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!