Trade Marks Amendment Bill 2008 passed - New Zealand is joining Madrid Protocol

The Trade Marks Amendment Bill 2008 (the Bill) (formerly known as the Trade Marks (International Treaties and Enforcement) Amendment Bill) was passed on 8 September 2011 - a full three years after it was introduced into Parliament. The Bill will amend the Trade Marks Act 2002 (“the Act”).

In its previous incarnation, as the Trade Marks (International Treaties and Enforcement) Amendment Bill, the Bill proposed to amend both the Act and also the Copyright Act 1994. On 6 September 2011, the original Amendment Bill was divided into the Trade Marks Amendment Bill 2008 and the Copyright Amendment Bill No. 2.

The most notable amendments proposed in the Bill reflect the Government’s decision to:

• join the Nice Agreement, the Singapore Treaty, and the Madrid Protocol;
• bolster the enforcement of the criminal offence provisions in respect of counterfeit goods;
• clarify the law relating to trade mark infringement by parallel imported goods; and
• remove the ability to voluntarily register licensees against trade marks.

Broadly speaking, the Bill proposes to amend the Act so that New Zealand can join the Nice Agreement, the Singapore Treaty, and the Madrid Protocol and fulfil its obligations under those treaties. By making provision for these treaties, New Zealand has shown its commitment to keeping in line with international trade mark practice.

As a result of becoming party to the Nice Agreement, trade marks registered in New Zealand prior to 1941 will need to be reclassified under the Nice Classification System. IPONZ has already begun the process of reclassifying these registrations on a voluntary basis.

The importation and sale of counterfeit goods is a growing problem in New Zealand, with the majority of counterfeit goods being sourced from overseas. Since July 2000, the number of counterfeit goods that have been detained by the New Zealand Customs Service (“Customs”) has increased by over 400%. To combat this, the Bill proposes to include new sections in the Act which provide Customs and the National Enforcement Unit (“NEU”) of the Ministry of Economic Development with extra resources and investigative and prosecution powers.

It is a criminal offence under the Act to import and/or sell counterfeit goods. The additional resources and powers that have been suggested under the Bill would enhance the ability of Customs and the NEU to enforce the criminal offence provisions in the Act. The provisions dealing for copyright infringement are to be found in the Copyright Amendment Bill No. 2.

The Bill also attempts to clarify the parallel importation provision in the Act. At present, a registered trade mark will not be infringed by the use of that mark in relation to goods that have been “put on the market anywhere in the world under that trade mark by the owner or with his or her express or implied consent.” The Bill would expand this provision so that infringement will not occur if the mark concerned is used for goods put on the market by the owner or with the owner’s consent or by “an associated person of the owner”. Under this proposed amendment, legitimate parallel importing cannot be thwarted by “an associated person of the owner”, which includes parties within the same group of companies as the trade mark owner or parties that have effective control over the use of the relevant trade mark.

The Bill also removes the provisions allowing the voluntary registration of licensees against trade marks. There are currently 13,000 licensee entries on the register, and these entries will be removed when the Bill is enacted.

As in the first reading, it is apparent from the second reading that the Bill has support across Parliament.

Reference was made to the benefits of joining the Nice Agreement, the Singapore Treaty, and the Madrid Protocol – and how by joining those treaties, New Zealand would align itself closer to international standards and how business compliance costs associated with registering trade marks in overseas jurisdictions will be reduced (Minister of Commerce, Hon Simon Power). The Minister also reminded us of the need to reduce the trade in New Zealand of counterfeit trade marked goods - which he considered timely as we approach the Rugby World Cup (starting 9 September 2011). On the point of counterfeit goods, the Minister commented that "counterfeiting and piracy affects the profitability of legitimate businesses, undermines productivity and threatens the jobs of many honest and hard-working New Zealanders".

Labour MP Grant Roberson briefly provided the Labour Party's support for the Bill and Green MP David Clendon confirmed that the Bill "is very sensible legislation, ... (which) .. seeks to protect the integrity and the value of New Zealand designed, manufactured, and produced products, (which he considered to be) a significant requirement".

The increased enforcement provisions come into force on a date to be appointed
by the Governor-General by Order in Council and the remainder of the Bill, including the Madrid Protocol provisions, come into force the day after the date the Bill receives Royal assent. The advise we have from the Ministry of Economic Development is that the Bill will receive Royal assent early next week.

8 September 2011