Beware of the words you use!

22 June 2009
There has been a string of recent cases involving FMCG companies using ‘descriptive’ terms on their products, only to discover these words actually belong to someone else.

Recently, DB Breweries asked Green Man Brewery to stop using the term RADLER on its beer. DB had registered RADLER as a trade mark and therefore owned the term.

In light of DB’s request, Green Man has now relabelled its beer - no doubt at significant cost to the company.

The question is - how do you avoid something like this happening to you? 

The answer is that you should check both the trade marks register and the marketplace to see what claims others might have to a term before you adopt it.


Why check the trade marks register?

The first place to check to see if anyone owns a term in New Zealand, is the New Zealand trade mark register.

This is because although a trade mark registration is not absolute proof of ownership, it creates a legal presumption that the registered term belongs to the registered owner.

That presumption of ownership will usually be enough to enable the owner to get an injunction to stop you from using the registered term, at least until a final judgement following trial.

Most cases do not go to trial, but if yours does, and the owner is successful, they are likely to be awarded damages (or an account of profits) and costs.


Why check the marketplace?

If your use of a word is likely to confuse consumers into thinking your product is another person’s product then that person can usually get, at least, an injunction to stop you using that term.

Again, although most cases do not go to trial, if your’s does, and the owner is successful, it could be a costly exercise for you.

However, working out whether New Zealand consumers are likely to be confused by your use of a term is not easy. The trick is to put yourself in the position of the New Zealand consumer and assess whether a term is generic from their perspective.


Assumptions – learning from the past

When you are assessing whether a term is generic the following cases in which someone assumed a term was free for all to use are worth bearing in mind.


Assumption 1: RADLERŽ is a generic term for a style of beer in Germany

It doesn’t matter what a word means in Germany. What matters is what the word means to New Zealand consumers.  As a starting point you should ask yourself the following questions before you adopt a new term:

  • Is more than one company using the term here?
  • Are they using it descriptively?
  • What does the average consumer think the term means
  • Does anyone have a trade mark registration for the term?
  • Can I own it myself?


Assumption 2: VINTAGEŽ is an ordinary English word that describes an old cheese

Don’t assume that because a word has a meaning in relation to one product it cannot be owned by someone in relation to another product (or that you cannot own it yourself).

Pull out your dictionary and look up the term you want to use. For VINTAGE, you will find that while the word has a meaning in the dictionary relating  to wine, it does not have a direct meaning in relation to cheese.

That is why New Zealand Milk Brands has a trade mark registration for VINTAGEŽ for cheese and has the sole right to use the term for cheese.


Assumption 3: Everyone uses CHAMPAGNEŽ in Australia, so it should be all right to use here

In New Zealand, the question is what the term means to the New Zealand consumer. Similarly, in Australia, the question is what the term means to the Australian consumer.

In the CHAMPAGNE case, the Australian courts held that CHAMPAGNE was a generic term for sparkling wine in Australia and could be used on any sparkling wine.

In New Zealand, the courts held that CHAMPAGNE was understood to indicate that the wine came from the Champagne region of France. Therefore, in New Zealand, only wine from Champagne can be labelled CHAMPAGNE.

The lesson is that if you sell your products here and overseas you need to consider the availability of a term and how consumers in each country will relate to the term.  Do not think of them as one global group of consumers.


Summary

The RADLERŽ case is the latest example of a seemingly innocent person adopting a term that turns out to belong to someone else.

Before you adopt a term you should ensure that no one owns the term or anything confusingly similar to it.  Make sure you:

  • Check the New Zealand trade marks register,
  • Check the New Zealand marketplace, and
  • Check the trade mark registers and marketplace in the countries you want to export to.

An edited version of this article was published in FMCG, June 2009.

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