In November 2019, royal assent was given to the Regulatory Systems (Economic Development) Amendment (No.2) Bill which introduces several key changes to the Trade Marks Act 2002 (Act), amongst other legislation.

The trade mark law changes come into effect on 13 January 2020.

What you need to know

  • The grace period for trade mark renewal has been shortened to six months. Previously, trade mark owners had an additional 12 months after the renewal deadline to restore an expired registration. Registrations with an “expired but restorable” status prior to January 13 will still be renewable within the 12 months grace period;
  • A certification trade mark owner (or applicant) may not have a current standard trade mark registration or application, for the same goods and services for which certification is being sought (and vice versa). The rejection of certification marks on this basis has been a longstanding IPONZ examination practice. The rationale is that the certifying party cannot objectively and independently provide and implement certification and certification standards to third parties if they are trading in the goods/services themselves.
  • In line with the Supreme Court of New Zealand’s judgement in the case, Crocodile International Pte Ltd v Lacoste [2017] NZSC 14 (see here), the legislation has been clarified to make clear that there is no residual discretion to maintain a trade mark registration where the non-use requirements have been established, and, where there are no special circumstances, outside of the control of the owner of the trade mark, which resulted in the non-use within the relevant period.
  • Under certain conditions, the Commissioner’s powers have been extended to order the payment of security of costs by an opposition party based overseas. Importantly, if the security is unpaid, the Commissioner may treat the proceedings as abandoned by that party.

Further considerations

Although not a result of the impending legislative changes, IPONZ has recently made several procedural changes for oppositions and hearings. These are:

  • There will be no award of costs in an uncontested proceeding, unless there are circumstances which justify an award of costs or where the party bringing the proceeding was clearly going to succeed. Circumstances which are not generally considered to be sufficient to justify an award of costs against an uncontesting party include, a request for the applicant/owner to abandon the trade mark application or registration prior to the proceeding, and a failure of the parties to reach a settlement (unless the applicant/owner has acted unreasonably).
  • Hearings can be conducted, on request, in accordance with Tikanga Māori, that being in consideration of Maori customs, culture and language. This includes conducting a traditional mihi (greeting) and karakia (prayers or incantation) by each party. A hearing can also be conducted in Te Reo Māori (Māori language).

Fee changes will also come into effect on 13 February 2020, the most notable being:

  • A decrease in the trade mark renewal fees from NZ$350 to NZ$200 (per class);
  • A decrease in the trade mark application fee from NZ$150 to NZ$100 (per class).

Considerations for Trade Mark Owners

Although already confirmed in case law, the changes to the Act reiterates the importance for brand owners to ensure they use their trade marks in New Zealand and keep evidentiary records of this use. The onus is on trade mark owners to defend revocation actions on the grounds of non-use. The removal of the registration is unequivocal (where special circumstances don’t exist) if use cannot be demonstrated in the relevant three-year period.

Overseas-based trade mark owners and applicants bringing proceedings should be aware that it may be necessary to front-up with a security of costs if proceedings are initiated. Given most trade marks are renewed within the initial 10-year registration period (and a six-month grace period is consistent with many other jurisdictions including Australia), the reduction in the renewal grace period shouldn’t impact too many trade mark owners. However, trade mark owners should be diligent in ensuring that renewal deadlines are met, preferably before the registration enters this grace period.