Most Read Contributor in New Zealand, September 2016
"In 2013, it can hardly be doubted that New Zealand and
Australia may, for the purposes of enforcing intellectual property
rights, be regarded as one market."
So said the Auckland High Court in the recent "Muzz
Buzz" franchise case.
The take-out from this is that New Zealand businesses need to
respect Australian trade marks, even if they are not used or
Muzz Buzz and Jitta Buzz
Muzz Buzz is a drive-through coffee business first established
in Western Australia in 2002. It had expanded through most of
Australia and was anticipating opening stores in New Zealand but
had not done so (though it had registered two marks) when a local
outfit established a look-a-like business called Jitta Buzz.
Muzz Buzz failed to get an interim injunction against Jitta Buzz
but at the trial succeeded on all fronts – copyright
infringement, trade mark infringement and passing off/Fair Trading
Although Muzz Buzz did not need to rely on passing off, it is
interesting that the judge also found for them on this ground and,
in doing so, issued a timely warning to New Zealand businesses.
He referred to a 1987 case called Dominion Rent A Car, when the
New Zealand Court of Appeal talked about spill-over reputation from
Australia and the fact that it might not need much activity in the
New Zealand market for a court to recognise rights in a mark so
that the Australian owner could succeed in passing off.
The Auckland High Court judge in Muzz Buzz seemed to go a bit
further: the fact that the reputation of the Australian business
and its brand name on a website in Australia was accessible in New
Zealand gave the Western Australian franchise a platform to sue in
passing off in this country.
Chapman Tripp comments
It has long been a rule that trade marks are territorial in
nature. That is, they can only give exclusive rights in the country
in which they are registered or where they have been used and have
acquired goodwill rights.
There have always been exceptions in both the trade marks and
passing off laws but they have relied upon being able to prove that
the IP holder has a reputation in New Zealand.
The implication of this case is that Closer Economic Relations,
coupled with internet access, mean that a company with an
Australian reputation might need little extra evidence to persuade
a judge that a New Zealand company has misappropriated its trade
mark even in the absence of the Australians having the mark
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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