New Zealand: When is a trade mark not a trade mark – when it is a descriptive or generic term for a product or service

Last Updated: 6 September 2011
Article by Ben Cain

This article first appeared in NZLawyer magazine and is an expanded version of an article Ben Cain wrote on 11 July.

Ben Cain discusses the use of descriptive or generic terms as trade marks in New Zealand in light of the recent "radler" decision from IPONZ and the furore over cheesemakers' use of 'vintage'.

What's in a name?

In 1600, the Bard penned the now immortal words for Juliet as she contemplates Romeo's lineage:

What's in a name? that which we call a rose
By any other name would smell as sweet;
[Act II, Scene II]

In 2011, following the decision in DB Breweries Ltd vs Society of Beer Advocates, Inc [2011] NZIPOTM 19 (13 July 2011) regarding DB's 'radler' trade mark, the answer to Juliet's question might well be framed in the negative: "that which we call a radler by any other name would not taste as citrusy".  In the same (blue) vein might be the response to Fonterra's recent notices to New Zealand cheesemakers to avoid using the word 'vintage': "that which we call a cheese by any other name would not taste as rich".

As we all now know, unless you have been off-planet or hiding under a rock, DB was successful in maintaining its registration for 'radler' much to the chagrin of beer drinkers, not to mention John Campbell and the team at 'Radler Live'. If proceedings are in due course issued in respect of Fonterra's 'vintage' trade mark, the same outcome might eventuate.

The danger of descriptive or generic brand names

Descriptive or generic brand names are those which describe, for example, the kind, quality, intended purpose, value, geographical origin, or some other characteristic of a product or service.  In other words, a descriptive or generic name is one that is in common use by the public to describe a product or service.

Descriptive or generic brand names are very attractive to marketers because they are easy for consumers to grasp and remember - I know: I speak from experience having been a professional marketer for 15 years prior to becoming an IP lawyer. In that time, I was involved both on client-side and agency-side in the development of a large number of trade marks for products and services across a wide variety of industries.

In terms of legal rights, descriptive and generic brand names make weak trade marks. The more descriptive or generic a brand name, the harder it is to protect and enforce any rights in that name, and the less chance a trade mark owner has in claiming its particular mark is distinctive of its products or services.

DB Breweries Ltd vs Society of Beer Advocates, Inc

On 4-6 May 2011, before Assistant Commissioner Jones of the Intellectual Property Office of New Zealand, the Society of Beer Advocates, Inc (SOBA) sought to revoke DB's trade mark registration for the word 'radler'.

SOBA submitted two arguments.  First, SOBA argued that when DB filed its application to register 'radler' in 2003, 'radler' was a known descriptive term for a beer-based, shandy-style drink and as such the word was not capable of distinguishing DB's product from those of other brewers. Consequently, the trade mark registration should be declared invalid. Second, in the alternative, SOBA argued that 'radler' had become a common name in general public use for a style of low-alcoholic beer as a result of DB's acts or inactivity.

In support of its arguments, SOBA presented incontrovertible evidence that as at the relevant date in 2003 radler was a known style of beer in New Zealand. SOBA also presented evidence that other traders - such as the now infamous Green Man Brewery - would likely want to use, and had wanted to use, the 'radler' name in the course of their business and without any improper motive in connection with their own goods.

SOBA also presented evidence that DB had itself, from day one, marketed its radler beer as a style of beer. Such evidence included wording on the packaging for 'Monteith's Classics Range', references in promotional recipe books and even as part of the tour guides' spiel at the Monteith's Brewery in Greymouth. Supplementing SOBA's material were admissions and references in DB's own evidence to 'radler' being a style of beer.

If the Assistant Commissioner needed any further convincing, SOBA argued that it was no mysterious co-incidence that the "backstory" for DB's radler beer was exactly the same as every other radler beer in the world, including for 'Barefoot Radler' brewed by DB's arch-rival, Lion Nathan, in Australia.

A reasonable person would think, then, that on the strength of the evidence, SOBA should have succeeded on at least one ground.

DB of course opposed and denied SOBA's arguments, adopting the strategy that 'the best form of defence is attack'. In carrying out its strategy, DB attacked the validity of SOBA's standing as an aggrieved person, its motives for bringing the proceedings, the validity of its evidence, in particular the credibility of its witnesses, and by denying that consumers would (a) read and (b) interpret the following text on its packaging according to its plain and ordinary meaning:

There are six styles of beer in the Monteith's Classics Range:

Original Ale / Golden Lager / Black Beer / Celtic Red Beer / Pilsner Beer / Radler Bier

Six styles of beer, of which 'Radler Bier' is identified as one. No, DB argued, radler is a brand, not a style of beer. To borrow from another kiwi beer brand: yeah, right.

A reasonable person would think, then, that on the strength of DB's own admission that radler is a style of beer, SOBA should have succeeded on at least one ground.

Sadly, for brewers and beer consumers in New Zealand, Assistant Commissioner Jones did not think so. Instead, the Assistant Commissioner found against SOBA on every ground.

DB's victory is, however, a Pyrrhic one. The public backlash to the decision, as seen through news and current affairs media, social media and conversations in bars up and down the country, clearly bears witness to that.

Significantly, and regardless of the outcome, the radler case - and the 'vintage' furore -  highlight the need for business owners, marketers, and branding professionals to avoid choosing and trying to register descriptive or generic names as word trade marks for goods or services. Avoiding descriptive or generic names may save the costs of defending successful trade mark registrations from invalidation or revocation proceedings - as DB found out to its expense and Fonterra may yet.

The key learning for business owners, marketers and branding professionals - choose a distinctive name

The fundamental purpose of a brand name is to make one trader's goods or services stand out in the crowd from competitors'. This purpose is reflected in trade mark law in that to qualify as a trade mark under the Trade Marks Act 2002 a name must be capable of distinguishing one trader's goods from another. If other traders are likely to want to use the same or similar name, without improper motive, in connection with their own goods or services, registration of that name as a trade mark should be refused. Period.

Unfortunately, due to human fallibility, a descriptive or generic name occasionally gets through the cracks in the intellectual property system and is registered as a trade mark, resulting in an unfair monopoly to the trade mark owner and the deprivation of choice for businesses and consumers in New Zealand.

'Radler' is one such trade mark, regardless of the Assistant Commissioner's decision, since it is a name for a style of low-alcohol beer, in the same way pilsner, black beer, and pale ale are all well-known names for styles of full strength beer. But as a consequence of the Assistant Commissioner's affirmation of DB's monopoly over the use of the word radler, no other brewer can use radler as a trade mark to properly denote a radler beer in New Zealand.  If other brewers use radler in a descriptive way, such as "Cyclist - a radler-style beer", then technically speaking this will not amount to trade mark infringement under the Trade Marks Act as radler is not being used 'in a trade mark sense'.

'Vintage' is arguably another such trade mark, as it is a descriptive term for a particular style of cheese (and not an alternative word for 'aged' or 'mature') if New Zealand cheesemakers are to be believed - and from my own research, there is convincing evidence that they should.

Another registered trade mark which could also be strongly argued was a descriptive term at the time its owner applied to register, or has become a common name in general public use, is the word 'batts'. The word 'batt' derives from the word 'batting' and originated in c. 1830-40. The word "batting" appears to have originated in c. 1605-1615 and is still used today to describe fibreglass batting, which are sheets of insulation material. In New Zealand, one company - Tasman Insulation - has a trade mark for the word 'batts'. It has owned this registration since 1973. Now it may be that when Tasman Insulation applied to register the word in 1973 it was not known as a descriptive term for insulation material in New Zealand, but this of course does not mean it was not a descriptive term at all. Furthermore, even if the word 'batts' could function as a trade mark in 1973, there is a strong argument now to say it no longer can since so many traders are using 'batts' to describe a type of insulation product.

Expert's recommendation: what to do when developing or choosing a brand name

When developing or choosing a brand name for a product or service, business owners, marketers and branding professionals are advised to:

1 NOT choose a descriptive or generic name that other traders are likely to want to use in the course of trade. Involve your trade mark attorney from the outset to avoid doing so;

2.CONSULT your trade mark attorney so he/she can advise you on (a) the strength of your proposed brand name as a trade mark; and (b) whether your proposed brand name may infringe someone else's trade mark rights; and

3 ASK your trade mark attorney to apply to register your brand name. A trade mark registration is a valuable business asset which can be bought, sold, assigned or licenced like any business asset so it makes perfect sense to register it.

And finally, if you do manage to register a descriptive or generic term, do the decent thing for New Zealand business and consumers if challenged - concede gracefully and allow competition to flourish for the benefit not just of New Zealand consumers but the economy as a whole.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

James and Wells is the 2010 New Zealand Law Awards winner of the Intellectual Property Law Award for excellence in client service.

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