Tuesday, 7th February, 2012

My - what a shambles!

Registering your trade mark gives you monopoly rights beyond those you would otherwise have through just using your trade mark. But not all trade marks are registrable. 

If you want the strongest monopoly over your trade mark, you should choose one which is registrable.

To be registrable, a trade mark must communicate the origin of your product or service.  To do that from the outset, the trade mark cannot describe the product or service or be a term that others in the same industry would reasonably and legitimately wish to use with the same product or service.

Selection of a trade mark is therefore very important if registered rights are to be obtained.  It must be unusual enough that consumers would identify it with only one business.

A recent New Zealand High Court decision AMI Insurance Limited  v IAG New Zealand Limited, Vero Insurance New Zealand, Tower Insurance Limited and AA Insurance Limited  has clearly identified the effects of selecting a non-distinctive trade mark.

AMI Insurance Limited decided to adopt a series of MY- trade marks to distinguish its products from its competitors.  It then applied to register those trade marks which comprised, for the most part, purely descriptive words, preceded by the possessive adjective MY.  Examples of the trade marks applied for are:

MY INSURANCE
MY CAR INSURANCE
MY HOUSE INSURANCE
MY CONTENTS INSURANCE

In total 15 trade marks were applied for.

The Intellectual Property Office of New Zealand (IPONZ) accepted AMI's applications.  However, AMI's competitors were uncomfortable with AMI having a monopoly over such terms.  They thought the terms applied for lacked the requisite distinctiveness to communicate that the services being offered were AMI's.  They also felt the terms should remain available for them to use as well.  AMI's  competitors opposed all of AMI's pending MY- applications and applied to cancel several registrations which they had managed to get already.

AMI fought off those objections before IPONZ.

However, the Assistant Commissioner decided that the trade marks qualified for registration, stating that:

  • the average consumer will be towards "the very observant and circumspect end of the spectrum"
  • MY will call to mind the ordinary meaning of "my" as a possessive adjective, and the average consumer will perceive the use of that adjective as awkward and unusual
  • as a possessive adjective for the consumer, MY does not make sense because the consumer may not have acquired insurance from AMI, and the average consumer is unlikely to perceive insurance as a personalised product
  • while MY INSURANCE is wholly descriptive when used by a consumer who has acquired the insurance product, it is not descriptive use by a trader
  • MY adds a distinctive element to the otherwise generic phrases
  • there is no evidence that insurers use MY to describe their services.

Her reasoning centred on the finding that consumers would refer to their insurance policies as 'my insurance' but insurance providers would not refer to their own services in such a way. 

None of the evidence revealed use by a provider of the words in question.  Some of the evidence pointed to insurance companies using the words 'my insurance' as part of their frequently asked questions.  But the Assistant Commissioner found that this was not an example of other providers wanting to use the trade marks.  This was because the provider is pretending to be in the shoes of the consumer and is not making the statement as a provider of the services concerned.

Undeterred, the insurance companies took their fight to the High Court.  They won!

The High Court held that 13 of the 15 trade marks applied for by AMI Insurance Limited were unregistrable.

The Court held that adding the word MY to an otherwise descriptive or generic trade mark  does not make it distinctive. It cannot, of itself, denote the origin of a product.  Rather, something more than that is needed [to create a registrable trade mark].

Take away points

Selecting a trade mark that others in your industry would also legitimately and fairly want to use to describe same or similar products will fail to qualify for registration.

Adding MY to a descriptive or generic word does not make a distinctive trade mark.

Consideration needs to be given to the actual context of use and the realities of modern marketing techniques need to be understood.

Even if use by a competitor was descriptive, it would place an undue onus on other businesses' to carefully check for the possibility of infringing use.

Conclusion

Care needs to be exercised when selecting a trade mark.

It is well recognised that words that simply describe the good or service are not distinctive. Laudatory epithets are also not registrable in themselves. 

On the other hand, an unusual, catchy or striking allusion or skilful reference in a trade mark in which meaning is conveyed in an indirect way or with less precision is likely to qualify.

Seek expert advice early when selecting a trade mark to ensure that it acts as a badge of origin for your business.

An edited version of this article was published in Her magazine, February/March 2012 edition.