News Zone

Court’s decision on Australian company rights should concern Kiwis 06 Oct 2014

A recent High Court judgement about the intellectual property rights of Australian companies in New Zealand should be a real cause for concern to New Zealand companies.

Intellectual property expert and lawyer, Theodore Doucas of Zone Law and Zone IP, an intellectual property law firm and consultancy in Wellington, said comments by the High Court that: "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," is troubling.

Successful Australian drive-through coffee franchise, Muzz Buzz, took local operation Jitta Buzz to the New Zealand High Court and succeeded in achieving findings against the local operation in terms of trade mark infringement, 'passing off', the Fair Trading Act and copyright infringement.

Mr Doucas said the High Court's comments regarding both markets as ‘one’ for the purpose of enforcing IP rights, was a strong statement to make because there are in fact two trademark registers regardless of CER and other agreements.

“The statement also suggests that Australians do not have to undertake very much activity locally, before they may assert intellectual property rights here.

"It is important to remember that trade marks are territorial in nature. Even in the European Union, where there are no borders, there is still a requirement in proceedings regarding a Community trade mark to prove the trade mark has been used in more than one jurisdiction.

"To say that New Zealand's close relations and economic ties with Australia overrides the territorial nature of trade mark rights is not correct. However, it appears that the real upshot of this is a warning about copycat behaviour.

"Muzz Buzz succeeded because Jitta Buzz is so obviously a copy, and this should sound a warning to Kiwis who take inspiration from Australian companies, even if they succeed in being first on the market here.”

Mr Doucas said the concern lay where a New Zealand company correctly and legitimately, without any idea of a pre-existing Australian company in Australia, starts trading with a similar brand to an Australian company.

“Sometimes, there is very little in what may be considered a copy, when it may well have been a new idea.

“The comment by High Court seems to infer that New Zealanders should take note of all brands on the Australian Trademarks Register in addition to those on the New Zealand Trademarks Register. Moreover, this sort of comment could then extend to New Zealanders also having to take note of nonregistered IP rights in Australia as well. This could have huge cost implications for New Zealand business especially SME’s.”

Mr Doucas said that to avoid being on the losing end of a High Court interpretation, companies should make sure that their trade mark is original and not a copy of an Australian brand. If possible, it may be a good idea to search the Australian Register as well.

"It also makes good business sense because for many Kiwis, Australia is a natural progression in terms of expansion. It is important to look further than New Zealand when it comes to trade marks."

Theodore Doucas, Principal