New trade mark regulations are being drafted and are expected to be in force by the end of the year
A Cabinet Paper summarising amendments to the Trade Marks Regulations 2003 (the Regulations) was released on 18 September. These will introduce fee increases, provide for the implementation of the Madrid Protocol in New Zealand, and introduce a number of other minor procedural changes, most notably to hearings office procedures.
New Fees to be introduced
The most important fee increases to be aware of are application fees, which will be increased from NZ$100 (approx USD$85) to NZ$150 per class and renewal fees, which will be increased from NZ$250 to NZ$350 per class. Fees for filing oppositions are to be increased from NZ$300 to NZ$350, hearing fees from NZ$750 to NZ$850, declaration of invalidity applications from NZ$300 to NZ$350, and revocations from nothing at present to NZ$350.
The Cabinet Paper explains that the Intellectual Property Office of New Zealand (IPONZ) is currently not covering its operating costs and that fees have remained their current level since 1999. Although the fee increases will raise costs for trade mark owners, in light of the need for IPONZ to cover its cost of operation, they seem reasonable. We also note that the official fees in New Zealand will remain lower than in many other countries.
The new Regulations will implement the Madrid Protocol in New Zealand. Few details on this are provided in the Cabinet Paper, however, it is mentioned that there will be an 18 month period for notification of refusal to the International Bureau, that fees for international applications designating New Zealand will be the same as the fees for New Zealand national applications (i.e. NZ$150 per class), and that there be a requirement for international applications to include a declaration of intent to use. No handling fee is to be charged for the transfer of international applications to the World Intellectual Property Organization.
Although only scant details are provided regarding the implementation of the Madrid Protocol, it is expected that there will be no major differences in the way the Protocol functions in New Zealand from how it functions elsewhere. In this respect it is noted that the 18 month notification period is the same as in Australia.
Changes to hearings procedures
Extensions of time
The new Regulations will allow extensions of time in proceedings for up to 3 months if the Commissioner is satisfied there are "genuine and reasonable" reasons to do so, and for a further period in "genuine and exceptional" circumstances.
This is a welcome step in the right direction but does not go far enough. Currently extensions during hearings proceedings are only available in "genuine and exceptional" circumstances. This is a high standard that can be difficult to meet. It can be especially problematic where the reasons to request an extension are quite commonplace (i.e. unexceptional) but very genuine and reasonable (e.g. if the parties are involved in difficult settlement negotiations). While the change is a welcome improvement on the current situation, it is disappointing that the "genuine and exceptional" circumstances requirement is retained for extensions after the first three months. There are many "genuine and reasonable" reasons an extension may be required for longer than three months. Under the new Regulations extensions in such situations will not be available.
The new Regulations will clarify that the maximum period for an extension of time to file a notice of opposition is three months after the acceptance of the trade mark, and that a request for an extension of time must be received before the expiry deadline but the Commissioner may grant the request after the expiry of the deadline.
This is also a welcome change. Currently there is some confusion over the length of the extension legally available. One month is currently available without consent from the trade mark applicant and two months with consent. While the practice of IPONZ has been to grant afurthertwo months with consent, the legality of this practice has been questionable. The new Regulations will remove the doubts over the current practice. Currently an extension for filing a notice of opposition must be applied for and granted before the deadline. Given that it can take some time for applications to be processed, this has in practice meant it was necessary to file for an extension several days before the deadline day. The new Regulations will allow applications for extensions to be filed on the last day.
Evidence of use in defence of non-use revocation actions
The new Regulations will require that a trade mark owner must file evidence of use or special circumstances, together with their counterstatement, in response to an application for revocation on the grounds of non-use. Currently, owners have two opportunities to file evidence of use or special circumstances, at the time of filing their counterstatement and again following the applicant for revocation filing their evidence of to support the allegations of non-use.
While the change to a single opportunity for trade mark owners to file evidence in revocation proceedings will streamline the proceedings and is welcome, the new Regulations set a very tight deadline for owners to prepare their evidence. Trade mark owners will need to be especially vigilant to ensure their evidence is prepared on time.
Further miscellaneous amendments
Reclassification of old trade mark registrations
The new Regulations will establish a conversion process for old trade mark registrations not classified under the Nice Classification system. Under this process the Commissioner will be able to initiate conversion of these registrations to the current edition of the Nice Classification system. The Cabinet Paper indicates owners will be given an opportunity to make representations on the proposed form of the conversion.
It is unclear from the Cabinet Paper what the conversion process will be. While owners will have the opportunity to make representations, it is unclear how much control over the process they will have. We recommend owners of trade mark registrations not classified according to the Nice system 3 who are concerned about this commence reclassification of their own volition before the new Regulations come into force. Under the current process, owners can propose the form of conversion.
Late extensions to be available for trade mark prosecution
The new Regulations will make extensions of time for trade mark prosecution available for a period of 2 months after the deadline has passed, provided that applicant, at the same time as they apply for the extension, also completes the action required to be taken.
This will be advantageous for trade mark applicants over the current system, under which no extensions are available after a deadline has been missed. It will, however, introduce some uncertainty for anyone waiting for other parties' deadlines to lapse. Requiring the action be taken at the same time as the extension is applied for will ensure that matters are progressed.
Additional classes will be able to be added up until acceptance of applications
The new Regulations will allow additional classes of goods and services to be added to trade mark applications until the date the application is accepted for registration. To clarify, this does not mean additional goods and services will be able to be added to applications. It means that if goods or services covered by an application are incorrectly classified, and the correct class if not included in the application, it can be added at any time until acceptance.
This is a very welcome change from the current rule, under which classes can only be added for a period of one month from the filing date. Given the period of time it takes IPONZ to examine an application, the current rule can result in very tight deadlines for applicants.
Online communication with IPONZ
The Cabinet Paper makes it clear that the regulations will contain a requirement that all dealings with IPONZ must be undertaken online. Effectively IPONZ will be closing their mail room. Apparently 97% of IPONZ dealings are already online. However, presumably in those 3% of cases where people aren't working online there is a good reason. Clearly some applicants will be disadvantaged by this change. The Cabinet Paper discussion on the issue contains factual errors and illuminates a lack of understanding as to how and why clients might rely on IPONZ accepting documentation other than through its online portal. Unfortunately it seems that the decision has been made.
The new Regulations will introduce a number of welcome and necessary changes. However, it is unfortunate that an opportunity for further improvements appears to have been lost, particularly in respect of the grounds for extensions of time in hearings proceedings and the tight deadlines that will be forced upon trade mark owners in revocation proceedings. It is also a shame that such an inflexible approach has been taken in respect of online communication with IPONZ.