New Zealand: Shape Trade Marks - the Sign of the Times

Recently we looked at the European Court of Justice's decision in Koninklijke Philips Electronics NV v Remington Consumer Products Limited. That case, which centred around the registrability of the shape of a three-headed rotary razor, held that where a shape has a functional purpose or technical effect, companies should not be granted a monopoly via a trade mark registration in these shapes. The decision did not, however, inhibit the registration of shapes as trade marks where the shapes are not functional. This was consistent with the practice in New Zealand. Examples of packaging shapes that have been granted trade mark protection in New Zealand in this way include Toblerone chocolate bar and Hershey's Kiss.

In a blow for current or would-be applicants for these types of shape trade marks, a recent decision of the Commissioner of Trade Marks has called into question the ability to register shape trade marks in New Zealand at all. The Commissioner held that the shape of Nestlé's Kit Kat chocolate bar was not registrable as a trade mark as, on a literal interpretation of the Trade Marks Act, a shape is not a "sign".

This decision appears difficult to justify and seems unlikely to be sustained in the long term. In our view it is neither a "sign of the times", nor the law. We believe that the definition of "sign", coupled with the definition of "trade mark" in the Trade Marks Act, is broad enough to include shapes. The weight of international and local New Zealand context also confirms the trend towards this broadening rather than narrowing of what is protectable as a trade mark, including:

• the previous and continuing Intellectual Property Office of New Zealand practice to accept shape trade marks for registration;
• the significant number of existing registrations for shape trade marks in New Zealand; and
• international trends such as those in Australia to allow shape marks to be inherently registrable as trade marks without evidence of factual distinctiveness (see Kenman Kandy v Register of Trade Marks).

In December 1996, Nestlé applied to register the shape of its two- and four-bar Kit Kat shapes as trade marks. Following consideration by IPONZ and the filing of evidence of factual distinctiveness, the applications were advertised prior to acceptance in January 1998. Soon after, the applications were opposed by The Horizon Biscuit Company of the United Kingdom and Cadbury New Zealand. Although both parties filed significant evidence in opposition, the case was essentially determined as a matter of statutory interpretation.

The Commissioner of Trade Marks considered three key issues:

1. Do each of the items (the two shapes) constitute a sign?

2. If so, do each of those items (signs) constitute a trade mark?

3. If so, are those trade marks registrable?

Although detailed consideration was given to each of the three issues, the central issue in the case was whether the two shapes could constitute a sign.

At the time of Nestlé's applications, the definition of "mark" and "trade mark" in the Trade Marks Act had just been amended to take account of the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS") to which New Zealand is a party. Of particular note, the definition of "mark" in the Trade Marks Act was amended to become "sign" and broadened to specifically include colour. This change was consistent with article 15 of TRIPS.

Although at first blush the change from the word "mark" to "sign" may appear only minor (the Commissioner appeared to think nothing of it), the change seems to indicate substantial broadening of the approach to what may be registrable as a trade mark. If the legislature had intended that the only change was to be the inclusion of colour, there would have been no need to change the definition from "mark" to "sign". Yet clearly there was a decision to change the work "mark" (which implies a physical "marking on something) to the broader word "sign" (which does not necessitate the same physical connection or "marking"). The change removes many of the difficulties that previously arose for "non-traditional trade marks" such as shapes which did not fit neatly into the traditional role of a "mark". This is also reflected in changes to the definition of "trade mark", which was broadened, requiring principally that the "sign" only be capable of being represented graphically and be capable of distinguishing the goods or services of one person from those of another.

It can also be argued that the legislature assumed the definition of "sign" included shapes. Indeed, in 2000, when the legislature saw fit to make further changes to the definition of "sign" to include smells, sounds and tastes, at no time was there a movement to include shapes "for the avoidance of doubt", which appeared to be the rationale in specifically including smells, sounds and tastes.

This commonsense approach to what can constitute a "sign" was accepted by IPONZ which, following the initial amendment in 1995, allowed many shape trade mark applications to proceed to acceptance.

In the Kit Kat decision, however, the Commissioner noted that, notwithstanding current IPONZ practice, the issue of whether shapes could be registered as trade marks had not been the subject of any real debate in New Zealand. The Commissioner's view was that, approaching the matter solely as a matter of interpretation (albeit a strict and literal one), as the definition of "sign" was basically the same as the previous definition for "mark" and did not specifically include three-dimensional shapes or products, a shape could not be registered as a trade mark. Consequently, the Commissioner held that the law relating to the registrability of shape trade marks was the same as it had been before the amendments to the Trade Marks Act following the TRIPS. That is, the decision of the House of Lords in Coca-Cola Trade Marks still applied, which had ruled that the function of trade mark legislation was to protect the mark, not the article which is marked (ie. shapes).

In our view, the Commissioner appears to have made an error at law in reaching this finding. It is hoped, however, that the uncertainty for shape trade mark owners created by this decision will be short-lived, especially with a new Trade Marks Act on the horizon.

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