AJPark

It is a well-known fact that after the Great Depression in the 1930s a number of companies were formed, which still exist today as market leaders. In New Zealand, small to medium enterprises (SMEs) make up nearly 90% of the market. Whatever the size of your company, your brand has to be considered your most valuable asset and marketing tool.

New Zealand is a nation of exporters, and this is an important factor when considering brand protection and market penetration. Both domestically and globally it is important to protect, maintain and nurture your most valuable asset.

There are four invaluable steps to ensure your brand equity:

1. selecting brands
2. clearing your brand to ensure you can use it, and register it as a trade mark
3. going through the filing, examination and registration process
4. enforcing it if the need arises.

New Zealand has a number of iconic brands, including (to name just a few):

• Edmonds Sure to Rise 
• Griffin's
• Watties
• Skellerup
• Swanndri
• Masport
• Fisher & Paykel
• Tip Top
• Anchor
• All Blacks
• Lion
• Montana

All of these brands have become household names by going through the process we are about to describe below.

1. Selecting your brand

Any name you select as a brand must withstand a rigorous examination as to whether it can qualify as a distinctive trade mark.

A trade mark can be any word or logo, or a combination of both. The classic example is NIKE and the swoosh logo. This started off life as a combined trade mark.  Then, over a period of time, the swoosh logo started being used by itself.  In time, and with extensive usage, it became a stand alone brand, and effectively shorthand for NIKE. So, it is essential to select what we call a "distinctive" brand which will distinguish your goods and services from those of your competitors.

It is important not to choose a name which could be used in a descriptive sense by competitors in your particular area of activity. 

For example, if you are in the apparel industry, a name like TOP OF THE RANGE could be used by your competitors in a descriptive sense, like: "Purchase from our top of the range style of fashion clothing".  You wouldn’t be able to stop such use, and in time any goodwill or equity you had built up in the brand, TOP OF THE RANGE, would have been diluted by your competitors' descriptive use of the name.

A good trade mark should be arbitrary (APPLE for computers); suggestive (BODY BALANCE for cosmetics); or fanciful (NIKE for sports shoes).
In selecting a "good" trade mark, we can then go on to the next step of carrying out clearance searches. 

From experience, it would be a good idea to come up with four or five "good" proposed names, as the next process is quite rigorous, and often only one may survive, or in some cases, none, and then its back to the drawing board to come up with another four or five names.  Your list should indicate an order of priority.

2. Clearance searches

Searching can be a complex exercise, costing a large amount of money.  If you are able to weed out some of the less distinctive marks at the outset, and provide your IP advisers with a list of "good" marks to search, the process is less costly, and certainly easier.

Whether your brand is going to be a trade mark used domestically, or as an export brand, it is first necessary to check its availablility in New Zealand.
Your IP adviser will recommend a search which covers both the Intellectual Property Office of New Zealand (IPONZ) records for any registered trade marks or pending applications, as well as certain databases which may indicate that the name chosen is in use, but may not be registered or the subject of a pending application.

Once it's been determined that one of the chosen names is neither registered nor in use by a third party, an assessment of the name's availability for use and registration will be made by your IP adviser, and communicated to you.

This assessment will give you some degree of certainty that, barring any unforeseen circumstances, the name which has been selected, searched and cleared, should have a reasonably steady progression through the registration process which follows.

3. The filing, examination and registration process

While you can rely on common law user rights to enforce your new brand name against anybody using a deceptively similar name, and passing off their products or services as those of your company, it is always preferable that you actually register the new name as a trade mark.

The rights under trade mark registration are much wider than simply relying on ‘passing off’.  It is much cheaper to register your trade mark rather than go through the costly process of obtaining an injunction for passing off.

Registration also serves as a useful deterrent to would-be infringers, as a simple search of the IPONZ register will show you are claiming proprietary rights in the name for the goods and services for which it is registered.  You also get to put the ® symbol next to your trade mark to indicate it is registered.

A trade mark registration also confers rights throughout the entire country in which it is registered.  Passing off rights, however, are territorial, so that if for example you are trading under a restaurant name in Auckland, and somebody starts up in Christchurch with the same name for a restaurant, you would struggle to succeed in a passing off action.  A trade mark registration for that name would, however, stop the Christchurch restaurant in its tracks.

The system is relatively straightforward if you've gone through the initial selection and clearance processes above.

An application for registration is examined by IPONZ.  If no objections are raised by the examiner, it will be published in an official journal.  There is a three month opposition period.  Assuming there are no objections, your trade mark will be registered within six months of filing.

4. Enforcement

Once registered, your trade mark registration remains in force for a 10 year period from the date you applied for registration.  You can renew your trade mark registration every 10 years and the renewal costs are relatively low.
It is important you use your new trade mark.  Otherwise, you run the risk of its validity being attacked for non-use.  The non-use period is three years continuous non-use.  The registration can only be attacked after it has been registered for more than three years.

Assuming your trade mark registration is in force, and is being used on the goods and services for which it is registered, you are then in a position to stop anybody else using the same or similar mark in New Zealand on the same or similar goods and services for which it is registered.

As an example of the effectiveness of a trade mark registration, in contrast to relying on common law rights to sue for passing off, there are virtually no proceedings for infringement of a registered trade mark — only passing off actions where the mark was not registered.

Your brand — your most valuable asset

So, we've taken you through the process of building a strong and enforceable trade mark registration.  All your activities under your new brand from now on will serve to build up and establish strong brand equity in that name. This, in time, will become your company's strongest and most valuable asset.

An edited version of this article was published in MXpress, July 2009.

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  John Hackett

  Partner