Rights in trade marks can be acquired in two ways: by use and by registration. But regardless of how you obtain your rights, if you don't use your mark you may lose your mark.
So what does 'use' mean?
One way to establish what 'use' means is to look at the 'test' for 'use' in proceedings for removal of a trade mark from the Trade Marks Register.
Under New Zealand law we apply the test from a High Court of Australia decision (Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2)  HCA 73; (1984) 156 CLR 414):
"...it is not necessary that there be an actual dealing in goods bearing the trade mark before there can be a local use of the mark as a trade mark. It may suffice that imported goods which have not actually reached [New Zealand] have been offered for sale in [New Zealand] under the mark ... or that the mark has been used in an advertisement of the goods in the course of trade: ... In such cases, however, it is possible to identify an actual trade or offer to trade in the goods bearing the mark or an existing intention to offer or supply goods bearing the mark in trade."
Thus 'use' means actual sales or an offer to sell goods or services by reference to a particular trade mark in New Zealand. Preliminary discussions or negotiations about selling goods or services (ie using the trade mark) will not be sufficient; neither will be a trade mark owner's1 subjective intention to use its mark in trade at some undefined time in the future.
An importer does not have to show it has sold anything in New Zealand to show it has 'used' a trade mark. However, the importer must be able to show that goods overseas have been committed to export to New Zealand – for example, by producing a bill of lading – and that the goods have been offered for sale or advertised for future sale in New Zealand.
In summary, then, if the owner of a trade mark registration can't show actual sales or offers for sale using its trade mark it may well lose its registration.
One such owner was Bickford's Trading Pty Limited. In a recent decision (Bickford's Trading Pty Ltd v Tata Sons Limited  NZIPOTM 5 (30 January 2013), the Assistant Commissioner of Trade Marks ordered Bickford's trade mark registrations for WATER+, WATERPLUS and waterplus (logo) in respect of non-alcoholic drinks be removed from the Trade Marks Register.
Tata Sons had applied to register TATA WATER PLUS as its trade mark but found Bickford's registrations were blocking its mark's path. Tata Sons consequently applied to remove Bickford's registrations from the Register. Tata Sons' application2 succeeded because the Assistant Commissioner found the use Bickford's claimed it had made of its 'Waterplus' trade marks did not the pass the test in Moorgate Tobacco Co Ltd.
If a business loses a trade mark registration, it doesn't automatically mean it can't start re-using the trade mark (although if it does it may find it is infringing a new owner's rights). Nor does it automatically mean it is open season for a competitor to immediately start using the trade mark: the original owner may have 'residual rights' in that mark whereby consumers still associate that mark with the original owner, even if the owner is no longer using it. If the original owner can establish such residual rights it may still be able to stop a competitor from using (and registering) an identical or confusingly similar trade mark.
1A legal term to describe a person entitled to make an application for a patent. In New Zealand this includes any person claiming to be the true and first inventor, the assignee of the inventor, or the legal representative of a deceased inventor or his/her assignee.
2In most jurisdictions patent applications are subjected to an examination process to determine whether the subject matter is novel and inventive. The terms "application", "pending" or "patent application" are used to describe the status of the application up to grant.
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 & Wells Intellectual Property, three time winner of the New Zealand Intellectual Property Laws Award and first IP firm in the world to achieve CEMARS® certification.