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Don’t count on copyright in Australia

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Under New Zealand law copyright can be infringed by a competitor who copies a three dimensional product (which most products are) in terms of its appearance. This can apply even if one has never done anything to patent the idea behind one”s product or to protect its appearance with a registered design.

But the copyright position in Australia is not so generous. The normal rule in Australia is that if one has the sort of three dimensional product that could have been protected with a registered design then one cannot rely on the Australian Copyright Act to protect its shape. There are some exceptions to this, but not many.

So for a new product destined for the Australian market, particularly where there is something unique and attractive about its shape, it is important to apply for design registration. Because design registrations are only granted for novel, or in other words new, designs it is important to apply for registration before the design is openly exposed. For Australia there are some exceptions to this but it is always best to err on the side of caution and apply for registration while the design is still at the confidential” stage of its life.

In Australia a design registration is relatively easy and inexpensive to obtain. In fact registrations can be granted without the Registry even running an examination step to check whether there is a valid case for registration. Before one can use the registration to sue a copyist it needs to be taken through an examination step, but that can be done at any time during the life of the registration. Again, it is not something that has to be done before registration occurs.

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Is there copyright in a slogan?

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A common misconception is that copyright cannot be relied on to protect short slogans of the type used in advertising. This is because such slogans are seen by some as just a brief run of words without much in the way of literary genius. Copyright law on the other hand is about protecting things that involve a reasonable amount of skill, labour and judgment.

In the recent case Sunlec v Electopar the High Court had to decide whether there was copyright in “Field Friendly – The best choice for fieldwork”. The slogan had been created by the company Sunlec to promote wire marking products and there was argument on whether it is capable of copyright protection.

The Court held that it is wrong to assume that slogans are incapable of holding copyright. It was said that if independent skill, labour and judgment had gone into creating a slogan then it might well be capable of protection. The Court went on to hold that in this case there is enough in the slogan to warrant copyright because the phrase involves a rather succinct and memorable use of the English language.

The interesting thing about the case is that if copyright can exist in a short slogan then in some situations it will provide a broader form of protection than even trade mark registration. This is because the scope of a trade mark registration is normally limited to the particular categories of business listed in the registration certificate. So for example a trade mark registration for a slogan in connection with ice cream might not be useful against someone using the same slogan for fertilizer. But if the slogan enjoys copyright protection then that could be relied on against others who use it in relation to markedly different products, so long as they have copied.

Also, in some cases a business might not have a trade mark registration for a slogan but may have used it to such an extent that it qualifies for protection as an unregistered trade mark. In this situation if competitors started using the same slogan then the first business could take action against them for “passing off” or for trading deceptively and thus breaching the Fair Trading Act. However the unregistered trade mark rights are generally limited to the geographical area that the slogan is known in. So for example an unregistered trade mark slogan might be well known in Auckland and be capable of protection in that city. However because it is not known in Dunedin there may be no way of using the law of passing off or the Fair Trading Act to stop a competitor using it there. But if the slogan qualifies for copyright then it may be possible to bring a claim against copying even in geographical areas where consumers have barely heard of the slogan.

While copyright in New Zealand does not need to be registered it is wise to make sure that there is a paper trail to show how and when a copyright work was created. This can help one to prove one”s case against a copyist in the years ahead. Ideally the paper trail should be copied and sent to one”s attorney so that there is a safely stored independent record of it.

While copyright can provide a useful tool in protecting ones slogan it would be unwise to rely on it to the exclusion of registering a trade mark. It is always best to register one”s brand as a trade mark, if at all possible, and then keep the copyright card up one”s sleeve. This is because in at least many situations copyright will not be an effective way of protecting one”s brand rights.

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The most valuable brands in the world

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Trade marks, or in other words brands, can be used to protect one”s business with great effect. In the age that we live in consumers are drawn to familiar brand names and the decision to purchase a product is often a result of the branding that it carries. In fact the value of many businesses is directly related to the value of their trade marks. According to a study published in News Week magazine the well known Coca Cola brand is worth more than US $65 billion, making it the most valuable trade mark in the world. The Microsoft brand came in second at US $58 billion and the IBM brand third at US $57 billion. The top 20 are as follows:\r\n

  1. Coca-Cola
  2. Microsoft
  3. IBM
  4. GE
  5. Nokia
  6. Toyota
  7. Intel
  8. McDonalds
  9. Disney
  10. Mercedes-Benz
  11. Citi
  12. Hewlett-Packard
  13. BMW
  14. Marlboro
  15. American Express
  16. Gillette
  17. Louis Vuitton
  18. Cisco
  19. Honda
  20. Google
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Choosing a brand name…

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When choosing a trade mark it is best to avoid descriptive names. For example a brand name such as “small tablet” for tablets that are small would probably be impossible to register and enforce because it is just too descriptive of the product it is used with.

The key with trade marks is to pick something that at best only provides an indirect or illusory reference to the goods. For example a brand such as “whimsical tablets” would be much easier to register and enforce because it does not deprive competitors from normal use of the English language when it comes to describing their products. This is because one would not normally say that a tablet is “whimsical”.

The next thing to look out for are trade marks that are the same or similar. If two trade marks are too close in terms of appearance or sound then the one which is later in time can be an infringement of the other. Trade marks usually need to be for similar goods or services before there is a conflict, but there are exceptions to this.

Assessing two trade marks for an infringement risk is not an exact science and really does depend on all the surrounding circumstances. For example in New Zealand the trade marks BAUER and EDDIE BAUER have been held to be sufficiently different for clothing. So have ELEMENT and TRACE ELEMENT. It did not matter that the ”two word” trade mark subsumed the ”one word” trade mark. However this is not a hard and fast rule and some cases involving a subsumed trade mark have been decided differently.

Generally speaking, the more unique or well known the trade mark is the harder it is for competitors to get near it. Invented words are generally the easiest to register and enforce but of course in some cases more regular words are preferred for marketing reasons. So the key when it comes to devising a new trade mark is to pick something that is not too descriptive and is at the same time sufficiently different to other brands.

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Is there such a thing as Maori IP?

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In recent times a number of Maori groups have argued that aspects of their culture cannot be used without proper permission. For example Maori groups objected when an Israeli tobacco company used “Maori Mix” in its cigarette branding.

To give another example, the Danish company Lego, famous the world over for children”s toys, created a computer game which involved the use of Maori words and certain aspects of Polynesian culture. In the game characters fight to liberate a Pacific Island and the complaint was that Maori intellectual property was being infringed. In particular, Maori voiced concern that their culture was not being represented accurately. A meeting was held with Lego and in the end the company made changes to its practices.

While Lego accommodated the concerns of Maori the reality is that in New Zealand there is currently no legal category known as “Maori intellectual property”.

Strictly speaking it is lawful to use aspects of Maori culture, or any other culture for that matter, so long as it is done in a way which does not offend existing legal rights or breach normal advertising standards. For example it might not be lawful to copy Maori artwork which, like any other artwork, may be the subject of copyright. There may also be certain Maori words or phrases that function as trade marks and to use those might be unlawful, not because they derive from Maori culture, but because they operate as brand names just like any other brand name.

The NZ Trade Marks Act has a section preventing the registration of trade marks that would be offensive to Maori. That does not mean that such trade marks could not be used in the marketplace, it just means that they cannot enjoy the same level of protection afforded to registered trade marks.

While it may be lawful to use aspects of Maori culture for branding it is prudent to have regard for the sensitivities of Maori before doing so. This may mean only using aspects of Maori culture in a respectful way and so as to avoid unnecessary offense and bad press. A brand which offends the sensibilities of a significant section of the New Zealand public is unlikely to be as successful and enduring as it would otherwise be.

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The tale of two Monsters

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Hansen Beverages is a large United States corporation which has sold MONSTER branded energy drinks for a number of years. The product sells in the hundreds of millions of dollars per annum and in the United States it is second only to Red Bull.

While Hansen”s brand was rapidly growing and achieving great success in the United States the company neglected to register it as a trade mark in a number of offshore markets. Bickford’s, an Australian drinks manufacturer, saw an opportunity downunder and applied to register MONSTER ENERGY for itself. The application was approved by the NZ Trade Marks Registry and was advertised. On seeing the advertisement Hansen launched an opposition.

Both sides eventually filed evidence in the form of affidavits and the dispute came to a hearing before the Commissioner of Trade Marks in Wellington. The Commissioner decided that Bickford’s was rightfully entitled to the trade mark and ordered that it go through to registration. It was held that because Hansen’s overseas MONSTER brand was not known to a significant number of NZ consumers Bickford”s was entitled to do what it had done, namely take the trade mark for itself. The Commissioner’s decision can be found at http://www.nzlii.org/nz/cases/NZIPOTM/2008/13.html

The decision was pretty much in keeping with established legal principles for deciding this sort of case. The normal rule is that there is absolutely nothing wrong with taking an overseas brand and registering it as one’s own. This is because trade marks are territorial creatures which serve to protect goodwill. If the overseas trade mark is not known in NZ, or is only known to a handful of people in NZ, then the overseas owner probably has no goodwill here.

However there are some exceptions to this, for example if the local business somehow acted in bad faith then that can be enough to disentitle it to the trade mark. Merely applying to register a trade mark in NZ is not normally bad faith, but the situation can be different if there was some sort of relationship between the parties – ie one which created an obligation to look after the overseas owner’s interests, etc.

Some trade marks are genuinely ‘international’ and in those cases a local trader can face real difficulties trying to register them. For example if the overseas trade mark reputation has significantly ‘spilled over’ into NZ, even though the trade mark is not used on product actually for sale here, then that can be enough to prevent a local business from taking it.

The moral of the MONSTER story is to plan ahead, and if one is likely to want to enter an overseas market later then file an application to register the trade mark ahead of time, preferably from day one. In the end the Commissioner”s decision was appealed and the case was settled out of court. Hansen has no-doubt learned a valuable lesson!

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