Australia: Recent updates to New Zealand trade marks guidelines: Ownership and divisionals

Last Updated: 12 April 2019
Article by Jacqui Symonds and Blake Knowles

Ownership: Don't underestimate the importance of nominating the correct trade mark Applicant!

IPONZ has recently updated its practice guidelines on Section 32(1) of the Trade Marks Act 2002, which relates to how a trade mark application is made.

The guidelines now state the following:

"A person claiming to be the owner of a trade mark may apply for the registration of a trade mark in the prescribed manner and on payment of the prescribed fee. ...

If an application is made by a person who cannot claim ownership of that trade mark (for example, a nominee company used to disguise the true owner) the trade mark may be vulnerable to opposition or invalidity proceedings on the basis of ownership.

In general, the Office will not investigate the right to ownership at examination unless there is a clear or obvious indication that ownership of the trade mark is at issue."

The term "owner", when used in relation to an unregistered mark, is defined in section 5 of the Act as "the person who owns all of the rights in the mark".

The guideline changes don't represent a dramatic shift in trade marks law. Instead, it is intended to clarify the current position on trade mark ownership, which has been the subject of some debate (at least in Australia) in recent years.

What does this mean?

Section 32(1) of the New Zealand Act 2002 is similar to section 27(1) of the Australian Trade Marks Act 1995, which provides that a person may apply for the registration of a trade mark in respect of goods and/or services if the person claims to be the owner of the trade mark.

Trade mark ownership in Australia was in the spotlight recently, following the Federal Court decisions in Insight Radiology Pty Ltd v Insight Clinical Imaging Pty Ltd [2016] FCA 1406 and Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83.

In this case, Mr Pham, a company director, filed a trade mark application in his own name. The trade mark application was later assigned to the company. As the company was the first to use the trade mark in Australia, it was the true owner of the trade mark at the time the application was filed. The subsequent assignment of the trade mark didn't cure the ownership issue, as the rights in the mark are determined at the application filing date. The application was therefore successfully opposed on the basis that Mr Pham was not the true owner of the trade mark.

While Australian court decisions are not binding in New Zealand, the IPONZ trade marks practice update confirms the view of IPONZ that the same general rule applies in New Zealand.

Interestingly, the guidelines use the filing of an application in the name of a nominee company to disguise the true owner as an example of an invalid ownership claim. This is a reference to the New Zealand Trade Marks Decision in NZME. Publishing Limited v Trade Me Limited [2017] NZIPOTM 22, in which the NZME trade mark was filed in the name of a third party company to keep the launch of the brand confidential. Whilst this is an extreme example, it is important for businesses to be aware that applications or resultant registrations could be found invalid even in cases where applications are filed in the name of related entities, including holding companies.

When applying for registration of a trade mark, businesses should consider the following:

  1. The relevant date for determining a claim to ownership is the filing date of the trade mark application. Accordingly, defects in trade mark ownership cannot be corrected by assignment after the application is filed. In the majority of cases, a new application needs to be filed in the correct name.
  2. If a trade mark is already in use, the application must be filed in the name of the entity that owns the trade mark rights. Generally, the first person to use a trade mark is considered the owner of the trade mark at common law, unless there has been an assignment of rights or the trade mark rights have been abandoned.
  3. Filing an application in the name of a company director, an IP holding company, or an entity related to the true owner of the trade mark may also lead to an invalid registration.
  4. In many cases, if a trade mark is not yet in use, the application can be filed in the name of any entity, provided that entity has an intention to use, or authorise the use of, the trade mark.
  5. In the event that the owner does not intend to continually use the mark subsequent to the filing of the application, or otherwise wishes to license the use of the mark to another party (including a related entity), a relevant licence should be prepared between the owner and the user (i.e. the licensee) to regulate such use. Please refer to our recent Australian case note on the Calico case regarding trade mark licensing, which can be found here. This case illustrates the importance of exercising control over use of the mark by the licensee and the implications for failing to do so.

If you believe any of your trade mark applications were filed in the incorrect name, or require advice on the ownership of a particular trade mark, please contact us.

Divisionals now possible for International Registrations

Following the new Trade Marks Regulations that came into force on 21 March 2019, owners of International Registrations designating New Zealand are now able to file divisional applications.

This means owners can now divide specific goods and services, or even entire classes, out of their International Registration into a divisional registration. This will be particularly useful where particular goods and services are facing objections, as remaining goods and services can be divided out of the registration and proceed through to acceptance. Trade mark owners are also able to merge trade marks that have previously been partially assigned or divided, back into a single International Registration.

It is not yet possible to file divisional applications from International Registrations designating Australia. However, it is expected that the regulations will be amended to effect this change in the first half of 2020.

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.

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