This paper deals with the non-use of registered trade marks. It mainly focuses on the trade mark system of New Zealand; however it compares this with selected issues of foreign trade mark systems. Unexpectedly, the non-use of registered trade marks is a topic which closely relates to the vivid field of promotion, competition, and globalization, although it is embedded in the rather static system of registration and administration. The non-use of a registered trade mark enables the opposition to initiate a procedure of revocation from the trade mark register against the respective trade mark. With removal from the trade mark register the trade mark rights of the owner hereby granted cease. Therefore, the application of revocation from the trade mark register in terms of non-use is, beside other grounds for removal, a common tactic of competitors to shed blocking trade marks.

This paper shall give an overview of the formal procedure of application, including the legal aspects of the requisite standing, the competent forum and the burden of proof. However, the main focus of this analysis encompasses the legal term and definition of the use (“genuine use”) of a trade mark. Unfortunately, New Zealand legislation as well as other Common Law and Civil Law jurisdictions gives minimal guidance on the interpretation of the term “genuine use”. Although, European jurisdiction created and confirmed a common understanding by pointing out some main criteria, this definition only constitutes a framework. Subsequently, the term has been formed through case-by-case decisions of national and overseas courts and the Intellectual Property Office. Therefore, this paper will provide different case examples of the jurisdiction of New Zealand and other jurisdictions. However, the line of cases will show the variety regarding the determination of “genuine use”. A comprehensive and universal definition of the term cannot be established. Actions made in respect of a trade mark can only be evaluated as “genuine use” in regard to the specific circumstances.

The  Revocation of registered Trade Marks in terms of Non-Use  3

Contents

Abstract   2

Chapter 1  Introduction to the system of trade marks  5

A.  Functions of trade marks  5

B.  Mechanisms of the Trade Marks Register  6

Chapter 2  Removal from the trade mark register  8

A.  Grounds for removal from the register  8

I.  Cancellation  8

II.  Revocation  9

1.  Non-Use, s 66 (1) (a), (b) TMA 2002  9

2.  Genericism, s 66 (1) (c) TMA 2002  9

3.  Deception, s 66 (1) (d) TMA 2002  10

4.  Confusion, s 66 (1) (e) TMA 2002  10

B.  Reasons for removal  10

C.  Formal procedure  11

I.  Standing  11

II.  Forum  12

III.  Application of revocation in terms of non-use  12

IV.  Burden of proof on grounds of non-use  12

V.  Extent and consequences of revocation  14

VI.  Re-application  14

Chapter 3  Non-Use  16

A.  Legal term non-use  17

B.  Key considerations on genuine use  18

I.  Case examples of sufficient use  21

Chapter 4 Conclusion 35

Appendix 1 Legislation New Zealand 37

Appendix 2 Legislation United Kingdom 41

Trade Marks Act 1994, Excerpt 41

Appendix 3 Legislation Australia 43

Trade Marks Act 1995, Excerpt 43 Appendix 4 International 45 TRIPS, Excerpt 45

Bibliography 46

Presently in commerce, trade marks have become an integral part of promotion, marketing, and competition. As a consequence thereof, traders permanently are confronted with the challenge to create new trade marks when launching goods and services. The difficulty is to find “distinctive marks” which are not only expressive, trustful, cultural applicable and therefore globally marketable, but also not yet or in a similar form registered and/or in use by a competitor. In certain areas where there is either a limited flexibility in alternatives or the market is glutted by competing products the creation of a suitable trade mark has turned to a tricky task, as for example in the pharmaceutical sector where regulations and efforts of consumer protection claim additional requirements on the naming of drugs.

A. Functions of trade marks

Trade marks are an essential feature of business not only to identify and distinguish the owner’s goods and services from the ones of competing traders, but in present times to serve more and more as an advertising tool. Modern trade marks do not solely fulfill the function of origin identification and as an indicator for persistent quality towards the consumer. ¹ Along with advancing possibilities of promotion and increasing globalization, products bearing the trade mark themselves take on the role of an advertising medium. ² The goodwill might not be

¹ As stated in Tanya Aplin and Jennifer Davis Intellectual Property Law (Oxford University Press Inc., New York, 2009) at [5.2.1]

² As stated in Sam Ricketson and Megan Richardson Intellectual Property (2ed, Butterworths, Sydney, 1998) at [841]

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created in relation to the quality of the commodity, but is already inherent to the trade mark itself. ³ This refers to cases like where “a well-known manufacturer of aspirin” is able to charge “higher prices than those by its lesser known competitors, even though it has been conclusively proved - and the public has been repeatedly advised - that virtually all brands of aspirin are chemically identical” ⁴ . Or where pieces of fashion just are bearing the right label (or in other words trade mark).

B. Mechanisms of the Trade Marks Register

Trade mark registration has become primary vehicle to establish a trade mark and to protect it against unauthorized use by competitors. ⁵ For a better understanding of the system of revocation in terms of non-use, it is helpful to first identify the mechanisms and conflicting priorities in connection with the registration of trade marks.

The registration of trade marks is based on the principle “First come, first served”. With the registration of a trade mark the owner benefits not only by the grant of exclusive rights, but also by the protection of its trade mark even before any use is set up. ⁶ Furthermore, the registration reduces the burden of the owner to prove a reputation or goodwill of the trade mark to protect it from imitations,

³ As stated in Sam Ricketson and Megan Richardson Intellectual Property (2 ^nd ed, Butterworths, Sydney, 1998) at [840]

⁴ As stated in Sam Ricketson and Megan Richardson Intellectual Property (2 ^nd ed Butterworths, Sydney, 1998) at [842]

⁵ As stated in Paul Sumpter Intellectual Property Law - Principles in Practice (CCH New Zealand Ltd., Auckland, 2006) at [136]

⁶ As stated in Hector MacQueen and Charlotte Waelde et al Contemporary Intellectual Property Law and Policy (Oxford University Press Inc., New York, 2008) at [13.9]

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exploitations and impairments. Of course, in line with the monopolization of certain terms, logos etc., tensions are caused between trade mark owners and competing traders which are finding themselves blocked by the registered trade marks.

Therefore, legal protection shall only be granted where it is justified for the accomplishment of the central functions of a trade mark. ⁷ As described above in Ch. 1.A, a trade mark is a tool for the communication of information, as about the origin and the quality of the goods and services the trade mark is registered for, and for the distinction from other manufacturers, goods, and services. It always has to be kept in mind that trade marks do not have a ”life on their own”, although they sometimes seem to. They only exist “in conjunction with the particular goods and services” ⁸ . Therefore, of course, the fulfillment of communicative functions can only be complied if the trade mark is in use. In that line, the use of a trade mark, at least after a certain period which gives the owner time for indispensable prearrangements, is obligatory to justify any protection and the grant of exclusive rights. Otherwise, the registration will degenerate to simple stockpiling, which impairs other traders disproportionately.

Since of course, the less trade marks that are on the register, the smaller the potential of conflicts for later applications. ⁹ Conclusively, the trade mark registers have to be kept current and accurate. They enable traders to evaluate whether a certain name, logo, etc. is still available and not already blocked by a competitor. Mechanisms to maintain a functional register are the periodical renewal of a trade

⁷ As stated in Lionel Bentley and Brad Sherman Intellectual Property Law (2 ^nd Oxford University Press Inc., New York, 2004) at [883]

⁸ As stated in Hector MacQueen and Charlotte Waelde et al Contemporary Intellectual Property Law and Policy (Oxford University Press Inc., New York, 2008) at [13.19]

⁹ As stated in Hector MacQueen and Charlotte Waelde et al Contemporary Intellectual Property Law and Policy (Oxford University Press Inc., New York, 2008) at [14.94]

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mark as well as cancellations and revocations as in terms of “invalidity” or nonuse to ensure that (at least the majority of) trade marks are worth protecting.

With the registration of a trade mark on the trade mark register, the trade mark is open to attack for removal from the register on various grounds, either partially for certain services and goods, or on a whole. Along with the removal from the trade mark register, the corresponding trade mark rights of the owner cease.

A. Grounds for removal from the register

The Trade Mark Act 2002 (TMA 2002) identifies the grounds on which a registered trade mark can be removed from the trade mark register, either by cancellation given in ss 61 to 64 TMA 2002 or by revocation as set out in s 66 TMA 2002.

I. Cancellation

According to ss 61 to 64 TMA 2002 a cancellation can be processed voluntarily, s 61 TMA 2002, as well as mandatorily, ss 62 to 64 TMA 2002. The owner of a trade mark may cancel its trade mark registration anytime at its sole discretion, s 61 TMA 2002. The reasons for such a behavior may be an extrajudicial agreement with a competitor or that the trade mark is not longer useful and the trader wants to save the costs of renewal. The owner might also avoid a law suit in terms of a falsely registered trade mark.

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A trade mark can also be cancelled on the order of the Commissioner ¹⁰ or the Court ¹¹ if the trade mark in question is in breach of a condition entered on the register, s 62 TMA 2002. Further on, s 63 and s 64 TMA 2002 set out certain circumstances when a certification trade mark and a collective trade mark is to be cancelled, for example if the trade marks oppose the public interest.

II. Revocation

According to ss 65 to 68 TMA 2002 trade marks may also be revoked by the Commissioner or the Court on the application of an aggrieved person. S 66 TMA 2002 sets out the grounds for the revocation of a trade mark. The list is limited to the grounds of non-use, genericism, deception and confusion.

1. Non-use, s 66 (1) (a), (b) TMA 2002

As this paper will give an expanded analysis of this ground of revocation below, this paragraph shall give only a rough definition of the term “non-use”. Non-use shall mean that the trade mark was not put to sufficient use for a continuous period of 3 years or more or the use has been suspended for an uninterrupted period of 3 years. The key considerations in the context of this ground of revocation focus on the understanding of the term “use”. The legal interpretation of this term will be the emphasis of this paper.

2. Genericism, s 66 (1) (c) TMA 2002

A trade mark may also be revoked in terms of genericism. “Genericism” means that in consequence of acts or inactivity of the owner, the trade mark has become a common name in general public use for a product or service in respect of which it is registered.

¹⁰ Hereinafter “Commissioner“ shall mean the Commissioner of Trade Marks and its Assistant according to s 5 TMA 2002. Both are members of the Intellectual Property Office of New Zealand

(IPONZ).

¹¹ Hereinafter “Court” shall mean the High Court according to s 5 TMA 2002.

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Since the public interest to utilize the name without restrictions in commercial and general use is evaluated to be more significant than the monopolized use in the course of trade, the exclusive rights of the owner have to step behind this superior public interest.

3. Deception, s 66 (1) (d) TMA 2002

An application of revocation can also be based on the grounds of deception. “Deception” is given in the course of a former patent under the trade mark name and if the words are the only practicable name or description of the good.

4. Confusion, s 66 (1) (e) TMA 2002

Finally, a trade mark can be revoked if the trade mark is likely to deceive or confuse the public, for instance as to the nature, quality, or geographical origin of those goods or services.

B. Reasons for removal

The application of removal from the trade mark register in terms of non-use is, beside the other grounds for removal mentioned above under Ch. 2.A.II, a common tactic of competitors to shed blocking trade marks and remove them from the register: A competitor finds itself blocked by an existing trade mark which is identical or similar to its trade name and registered for the same goods or services. The competitor might directly apply for revocation of the existing trade mark on the grounds of non-use.

In case the trade name is already in use and the competitor therefore is sued for an infringement, the competitor may also defend itself by raising a counterclaim based on the grounds of non-use.