on another trader’s rights, thereby wasting time and money.
The Madrid Protocol
The Madrid Protocol sets out an international registration system whereby one application can be filed for countries that are member states, reducing the time and costs of individual national applications. New Zealand is one of the last developed countries to become a party to the protocol, although delays in becoming a member may, in reality, be beneficial, given that the Intellectual Property Office is suffering examination delays.
Both the trademark and copyright acts already include provisions relating to criminal offences for cases of wilful counterfeiting or piracy on a commercial scale. These partly fulfil New Zealand’s obligations under the Telephony Routing over Intellectual Property Protocol. The task of enforcing these provisions rests with the police. This has implications, given that such offences are commonly regarded as ‘victimless crimes’, at least when compared with crimes against the person or more tangible forms of property. These crimes are regarded as low-priority matters by a police force with overstretched resources.
The new sections of the bill propose to: (i) provide national enforcement officers within the existing National Enforcement Unit (NEU) with powers and duties; and (ii) grant both those officers and customs officers increased powers. Customs will focus on border enforcement and the NEU on post-border enforcement. Both the NEU and Customs will have warranted powers of search and seizure, as well as the power to share information with other enforcement agencies (eg, the police), to identify persons breaching the criminal provisions of the acts. Customs will receive non-warranted powers to seize counterfeits at the border when they come within their control and the NEU will have non-warranted powers to undertake search and seizure where counterfeits are being offered for sale in a public place.
The bill attempts to address a number of technical issues in the Trademarks Act.
First, an amendment of Section 66 would clarify that to revoke a registration on the basis of non-use, the mark must have been unused for an uninterrupted three-year period. Previously, there was confusion over the additional right to revoke a registration on the basis that use had been suspended for an uninterrupted three-year period.
Second, an amendment of Section 97A would extend legitimate parallel importing, so that a mark would not be infringed if it were put into the market overseas by an “associated person of the owner”. This would include companies within a group of companies and a person with effective control over the use of the trademark.
When drafting of this bill began in 2006, the government issued the following media release:
“New Zealand's economic transformation depends on us becoming a country that produces high-value goods and services based on new ideas and innovation. We want to see Kiwi ingenuity protected in other jurisdictions in an efficient and effective way.”
At a time when many economies and consumers are struggling simply to stay afloat, the enactment of a bill that reduces compliance costs and encourages traders to expand more easily into foreign markets would indeed be desirable. However, given that elections are due to take place on November 8 2008, it will take some Kiwi ingenuity to get this bill into force any time soon.
For further information on this topic please contact David Marrriott at James & Wells Intellectual Property's Auckland office by telephone (+64 9 914 6740) or by fax (+64 9 914 6760) or by email (firstname.lastname@example.org). Alternatively, contact Rachel Dawson at James & Wells Intellectual Property's Christchurch office by telephone (+ 64 3 961 2460) or by fax (64 3 961 2461) or by email (email@example.com).
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