A registered trade mark provides the owner with an exclusive right to use the trade mark on the goods and services described, and any unauthorised use can constitute trade mark infringement and result in expensive and lengthy action through the courts.
For this reason, businesses are often too scared to use or mention another trader’s trade mark for fear of being sued for infringement. But in some circumstances you can use someone else’s registered trade mark in New Zealand and may not be liable for trade mark infringement.
When referring to genuine second-hand goods:
Trade marks are applied to goods with the authorisation of the registered owner. After the goods are sold, the trade mark owner no longer has the right to object to the trade mark applied to those goods regardless of how they are presented to the market.
When referring to parallel imported goods:
Under the same principle, if a trade mark is applied to goods overseas with the permission of the trade mark owner, those goods could be sold in another market through parallel trade channels, and the trade mark owner cannot object to that use.
When it is part of comparative advertising:
Registered trade marks can also be used when referring to equivalent points of comparison for consumers to make purchasing decisions through comparative advertising provided the comparison is fair, accurate, informative and will not mislead or deceive consumers.
When it is part of honest business practice:
A business may also be able to use someone else’s trade mark to refer to a predecessor or current business name or place of business, or to indicate a characteristic or purpose of its goods or services, provided that use is part of honest business practice.
But be aware of other rights!
These defences to trade mark infringement are a simplification of some of the most common areas of permitted.
However, while use of other party trade marks can be allowed, the legal considerations are layered and not necessarily straightforward. A range of other rights must also be reviewed and considered – including:
Copyright – are there logos or images which would attract different rights for the owner?
Are imported goods truly parallel imported – do different traders own the same trade mark in different countries, and are you looking at the right trade mark owner for your country?
Counterfeit or tampered trade marks – are the trade marks used in the format authorised by the registered owner?
Fair trading legislation – is your use likely to deceive or mislead consumers into thinking that there is a connection or endorsement by the registered trade mark owner which does not exist?
Each country has its own laws. There is no “one size fits all” approach and the legal benchmark for permitted use needs to be consider for each country of interest.
When using someone else’s trade mark goes wrong
A popular way for a business to attract customers is to provide a cost-effective or more reliable alternative to an existing well-known product in the market.
Recently, New Zealand toy manufacturer Zuru used LEGO® on packaging its own building bricks in a series of “compatible with” statements. Perhaps unsurprisingly, Lego objected. Zuru sought a declaration from the High Court that use of LEGO® on the Zuru packaging was within honest business practice to describe a function of its own product, or was used as part of comparative advertising, and therefore not infringement.
Lego objected, arguing that Zuru infringed the LEGO® trade mark and breached fair trading legislation.
Ultimately, Lego succeeded with the bulk of its objections and the High Court found that Zuru’s use of LEGO® was trade mark infringement and that use by Zuru of LEGO ® was not in line with honest business practice because the prominence of the term LEGO® on Zuru’s packaging took unfair advantage of and leveraged Lego’s reputation. In addition, the use was not in line with comparative advertising standards.
This decision is not the end of the story, with Zuru seeking a further assessment by the Court of Appeal. This was heard 30 October 2024 and we wait to see whether Zuru’s appeal will succeed.
This situation highlights the ongoing issues that can result from trying to use other trader trade marks and the potential for protracted and expensive action. Our team of trade mark experts can help you work through the issues of permitted use and ways minimise the risk of trade mark infringement.
Comentarios