Baldwins news articles

Another 16 good reasons to talk to us

Fri, 17 May 2013 00:00:00 +1200

Baldwins set to lead the IP field with new appointments

Intellectual Property firm Baldwins has made exciting senior staffing changes to ensure continued success in New Zealand, Australia and internationally, with four new appointments and 12 promotions.

	Angela Searle, with significant experience in intellectual property law and trade marks both in New Zealand and across the Tasman, has been appointed Baldwins’ newest partner in Christchurch. Angela returns to Baldwins Christchurch office, having been part of the team from 1993-2002, after building her own successful Canterbury practice.
“Angela has significant experience as one of New Zealand’s leading IP lawyers and we are thrilled about the insight and knowledge she brings to our clients and the firm,” says Baldwins Chairperson Sue Ironside. “To have a partner of Angela’s standing demonstrates Baldwins’ commitment to Christchurch, the South Island and New Zealand’s innovative culture.” Ironside says she also expects the new appointments to considerably enhance the firm’s capabilities in a number of critical areas. “The other newly appointed staff members all contribute knowledge to the multi-disciplinary skill set we pride ourselves on possessing at Baldwins.”
	David Alizade joins the Auckland office as head of Commercial. David has worked extensively in New Zealand and Great Britain, consulting for Overture and Yahoo! Europe. He has also spent two years as MD of a retail marketing company.
	Alongside David at the Auckland office, Geoff Chisholm has been appointed Senior Associate. Geoff specialises in telecommunications, electronics and computer-related inventions and has held several senior positions in the UK.
	Andy Locke has also taken a role as Senior Associate. Andy is originally from the UK, and has involved himself with many overseas patent matters. He will strengthen the electronics and engineering team at Baldwins’ Wellington office.
“The number of internal promotions we have also been able to make to fulfil available roles recognises that we have some of the best staff we could hope for,” Sue Ironside adds. “The appointment of Angela, David, Geoff and Andy only increases Baldwins existing outstanding capabilities. “I would also like to congratulate our new Senior Associates on their promotions. Developing the gifted people at Baldwins is essential to the evolution of the firm. It exhibits our commitment to grow the firm and promote from within,” says Sue Ironside.
	Fiona Pringle joined Baldwins in June 2005, was appointed team leader in January 2013 and works primarily in the area of biotechnology patents. After gaining her PhD in 2000, she spent three years as a postdoctoral research fellow at the University of Alabama-Birmingham. Upon returning to New Zealand she worked as a science policy analyst in the area of biotechnology for the Ministry of Agriculture and Forestry. Fiona’s PhD research focussed on an RNA virus from the family Tetraviridae. Her work involved cloning and sequencing the tetravirus (which infects insects and is used as a biocontrol agent in some developing countries), and demonstrating its unique assembly strategy using a baculovirus expression system. During her postdoctoral research Fiona characterised the first tetravirus capable of replicating in tissue culture.
	Rachel McDonald is a Senior Associate specialising in Trade Marks in Baldwins' Auckland Office. Rachel started with Baldwins in April 1998 were she was appointed to assist one of the trade mark teams. In November 2000 she joined the professional staff as a trade mark executive and is currently studying towards a Certificate in Business Studies. Rachel's experience is in trade mark searching, filing and prosecution in New Zealand and internationally. She also assists clients in maintaining international watching briefs to provide clients with a market advantage of ensuring security to their trade mark rights.
	Sophie Thoreau joined Baldwins in May 2003 having a background in intellectual property. She is qualified in law, and in the arts majoring in psychology and linguistics. She uses these skills in her daily work. Sophie is admitted as a Barrister and Solicitor in 2003 and was appointed as a Senior Associate in 2013. Sophie specialises in the application of Intellectual Property in commerce, particularly in contentious trade mark and branding related matters in New Zealand and internationally. She has been involved in a number of complex cases, developing new and emerging concepts of case law for regional and multinational clients of the firm. As a recognised contributor to learned and professional publications, Sophie is well engaged in and represents Baldwins in Intellectual Property professional peer groupings and advisories.
	Duncan Schaut joined Baldwins in November 2009 and has been promoted to Senior Associate in the mechanical and manufacturing team in our Auckland office. He specialises in patents, registered designs and copyright particularly for mechanical and manufacturing inventions. Duncan’s industry experience comprises a range of technologies and their commercialisation namely aeronautical, building, cleantech, greentech, infrastructure, manufacturing, marine, medical devices, mining and mineral, packaging, recreational, sustainability, and transport. Duncan has worked as an intellectual property specialist since 2000 both in leading IP firms and as in-house IP counsel. This combination of experience brings a unique perspective and understanding of clients’ needs.
	Brigette Shone is a barrister and solicitor, is currently studying towards becoming a registered patent attorney, and was appointed as a Senior Associate in 2013. Prior to joining Baldwins in January 2012, Brigette practised general litigation for five years at a major New Zealand commercial law firm. Brigette specialises in all areas of intellectual property litigation and advice including trade marks, passing off, Fair Trading Act, border protection, domain name, patent, design and copyright disputes. Brigette also advises clients on commercial issues related to intellectual property, including contractual matters. Brigette has represented clients in hearings on a wide range of matters in the Intellectual Property Office of New Zealand, District Court, High Court and Court of Appeal. From her commercial law background, Brigette also has experience in alternative dispute resolution, including arbitration and mediation.
	Natalie Harre (nee Larnder) joined Baldwins in July 2012 as an Associate in the litigation team in the Auckland office and was appointed as a Senior Associate in 2013. Prior to joining Baldwins, Natalie practised in general commercial litigation and intellectual property at a top tier commercial law firm in Auckland. Natalie's previous intellectual property experience includes trade mark portfolio management, filing and prosecution of trade mark applications, contentious IP matters, border protection, domain names, passing off, Fair Trading Act and copyright issues.
Six staff have been promoted to Associate effective immediately. "It’s a pleasure to recognise this group for their continued hard work and dedication to our clients and their needs,” says Sue Ironside.
	Tim Stirrup is a Registered Patent Attorney in New Zealand and Australia and joined the Auckland office of Baldwins in November 2008. He works primarily in the field of chemistry and biotechnology patents and has previous experience as a Research Scientist working in the UK and New Zealand. Tim also headed up a commercial initiative at the University of Southampton to provide Environmental and Ecological consultancy services from the University to regional clients.
	Katherine Bowker joined Baldwins as a Solicitor in February 2010 and was appointed as an Associate in 2013. Katherine is able to advice on all aspects of trade mark and related Intellectual Property law. She has international trade mark experience, having joined Baldwins after working at a major international law firm in London and also has previous experience as a Senior Trade Mark Examiner at the Intellectual Property Office of New Zealand.
	Piers Thoreau has specialised in trade marks practice since 2001, and brings industry experience in intellectual property with SMEs and multinational corporations in New Zealand, as well as European experience with a major multinational FMCG beverages company and a UK firm of patent attorneys. Specialising in all aspects of strategic trade mark matters, Piers has particular interest in freedom to market, new trade mark application, prosecution, opposition and trade mark filing, together with management and development of Intellectual Property portfolios.
	Rachael Koelmeyer joined the Auckland office in 1999 to assist the trade mark department and was appointed as an Associate in 2013. While studying for her MA, Rachael worked with a legal database company with a particular emphasis on legal case law in New Zealand. Since joining Baldwins, Rachael has had considerable experience advising on the protection of trade marks for clients in the retail, building, clothing, wine areas. Rachael is also experienced in working with clients to form branding strategies and in active enforcement of their rights under the Trade Marks, Copyright, and Fair Trading Acts.
	Anna Bargh joined Baldwins in July 2007 as a solicitor and trade mark executive and was appointed as an Associate in 2013. Following completion of a BA (History) and LLB at the University of Otago in 2001, Anna worked as a trade marks advisor at the Intellectual Property Office of New Zealand. Anna then moved to London where she spent 18 months gaining work experience with law firms while taking some time to travel before returning to New Zealand and joining Baldwins.
	Maria Sun joined Baldwins as a summer clerk in December 2008 and is now a solicitor in the Wellington Office. Maria was appointed as an Associate in 2013. Prior to this, Maria worked as a law tutor at the Otago School of Medicine and as a legal intern at the Mental Health Commission. Maria specialises in the protection and prosecution of trade marks. In addition Maria provides advice on trade mark availability and clearance searches, passing off and the Fair Trading Act.

Software and the New Zealand Patents Bill

Wed, 15 May 2013 00:00:00 +1200

In response to concerns from local ICT industry sources that the currently worded Patents Bill would have allowed software to be patentable and hindered innovation, a new supplementary protection order (SOP) has been issued here. The Patents Bill uses the old English law concept of an invention being a new manner of manufacture, and provides for limited exclusions to patentability including in certain biological fields. However the newly proposed clause 10A specifically excludes computer programs from the definition of an invention, but retains the “as such” wording familiar from European jurisprudence. In particular an invention is excluded only to the extent that a claim relates to a computer program as such. While this had been present in the previous version, the latest draft of the legislation newly clarifies that a claim relates to “a computer program as such” if the actual contribution made by the alleged invention lies solely in it being a computer program. The actual contribution is considered by looking at the substance of the claim and considering what problems are addressed or what benefits result. Two examples are provided which pass and fail the new test – a washing machine controlled by a computer program implementing a new washing cycle and computerisation of a known business method.

Whilst the draft exclusion is superficially similar to the test devised in the UK’s Court of Appeal decision in Aerotel v Telco and Macrossan’s application, there is in fact no mention of a technical requirement in the Bill (and the only relevant exclusion is a computer program). However even if the NZ Courts do eventually interpret the exclusion in a manner similar to the UK Courts, given that the UK Courts have allowed patents for a computer programmed to operate more efficiently (Symbian) and most recently an improved method of handling multitouch events on a Smartphone type device (Apple), it may be that this clause will not have such a significant impact.

There will be uncertainty around these issues and whether the UK approach is to be adopted until clarified by the NZ Courts. However, since the difference in wording from that used in the UK was intended to broaden the exclusion compared to that in the UK in response to arguments that the “as such” wording on its own allows for the exclusion to be easily avoided, it may well be that some software inventions which are currently allowed will become unpatentable.

Furthermore, in the absence of any technical requirement, there is also a question around whether novel business methods may be patentable, these not being specifically excluded. It remains to be seen whether the NZ Courts will take a hard line on this.

It is however hoped that this SOP will enable progress on enacting the Patents Bill into New Zealand law.

A response that is unlikely to be accepted

Mon, 13 May 2013 00:00:00 +1200

This article was written by John Foulkes john.foulkes@baldwins.com.

An American patent attorney has discovered the dangers of unprofessional conduct. Not only is it a disservice to your client or your relationship with the Intellectual Property office, but, in America, submissions to the Patent Office become publically available. Dennis Crouch, on his informative blog at www.patentlyo.com, published a response, which was publicly available on the USPTO website but later removed, presumably because it lacked decorum and courtesy (MPEP 1.3). The response, which included the italicised comments of this article, is angry, unprofessional and offensive. Complaining about the examiner personally and attacking the Patent office does not help the arguments made or to create a more effective claim, nor does it uphold the professional code of conduct required from US Patent attorney, or a member of The New Zealand Institute of Patent Attorneys (NZIPA).

“…what would it take for a patent application to be approved? Do we have to write patent applications in crayon? Does a patent application have to come with some sort of pop-up book?”

Responding to examination reports is not always straightforward, nor are claims that effectively distinguish an invention from prior art always easy to draft. Often disagreement arises between the Examiner and attorney on the interpretation of a term, or claim, causing exasperation. However, it is important that the Examiner and attorney acknowledge that each is trying to do their best in their role, and to maintain professionalism at all times.

“If you can't motivate yourself to take your job seriously, then you need to quit and let someone else take over what that [sic] actually wants to do the job right. “

The NZIPA Code of Conduct (available on www.nzipa.org.nz) includes requirements that patent attorneys provide confidentiality and candour with their clients, and courtesy and professional conduct to the profession. Breaches of the Code can be referred to the NZIPA Ethics Committee which may admonish reprimand, suspend or expel members for breaches. Under section 102 of the Patents act either the Commissioner or the NZIPA may apply to the court to remove or suspend a patent attorney for dishonesty, professional misconduct, grave impropriety or infamous conduct. Similarly, in the United States any person, agent or attorney practicing patent law may, after notice and the opportunity for a hearing, be disciplined by the Director of the USPTO if they are shown to be “incompetent or disreputable, or guilty of gross misconduct…”.

“Clearly, the combination of references would render the final product to be inoperable for its intended use.”

The Ministry of Business, Innovation and Employment (MBIE) has signed a bilateral agreement with IP Australia to implement a trans-Tasman patent attorney regime (TTPA). This will, once implemented in legislation, create a trans-Tasman IP disciplinary Tribunal to oversee the profession. Sanctions for misconduct will include reprimand, suspension or cancellation of registration. The Australian administrative appeals tribunal (AAT) may review any decision which can then be appealed to Australian Federal Court on questions of law. This is likely to see a similar standard of professional duty for patent attorneys in both NZ and Australia.

“Have you even read the patent application? I'm curious.”

Patent jurisdictions around the world value and protect balanced and professional conduct of all parties involved in patent applications. A Patent attorney must remember that his/her duty is to his/her client and that nothing is gained by sending angry rhetoric to the Intellectual property office. It is especially important to remember this when the submitted documents form part of the public record.

Georgie Pie: a brand that forever lives on in the hearts of its fans, and on the trade marks register

Fri, 10 May 2013 00:00:00 +1200

New Zealanders are a nation of pie lovers, so it is no surprise that Georgie Pie evokes nostalgic feelings of simpler times and $1 pies. At its peak, Georgie Pie was selling more than 700,000 pies a week. Then, in 1996 McDonald’s bought the chain from Progressive Enterprises, and three years later, the Georgie Pie chain closed its doors.

Since then, fans have lamented its loss with campaigns similar to “Bring Back Buck”[1] being launched. The "Bring Back Georgie Pie" Facebook page currently has more than 54,000 members. But while Georgie Pie may have abruptly closed its doors in 1999, the trade mark and intellectual property rights in the name live on.

In 2009, a "Bring Back Georgie Pie" campaigner was selling badges and t-shirts emblazoned with a Georgie Pie logo that had been modified to read “BRING BACK GEORGIE PIE”. After his campaign was publicised, he received a letter from McDonald’s lawyer highlighting McDonald’s trade mark rights and copyright in the brand, and requesting that the sale of the merchandise cease.

How can this be, when Georgie Pie closed 14 years ago? The answer is that a registered trade mark has the ability to live on in perpetuity, subject to renewal and continued use by its owner.

New Zealand legislation promotes the weeding out of unused, shelved brands, and the Trade Marks Act 2002 removed the ability to apply for a defensive trade mark (one that an owner could rely on, unused, to prevent others from applying for or using a similar trade marks). Now, if a trade mark has not been used, it can be removed from the register. Under section 66(1)(a) of the Trade Marks Act 2002, a registered trade mark may be revoked if a continuous period of three or more years has elapsed during which the mark was not put to genuine use in the course of trade in New Zealand.

Section 66(1A) introduced by the Trade Marks Amendment Act 2011 clarifies a “continuous period” as meaning a period that commences from a date after the actual date of registration and continues uninterrupted up to the date one month before the application for revocation. In other words, intermittent use of a trade mark from the date it was registered, and before the expiry of three years, can save it from revocation for non-use.

McDonald’s announcement on 9 May 2013 that the Georgie Pie would return in limited locations will preserve the trade mark rights in the brand and protect the mark from removal for non use for the next few years.. From June, the Georgie Pie trade mark will be used in trade on the Steak Mince ‘N’ Cheese pie, and will be available at two Auckland McDonald’s stores. At a later date this year, it will be available at four Waikato McDonald’s stores.

Similar limited use occurred in 2008 when a temporary Georgie Pie restaurant at a Christchurch bakery was established for one-day-only with fans flying from Manukau and driving from Invercargill to get their fix.

Is McDonald’s testing the market before a full scale revival of Georgie Pie? Is it researching the theory that “absence makes the heart grow fonder”? Or is it simply preserving its trade mark rights every three years?

Let us know your thoughts on Twitter.

[1] Wayne Thomas "Buck" Shelford is a New Zealand former rugby union footballer who captained the New Zealand All Blacks in the late 1980s. Following a slump in form Buck was dropped from the All Blacks in 1990. The general public were unhappy with this decision, especially when the All Blacks lost their first test in 17 matches, which also ended a 49 game winning streak. Fans started appearing at games with signs saying "Bring Back Buck", which continues today even at unrelated sporting events throughout the world.

MAGS Robotics make it to Kiwi challenge regional championships

Mon, 06 May 2013 00:00:00 +1200

Baldwins is proud to sponsor the Mount Albert Grammar School (MAGS) Robotics team for 2013.

After a successful National Championship round their team has moved into the new season with two new Junior teams competing in the New Zealand Kiwi Challenge mini series.

The Junior teams had their first event last weekend, and both robots, which are completely designed and built by their new students, worked well and one of the teams made it into the semi finals.

MAGS Robotics are looking forward to the Kiwi challenge regional championships, which are on in two weeks, and to the global season which starts as soon as the Kiwi Challenge ends.

The new game has been released and the senior team is starting to design and build thier new robot for this season.

Baldwins' sponsorship has made it possible for MAGS Robotics to run robots at the same time as designing new ones, which gives them a head start to this year's season.

MAGS robot in a game at the Nationals (robot at top right)

A double bogey for descriptive domain names

Tue, 30 Apr 2013 00:00:00 +1200

Last month we wrote about the need for businesses to adopt distinctive, non-descriptive trading names to adequately protect themselves against others. The NZ Tax Refunds case showed us that, short of demonstrating that a descriptive trading name has acquired distinctiveness and that a competitor is deliberately seeking to free ride on another’s goodwill and reputation, competitors are largely free to adopt virtually identical trading names.

The decision of the Dispute Resolution Service (DRS) in Wellington Golf Centre Limited v Ricky Faesen Kloet (DRS No. 846) reinforces this view. The complainant, trading in Wellington as Wellington Golf Centre, registered the domain name www.wellingtongolfcentre.co.nz in December 2010. The respondent, trading throughout New Zealand (including in Wellington) as Golf Warehouse, registered the domain name www.wellingtongolfcenter.co.nz in April 2011.

Given use of the domain name for over two years, DRS found that the complainant did have rights in www.wellingtongolfcentre.co.nz, but that the name was wholly descriptive of the goods and services provided. This meant the complainant was required to establish some acquired distinctiveness or secondary meaning for its domain name to prevent others using it. Unfortunately for the complainant, its evidence of reputation and distinctiveness was inadequate – no evidence of sales, advertising, or other use beyond use of the website was provided. The respondent was therefore allowed to retain the virtually identical www.wellingtongolfcenter.co.nz.

Taking a cynical view, one could question why Golf Warehouse wanted to register a domain name relating solely to Wellington, with American spelling, and which did not reflect its own trading name. Surely Golf Warehouse was aware of its competitor and its competitor’s domain name. Given the lack of evidence of distinctiveness and reputation in the www.wellingtongolfcentre.co.nz name, however, these matters did not require consideration by the DRS. With evidence like that provided in the Tax Refunds case, the result may possibly have been different.

As with the NZ Tax Refunds case, the moral of the story is to choose a trading name that is distinctive. We also recommend registering your trade marks to provide an additional avenue of redress should a competitor adopt a confusingly similar trading name or brand.

We can patent jeans – so what about genes?

Fri, 26 Apr 2013 00:00:00 +1200

Our genes determine how we look, how our bodies work, and we now know that they also play a major role in our susceptibility to disease. Consequently, there has been a huge increase in genetic research to find ways to battle disease more effectively.

Now the spotlight is on the patents covering the outcomes of this research – but what is a gene patent, and why do they appear controversial?

Since the 1970s, researchers have been able to artificially add new genetic information into genes to create modified genes though genetic engineering. These modified genes formed the basis of advancements such as the production of human insulin to treat diabetes, and pest resistant and drought resistant crops. Most of these new technologies, and the modified genes involved in them, are protected by patents.

More recently, research has focused on what information can be obtained from genes, and what it tells us about a person’s susceptibility to disease. Researchers can now isolate a single gene and use its genetic information to determine the likelihood of an individual developing a particular disease. As opposed to modified genes, these isolated genes contain the same information as genes that are found in ordinary cells; the only difference is that they have been separated from all of the other genes and DNA sequences.

The fact that this research is also often covered by patents has led to controversy in some countries, notably Australia and the United States. Recently, the issue has been highlighted by a case between Myriad Genetics and the Association for Molecular Pathology, which is currently before the US Supreme Court. The case considers the legality of a patent covering two isolated genes which, when decoded, can be used to determine the likelihood of an individual developing breast cancer or ovarian cancer.

Opposition arguments to the patent for isolated genes include that they restrict a person’s ability to know more about their genetic predispositions. Another argument is that the isolated genes protected by patents are no different to genes inside an ordinary human cell, and so are not “inventions” that should be able to be patented in this way.

Those in favour of gene patents say these new techniques provide a powerful tool in diagnosis and enable a more personalised approach to medical treatment, and that patents are necessary to recoup the costs of the development of the screening techniques and promote further innovation in this field.

A decision for this case is expected around June this year.

You’re such a happy chappy, just like a budgie in a nappy!

Fri, 26 Apr 2013 00:00:00 +1200

You’ve probably heard the saying “It’s a crazy old world out there!”

Since it’s World IP day on 26 April 2013, we thought we’d acknowledge the day by honouring our favourite patented invention craziness from around the world, well, from the United States at least.

This is an actual patented invention - not all inventions are of a geeky technical nature by boffins. Some are just completely crazy weird, and we’re not making this one up.

So, if you have ever wondered how to let your pet bird have some exercise flying around your living room without having excrement on your head or furniture, or wished to take your bird out for a “fly” while you go for that evening run around the block but can’t, because, well, birds fly away: how do you put a bird on a leash? We have the answer for you right here, in the form of this nappy for birds.

The “Bird diaper” is protected by United States Patent 5,934,226 and is currently in its 12th year of patent protection.

This invention may may leave some people wondering how on earth would it be possible to patent protect a nappy for birds. Provided that the inventor can show and prove that the invention is novel (new), is not obvious (inventive), and has a utility (a use), a patent can be granted, and this invention has been deemed to meet those requirements. Well, a nappy for birds is certainly novel and inventive.

As the title of the invention suggests, the invention is relates to a “wearable pet appliance”. The nappy is made from lightweight stretchable absorbent materials: namely Lycra® (to allow leak absorption and easy cleaning), and Velcro® to fasten it all together, leaving openings for the bird’s tail-feathers and wings. The nappy is made from 3 parts, the front piece which covers the breast of the bird and has an elongated bottom part, the two other pieces connect the back and sides with Velcro (to form the dropping pouch), and the elasticated straps pull the nappy closer to the bird for that snug fit.

The nappy also provides further features: it can be moistened in the summer to cool the bird, and used as an insulator in winter to keep him warm (just in case the evolution of feathers isn’t enough); and let’s not forget the attachment for the leash to take your bird with you on your evening run around the block.

Innovation, piracy and change in digital media

Fri, 26 Apr 2013 00:00:00 +1200

In the late 1990s, several technological advancements changed the face of digital media forever. At the forefront of these was the advent of MP3: a means of compression for high-quality music. Still using this technology, consumers are able to store and share entire digital libraries at a fraction of the time, and using a fraction of the storage space, previously required. The WALKMAN became history in the face of the iPod.

In 1999, the concept of file sharing became hugely popular with the release of Napster, a software program allowing users around the world to share their entire MP3 libraries with each other for free. At its peak, Napster had 26.4 million users. Unsurprisingly, Napster and its creators were ultimately sued, resulting in the system being shut down in 2001. In its place sprung up hundreds of free P2P software programs – today’s equivalent being BitTorrent, with an estimated 150 million active users at any given moment.

In recent years, we’ve also seen the rise and fall of MegaUpload, now reincarnated as Mega.co.nz, the rise, fall and resurrection of The Pirate Bay, and an increased use of illicit streaming websites, particularly for TV series.

But it’s not all bad news for copyright owners, with iTunes recently surpassing 40 billion unique downloads (with nearly 20 billion in 2012 alone), Netflix and Quickflix providing legitimate alternatives to DVD rental, and various online streaming services such as Spotify drawing in a substantial number of global subscribers. The digitisation of media has extended to books, with eBooks now comprising a considerable portion of publishers’ markets, and the Kindle eReader selling at rates exceeding 1 million units per week in 2012’s Christmas period.

The face of our media is changing; are you changing with it?

IP issues for the next generation

Fri, 26 Apr 2013 00:00:00 +1200

Intellectual Property refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce.[1] This Friday 26^th April 2013 we celebrate World Intellectual Property day and reflect on what the future creative landscape of Aotearoa will look like. What will be the big IP issues of the future?

Indigenous Intellectual Property rights

Arguably the current Intellectual Property laws in New Zealand are not adequate to protect Maori Intellectual and Cultural property, referred to as Traditional Knowledge. What is the best way to preserve, protect and fairly make use of traditional knowledge held by Maori? For example, if an indigenous culture has practiced traditional medicine using a particular plant for thousands of years, should a third party be able to obtain a patent for that plant for use as a weight loss product?

Internet file sharing and service provider liability

The way in which we consume art, literature, film and music has changed drastically in recent years. Arguably the artistic industry has lagged behind in adapting to these changes and this has led to the existence of such file sharing websites as Megaupload Limited. The law dealing with users who infringe Intellectual Property rights and the liability of service providers who provide the means of doing so is evolving and controversial.

Human Rights issues

Conflict can occur between IP rights and human rights. The Universal Declaration of Human Rights recognises a series of economic and social rights, such as the right to share in the benefits of scientific achievement. How is this right impacted by the patenting of a human gene? If someone discovers a gene that is linked to increased risk of breast cancer, should they be granted a patent to this gene? How do we balance the rights of others with the need to encourage investment in research and development?

International Trade Agreements

Trade Agreements often contain significant provisions regarding Intellectual Property laws. Negotiations for trade agreements are confidential and are not revealed publically, which means that the law changes are not subject to public scrutiny until after the agreements have been signed. A recent example is the Trans Pacific Partnership (TPP) multilateral free trade agreement, which includes provisions relevant to IP.

[1] World Intellectual Property Organisation “What is Intellectual Property?”

Endless pursuit for the smartest smartphone

Fri, 26 Apr 2013 00:00:00 +1200

The modern-day smartphone is a far cry from Alexander Bell’s first patented telephone in 1876. Although the primary goal remains the same, phones in 2013 represent much more than being able to talk to someone from a distance.

In the 1980s, Motorola introduced the first cellular phones to the public, costing as much as US$4,000, and weighing almost a kilogram. More than a decade later, IBM released the “Simon Personal Communicator”, the first cellular device that could make and receive phone calls, faxes, emails, and data pages to its touch screen display – for all intents, the world’s first “smartphone”, although the term was only coined in 1997 by Ericsson.

However, from 1996, it was Nokia that went on to lead the smartphone market – until 2011, when Samsung overtook Nokia in smartphone shipments and Apple overtook Nokia in revenue and profit.

In 2007, Apple revolutionised smartphones with the iPhone, the first mobile phone to successfully incorporate multi-touch interface. Its (then) large touchscreen with finger-input functionality and its notoriously easy-to-use iOS made it an instant hit.

2010 saw the upsurge of Google’s Android OS, thanks to the large number of developers using it – including Nokia, Samsung, Sony, HTC and LG. By 2011, Android had grown to hold a 50% market share, and by 2012, almost 70%. Apple comes in a distant second, BlackBerry third, and Microsoft fourth.

Smartphones now account for over 50% of mobile devices in many countries. It’s an ever-growing competitive space, and no wonder that the number of patents, lawsuits and fair trade complaints have increased dramatically. In 2009, there were three major smartphone patent battles. Between 2011 and 2012, there were over a hundred. Market leaders Apple and Samsung waged all-out war. Quote of 2012 goes to Judge Birss (UK) for holding that Samsung did not infringe Apple’s design, in part because its products were “not as cool”. Most recently, Samsung Taiwan was accused of paying consumers to post negative website reviews about its competitors’ products.

What’s too big, too small, not fast enough, not ‘cool’ enough – it’s hard to pin down a trend. Over the past few months, Apple, Samsung and Microsoft have all announced their development of smartphone watches, opposing the trend of increasing screen sizes (the largest measuring a massive 6.3 inches). Google is also testing “Google Glass”, a smartphone and camera device built into glasses frames. Price, it seems, is low on the list of concerns.

With such freedom and financial incentive to innovate, who knows what this year’s smartest smartphone will look like?

Inventions that are just...well...cool

Fri, 26 Apr 2013 00:00:00 +1200

Time Magazine’s article detailing the list of cool inventions for 2012 quite rightly points out that we appear to live in an age where the ‘perfector’ is king. These are the people that have the necessary consumer focus and drive to take the raw idea of a mouse trap and turn it into a mouse trap that people want enough that they would queue overnight to pick up the latest version. Taking nothing away from people like Steve Jobs, who was very good at what he did, every so often I think we have to remind ourselves that in milieu of consumer gadgetry and innovative products that surround us, there was the man, women or group that came up with the core innovation in the first place.

So in no particular order, here is my top 5 from the Time Magazine Top 50 Inventions of 2012. From the simply cool to the innovations that have the potential to significantly impact on our daily lives; this is my salute to raw ideas and the people that worked to come up with them.

The Virus Killer

A cure for the common cold? An antiviral called Double-Stranded RNA Activated Caspase Oligomerizer (DRACO) in development by MIT has both a hefty name and a potentially hefty impact on medicine. DRACO triggers early cell death in virus infected cells which in turn shuts down the spread of the virus. If it fulfills its potential, DRACO could have as big an impact on medicine as the development of antibiotics.

Liquiglide

And in another nod to MIT, five students and their professor have come up with a way to make a super slippery surface for liquids and viscous gels. The plant-based product adds a microscopic slippery coating to almost any material—glass, ceramic, metal or plastic. Be it a non-stick tomato sauce bottle or a medical tube that will not get blocked, this is a breakthrough technology that will creep into our daily lives before we know it. Have a look here.

Enable Talk Gloves

Four Ukrainian students have created gloves that allow speech- and hearing-impaired people to communicate with those who do not understand sign language. The gloves are equipped with sensors that recognize sign language and translate it into text on a smart phone, which then converts the text to spoken words. I think that any idea that enables more people to understand each other deserves a mention

A Dress made of Milk?

Simply because clothes must be my second love after gadgets, this one deserves a mention. Anke Domaske creates clothes using a material made from sour milk. Well actually QMilch is a textile fibre made of casein concentrate that is extracted from the sour milk and spun into a yarn. While textiles from milk proteins are not new, QMilch is the most successful and ecologically friendly attempt to date.

At Home 3D Printing

Confession time. This is not on the Times 2012 list and it is more of an ongoing perfection of an existing technology. However, I have included it as at home 3D printers have the potential to fundamentally shake up manufacturing and retails sectors around the world. Break a cup? Instead of going and buying a replacement this technology will eventually let you print the replacement at home. At this stage the technology is more hype than reality as for anything more than simple plastic objects you almost need an engineering degree and CAD experience to run the printers. However, 3D printers will invariably become simpler and less expensive to use. So watch this space in say four to five years.

ISP liability for copyright infringement: Are dodgy subscribers worth the risk?

Fri, 12 Apr 2013 00:00:00 +1200

Internet Service Providers (ISPs) play a major role in our everyday lives. As gatekeepers to the internet, they provide us with the means to collect and publish information, and the means to communicate with the world. In this sense, ISPs offer a broad service that involves publishing, broadcasting and communications.

But what happens when the user of an ISP service acts illegally? For instance, what if the user publishes defamatory material, incites criminal activity, or breaches someone else’s copyright? In these circumstances, can the ISP be held responsible for the user’s actions?

We can draw several analogies, such as comparing the ISP to a newspaper that has published the writer’s specific material, a broadcasting company that has allowed its subscriber to sell a specific product, or a telephone company that simply provides the physical means of communication. Unfortunately, each of these analogies can result in a different answer. So, how do we decide if or when the ISP is liable for its users’ actions?

“Safe harbour” provisions

Many countries have provided ISPs with “safe harbour” provisions in legislation. For example, in the US and Europe, the Digital Millennium Copyright Act (DMCA) and the European E-Commerce Directive respectively strive for a balance between a growing digital economy and the protection of intellectual property rights. The DMCA shields ISPs from copyright infringement liability, but only when the ISPs:

Do not have actual knowledge of the copyright infringement;
Have not financially benefited from the copyright infringement;
Comply with “takedown” standards for removing copyright material from its servers; and
Establish a system for dealing with copyright infringement complaints.

The provisions of the DMCA were always intended to apply to traditional “access” ISPs, being those who connect their clients to the internet. However, with a rapidly changing technology landscape, the Courts have also been asked to apply the provisions to various newer kinds of online intermediaries, such as “hosting” ISPs (those offering data hosting servers) or “transit” ISPs (those selling bandwidth).

Most recently, on 14 March 2013, the US Ninth Circuit Court of Appeals held that Veoh, a file sharing website similar to YouTube, was not liable for the copyright infringement of its users.[1] Users of the website can upload videos, which are hosted in a particular format on Veoh’s servers and made available on its website. Unfortunately, many users uploaded copyright music videos belonging to Universal Music Group (UMG) and other record labels. Veoh profits from its service by selling advertising.

The Court found that Veoh did not have a “substantial influence” over its users or a high level of control over its users’ activity; nor did it have a precise knowledge of the type of copyright infringement taking place. When Veoh was provided with knowledge of copyright infringement (such as when it received takedown notices from copyright owners), it had complied with the DMCA requirements by removing copyright materials. The decision follows a more stringent decision released in 2012 involving video giant YouTube.[2]

Similar questions will also be considered in the much-anticipated MegaUpload case, now due to be heard in New Zealand in August 2013. The issues for determination include allegations of of copyright infringement and conspiring to commit copyright infringement..

The New Zealand Copyright Act was amended in 2011 to provide narrow safe harbour protections for access ISPs, termed “Internet Protocol Address Providers” (IPAPs). IPAPs are shielded from vicarious copyright infringement liability if they comply with their obligations to assist copyright owners under a graduated response scheme. We have discussed this regime, including the role of IPAPs, in greater detail in previous articles.[3]

However, what remains to be seen is what might happen to an IPAP that fails to comply with its obligations, or whether other ISPs that do not fall within the “IPAP” definition (for example, Kim Dotcom’s MegaUpload) may be found liable for their users’ actions.

Blocking orders

Rather than seeking large monetary awards from ISPs, the British Phonographic Industry (BPI) has taken a more reserved approach than UMG. The BPI has led nine major record labels in two recent cases against UK ISPs, requesting that access to certain websites be permanently blocked.

In April 2012, the High Court of England and Wales ordered major UK ISPs to block access to The Pirate Bay, the most notorious of all torrent websites. In reaching his decision, Justice Arnold stated that the owners of The Pirate Bay went beyond enabling copyright infringement: they blatantly encouraged it. The downfall of the ISPs was in their knowing that so many users accessed The Pirate Bay each month. The ISPs had been provided with specific visitor statistics and had received complaints from various copyright owners long before BPI filed proceedings. The decision also followed the precedent of the ‘Newzbin’ case of October 2011, where ISPs were ordered to block access to all Newzbin2 services.

On 28 February 2013, the same High Court made a similar order for ISPs to block three more torrent websites: KickassTorrents, H33T, and Fenopy. KickassTorrents was among the 50 most visited sites for UK internet users and has an estimated annual advertising revenue of between US$12million and US$22million. While the effectiveness of website blocking has been questioned given the ease by which one can circumvent such blocks, the High Court orders must surely be having some impact on the file sharing landscape.

This line of UK decisions can be contrasted with the position in Australia, where the third biggest ISP, iiNet, successfully defended claims that it had authorised or enabled copyright infringement by allowing users to download copyrighted material. There, it was held that the extent of an ISP’s power is “limited to an indirect power to determine its contractual relationship with its customers” and does not extend to taking positive steps to ensure that its customers are not infringing copyright.

Nonetheless, service providers worldwide should be wary, and at the very least, should comply with any local regulations requiring positive steps to monitor or restrain their users. They should be particularly careful when they know or ought to know that their users are infringing copyright. The courts of a number of jurisdictions have been disapproving of service providers that are satisfied in earning subscriptions fees without taking any responsibility for the significant public service they provide.

[1] UMG Recordings v Shelter Capital Partners (9th Circuit, 14 March 2013).

[2] Viacom International, Inc. v YouTube, Inc., 676 F.3d 19 (2nd Circuit, 2012).

[3] See: http://baldwins.com/new-zealand-file-sharing-legislation-passed/ and http://baldwins.com/first-alleged-pirate-walks-the-plank-lands-in-shallow-water/

An intro to your IP rights in China!

Fri, 12 Apr 2013 00:00:00 +1200

Clients have previously asked whether it is worth protecting their Intellectual Property Rights (IPR) in China given its reputation and perceived lack of regard for Intellectual Property Laws.

The short answer is Yes-definitely consider protecting your IPR in China.

Since joining the WTO in 2001, China has improved its Intellectual Property Laws to comply with the WTO and Trade Related Aspects of Intellectual Property Rights (TRIPS). China is also signatory to International Intellectual Property Agreements such as World Intellectual Property Office (WIPO), Patent Cooperation Treaty, Madrid Protocol, and the Berne and Paris Conventions. China is therefore bound by these agreements regarding the protection of Intellectual Property Rights.

However, China has emerged as not only a major global manufacturer in recent years but also as an innovator and trading partner. It is this innovation that is increasing the interest of Chinese businesses in protecting their own IPR. This in turn, has helped facilitate improvements to China’s Intellectual Property Laws. This emergence as a global trading partner is one reason as to why it would definitely be prudent to consider China in your Intellectual Property portfolio.

What IP Rights are available?

China provides IP protection for Patents (Patents, utility models and designs) through the State Intellectual Property Office (SIPO); Trade marks, through China Trade Mark Office (CTMO); and although copyright does not need to be registered, it can be voluntary registered with the National Copyright Administration (NCA). Any foreign person wishing to protect their IPR in China must file their application through a Chinese attorney; however, the application can be prepared by either Chinese or overseas attorneys.

Patents: China also follows a first-to-file patent system, and will grant a monopoly for a period of 20 years to a patent holder, providing the owner the exclusive right to make, use, vend or licence the granted patent. Patents in China are subject to similar examination procedures as those in EP and the US. However, the opposition period to the grant of a patent was abolished in 2001, consequently a request for invalidation of a patent can be filed at any time.

Trade marks: China’s trademark system requires no evidence of use or ownership to be submitted. This leaves popular foreign marks vulnerable to registration by third parties. However, the China Trade mark Office has in the past, cancelled Marks that were unfairly registered by local agents or customers of overseas companies. Therefore, it is recommended that all Marks are formally protected and registered at the China Trade Mark Office before introducing branded products.

Copyright: Copyright works do not need to be registered in China; however, there is the option to voluntarily register copyright with the National Copyright Administration. This is beneficial should enforcement action be required.

What happens in the case of infringement?

China has two routes to deal with IP enforcement. The first, and most established route, is through the administrative enforcement procedure. This is where a complaint is filed at the local administrative IP Office by the IPR owner. The second route is via the judicial route, where legal proceedings are initiated in the court system. It is worth noting that China has specialist IP Panels in its civil courts throughout the country to deal with disputes. A large number of IPR owners elect for the administrative enforcement channel as it is often faster and more cost effective than through the court system; however, the penalty for infringement is limited to a fine for the infringer, which goes back to the State. While this system does not result in a payment to the IPR owner to cover damages, it does at least stop the infringer from continuing the infringing activity. Conversely, enforcing through the court an IP owner can claim compensation from the infringer, thus patent owners often opt to enforce their IPR through the courts.

Despite this, China has in the past, had a poor reputation of enforcing IP laws, and this has significantly improved in recent years.

Even still, it would be risky to ignore protection of IPR in China, and often, the registration of a patent or trademark may be a sufficient enough deterrent to infringement.

References:

www.sipo.gov.cn

http://www.saic.gov.cn/sbjEnglish/

www.wto.org

http://www.chinaipr.gov.cn/

http://www.chinabusinesssolutions.com/

Patents and health care in developing countries: ViiV Healthcare joins the Medicine Patent Pool

Fri, 12 Apr 2013 00:00:00 +1200

ViiV Healthcare, a joint venture between Glaxosmithkline and Pfizer, have announced their collaboration with Medicines Patent Pool (MPP) providing lower cost HIV medicines to those in developing countries.

UNITAID is hosted by the WHO and is funded through levies on air tickets a number of countries including the founding countries of France, United Kingdom, Brazil and Chile, and founded the MPP in 2010, as a way to lower the cost of HIV medications. This is done through licensing key HIV patents and promoting the development of much needed formulations, especially in relation to paediatric medicine. This improves medical treatment by negotiating licences from the patent holders of HIV medicines, and making those licences available to manufacturers of generics, allowing for more affordable versions of drugs long before the patent term expires. It is hoped that MPP will also facilitate innovation by the generation of medicines adapted particularly for use in children.

According to the WHO there are 34 million people worldwide living with HIV. There are estimated to be between 280,000 to 390,000 children with HIV living in sub-Saharan Africa, who have received inadequate treatment because among other things, many pharmaceuticals are not adapted for use in children. The collaboration between ViiV and MPP will allow Abacavir, the WHO recommended paediatric antiviral, to be supplied under licence to 118 developing countries. These countries are where significant numbers of HIV infected children live.

The venture will also provide scope for future licence negotiations of other medicines that ViiV is developing, including Dolutegravir, which has recently been submitted for approval in the United States, Europe and Canada. Both Abacavir and Dolutegravir are seen as being key medicines in the treatment of HIV in developing countries.

Other Licences in the pool cover Gilead’s products: Tenofovir (TDF), Emtricitabine (FTC), Cobicistat (COBI), Elvitegravir (EVG) and the Quad [a combination of TDF, FTC, COBI, and EVG]. However, not all major pharmaceutical companies have agreed to the Medicines Patent Pool. Bristol-Myers Squibb, Hoffman-La Roche and Boehringer-Ingelheim are currently in discussions regarding joining the scheme. Abbott, Johnson & Johnson, and Merck have remained freestanding, although Johnson & Johnston have agreed not to enforce the patents they own and control on Darunavir, provided that Darunavir is used only in least developed countries.

This joining of ViiV and MPP appears to be a win-win solution all round. Pharmaceutical companies are able to licence their products, generic manufacturers are able to produce patent protected products, and most importantly, treatment is within the reach of those that desperately need it in developing countries.

References:

http://www.reuters.com/article/2013/02/27/aids-drugs-patents-idUSL6N0BL8BY20130227

http://www.medicinespatentpool.org/

http://www.viivhealthcare.com/

http://www.who.int/en/

http://www.unitaid.eu/

UNAIDS Global Report 2012, http://www.unaids.org/en/

http://www.unitaid.eu/resources-2/events/9-uncategorised/401-innovation-levy

http://www.diplomatie.gouv.fr/en/global-issues/development-assistance/institutions-and-issues-of/innovative-ways-to-fund/unitaid-the-international/

Hot Demand for Intellectual Property Rights

Tue, 09 Apr 2013 00:00:00 +1200

Intellectual capital is crucial in gaining a competitive edge in the local and international marketplaces. From the individual inventor to the multi-national company, technological advancement and globalisation present unparalleled opportunities to maximise intangible assets.

Last year, the Intellectual Property Office of New Zealand reported the highest number of national trade mark filings since 2009. The burgeoning demand for protected and enduring brand names was a global trend. The United States Patent and Trademark Office experienced a 4% increase in national filings, while in Asia the growth was even more pronounced.

The Madrid Protocol fostered an unprecedented upsurge in applications for international trademarks. The Protocol, which came into effect in New Zealand in December of 2012, is a cost effective process of protecting trade marks overseas. It allows Kiwi companies and individuals with a basic trade mark application or registration in New Zealand to file for international registration, designating up to 89 member countries.

Given the patchwork of varying intellectual property systems that currently exist throughout the world, the Protocol serves as an invaluable tool for harmonisation. There was a 4.1% increase in Madrid applications last year. China received the most designations, followed by the European Union and the Russian Federation.

As the value of intellectual property grows, so too does the threat of misappropriation. Effective strategies of commercialisation and management are integral to success in an increasingly competitive market. For policymakers, a comprehensive international legal framework will be an on-going challenge. This is especially true in developing countries, where half of all trade mark applications were filed in 2012. While strengthening laws have increased investor confidence, issues of counterfeiting, piracy and border control still threaten customer trust and the perceived quality of trade names and products.

If you have any questions regarding intellectual property, please do not hesitate to get in contact with us here at Baldwins. We are committed to helping you protect and build an intellectual property portfolio that will ensure your future economic growth.

This article was written with assistance from Lucy Hopman (lucy.hopman@baldwins.com).

A Physical Jolt – When Franchise Agreements Falter

Thu, 04 Apr 2013 00:00:00 +1300

On 8 February 2013, gym members in Auckland were given a physical jolt recently when they found three “Club Physical” gyms completely rebranded “Jolt Fitness”. The rebranding resulted from a falling out between Stuart Holder the sole director of Colven Botany, Colven Three Kings and Colven Westgate Limited (collectively “the franchisee”) and franchisor, Health Club Brands.

The franchisee entered into the three franchise agreements incrementally between 2009 and 2011. On 8 February 2013, the franchisee issued notices terminating each of the three franchise agreements, claiming that Health Club Brands had failed to fulfil its contractual obligations to provide on-going business development assistance.

Health Club Brands in return accepted the termination of the franchise agreements and applied to the New Zealand High Court for an interim injunction, seeking to restrain the franchisee from conducting any health and fitness business within 5 kilometres of their previous premises. This would mean shutting down the new gyms, despite having been rebranded as Jolt Fitness.

Restraint of trade

In its application for an interim injunction, Health Club Brands relied on restraint of clauses in each of the franchise agreements.

In return, the franchisee claimed that the restraints of trade were:

not properly completed because the parties failed to indicate the duration and geographical reach of the restraint;
were unreasonable; and
that the enforceability of any restraint were nullified by the Health Club Brands’ own breaches of contractual obligations

The verdict

Justice Winkelmann issued her interim decision on 7 March 2013[1].

While Justice Winkelmann acknowledged that two of the three restraint of trade clauses had incompletely indicated an appropriate duration and geographical reach, Health Club Brands could at the very least seek to enforce the provisions of another clause requiring the assignment of the lease of each of the premises. In other words, even if the restraints were inconclusive, a separate clause provided that Health Club Brands was to be assigned the franchisee’s three leases.

In her decision, Justice Winkelmann agreed with Health Club Brands’ argument that if the franchisee were allowed to continue trading in competition with Club Physical, it would be impossible for another Club Physical franchise to be re-established in the same geographical areas.

She also considered it a reasonable assumption that, although no longer using the Club Physical brand, the franchisee would continue to trade on the goodwill of the Club Physical business body by operating from the existing premises.

Further although she was reluctant to deliberate over factual disputes at an interim hearing level, Justice Winklemann appeared to be sceptical of the merits of the franchisee’s case.

Evidence from the franchisee asserted that that Health Club Brands’ did not provide direct assistance, offering a “total lack of support”. This conflicted with other complaints of disruption caused by Health Club Brands “continuing to exert influence over the gym” through continuous site visits. Justice Winkelmann wryly observed that Health Club Brands did appear to have provided business development advice and assistance, even if the franchisee chose not to be receptive to it.

Further, the franchisee’s accusations of breach focused largely on failures to evaluate membership pricing and arguably distasteful marketing campaigns. Justice Winkelmann quite rightly concluded that the terms of the franchise agreements did not stipulate that the franchisee held control over pricing and marketing matters. Rather the franchisee had contracted to conform to the franchise system at all times, including cooperating with the marketing strategy, and obtaining prior approval from Health Club Brands regarding any changes in membership options or prices.

The decisive stroke against the franchisee’s case was its decision to purchase two further franchises after the initial purchase. Justice Winkelmann opined that if the allegations that the franchise was dysfunctional over a three year time span were true, it would be commercially illogical of the franchisee to persevere with further expansion of such a problematic franchise.

The result was that Health Club Brands’ application was successful: the franchisee was restrained from operating a health and fitness business from each of the three premises, and from within 5km of the Three Kings premises.

The franchisee applied for a counter interim injunction order from the High Court to prevent Health Club Brands from contacting members of the rebranded Jolt Fitness gyms. Health Club Brands was able to do so only through accessing a contacts database with details collated prior to the termination of the franchise agreements. This counterclaim was dismissed by Justice Winkelmann. The franchise agreements expressly contemplated that, upon termination, the franchisee would immediate cooperate with Health Club Brands to ensure a smooth transition so as not to disrupt the customers of the business. To ensure the business transitions were effected smoothly, Justice Winkelmann considered it a practical necessity for Health Club Brands to access details of existing customers and to be free to contact them.

Further development

The day following the decision however, Justice Winkelmann granted a stay of the interim injunction, allowing the franchisee to operate Jolt Fitness gyms in the premises while the parties pursued potential settlement discussions.

On 27 March 2013, the parties reached an amicable agreement, with Health Club Brands set to take over the leases of the franchisee’s Jolt Fitness gyms, purchase the Jolt Fitness equipment, and retain most of the Jolt Fitness staff. Most importantly, the three gyms will be rebranded back to Club Physical.

Take home messages

The case highlights a number of important points for brand owners. First, it is a good idea to obtain legal advice for your intellectual property agreements – particularly where they involve complex legal elements such as a franchising relationship or a restraint of trade. This applies to those drafting an agreement as well as those entering an agreement. If in doubt, parties should at least make a record of their shared understanding of the agreement. This can help to resolve any ambiguities in both written and oral agreements.

Second, brand owners should remember that there are two important elements to any trade mark that is being used: (a) the legal ownership of the trade mark, and (b) beneficial ownership, or ownership of the goodwill accruing as a result of the use of the trade mark.

More complex trade mark cases involve the separation of these elements, resulting in a situation where one party is the legal owner of the mark (here, Health Club Brands) and the other party has assisted in the accrual of goodwill by using the mark (here, the franchisee). In this case, even though the businesses were rebranded to Jolt Fitness, there was a residual goodwill in the premises that had previously been occupied by the Club Physical gyms. If the franchisee were permitted to trade as a health and fitness centre from the same premises, it would be misappropriating that goodwill.

Businesses generally require a substantial investment. Both franchisees and franchisors are advised to adequately insure themselves from the risks involved in making such an investment.

[1] Health Club Brands Limited v Colven Botany Limited [2013] NZHC 428

Many happy returns: The NZ Tax Refunds case

Thu, 04 Apr 2013 00:00:00 +1300

In a relatively rare decision in this area of law, the Court of Appeal last week granted an interim injunction in favour of an appellant, an online tax refunds service called NZ Tax Refunds Ltd, to prevent the respondents from using the domain name www.taxrefundnz.co.nz and the trading name “Tax Refund NZ”. The appeal partially overturned the earlier decision of Justice Fogarty in the High Court.[1] In a separate finding that was not appealed, the High Court had granted an interim injunction in favour of NZ Tax Refunds Ltd to prevent a third business from using the trading name “NZ-Tax Refund” or the domain name www.nz-taxrefund.co.nz.

NZ Tax Refunds Ltd brought proceedings against its competitors the parties associated with the My Refund, alleging breach of the Fair Trading Act 1986 (alleging misleading and deceptive conduct) and passing off under common law. Both the High Court and the Court of Appeal noted that the NZ Tax Refunds trading name was descriptive of the services that the business provided to its customers, quoting the words of Justice Tipping in Airport Car Rentals (Southern) Ltd: “As a general rule the more distinctive a trading name is, both in itself and as identifying the plaintiff’s business, the further away competitors must keep in the names they adopt.”[2]

The respondents operated their business under the name My Refund but wanted to raise their internet search rankings for New Zealand based services by building a New Zealand connection into the name. In the High Court, Justice Fogarty found that, despite the highly descriptive nature of NZ Tax Refunds name, the trading name “NZ-Tax Refund” was effectively a direct copy of “NZ Tax Refunds”. Justice Fogarty considered that there was a serious argument to be made that NZ-Tax Refunds had deliberately attempted to pass itself off as NZ Tax Refunds. Justice Fogarty, however, felt that “Tax Refund NZ” (which is simply a re-ordering of NZ Tax Refunds, minus the final “s”) was not similar enough to NZ Tax Refunds to warrant interim intervention from the court. The result was a very fine line drawn between extremely similar and descriptive trading names and domain names, with Tax Refund NZ falling on the right side of that line and NZ-Tax Refund falling foul of it.

The Court of Appeal reviewed Justice Fogarty’s reasoning and overturned his findings on Tax Refund NZ. Key to the Court of Appeal’s decision was the finding that NZ Tax Refunds had spent some $3.5 million on development and advertising of its brand since its inception in 2008, so that the name had moved from being highly descriptive to becoming somewhat distinctive. That afforded NZ Tax Refunds slightly greater protection than it otherwise would have as a descriptive name. The Court of Appeal also found that there was a possibility that the respondents had adopted the name Tax Refund NZ to free-ride on the goodwill of NZ Tax Refunds. The respondents operated concurrently under the trading name “My Refund”, which raised questions why they were using Tax Refund NZ and www.taxrefundnz.co.nz. What appeared to be a deciding factor for the court was that visitors to www.taxrefundnz.co.nz were redirected to My Refund, suggesting that Tax Refund NZ was simply a means of increasing the respondents’ catchment pool and not a separate business The Court of Appeal referred to the lack of evidence as to why the respondents had not simply adopted the name “My Refund NZ” or “My NZ Refund”.

There is now a temporary order in place until trial, or until the case settles, whichever comes first. The case highlights the fine balance between competing interests over highly descriptive names. On the one hand, businesses that adopt highly descriptive words for their trading names should not be able to monopolise those words and prevent other traders from using them. On the other hand, if a business has built up significant goodwill and reputation in a trading name that is descriptive, that goodwill and reputation should be protected from those that seek to free-ride on it to obtain a commercial advantage. Regardless of the ultimate result in this case, adopting a more distinctive and less descriptive trading name would have avoided the argument.

[1] NZ Tax Refunds Ltd v Brooks Homes Ltd [2012] NZHC 2598 (HC).

[2] Airport Car Rentals (Southern) Ltd (1995) 6 TCLR 664 (HC).

Google Entrenches its Policy to Facilitate Deceptive and Misleading Behaviour Online

Wed, 27 Mar 2013 00:00:00 +1300

Rights holders in New Zealand and Australia have long been able to rely on Google to assist with tackling trade mark infringement online. In a recent press release Google has announced it is removing a major part of its trade mark complaints and review process, advising it will no longer monitor or restrict the sale of AdWords in response to trademark complaints. Moreover, affected parties will no longer be able to ask Google to remove keywords, even in the case of demonstrable infringement or deceptive and misleading conduct. The advertising giant states that this change aligns Australasian practice with other markets abroad.

The Google AdWords programme makes available for purchase keywords, company names or brands that are used to generate advertisements or sponsored links to other websites. Changes in Google’s internal policy effective 23 April 2013 mean that unscrupulous traders will be able to purchase unchecked any Google keywords comprising their competitor’s brands, generating advertisements for their own company every time a user enters those brands into Google.

OPEN SEASON ON ADWORDS

The announcement follows a landmark decision in Australia last month in which the High Court of Australia unanimously held that Google did not breach Australia's Trade Practices Act 1974 trade laws by allowing companies to purchase AdWords related to competitors' names. Google’s argument that it was merely acting as a publisher was ultimately upheld.

This means that Google will maintain its freedom to profit from activity that is potentially misleading and deceptive and a trade mark infringement.

INCREASED BRAND RISK

New Zealand and Australian trade mark owners will have to be increasingly vigilant to enforce their rights under the Trade Marks Act and at common law. Trade mark owners can expect little help from Google going forward and must therefore look to their established intellectual property rights or to patent attorneys to monitor and enforce these online infringements.

ACTION

In the lead-up to the 23 April 2013 policy change that trade mark owners should consult their advisors to ensure they have adequate and appropriate trade mark protection in place to enable the increased risk of infringement to be addressed. Going forward rights holders will need to take on greater responsibility for enforcement of their rights through their Intellectual Property advisors.

Baldwins presents at NZBIO 2013 Conference

Wed, 20 Mar 2013 00:00:00 +1300

Baldwins was a proud sponsor of the NZBIO 2013 Conference held on 18-20 March at The Langham in Auckland.

Dr Jared Scarlett, Senior Associate, was the Chair of the "IP Commercialisation and Innovation" session and Baldwins' Head of Commercial, David Alizade, was a speaker at the "Enabling Market Entry" session with his presentation on "Accessing International Markets through Joint Ventures".

2013 marks the 10th anniversary on NZBIO. For more information visit www.nzbio2013.co.nz.


David Alizade, Head of Commercial				Dr Jared Scarlett, Senior Associate

Fragrant Rice Wins GI Status in EU

Tue, 12 Mar 2013 00:00:00 +1300

Following a long legal battle, the Department of Intellectual Property in Thailand has secured registration of Khao Hom Mali Thung Kula Rong-Hai as a Protected Geographical Indication in the European Community for a particular strain of fragrant jasmine rice. The registration is viewed as a significant legal achievement as it is the first time a South-East Asian product has been recognised as a Protected Geographical Indication in the EU.

The Department renewed its efforts to achieve GI status in the EU following opposition by five members states which argued that Thailand could not use the phrase Khao Hom Mali exclusively as it is a generic term and that the condition that the packaging of the fragrant rice product occur within a certain geographical location in Thailand was unjustified and packaging should be allowed to take place outside the defined area.

The Department advanced its case on the basis that GI status was warranted because Khao Hom Mali Thung Kula Rong-Hai jasmine rice is only able to grow in a defined geographical region in Thailand, namely, the Thung Kula Ronghai area which encompasses five provinces in the northeast of Thailand. Furthermore, in order to avoid grain combination, packaging of this jasmine rice product only occurs within this defined region. Jasmine rice grown within the region has a particular sweet aroma and taste.

The registration is viewed as a significant legal achievement as it is the first time a South-East Asian product has been recognised as a Protected Geographical Indication in the EU. The Department believes the securement of the Protected Geographical Indication status will increase the international profile of Khao Hom Mali Thung Kula Rong-Hai rice and bring significant economic advantages to Thai rice farmers.

Following its success, the Department now intends to seek registration of two well-known coffee varieties; silk yarns; and another type of rice as Protected Geographical Indications in the EU. Watch this space for further updates!

Exporters to Australia Beware: Mind your Rs and TMs

Tue, 12 Mar 2013 00:00:00 +1300

New Zealand and Australian trade mark law is so similar you would be forgiven for thinking they are, for exporting purposes, the same. However, the respective jurisdictions are surprisingly different in terms of the labelling and use of the ® symbol on goods and services.

When a trade mark is registered in New Zealand, the proprietor is free to use the ® symbol on its goods or in association to its services. The ® demonstrates to the public and traders alike that a trade mark is protected. It is an offence in New Zealand to claim that a trade mark is registered when it is not[1].

New Zealand law also provides that exporters to New Zealand, who may not have a New Zealand trade mark registration, are free to use the ® symbol in connection with their goods and services if the trade mark is registered in an overseas jurisdiction.[2] This provision recognises the modern-day global market for goods and services.

Unfortunately, this pragmatic approach is not reciprocated by our most significant and principal trading partner.[3] Under Australian law the privilege of using the ® symbol is restricted to trade marks registered in Australia[4] unless:

“the word or symbol is used, together with other words or symbols of the same or a bigger size, to indicate that the trade mark is registered in that other country or in a country outside Australia[5]”

The fines for non-compliance are not trivial. A breach of any of the subsections in section 151 of the Australian Trade Marks Act carries a penalty of 60 ‘penalty units’. Under Australian federal law, one penalty unit currently holds the value of AUD170[6], leaving a business owner approximately NZD12,648[7] out of pocket if found liable under the Act.

To avoid these penalties, New Zealand traders exporting to Australia must ensure that their packaging or advertising complies with Australian law on correct identification of trade marks. However, re-labelling may not only be an inconvenience, but using “® in New Zealand” may prove aesthetically undesirable, especially on small goods such as cosmetics or confectionary.

Registering your trade mark in New Zealand and Australia will not only eliminate potential relabeling headaches and pecuniary penalties, but will grant your trade mark full protection against infringing third-parties in Australia. If you are interested in pursuing an Australian registration for your local trade mark, please contact us for more information.

[1] Trade Marks Act 2002 (NZ) s.186(1)(a)

[2] Trade Marks Act 2002 (NZ) s.186(4)

[3] New Zealand Treasury (2012, June 8). New Zealand Economic and Financial Overview 2012, p.32. Retrieved 11 March 2013 from http://www.treasury.govt.nz/economy/overview/2012/nzefo-12.pdf

[4] Trade Marks Act 1995 (Aust.) .s.151(1)

[5] Trade Marks Act 1995 (Aust.) s.151(5)(d)

[6] Crimes Act 1914 (Aust.) s.4AA

[7] Exchange rate calculated 12/03/2013.

Making a Spectacle of Yourself

Tue, 12 Mar 2013 00:00:00 +1300

In a world of light consumer demand and heavy consumer choice, comparative advertising can be an effective tool for creating business awareness. However, a recent Court of Appeal decision serves as a reminder to carefully assess not only the factual accuracy of an advertisement, but its impression of accuracy on consumers.

Facts of the case

Retail optometry giant Specsavers ran two similar comparative advertising campaigns featuring one of its main competitors OPSM in 2010. The crucial comparison in each campaign was the price of two pairs of ‘progressive glasses’ from the two respective retail outlets.

In the first Specsavers campaign, the screen showed the following paragraph in bold font:

“At Specsavers, you can get two pairs of our lowest priced progressive glasses and pay no more than $399 in any store you visit. But at OPSM, we found that two pairs of their cheapest progressive varied by over $200 from store to store, anywhere up to $976 for two pairs”.

The words “up to” were represented in half size font to the remainder of the paragraph. The second advertisement promoted a similar comparison with the words “as little as” and “as much as” also represented in smaller font and similar small qualifying print.

The Court of Appeal noted that the “anchoring effect” the top price for OPSM’s glasses had in the advertisements was significant. Consumers would potentially “take home” the message that the average price of OPSM glasses was $976 and the price of Specsavers’ $399. This effect was exacerbated by use of the words “as much as” and “up to” in smaller font to the remaining words in the television campaigns. The act of comparing the most expensive OPSM glasses with the cheapest Specsavers glasses was, in effect, not comparing apples with apples.

The Court highlighted that the qualifying references or “fine print” in the advertisements was too small and likely to be missed by the average consumer. With a fleeting timeframe and inattentive viewers, it is the overall impression an advertisement portrays that must be held up to the tenets of the Fair Trading Act.

Take Home Message

Comparative advertising can help consumers make informed purchasing choices when choosing between competing products. While the Fair Trading Act permits puffery, businesses should be very careful when using comparisons about quality or price that may appear as fact. The New Zealand Advertising Standards Authority recommends the following set of guidelines for comparative advertisements:

Where an advertisement makes a comparison, whether explicitly or implicitly, it should be clear with what the comparison is being made, i.e. price to price, dimension to dimension, feature to feature.

The competition should be fairly and properly identified but never in a manner or tone of voice that degrades the competitive product or service.

Where appropriate, comparative advertising claims must be supported by documentary evidence which is easily understood. Where technical data is submitted it should be accompanied by a summary of the relative comparative points, written in layman’s language.

If the advertisement refers to a competitive test, such tests should have been conducted by an independent and objective body so that there will be no doubt as to the independence of the results. In all cases the test must be supportive of all claims made in the advertising that are based on the test.

The advertising should never use partial results or stress insignificant differences to cause the consumer to draw an improper conclusion.

Advertisements should not make unjustifiable use of the name or initials of any firm, company or institution nor take unfair advantage of the goodwill attached to the trade name or symbol of another firm or its product or the goodwill acquired by its advertising campaign.

Is important when creating comparative commercials that not only the message portrayed is accurate, but it is clearly accurate. The Specsavers case serves as a lesson to advertisers to scrutinise the overall impression a prospective advertisement may have – taking due consideration to the inattentive and distracted nature of the average viewer. The safest approach to any advertisement is to scrupulously test the advertisement on prospective viewers and to obtain sound legal advice on any comparison that takes place. Failure to heed these advertising guidelines could result in a campaign being pulled from the air, wasting the thousands of dollars it took to create.

Registered Designs – A Hidden Danger

Tue, 12 Mar 2013 00:00:00 +1300

Registered designs offer protection for the appearance of a product, or part of a product. The registered design system in most countries is less complex than the patent system, and this often leads to a view that registered designs are easier or simpler to obtain. However, whilst the application process is usually less involved than the patent system, there are traps which may remain hidden until too late.

Is it New?

Most countries require a design to be new. This generally means that the design is not available to the public anywhere in the world before a design application is filed. In New Zealand a design is considered ‘new’ if it is not available to the public in New Zealand before a design application is filed. So in New Zealand, the test for novelty is more favourable, in that disclosure of the design outside of New Zealand may not prejudice a design application here.

The Internet

In most cases, disclosure of a design on the internet will count as making the design available to the public in New Zealand provided that someone in New Zealand could have accessed the information.

Grace Periods

Some countries provide a ‘grace period’ in which a designer can publish his design before filing a design application in that country. This can be useful if the designer would like to gauge opinion on his design, or perhaps generate some early sales profit. This can also be useful in the case of an inadvertent or accidental publication of the design, such as by an enthusiastic sales person or distributor. One example of such a grace period is in the EU, where a 12 month period exists in which a Community (EU) design application can still be filed after a first public disclosure by the designer.

The Catch

Whilst some countries provide a grace period, some countries do not. For example, New Zealand design law does not provide such a general grace period. Many other countries also do not. If relying on a first application filed using the grace period of that country, any subsequent applications filed in other countries, which do not provide a grace period, may be invalid as not being new over the initial publication of the design by the designer.

For example, a European application filed using the grace period provisions in Europe would be considered new and therefore valid, whereas a subsequent application in New Zealand, based on the European application, would be considered invalid as no equivalent grace period exists here. In many countries, examination of design applications is brief, and this problem may therefore not be identified until the time comes to enforce the registered design against third parties some time later. In New Zealand, design applications are examined substantively, and the early publication of the design by the designer may be identified during examination and significant objections raised.

It is therefore important, if possible, to have at least a first design application on file before a public disclosure of the design in question. Relying on grace periods, whilst seemingly useful in the country concerned, can lead to design protection not being available, or design registrations not being valid, in countries such as New Zealand which do not have a period of grace.

Saving Grace

It is often the case that prior publications of a design do not show all features of the design. Consequently, it is often possible to obtain some protection and this should not be dismissed outright.

Trademark Clearinghouse opening soon

Tue, 12 Mar 2013 00:00:00 +1300

With the first new global Top Level Domains (gTLDs) due to go live from the middle of this year,[1] the Internet Corporation for Assigned Names and Numbers (ICANN) has announced that the Trademark Clearinghouse will start operating on 26 March. The Trademark Clearinghouse is the first global repository for trademark data in the domain name space.[2]

As we mentioned in our last update, the Trademark Clearinghouse will be provided by Deloitte Enterprise Risk Services and IBM. Deloitte is responsible for trade mark validation, while IBM will manage the database, providing relevant data to the registries and registrars for Sunrise and Trademark Claims services.

The Trademark Clearinghouse protects brand owners from new gTLDs that might infringe their marks. Owners are able to record:

Nationally or regionally registered trade marks;
Court-validated marks; and
Marks protected by statute or treaty.

The recently published Trademark Clearinghouse Guidelines provide extensive information as to what marks can be lodged, and what information a brand owner must supply.

The Trademark Clearinghouse has two functions.

First, it provides “Sunrise services”. “Sunrise” is a period of at least 30 days before domain names are offered to the general public. Trade mark holders who have signed up to the Trademark Clearinghouse will be notified if a new gTLD matches their trade mark and will be given the option to reserve the domain name for themselves. Every new gTLD is required to have a Sunrise Period.

Secondly, the Trademark Clearinghouse provides a Claims Service. After the expiration of the Sunrise Period, the Claims Service will send an automatic notification to a trade mark holder who has signed up, if another party applies to register a domain name that directly matches the trade mark.

The protection provided by the Trademark Clearinghouse is not absolute. It it is only direct textual matches with trade marks that will be flagged. The Trademark Clearinghouse Guidelines describe this as the Identical Match Rule. So, for instance, if there is an application to register a domain name of which only a part corresponds to a registered trade mark, the applicant will probably not be prevented by the Trademark Clearinghouse’s procedures. In this regard, traditional watching services are more helpful, especially for owners who simply want to protect their current brands and domain names.

Nevertheless, the Trademark Clearinghouse is an important tool for trade mark holders who wish to reserve the right to register gTLDs that correspond with their marks. With registrations for a single trade mark costing from $US150 for one year, up to $US750 for five years, it is likely to be a useful means of brand protection.

[1] “New top-level domains to go live starting mid-2013: ICANN”. Associated Press, 26 February 2013.

[2] “ICANN’s Trademark Clearinghouse to Provide Unprecedented Protections in the Domain Name Space”. ICANN News Alert, 25 February 2013.

Maori Trade Marks Advisory Committee

Fri, 08 Mar 2013 00:00:00 +1300

In the competitive global marketplace, New Zealand’s indigenous culture presents trade mark owners with unique branding opportunities. Māori words and imagery create a point of difference and that can promote the spiritual and natural aspects of a product.

Despite the commercial benefits, the Māori tradition must be respected. Māori custom regards certain objects and locations as holy, or tapu. If they are associated with common objects, their sacredness is removed. For example, a trade mark that associates an image of a Māori chief, which is tapu, with an ordinary item such as food, could be considered culturally offensive to the Māori community.

The Trade Marks Act of 2002 increased the protection of Māori intellectual property rights. Under the Act, the Trade Marks Commissioner must examine all trade mark applications for Māori text or devices. The Intellectual Property Office of New Zealand (“IPONZ”) has published a set of guidelines to assist the Commissioner in the identification process. In addition, the Vienna Classification System, which classifies all marks that contain imagery, has specific delineations for Māori objects.

Trade marks that use Māori symbols are referred to the Māori Trade Marks Advisory Committee. Its function is “to advise the Commissioner whether the proposed use or registration of a trade mark … is, or is likely to be, offensive to Māori”.[1] Trade mark owners will be notified if their mark is to be examined by the Advisory Committee.

IPONZ aims to have the Advisory Committee’s determination passed onto the Commissioner within 15 working days. Although not binding, the Commissioner generally acts in accordance with the Advisory Committee’s recommendations when deciding if a trade mark should be prevented from proceeding to registration on the basis that it will “offend a significant section of the community, including Māori”.[2]

Whether the Trade Marks Act goes far enough to protect Maori rights remains a matter of debate and there is no doubt that legislation and case law in this area will continue to evolve. Here at Baldwins we are committed to promoting the individuality of products in a way that respects New Zealand culture and heritage. If you have any questions about how a trade mark may impact the rights of others, please do not hesitate to contact us.

This article was written with assistance from Lucy Hopman (lucy.hopman@baldwins.com).

[1] Section 178

[2] Section 17(1)(c)

Business Method Patent Rejected by Australian Federal Court

Fri, 01 Mar 2013 00:00:00 +1300

Research Affiliates v Commissioner of Patents

On 13 February 2013 the Federal Court of Australia issued its long-awaited judgment in Research Affiliates LLC v Commissioner of Patents.[1] The Court upheld IP Australia’s rejection of both Australian Patent Application No. 2005213293 and the divisional application No. 2010236045, signalling a narrowing of the bounds of patentability for business methods in Australia.

The patent applications at issue both related to methods for generating a passive investment management index weighted by an objective measure of scale other than the usual share price, market capitalisation, or equal weightings. The weighting could be based on revenue, sales, or a number of employees, for example.

The Full Court of the Australian Federal Court previously addressed the patentability of business methods in Grant v Commissioner of Patents.[2] In that case, the Court upheld the revocation of an innovation patent for an asset protection method on the basis that “a physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation is required.”

To meet this so-called “physical effect” requirement, the claimed methods in Research Affiliates v Commissioner of Patents recited a computer-implemented method and system for constructing data indicative of a non-capitalization weighted portfolio of assets, comprising the steps of gathering data about a plurality of assets, selecting a plurality of assets to create and index, and weighting the selected assets based on an objective measure of scale other than market capitalization weighting, equal weighting, share price weighting, or any combination thereof.

However, the Court disagreed that the mere use of a computer was sufficient for patentability, rejecting the claims on the basis that they were not for a “manner of new manufacture”:

"The case propounded by Research Affiliates depends upon the proposition that information of economic significance, once entered into or produced by means of a computer, becomes an economically valuable artificially created state of affairs, and thus patentable. That proposition must be rejected."

While there are several criticisms which can be levelled at the judgment, it largely vindicates IP Australia’s narrowed view on the patentability of business methods which seemed to come into effect, unannounced, in 2010.[3] Accordingly, patent applicants can expect IP Australia to continue objecting to computer-implemented method claims unless the claimed method “improve[s] the operation of or effect of the use of the computer”.[4] However, the judgment provides little guidance as to precisely where the line will be drawn between patentable and unpatentable subject matter.

Similar objections can also be expected in New Zealand, where the Intellectual Property Office increasingly cites Australian cases in support of “manner of new manufacture” objections to computer-implemented invention claims, despite those decisions having no legal effect in New Zealand.

Research Affiliates LLC have until 6 March 2013 to appeal the decision.

[1] Research Affiliates LLC v Commissioner of Patents [2013] FCA 71

[2] Grant v Commissioner of Patents [2006] FCAFC 120.

[3] Invention Pathways Pty Ltd [2010] APO 10.

[4] Above n 1, at [70].

USPTO Publishes Final Guidelines for New America Invents Act

Mon, 25 Feb 2013 00:00:00 +1300

The Leahy-Smith America Invents Act (AIA), the most comprehensive review of American Patent Law since the 1950s, was passed into law in September 2011. Many important aspects of the new act come into force on 16 March 2013. We reviewed some of these in our earlier article entitled “United States switches from first-to-invent to first-inventor-to-file system in 2013”.

In July 2012, the United States Patent and Trademark Office (USPTO) published a set of proposed rules and examination guidelines which outlined how it intended to interpret the new act. Following a period of public consultation, the USPTO released the final version of its new rules and guidelines on 14 February 2013. These clarify the USPTO’s approach to several important aspects of the new law, including its interpretation of the “grace period” provisions.

Disclosure of the Invention / Grace Periods

Under the AIA, an invention is only patentable if it has not been disclosed to the public (whether in a printed publication, or by other means such as public use or offer for sale) before the effective filing date of the patent application. However, the act also contains a “grace period” provision, whereby an invention is still patentable if the inventor files a patent application within 12 months of their first disclosure of the invention. Moreover, the AIA allows an invention to be patented where a third party has made their own, independent disclosure, after the first inventor has themselves disclosed the invention.

The final rules make it clear that where an inventor has disclosed their invention, and subsequently filed a patent application within 12 months of that disclosure, any third party disclosure of the same invention which occurs after that of the inventor will not form part of the patentability assessment (that is, will not be considered “prior art”) - even if that disclosure is in a different form to that made by the inventor.

This means that, for example, where an inventor publicly demonstrates an invention, and a competitor subsequently publishes a newsletter reporting development of a separately developed but otherwise identical invention, the newsletter will not be considered prior art. Similarly, where an inventor publishes details of a new invention in a printed document, any subsequent publication describing the same invention will not be considered prior art just by virtue of the fact that it uses different words to describe the same invention.

This interpretation of the grace period rules may result in some inventors, particularly those focussed solely on the US, choosing to publish details of their new inventions as soon as possible, in order to pre-empt any publication by a third party.

While this strategy may be appropriate for inventors who are not interested in patent protection outside the USA, it will mean that the invention cannot be protected in many other countries around the world. Inventors who wish to obtain patent protection in countries other than the USA should still be careful to file a patent application before there is any disclosure of their invention. The fact that some US based inventors may be adopting an early publication strategy simply reinforces the need to file a patent application as early as possible.

If you require further advice about intellectual property matters in the United States or elsewhere, please contact Richard Clement (Richard.Clement@baldwins.com).

This article is intended to summarise potentially complicated legal issues, and is not intended to be a substitute for individual legal advice. Please contact a Baldwins attorney or other IP professional before acting on any information contained in this publication.

Changes to The European Patent System

Wed, 13 Feb 2013 00:00:00 +1300

Following a year in which the number of European patent applications filed increased to a record 258,000 (an increase of over 5% on 2011 despite difficult economic conditions), a single European patent that is enforceable in all EU states via a single court procedure is set to become a reality as early as 2014.

The European Unitary Patent (UP) System was approved in December 2012, after many years of debate and discussion. The Unitary Patent Court (UPC) is expected to be open for signature on 18 February 2013. It is envisaged that the UP Regulations will apply from 1 January 2014 or from the date of the entry into force of the Court Agreement if ratification by the contracting member states is delayed.

Unitary Patents

Once a European patent is granted it will be possible to request that the patent be treated as a Unitary patent, covering all European states signatory to the Unitary system. The patent will then be enforced/revoked via a single court procedure with a court decision taking effect in all states.

Implications

Transitional Period - There is a transitional period between the current European system and the new Unitary system, of at least seven years, with possible extension for a further period. During the transitional period, owners of existing European patents can opt out of the new Unified Patent System. This might be advantageous in certain circumstances. For example opting out could be useful in preventing the European Patent being revoked across all EU states via a single court decision under the UP system. At the same time, if existing European patent owners become aware of infringement in the EU, opting in to the UP system might be useful, so as only to organise and pay for a single infringement action covering all EU countries. Thought will need to be given as to whether to opt in or out during the transitional period.

Cost Savings - The UP system is being touted on the basis of providing a significant cost saving over the current system. However, this does assume that existing European patents are validated in a large number of European states. This is not always the case. It remains to be seen whether the new system will be cheaper. The official fees for the Unitary Patent have yet to be set.

Translation - The need for a granted European patent to be validated and translated into the local language of each country required is to be removed. However, if the patent is granted in German or French, it will still need to be translated into English. Patents granted in English will need to be translated into another language at least during the transitional period, although this need not be French or German. So for English language patents, some translation requirement will remain initially.

Renewal Fees - Renewal fees to keep the Unitary patent in force will be payable annually to the European Patent Office. This should represent a saving on the cost of paying renewal fees separately to each national patent office in which the patent is validated, and generally reduce the administrative burden. However, importantly, the cost of the single central renewal fee has not yet been decided but is expected to be relatively high and so will only be cost effective if protection in a threshold number of countries is required.

Court Strategy - The EU Member states are still to decide on the establishment of local/regional divisions of the Unified Patents Court, to supplement the Central court in Paris, Munich and London. There are also complicated rules on where different court procedures may be held. Bringing an infringement action on a European patent will therefore become the subject of some detailed tactical considerations, at least during the initial stages of the new system.

There is also considerable uncertainty as to how the system will operate, whether the stated cost and time savings will result in practice, and whether the court system will actually increase uncertainty. The new system appears to provide a great many potential options which may lead to forum shopping and/or bifurcation of the infringement and revocation parts of a patent case i.e. the hearing of these parts in separate courts as per the current German system.

Overall Views

Whilst not perfect, the single unitary European patent grant system should result in a simpler and probably cheaper grant system offering protection for inventions across a marketplace of around 500 million people. However, whether and to what extent this applies will depend on the amount of the official fees and the countries in which protection is actually required. It is possible that the Unitary patent will only be of real value to large multinationals/corporations that require wide protection across Europe. However, the implications of being able to sue for infringement before a single court will most likely outweigh such considerations, assuming there is some prospect of litigation, but this must be weighed against the ability for such a patent to be centrally revoked. In view of these considerations, it is vital that strategies are tailored to particular circumstances.

United States switches from first-to-invent to first-inventor-to-file system in 2013

Tue, 12 Feb 2013 00:00:00 +1300

The Leahy-Smith America Invents Act (AIA), the most comprehensive review of American Patent Law since the 1950s, was passed into law in September 2011. Changes include switching from a ‘first-to-invent’ to a ‘first-inventor-to-file’ system, increased recognition of prior art from outside the United States, and the introduction of ‘prior user rights’. The first-inventor-to-file system comes into effect on 16 March 2013, bringing the United States more closely into alignment with the rest of the world, including New Zealand. On 26 July 2012 the United States Patent and Trademarks Office (USPTO) released proposed rules and guidelines for dealing with these changes, some of which are outlined below.

First-inventor-to-file

Until the AIA comes into effect the United States operates a first-to-invent system. The person(s) who first conceives an idea and reduces it to practice is the ‘inventor’ and owns the rights to the invention as of the date of conception – even if another conceives the same idea later but reduces it to practice and files a patent application earlier. Under the current system the first conceiver would have to bring interference proceedings against the second to prove that they were the true inventor. Thorough and accurate records of all activities are important in such a case.

Under the new first-inventor-to-file system, the inventor who files a patent application first (or their assignee) will own the rights to the invention, regardless of the relative dates of conception.

Prior art considerations

To be patentable, an invention must (among other things) be novel and non-obvious. Under first-to-invent these criteria are judged against the publications and disclosures (prior art) available at the date of conception. Under the new first-inventor-to-file rules they will be judged against the prior art available at the filing date.

Currently only public use, disclosure, and offer for sale within the United States are considered prior art when assessing a patent application (although publications describing the invention are relevant regardless of where they were published). Under the AIA, foreign equivalents will also be considered, shifting the criteria from ‘relative novelty’ to ‘absolute novelty’, as is the case in most other jurisdictions.

Grace periods and tactical disclosures – proceed with caution

The AIA introduces a revised ‘grace period’ for disclosure of an invention by the inventor. Any disclosure by the inventor made up to one year prior to a patent application being filed cannot be used to attack the novelty or inventive step of that inventor’s patent application. For example, if a Company X conceives an invention in January and files for a patent in April, and Company Y conceives the same invention in February but files in March, Company Y would receive the patent rights. However if Company X had made a sufficiently detailed disclosure of the invention in February, this disclosure would be counted as prior art against Company Y’s patent application, but not that of Company X.

This has implications for the offensive and defensive use of disclosures with the United States system, and has led some commentators to dub the new system ‘first to disclose’. However, caution must be exercised when considering this option, as disclosing an invention before a patent application has been filed will likely invalidate patent applications filed in most jurisdictions outside the US. It is also important to note that it is not clear whether, and in what circumstances, public use or offering an invention for sale will be covered by the new grace period. We recommend that you always seek advice on the best patent strategy for your technology and commercial aims prior to disclosing information about an invention to any third party.

The AIA legislation provides for joint contribution to and ownership of patents, with disclosures within the grace period from any one party to a jointly owned patent being excluded from prior art considerations.

Trade secrets, derived inventions and prior user rights

With these changes IP security becomes increasingly important. Unintentional or malicious disclosures could result in loss of patentability, or rights being awarded to another party. However, a new form of proceeding, termed a ‘derivation proceeding’, is available to original inventors with substantial evidence that a third party’s patent application has been derived from their own invention without their consent. Maintaining internal documentation and records of invention are again vital, and policies for employee education, data storage and security, and debriefing of outgoing employees will also be important.

If an idea is independently conceived by another party then the first-inventor-to-file principles apply.

The AIA will also expand the ‘prior user rights’ defence to patent infringement beyond business method patents. Prior user rights are available where one party has developed and commercialised an invention, but has chosen to hold the details of that invention confidential as a trade secret, following which another party has been granted a patent covering that same invention. Provided the first party has put the invention to commercial use within the United States for a period exceeding one year before the filing date of the second party’s patent, prior user rights can be claimed, and the first party can continue to do so royalty-free in those locations where it was already in use.

Maintaining documentation to support a claim of prior use of the invention will be critical if a prior user defence is to be relied on. It is also important to note that, unlike patent rights, prior user rights cannot be licensed or sold except with the sale of the entire line of business. Furthermore, university-owned patents are explicitly excluded; the prior user rights defence cannot be used against them.

When to file?

Selecting the optimum time to file a patent application is always of strategic importance. The changes under AIA bring new considerations to this decision. In some circumstances there may be advantages to filing in the limited time remaining while the first-to-invent standard is still in place. Likewise, there may be situations where delaying until the first-inventor-to-file system is initiated is desirable. The potential for transition problems should be considered, especially if a disputed technology has filings under both systems; for example if a provisional application is filed before 16 March 2013 but the full application is filed after 16 March 2013, or when a PCT filing is entering national phase in the United States.

The guidelines issued by the USPTO state the intention that any application having one or more claims with a priority date prior to 16 March 2013 will be examined in accordance with AIA plus section 102(g) of the previous act, which allows for interference proceedings as described above. This essentially reverts the application to the first-to-invent examination procedure. There are a number of administrative procedures that must be followed where applications effectively ‘straddle’ the changeover date.

The new provisions are complex, and in some cases their effect is not yet fully settled. We recommend that businesses consult with their patent attorneys before taking any action in respect of a new invention, to ensure they are fully aware of any associated risks, and to confirm that their strategy is commercially sound having regard to the structure of the business and its commercial goals.

If you require further advice about intellectual property matters in the United States or elsewhere, please contact Richard Clement (richard.clement@baldwins.com).

This article was written with assistance from Harriet Sandstad.

New Food Standard to Affect Nutrition and Health claims – Is Your Business Ready for the Change?

Mon, 11 Feb 2013 00:00:00 +1300

On 18 January 2013, a new food Standard (Standard 1.2.7 – Nutrition, Health and Related Claims) developed by Food Standards Australia New Zealand (FSANZ) came into force in New Zealand and Australia. The text of Standard 1.2.7 can be found at www.comlaw.gov.au/Details/F2013L00054.

Businesses in the food industry have until 18 January 2016 to ensure that any voluntary nutrition content or health claim that they include on labels or advertisements meets this new Standard. However, businesses can start using the new Standard now.

The new Standard is seen as good for consumers as it assists them in making an informed choice about the food they are buying. It is also seen as a positive step in supporting the development of innovative foods for health. This is because the Standard requires that certain criteria be met before particular health or nutrition claims can be made in relation to certain food products.

The new Standard includes four defined types of nutrition and health claims as follows.

1. Nutrition Content Claims

These are claims that a particular substance or nutrient is included or not included in a food. For example, if a claim of “low cholesterol” is made in relation to a food, the food can not contain any more than a set amount of cholesterol as prescribed in the Standard.

2. General Level Health Claim

These are claims about a substance or nutrient in food and its effect on health. For example, a statement can be made on a product containing fruit and vegetables that fruit and vegetables “contribute to heart health” provided that the product includes 90% or more fruit and vegetables.

3. High Level Health Claim

These are claims about a substance or nutrient in food and its relationship to a serious disease or to a biomarker of a serious disease. For example, a statement can be made on a product containing calcium that calcium “reduces the risk of osteoporosis” provided that the food in relation to which such a claim is being made contains no less than 290mg of calcium per serving. The claim must also include a reference to any relevant population group (which in this example would be persons aged 65 and over). It must also include any relevant context statements (which in this example would be that the previous statements are in the context of a diet high in calcium and with adequate Vitamin D status).

Although the new Standard will not be compulsory until January 2016, it would be prudent for businesses to begin a review of the new Standard to ensure that the statements or claims being made on their packaging and advertising will adhere to the new Standard.

There will be some businesses whose products meet or are capable of meeting the relevant criteria in the new Standard. These businesses should consider reviewing their products, labelling and advertising to see how they can start promoting their products using the new health and nutrition claims allowed under Standard to their best advantage.

A Picture is Worth a Thousand …. Dollars???

Tue, 05 Feb 2013 00:00:00 +1300

In December 2012, the photo-sharing application Instagram announced plans to change its terms of service. The new terms said that Instagram could “sell user photo[graphs] to advertisers without paying them compensation”.[1]

The move was met with fierce opposition by Instagram users. They saw the amendments as an attack on their intellectual property rights and a drastic shift from the original, user-friendly terms, which only allowed Instagram to display members’ photographs next to advertisements, not in them.

Instagram tried to defend its decision claiming the proposal had been misinterpreted and that it had no intention of profiting from people’s photographs. Nevertheless, the damage was done. Celebrities with thousands of followers vowed to quit the service, daily usage decreased by 50% and threats of legal action ensued. The social media company relented on its proposal and the original terms were left to stand.

Despite the back down, Instagram has reiterated its intention to generate revenue through advertising. This emphasis on monetising their platform is an expected by-product considering it is owned by Facebook, who acquired the company in April 2012 for almost 1 billion dollars.

The social networking heavyweight is familiar with cashing in on people’s data - by signing up to Facebook, account holders grant it a licence to use their intellectual property without payment. Its latest feature, the Facebook Graph Search, allows people to search for photographs by entering keywords, such as “Disneyland”. These photographs can be viewed regardless of who they belong to which poses an interesting prospect for advertisement companies.

Facebook’s proprietary terms of service have long caused member discontent. However, when Instagram tried to follow in big brother’s footsteps, the impact of consumer reaction hit harder as users could simply switch to another photo-sharing platform. Due to Facebook’s dominant market share there are virtually no alternatives for those who are unhappy with the handling of their intellectual property.

In the world of file sharing and social media, digital data is the currency. People are eager to share their photographs, but their privacy and the value of their intellectual property are sacrosanct. Instagram went over the line and this violation of its members' trust proved a commercial misstep. Social media platforms must develop means to turn a profit while ensuring that users are confident that their intellectual property is respected and secure. Needless to say a close eye will be kept on Instagram’s next move.

If you have any questions about how your intellectual property is being used or should be protected, get in touch with us. We can also offer advice on how to draft terms of service that balance business needs with user rights.

This article was written with assistance from Lucy Hopman.

[1] “Instagram loses half its users following copyright policy backlash” (15 January 2012) Intellectual Property Magazine.

Kryptonite for creators: How to protect your intellectual property

Fri, 01 Feb 2013 00:00:00 +1300

Just months before “The Man of Steel” releases in US cinemas, Warner Bros, the owner of DC Comics, has won an appeal in the US 9^th Circuit Court of Appeal confirming its ownership of its rights to the Superman universe and creative control over the Superman character.

The appeal decision, which comes after almost 75 years of on-going legal battles involving Warner Bros and the co-creators of Superman, Jerry Siegel and Joe Shuster, represents a resounding victory for Warner Bros and will be a great relief to the business. However, the on-going legal saga illustrates the importance for creators of obtaining appropriate legal advice before commercialising their intellectual property.

When they created Superman in 1938, Siegel and Shuster would have had little idea of the then current and future value of their creation, but at the time they should have considered alternative means of structuring the deal with Warner Bros (such as a licensing arrangement) to ensure that they retained the legal rights to their now world-famous character.

Superman’s legal history

Siegel and Shuster sold all the rights to Superman in 1938 for US$130, and at the time they entered into an agreement to supply the publisher (then National Comics Publications) with material on a regular basis. The agreement provided the creators with a fairly substantial annual salary, although this was relatively little compared to the millions that the publisher was already making from Superman.

In 1947, Siegel and Shuster attempted to void their 1938 contract and reclaim copyright in Superman. The case was ultimately settled, with National Comics retaining all legal rights to Superman.

Then in 1973, Siegel and Shuster made a further failed bid for ownership, losing their arguments before both the New York District Court (in October 1973) and the US Second Circuit Court of Appeals (in December 1974).

In 1975, the publisher of Superman (now owned by Warner Bros) felt a moral obligation to accredit Siegel and Shuster as the creators of Superman, agreeing to do so for all comics, TV series and films. In addition, Warner Bros reportedly agreed to award lifetime pensions to the pair of $20,000 each per year.

Major amendments to the Copyright Act in 1976 and 1998 then saw the US copyright term lengthened, and special “termination” clauses inserted, allowing for authors to reclaim rights to their works from publishers within specific reclamation windows. Siegel and Shuster’s estates filed notice of their intent to reclaim copyright to Superman, and then entered into lengthy settlement negotiations with Warner Bros. However, the Siegel and Shuster estates had little success and issued further legal proceedings, alleging copyright infringement by Warner Bros.

In March 2008, the California District Court ruled that Siegel’s estate was entitled to reclaim some of its rights to Superman. However, Warner Bros appealed the decision, claiming that the District Court did not adequately consider an agreement between the parties that was concluded in 2001.

In January 2013, the US 9^th Circuit Court of Appeal held that the parties had agreed to specific terms of settlement in October 2001, that those terms were sufficiently clear, and that the settlement agreement between them was legally binding.

That decision followed a similar finding in October 2012 regarding the estate of Superman’s other co-creator, Joe Shuster. The combined result of the recent litigation leaves Warner Bros in complete creative control over the Superman character, including his origin, his likeness, and his alias Clark Kent.

Batman too?

Of course, Siegel and Shuster are not the only creators to receive what they later considered to be a raw deal for their intellectual property. Under an agreement with DC Comics, Bob Kane is recognised as the sole creator of Batman. While it is true that Bob Kane came up with the idea for Batman, much of the character, plot and mythology of the Batman series – including many of its villains – were developed in close collaboration with William “Bill” Finger.

Bill Finger passed away in 1974 having received very little compensation or recognition for his contributions to the Batman universe. Even to this day, Bill’s estate has failed to have him listed in the credits to more recent Batman works. Despite being the creator and writer of the Joker character, and the man who coined the term “The Dark Knight”, Warner Bros has refused to accredit Bill Finger in its most recent Batman movie franchise.

Protecting creations

The cases of Superman and Batman illustrate the need for authors and other creators of intellectual property to ensure that they receive appropriate legal advice before entering into agreements with publishers and other businesses to commercialise their intellectual property.

In particular, authors and other creators sometimes appear sometimes to disregard their on-going legal rights when negotiating with publishers, and care should be taken (for example) when conducting an outright sale of the intellectual property rights to their creations. In certain cases, a licensing arrangement where the author or creator receives on-going royalties based on revenues derived from the creation may be appropriate.

If you need any assistance with protecting your creation, then please contact David Alizade and Thomas Huthwaite.

Mega-misinformation: The difference between cloud computing and file sharing

Fri, 01 Feb 2013 00:00:00 +1300

Several news reports in the past week have referred to Kim Dotcom’s new website, Mega, as a “file sharing” website, saying that Dotcom’s company has received “file sharing infringement notices” and mentioning the Mega website alongside reports on the recent decision of the Copyright Tribunal on the infringing file sharing legislation.

These reports appear to be confusing two different aspects of the copyright legislation: there are some important distinctions to be made.

File hosting vs. file sharing

In the colloquial sense, Mega is a ‘sharing’ website. However, it is not a “file sharing” website as defined by New Zealand’s infringing file sharing legislation. Under the legislation, file sharing occurs only when material is uploaded via, or downloaded from, the internet using software or a network that enables the simultaneous sharing of material between multiple users.[1] Examples of such software include BitTorrent and uTorrent.

Mega does not appear to operate in this way. It is a file hosting service, otherwise known as a cloud service or a cyberlocker. When using a file hosting service users upload material to the website servers, and then provide links and encryption keys to other users, who can download that material from the server. Similar services include Dropbox, Google Drive and Microsoft SkyDrive. The now-extinct MegaUpload, the very reason for Dotcom’s arrest and infamy, was another example.

File hosting services do not typically provide for the simultaneous sharing (uploading and downloading) of material between multiple users, and are therefore not subject to the Infringing file sharing legislation, because of the definition of “file sharing” in the Copyright Act.[2]

Most file hosting services are intended to be used by individuals and groups to store their personal or collaborated material. The difference with MegaUpload is that many individuals (perhaps inevitably) used the cloud storage to upload and share copyright material with other users. The acts of uploading copyright material, making it available to other members of the public, and downloading the material, are all forms of copyright infringement when such actions are not licenced by the true copyright owner.[3]

In MegaUpload’s case, copyright owners soon made the website administrators aware of instances of copyright infringement. Dotcom and his associates claim to have adopted a takedown procedure, acting on the claims of infringement by removing the links. However, the website’s popularity, and the alleged widespread piracy taking place, inevitably got the better of it. MegaUpload was shut down on 19 January 2012.

MegaUpload vs. Mega

One year later, Kim Dotcom has replaced MegaUpload with the new service, Mega. The difference between Megaupload and Mega is that on Mega material is encrypted on the client’s side before being uploaded. The Mega administrators therefore do not know the encryption keys to uploaded files, do not know the content of the files, and are (arguably) not responsible for the contents of uploaded files.

Further, the Mega administrators have stated that certain companies (e.g. film and music studios) can apply for direct access allowing them to remove files that are discovered to contain copyright material. A condition of this access is that such companies will have to undertake not to sue Mega for the conduct of its users.

Whether this will be attractive to those studios remains to be seen.

Copyright infringement warnings

What has occurred already, however, is that Mega has received a host of copyright infringement warnings (at least 150 according to one of Dotcom’s New Zealand lawyers, Rick Shera).

These warnings are not the “three strikes” warnings that copyright owners can send in accordance with the infringing file sharing legislation (for more on that, see our most recent report[4]). Rather, the warnings are the equivalent of cease and desist notices, putting Mega on notice of its users’ infringing conduct and requesting that copyright material be removed.

While Dotcom appears to have tried to avoid Mega being put on notice of copyright infringement, namely by encrypting all uploads, copyright owners have still apparently still found cause to issue their complaints. Whether Mega and its owners are vicariously liable for copyright infringement is at presently unclear; the same question remains to be answered in respect of MegaUpload.

However, copyright owners’ views are clear: encryption or no encryption, sharing their content without a licence is illegal.

[1] Copyright Act 1994, section 122A(1).

[2] 122A(1) Interpretation for sections 122B to 122U

file sharing is where—

(a) material is uploaded via, or downloaded from, the Internet using an application or network that enables the simultaneous sharing of material between multiple users; and

(b) uploading and downloading may, but need not, occur at the same time.

[3] Typically, copyright infringement requires “substantial copying” of copyright material, which may include broadcasting, publishing, or making such material available to others.

[4] http://baldwins.com/first-alleged-pirate-walks-the-plank-lands-in-shallow-water/

First alleged pirate walks the plank – lands in shallow water

Thu, 31 Jan 2013 00:00:00 +1300

The first of at least 11 infringing file sharing cases before the Copyright Tribunal has now been decided. The Tribunal’s decision is largely a positive one for the Recording Industry Association of New Zealand (RIANZ), the authorised representative for various rights holders in the music industry, with the accused found to have infringed the File Sharing legislation and fined. This article discusses some of the interesting implications of the case for internet users and rights holders.

Three strikes and you’re out?

Despite the wide publicity and controversy caused by the Infringing File Sharing legislation, there still appears to be a fair amount of confusion over what conduct is illegal. This case is a clear example of this. The accused account holder in the present case only admitted to having downloaded a single song by Rihanna (“Man Down”). But the legislation requires at least 3 file sharing infringements, each occurring approximately one month apart, before any penalty can be awarded.

So, how did the accused become unstuck?

First of all, file sharing by its very nature allows for the simultaneous uploading and downloading of material by several users. Any time that file sharing software (such as BitTorrent or uTorrent) is used, the user is likely to be both downloading and uploading the material in question.

The accused in the present case chose to illegally download a single song using file sharing software. However, by file sharing, not only was she downloading the song – she was also making it available for others to download. RIANZ happened to be monitoring that particular song, which meant that the accused’s initial infringement led to a warning notice. One month later, the accused was still sharing the same song, and was therefore liable for a second notice in respect of that song.

Secondly, it is the account holder who is held liable for any infringement that occurs on his or her internet account. In this case, a third infringement occurred when the accused illegally shared the song, “Tonight Tonight” by Hot Chelle Rae. Even though the accused claimed that she did not illegally share this song herself, and someone else must have done so, the accused was held responsible for any other person accessing her internet account to file share that song.

Two counts of sharing “Man Down” and one count of (vicariously) sharing “Tonight Tonight” meant that the accused had committed three strikes and was liable for a fine of up to $15,000.

A real deterrent?

In this case, the accused was fined a meagre $616.57. Of this, $250 was calculated to reimburse RIANZ for sending its infringement notices, for applying to have the case heard, and for making its submissions.

The Tribunal held that a total of $360 ($120 per infringement) was an appropriate deterrent in this case – a far cry from the several thousand typically sought by RIANZ in file sharing cases. Of course, in this case, the accused only admitted to illegally file sharing one song, so some might say that an award of several thousand was not warranted. But consider for a moment a case heard in late 2012, where a Minnesota woman was fined US$222,000 by an American Federal Court for illegally sharing 24 songs.

In our view, the Tribunal must look to increase its fines considerably (in appropriate cases) for the File Sharing legislation to have any real bite and deterrent effect. There are many copyright owners who will otherwise decide that the cost to them will be far too prohibitive, and the rewards far too little, to justify sending infringement notices to infringing file sharers.

As an aside, $6.57 is the amount that the three songs would have cost to purchase for download legally, for example, through the iTunes store.

What can you do to protect yourself?

Educate yourself. In most cases, it is clear what the law allows you to do. Unless the copyright owner has licenced or authorised you to do so, copying or communicating any copyrighted material may amount to copyright infringement. This includes copying text, photos, music and videos; it includes sharing material with others that does not belong to you. The Infringing File Sharing legislation simply provides copyright owners with an easier way to find and prosecute people who illegally share material using file sharing software.
Protect your internet network, especially if you are operating a wireless network. Password protection is an easy starting point. Educate those who will be using your network. Adopt strict software rules. Further measures, such as port blocking, can also be used to prevent unauthorised use of certain software.
If in doubt, buy your digital content through legitimate and licenced sources, such as iTunes – it’s inexpensive, it’s accessible, it has a huge library of high quality content, and most of all, you know it’s legal. There are even legitimate free alternatives to iTunes, such as Spotify, which allow users to stream music for free.
Ask for help.

For more information or assistance in copyright matters, we are happy to help both account holders and copyright owners. Please feel free to contact Brigette Shone and Thomas Huthwaite.

Isolated DNA patent-eligible, comparison methods maybe not: Myriad unchanged by Mayo (so far)

Thu, 17 Jan 2013 00:00:00 +1300

A 2:1 decision reaffirming Myriad Genetics’ patent rights was made by the U.S. Court of Appeals for the Federal Circuit on August 16 2012, following re-examination of the decision in Association for Molecular Pathology v Myriad in light of the U.S. Supreme Court’s decision in Mayo Collaborative Services v Prometheus Laboratories, Inc. (Mayo). In Mayo the Supreme Court found that methods were not patent-eligible if they simply applied laws of nature (see our previous article regarding the USPTO’s interim examination guidelines based on this decision http://baldwins.com/uspto-issues-guidance-on-eligibility-of-subject-matter-involving-laws-of-nature/).

The patents in question, owned by Myriad Genetics, cover three inventions: isolated DNA, a diagnostic method, and a method of screening for new therapeutics. All are related to Myriad’s test for the BRCA genes associated with some breast and ovarian cancers. The court considered only the question of what subject matter is patent-eligible, finding that man-made compositions of matter including isolated DNA molecules are patent-eligible. However they found that the eligibility of methods incorporating such matter depends on whether the method claims go beyond ‘abstract mental steps’.

Isolated DNA: a product of man following laws of nature

Isolated DNA was found to be patent-eligible as it is sufficiently distinct from natural DNA molecules, being not just purified but ‘chemically cleaved’ from its natural state. Judge Lourie observed that all matter is ultimately derived from products of nature and it does not equate to equivalence with natural products, “Everything and everyone comes from nature, following its laws, but the compositions here are not natural products. They are the products of man, albeit following, as all materials do, laws of nature.”

The United States Patent and Trademark Office’s practice of granting patents for isolated DNA for almost thirty years was cited with reference to the potential adverse impact of changing eligibility on the biotechnology innovation system. Judge Moore stated that the court “must be particularly wary of expanding the judicial exception to patentable subject matter where both settled expectation and extensive property rights are involved.”

Many commentators predicted that the court’s decision would not change because Mayo concerned method patents and the first decision in Myriad had already invalidated their comparison method patents on similar grounds. However Judge Bryson dissented on isolated DNA being patent-eligible based on Mayo. Bryson’s opinion is that Mayo should alter the court’s previous decision based on its criteria that, in order to be patent-eligible, subject matter should contribute or add ‘enough’ inventiveness for it to no longer be well-understood, routine or conventional activity and that isolation of DNA does not satisfy these criteria.

Methods must be more than abstract mental steps

In line with the decision in Mayo the court found that diagnostic methods always include natural laws and are patent-ineligible unless they go beyond an ‘abstract mental step’ to apply a natural law. The diagnostic method examined consists of comparing of a patient’s gene sequence to Myriad’s proprietary sequence that is associated with a predisposition to certain types of breast cancer. The court found this method to be simply an abstract mental step.

The court noted that an abstract mental step could be one element of an eligible method, but not the sole process involved. They also stated that a method claim would have been better supported by specific reference to physical embodiments of the method, for example extraction of DNA and sequencing.

In illustration of the above points, it was found that a method for screening for cancer therapeutics was eligible on the grounds that the screening took place in cells transformed by isolated DNA molecules into transgenic cells by the hand of man. This decision found that at the heart of the claims is a manmade, transformed cell thus conferring eligibility to the screening process which taken alone could be considered an abstract ‘comparison’ step.

What next for Myriad?

While this reconsideration in light of the decision in Mayo reaffirms this court’s 2011 decision, in November 2012 the Supreme Court agreed to hear the Association for Molecular Pathology’s appeal against the decision with respect to the single question, “Are human genes patentable?” This hearing is yet to take place.

Commentators believe that it is likely the Association for Molecular Pathology will argue that the outcome could be consistent with Judge Bryson’s opinion that isolation of DNA does not ‘add enough inventiveness’ to conventional activity. Regardless of on-going litigation the first of Myriad’s patents are set to expire in 2015, allowing competitors to offer the test without requiring a license, although improvement patents will not expire until 2018.

No doubt the biotechnology community will continue to watch this case with interest, however for the meantime isolated DNA, and in particular cDNA sequences, are patent-eligible. Regarding diagnostic and prognostic methods, while both the Mayo and Myriad courts agreed that methods which simply involve abstract mental steps are not patent-eligible, provided certain criteria are met, diagnostic and prognostic methods may still be protected. We recommend obtaining legal advice before making any decisions about patent eligibility and/or filing a patent application in the United States.

If you require advice on patenting of biological materials please contact Shelley Rowland (shelley.rowland@baldwins.com).

This article was written with assistance from Harriet Sandstad.

India’s IP Appellate Board endorses compulsory license of patented cancer drug to generic manufacturer

Wed, 16 Jan 2013 00:00:00 +1300

In March 2012 the Indian Patent Office (IPO) granted its first compulsory license to Natco Pharma, an Indian generic manufacturer, revoking the exclusive rights held by Bayer to market Nexavar (sorafenib tosylate). Nexavar is used predominantly for kidney and liver cancer treatment. In May Bayer appealed the case, however their petition was dismissed in September. This article discusses some of the issues raised by both the patent controller’s decision and Bayer’s argument.

Grant of compulsory license

Compulsory licensing occurs when a government authorises an organisation other than the patent owner to produce a patented product or process without the patent owner’s consent. The patent owner is remunerated for the license but does not have the option to refuse the license, select the licensee, or determine royalty rates. The Indian Patents Act (2005) provides for compulsory licenses three years following patent grant. Compulsory licenses can be granted on the grounds of the invention not being available at a reasonably affordable price, the reasonable requirements of the public with respect to the patented invention not being met, or the patent not being worked. This has recently been changed from ‘reasonably priced’ to ‘reasonably affordably priced’, which is seen to lower the threshold for compulsory licensing.

The IPO found that the price charged by Bayer contravened the Patents Act (2005) as it was not available to the public at a reasonably affordable price with respect to the purchasing power of the public or in sufficient quantities, and that the patent was not being ‘worked’ in India as the drug was not being manufactured in India. The decision took into account the finding that Bayer and Natco had not come to an agreement regarding a voluntary license – although this is disputed by Bayer who claims Natco’s ‘request for a license’ lacked the requisite form and detail to be construed as such.

Bayer unsuccessfully argued that a ‘reasonably affordable price’ should take into consideration the costs of both successful and unsuccessful research and development efforts required to bring a drug to market as well as the ability to fund future research for the next generation of innovative drugs. Bayer also argued that a generic version of the drug manufactured by Indian generic manufacturer Cipla Ltd which was already on the market should be considered with respect to ‘meeting public need’.

By way of background, in 2011 Bayer bought patent infringement action against Cipla, Ltd., for manufacturing an unlicensed generic version of Nexavar under a marketing authorisation from the Drug Controller of India since mid-2010. In India marketing authorisations are granted independent of any intellectual property considerations. This patent infringement litigation is still underway. Cipla cut the prices of its version of the drug following the grant of compulsory license to Natco – prompting Bayer to bring a second patent infringement action against Cipla.

Under the compulsory licensing arrangement Natco must:

Pay a 6% royalty to Bayer
Manufacture the drug themselves, production may not be outsourced
Only sell the drug in India, only for treatment of kidney and liver cancer, and at the price set by the Patent Controller – approximately $US175 for a month’s treatment compared to US$5,000 for Bayer’s drug
Supply the drug to at least 600 needy patients each year free of charge
Not represent that their product is the same as Bayer’s or that Bayer is associated with their product

Bayer is able to grant other licenses and compete with Natco, who has been granted the compulsory license to 2020. Bayer has no liability for Natco’s product.

The Organisation of Pharmaceutical Producers of India (OPPI), representing multinational biopharmaceutical companies in India, believe the decision will be damaging to the industry in the long term and that compulsory licenses should only be used in “exceptional circumstances such as times of a national health crisis” (OPPI President Ranjit Shahani).

Bayer’s challenge to the ruling

Bayer appealed the order on grounds that a ‘reasonably affordable price to the public’ should consider the costs incurred in developing a patented product, as the ‘public’ comprises both the patients and the patentee. They cited the cost of development of the drug, and that the generic manufacturers incur no such expense. They also argued that they should have been provided the opportunity to reconsider pricing prior to a compulsory licensing being granted and that Cipla’s manufacture and sale of a generic version of the drug at a lower price should have been taken into account in considering availability of treatment. Furthermore they argued that Cipla’s subsequent lowering of their price defeats the objective of the grant of the compulsory license. Bayer’s appeal was rejected in September 2012 on the basis that the patentee must work the patent at a reasonably affordable price.

In November 2012 Bayer again attempted to terminate the compulsory license, on the basis that Natco exported it’s generic version of the drug to China and Pakistan, in violation of the terms of the license. Natco argued that the evidentiary products obtained by Bayer were “suspect and orchestrated” and that they have no distributors in China or Pakistan, suggesting that online pharmacies and India-based on-sellers are a possible source of the products. Several commentators are of the opinion that Natco is obligated to control the entire supply chain in order to fulfil the terms of the compulsory license, and the IP Appellate Board has yet to rule on this matter.

TRIPS and compulsory licensing

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement that establishes minimum standards for IP regulation administered by the World Trade Organisation. TRIPS allows members the right to grant compulsory licenses and determine the grounds for such grant. This is usually used in cases of ‘extreme urgency’ or ‘national emergency’, and in such cases may be granted without first trying for a voluntary licenses.

Declarations on the TRIPS Agreement specifically state that the agreement is not intended to prevent member governments from acting in the interests of public health in accordance with the Doha Declaration, “Each member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such license are granted”.

The TRIPS Agreement states that patentability should not be discriminated on the basis of “the place of invention, the field of technology and whether goods are imported or locally produced”. In the UK this was interpreted to mean that lack of local manufacture was not grounds for grant of a compulsory license, however the Indian Patents Act (2005) states that “patents are not granted merely to enable patentees to enjoy a monopoly for importation of a patented article” and as such lack of local manufacture was interpreted as one of the grounds for grant of a compulsory license in case of Bayer and Natco.

USPTO commentary

In June 2012 Teresa Stanek Rea, Deputy Director of the USPTO, has stated that “compulsory licenses dissuade pharmaceutical and biotech companies from innovating” and that the grounds for granting a compulsory license in the case of Natco “did not meet international standards”. She also stated that the USPTO is taking all available steps to encourage other nations to find solutions to public health issues that do not undermine the incentives provided by intellectual property rights.

The next possible step for Bayer is to appeal the decision to India’s Supreme Court. On-going activity in this case will be closely watched by the pharmaceutical and biotechology industries, as well as by intellectual property offices and practitioners internationally, as it will likely have implications for how these firms do business in India and in other countries.

New Zealand and Australia

Both New Zealand and Australia have general compulsory licensing provisions, and both are members of TRIPs.

In Australia courts may order compulsory licenses after a period of three years following grant of patent where the ‘reasonable requirements of the public’ have not been satisfied, the patent holder has failed to provide a satisfactory reason for these requirements not being met, and the applicant applying for the license has unsuccessfully attempted to obtain a license on reasonable terms. The New Zealand legislation is similar, allowing grant of compulsory license after a period of three years following sealing, or four years from the date of the patent.

Despite these provisions, concerns have recently been raised about access to patents covering medical technologies both in Australia and New Zealand.

Compulsory licensing in Australia is currently the subject of a public enquiry; see http://www.pc.gov.au/projects/inquiry/patents for further details and a draft report issued in December 2012 recommending changes to Australia’s law on compulsory licensing. In New Zealand, a bill amending the Patents Act 1953 passed its second reading in late 2012 (see article http://www.baldwins.com/patents-bill-passes-second-reading-in-parliament/). The bill provides for the granting of compulsory licences for manufacture and export of medicines to address a serious public health problem in an overseas country (in accordance with the DOHA Declaration on the TRIPS Agreement and Public Health).

If you have any questions regarding compulsory licensing provisions in New Zealand, Australia or other countries, please contact Shelley Rowland (shelley.rowland@baldwins.com).

This article was written with assistance from Harriet Sandstad.

Callaghan Innovation: A new Advanced Technology Institute for New Zealand – Out of the lab and into the marketplace

Wed, 16 Jan 2013 00:00:00 +1300

In December 2012 the Ministry of Business, Innovation and Employment officially formed an Advanced Technology Institute, to be called Callaghan Innovation, with locations in Auckland, Wellington and Christchurch. With a budget of $166 million spread over four years, ATI’s remit is to “get our best, most innovative ideas out of the lab and into the marketplace more quickly”. While the institute was expected to be operational from the beginning of December 2012, it has been delayed.

Callaghan Innovation will focus on the high value manufacturing sector, which generates 29% of New Zealand’s gross domestic product (GDP) according to a report generated for the Ministry of Science and Innovation in April 2012[1]. Specific focus will be on food and beverage, (the most significant subsector), agri-tech, digital technologies, health technologies, therapeutics manufacturing, and high-value wood products.

Services to be provided by Callaghan Innovation

Callaghan Innovation will be both an intermediary - helping to build and foster capabilities within New Zealand’s innovation system - and a service provider. It will help build links between local and international research organisations and act as a portal for access to research and development expertise, grants, and commercialisation support. Some existing business development and research and development grants will also be accessed via Callaghan Innovation rather than current agencies. The institute will work in close partnership with existing organisations including New Zealand Trade and Enterprise (NZTE) and the Crown Research Institutes (CRIs), particularly Industrial Research Limited.

Specific capabilities to be developed within ATI include:

Applied biotechnology
Applied chemistry
Advanced materials
Digital technologies
Manufacturing and services processes and systems
Measurement for analytical testing, standardisation and certification

The Powering Innovation Report

Impetus for creating an ATI came from the report on ‘Powering Innovation’, prepared in April 2011 for the former Ministry of Science and Innovation by an independent expert panel – Professor John Raine, Head of the School of Engineering and Pro Vice Chancellor of Innovation and Enterprise at AUT, Professor Mina Teicher, previously director general of the Israeli Ministry of Science and Technology and Phil O’Reilly, Business New Zealand CEO[2].

This study identified that industry participants require a customer-focussed public research organisation with easy access to expertise and infrastructure, flexible intellectual property ownership, and benefit arrangements to assist with marketing New Zealand as an ‘innovation centre’. To this end ATI is designed to be business-friendly, industry-focussed and results-driven. Whether it will rise to the challenge remains to be seen.

Prior to collaborating with other parties or applying for grants, we recommend that Government, academic and industry organisations alike obtain legal advice to ensure wherever possible that there is clarity around issues of confidentiality and ownership and to ensure that any agreed contractual arrangement meets and accurately represents each party’s commercial goals. In many cases, public disclosure or sale of a new product or service will limit the options available to protect the product or service, for example, public disclosure of an invention prior to filing a patent application can invalidate the application.

If you require further information, please contact Shelley Rowland (shelley.rowland@baldwins.com).

This article was written with assistance from Harriet Sandstad.

[1] High Value Manufacturing Services Final Report: A sector profile prepared for the Ministry of Science and Innovation by Martin, Jenkins & Associates Ltd. Available from: http://www.msi.govt.nz/assets/HVMS-Sector-profile.pdf

[2] Powering Innovation – Improving access to and uptake of R&D in the high value manufacturing and services sector. An independent report commissioned by the Ministry of Science and Innovation. Commissioned by MSI and prepared by members of an independent panel – Prof John Raine (Head of the School of Engineering and Pro Vice-Chancellor Innovation and Enterprise at AUT), Prof Mina Teicher (Director of the Emmy Noether Research Institute for Mathematics at Barllan University Israel; former Director General at the Israeli Ministry of Science and Technology) and Philip O’Reilly (Business New Zealand CEO). 28^th April 2011. Available from: http://www.msi.govt.nz/assets/PoweringInnovation.pdf.

The Patent Box – Tax reductions for patent-protected products in the UK

Tue, 15 Jan 2013 00:00:00 +1300

Significant tax reductions are in store for UK-based companies profiting from patented or similarly-protected innovations from 1 April 2013. ‘The Patent Box’ aims to incentivise development and commercialisation of technology in the UK by taxing profits attributable to patents at 10% rather than the standard corporate tax rate of 22%. This change is part of wider corporate tax reform including reductions to the main corporate tax rate and R&D tax credits. Patent Box benefits will be phased in over a five year period, starting at 60% with the full benefit available from 2017.

Qualifying IP

Qualifying IP includes new and existing patents granted by the UK Intellectual Property Office or European Patent Office, plant variety rights, data exclusivity rights and supplementary protection certificates. There are plans to extend the regime to patents granted by other European Union Member States with similar patentability criteria to the UK, this currently includes patents granted by Austria, Bulgaria, Czech Republic, Denmark, Estonia, Finland, Germany, Hungary, Poland, Portugal, Romania, Slovakia, and Sweden. Pending patents cannot be claimed; however the benefit of the Patent Box can be back-claimed to the priority date once a patent is granted.

Companies that have been granted a marketing authorisation for medicinal products for human or veterinary use that benefit from marketing or data protection are able to use the Patent Box as if they held a qualifying IP right.

Company eligibility criteria

In order to be eligible a company must qualify for UK corporation tax, hold the right to the IP or an exclusive in-license (for at least an entire national territory), be involved in developing the protected item or an item incorporating that protected item, and have active ownership. Active ownership means the company is involved in significant management or development. Development criteria includes both the patented technology itself and ways in which it can be used or applied. If the UK company is part of a group of companies, in some circumstances qualifying development may be undertaken by another member of the group provided the ‘significant management’ criterion is met within the UK. IP holding companies not involved in development are intentionally excluded.

Profit eligibility criteria

Profits from patented products that are not attributable to ‘valuable marketing assets’ or ‘routine activities’ are eligible. This includes worldwide royalties and other licensing income, income from sale of patents, infringement income and income from sales of patented products or products including patented components. There will be two methods for calculating eligible profit depending on the size of the claim; a simpler method will be available to firms with profits less than £3 million. Patent Box losses can also be offset and carried forward.

There are two notable criteria above. First, worldwide profits returning to a UK-based company are eligible. Therefore if a company based in the UK sells product in New Zealand or Australia that income qualifies for the Patent Box tax rate. Second, almost any income from selling products that are protected will qualify for the reduced tax rate, even if only part of the product is protected. As Diarmuid MacDougal, PwC UK R&D and Patent Box network leader notes, “The patent is a switch, so you just need one patent to switch the entire product profit into the [Patent] Box.”

Implications

Combined with above the line tax breaks for R&D also being introduced in April 2013, there are incentives to established limited liability companies in the UK. It is anticipated the number of patents filed with the UK Intellectual Property Office will increase. From a company perspective, ensuring that the eligibility criteria are met and documented is an important step. This includes tracing which intellectual property rights are embedded within which products and processes, and documenting patent-related decision making as evidence of the required management activity.

As noted in an article by Tim Jackson (Partner, Baldwins Intellectual Property) in 2009 (http://www.baldwins.com/patent-box-patent-income-to-be-taxed-at-only-10-percent-in-the-uk/), local companies may wish to consider out-licensing or transferring ownership of to a UK company. This could involve forming a new UK-based company tasked with developing the protected products, or transferring ownership to existing joint venture or subsidiary companies in the UK. Of course, we recommend that companies consult with their attorneys and tax advisors before taking any such action, to ensure they are fully aware of any associated risks and that such a strategy is commercially sound having regard to the structure of the business and its commercial goals.

Further information is available from HM Revenue & Customs http://www.hmrc.gov.uk.

If you require further advice, please contact Shelley Rowland (shelley.rowland@baldwins.com).

This article was written with assistance from Harriet Sandstad.

With a Mc/Mac Whisky Spat, Give the Mill a clone?

Tue, 18 Dec 2012 00:00:00 +1300

The New Zealand High Court in The Scotch Whisky Association v The Mill Liquor Save Limited[1], has reversed an earlier decision by the Assistant Commissioner of Trade Marks which upheld[2] an application by the Mill Liquor Save Limited (the “Mill”) for the word MACGOWANS (the “MACGOWANS mark”) covering “whisky flavoured spirits; none of the foregoing being whisky”, despite opposition by the Scotch Whisky Association (the “Association”). This decision had an unexpected twist. The appeal succeeded not on the basis of the ability of the contested mark to qualify for registration but because of a misdescription of the goods in the specification.

The Association, a representative body for producers of over 90% of Scotch Whisky sold worldwide had opposed the MACGOWANS mark on six grounds, however four of them were succinctly dismissed by Justice Stephen Kos as being “essentially parasitic”[3] to the principal grounds. Following similar suit, this article will only delve into the two substantive grounds of opposition.

Ground #1: Use of the MACGOWANS mark on the goods is likely to deceive or cause confusion

Deception and confusion is commonly pleaded in a scenario of inter-mark confusion. Typically, where the MACGOWANS mark would be compared to a rival mark owned by the Association relating to the same or similar goods. However, this is not a typical case. The Association does not hold any similar trade marks on the Register, rather its raison d’être is to promote and protect the integrity of the Scotch Whisky trade description. The Association’s objections consequently centred upon the alleged deception or confusion intrinsically evoked by the MACGOWAN name. “Shorn of inessentials”[4] the Association alleged that use of the MACGOWANS mark on “whisky flavoured spirits” (the “MacGowan’s product”) would be likely to deceive or confuse the relevant public into thinking that:

Claim 1. The MacGowan’s product is Scotch whisky;

Claim 2. The MacGowan’s product either contains, or is low strength, Scotch whisky i.e. the nature of the product; and/or

Claim 3. The MacGowan’s product comes from Scotland i.e. the origin of the product.

In the initial opposition proceedings, Assistant Commissioner Walden commenced her decision by identifying the relevant market as the general purchasing public of 18 years or more with a range of knowledge and experience concerning spirits. Walden predicated that such consumers would read information on the label of the MacGowan’s product and any relevant point-of-sale information. This would allow them to gain a suitable basic appreciation of the nature of the alcoholic product, its alcoholic content and its price and to deduce that the MacGowan’s product was not related to a Scotch whisky. As such Walden concluded that the Association had failed to establish the first two claims, above.

Assistant Commissioner Walden then reviewed existing Scotch whisky brand names and noted that while some names incorporated the “Mac” or “Mc” prefix, such as MacAndrews, many others including Glenfiddich and Grant’s did not. Walden further observed that the “Scotch Whisky” trade description was displayed on the bottle and surmised that this consistent trade practice would cue the consumer to seek out the Scotch Whisky descriptor to confirm the nature of the product. The culmination of these two factors led Walden to determine that a consumer was far more likely to consider MACGOWANS as representative of a person with the surname MacGowan (for example as the manufacturer or creator of the product), as opposed to where that person might reside. The Association therefore in her view, also failed to substantiate the third claim.

On appeal, Justice Kos accepted that the relevant consumers are the general purchasing public, 18 years or more. However he disagreed with the knowledge and sophistication attributed by Walden to such consumers. In this regard, Justice Kos cautioned against the perils of judicial officers giving undue weight to their own appreciation of the market. He cited with approval an observation made by the Court of Appeal in an earlier case[5] that the purchasing public:

“...will vary in their knowledge of the products and their characteristics from experts to persons who have little knowledge of wine … not all prospective purchasers will read the whole label closely. Not all would appreciate the percentage is such that the product is thereby not one that can be sold as gin, vodka etc”.

Justice Kos could find no evidential foundation for Walden’s proposition that a majority of the relevant purchasers would generally and with immaterial exception read the label and point of sale material carefully. Nor did Justice Kos consider there to be an evidential basis for Walden’s conclusion that consumers of Scotch whisky would expect the words “Scotch whisky” to be on the label of a product to affirm that the product was in fact Scotch whisky.

However it was accepted that the mere adoption of a Gaelic name, which in original derivation may be Scottish or Irish (the notional purchaser would not know which) is not distinctive of a Scots product, let alone a Scotch whisky[6]. In this regard, the Mill had rather ingeniously provided evidence that the Dunedin phone book referenced proportionately, the same number of entries for MacGowan as Edinburgh.

Justice Kos also accepted that the potential price of the MacGowan’s product would be an essential feature of the “surrounding circumstances”. Evidence from the Mill had deposed that the MacGowan’s product was sold for $10 per litre and displayed alongside other cheap “spirits”.

Taking these factors into account, by a relatively narrow margin, Justice Kos ruled that while the consumer may hold some initial doubt, “a moment’s reflection on the price difference would dispel any impression that the product is whisky, let alone Scotch whisky”[7].

In summary, Justice Kos concluded that the relevant purchaser although not a whisky expert is also “neither careless, gullible nor stupid”[8], and would not be likely to confuse use of the MACGOWANS mark on the MacGowan’s product as representative of Scotch whisky, to contain Scotch whisky or to come from Scotland. To this end, Justice Kos was rightly wary of granting the Association a de facto geographic nominal monopoly over any use of a Gaelic name on an alcoholic beverage.

Ground #2: The Mill had no intention to use the MACGOWANS mark in respect of “spirits”

The Trade Marks Act prohibits the registration of a mark in respect of its specified goods unless the use or intended use of the mark on said goods are justified[9]. It is however settled law that the fact of application is prima facie evidence of an intention to use the mark for the relevant goods. But in a rather ingenious secondary ground of opposition, the Association argued that the presumption to use the MACGOWANS mark to the goods identified in the specification namely “whisky flavoured spirits; none of the foregoing being whisky” had been displaced given that the MacGowan’s product, contained a meagre 13.9% alcohol per volume and could not be defined as a spirit at all. This argument was based upon the legal definition of “spirit” provided by the Food Standards Code, as “a potable alcoholic distillate containing at least 37% alcohol by volume”. The Mill explicitly deposed in its evidence that MacGowan’s product “… is not a spirit of a wine”[10] yet implored that the word “spirit” should embody a range of meanings and be inclusive of the MacGowan’s product.

The Mill’s arguments were accepted by Walden, who opined that the term “spirit” should be given an ordinary meaning. She made reference to the definition found in Oxford English Dictionary, defining spirit as a “strong alcoholic liquor for drinking, obtained by distillation from various substances” and taking a broad interpretation considered that the presumption of an intention to use the MACGOWANS mark on “spirits” had not been displaced.

Walden’s line of reasoning would be the Mill’s downfall on appeal when Justice Kos countered that “spirits” must be given a meaning appropriate to its context. That context did not equate to the understanding of the ordinary consuming public, but the technical “esoterica”[11] utilised by those persons who would in fact read the specification, namely, trade mark examiners and trade mark attorneys, “who are those the specification is directed to”[12]. Leaving this interesting point aside for future reflection over an appertif, there was no question that the present MACGOWANS product does not meet the Food Standard’s definition of “spirits”. Even when one applied the dictionary definition, Justice Kos considered it a gross exaggeration to suggest that the MacGowan’s product could be considered “strong liquor”:

“It is stronger, perhaps, than a tumbler of tonic water with a thimbleful of gin, but the analogy, while extreme is apposite”.[13]

Finally Justice Kos noted the inherent anomaly that would be created if the Court determined that the MacGowan’s product was not whisky, wine, nor spirit, for the first ground but reach the opposite conclusion in the second ground.

As it was not deposed in the evidence that the Mill had an intention to use the MACGOWANS mark on products that would be capable of being labelled “spirits”, Justice Kos allowed the appeal and ruled that the MACGOWANS mark could not be registered.

In spite of the Association’s technical win in this whisky spat, the Mill remains free to apply its unregistered MACGOWANS mark on its cheaper, weaker “whisky flavoured” clone – for now. Any such liberties may be lost if the Association are successful under the Fair Trading Act. Initiating such proceedings would allow the court to take into account the other indicia present on the bottle of the MacGowan’s product, including the exhortation “finest distilled spirit blended to evoke the flavour of the Highlands”. Justice Kos’ musings that the Association would have a “far stronger case”[14] may be just enough to prompt another whack, particularly when taken with his pertinent observation that success at opposition to registration will not take the MacGowan’s product off the market.[15]

This article first appeared on WTR Daily, part of World Trademark Review, in January 2013. For further information, please go to www.worldtrademarkreview.com

[1] [2012] NZHC 3205

[2] The Mill Liquor Save Limited v The Scotch Whisky Association [2012] NZIPOTM 18 (27 June 2012)

[3] At paragraph 13 of The Scotch Whisky Association v The Mill Liquor Save Limited

[4] At paragraph 55

[5] Gault J ruling in Wineworths Group Ltd v Comite Interprofessionel du Vin de Champagne

[6] At paragraph 92

[7] At paragraph 93

[8] At paragraph 112

[9] Section 32(2) of the Trade Marks Act

[10] Affidavit by the Mill’s credit controller, Ms Brenda Kelly

[11] At paragraph 102

[12] At paragraph 102

[13] At paragraph 106

[14] At paragraph 77

[15] At paragraph 16

Carols by Copyright

Tue, 11 Dec 2012 00:00:00 +1300

In the run up till Christmas, marketing teams are frantically busy developing products and advertising campaigns centred on exploiting the festive season and all of its financial opportunities.

In order to fuel the spending, businesses invariably spend money on campaigns that involve the well-known Christmas music that we are all familiar with.

From an intellectual property perspective, it is very important that these rights are understood and recognised, and that businesses do not find themselves in hot water over the use of these well-known songs, that are seemingly in the public domain.

Before using them, it is important to first determine which recordings can be used freely, and which may require a licence. A basic understanding of the song owners’ rights can save retailers this Christmas from getting pinged for creating un-licensed associations, and benefitting from others’ creations.

Therefore any business that plays carols to entice or enhance its customers experience should be aware of its responsibilities, particularly from a copyright perspective.

Legal Position

Copyright protection is far-ranging and lasts for a long period of time. For instance, for literary, dramatic, artistic and musical works, copyright protection in New Zealand is calculated as the life of the author, plus 50 years from the end of the year in which the author of the particular work dies (Section 22). This would include any lyrics recorded in the composition of that song under a literary work.

On the other hand, copyright protection for sound recordings and film runs for 50 years from the end of the calendar year in which the work was made lawfully available to the public (Section 23).

Copyright exists automatically in the original sound recording, and the owner of the sound recording (e.g. the recording label or artist) has the exclusive right to use or licence a number of restricted acts in relation to the sound recordings. These restricted acts include the exclusive right to play or communicate the work in public.

Licence Fees

Essentially, there may be two licence fees every time you wish to play music in the public arena in order to satisfy the copyright requirements under the Act.

One is for the copyright in the song, being the composition and/or lyrics by the songwriter or composer. This is administered by the Australasian Performing Rights Association (APRA) which grants licences for the broadcast of public performance rights in the musical work and distributes licence fees to the songwriters.

The other copyright is for the recorded version of the musical work by a recording artist (e.g. record label). This is administered by Phonographic Performances of New Zealand (PPNZ). PPNZ grants licences for the broadcast and public performance of recordings and distributes licence fees to record labels as well as directly to registered New Zealand recording artists.

Public performance

A public performance takes place any time a carol or song is played in a non-domestic setting. This also prevents businesses that have legally purchased an album, from playing the album in a public environment. For example, a business owner such as a retail store would be prevented from purchasing “Mariah Carey – Merry Christmas”, and blasting this from within the store and on any outdoor speakers to attract customers, without first obtaining licences.

Examples

Many Christmas carols are now in the public domain because they were published so long ago that copyright has expired or protection did not exist at the time they were written. For instance ‘Silent Night’, a poem written by Austrian priest Father Joseph Mohr and composed into the melody we know today by Austrian headmaster Franz Xavier Gruber, was first published in 1816. Another example is ‘Joy to the World’, which was first published as a hymn in 1719 by Isaac Watts, and adapted and arranged into music by Lowell Mason in 1939. However, while the copyright in the composition of the song may have expired, it is likely that any recording of Silent Night or Joy to the World that you would listen to today will have been more recently re-recorded, and will therefore still be subject to copyright.

Penalties

Under the Copyright Act, a person infringes copying in a sound recording when that person plays the recording in public without a licence. The New Zealand copyright Act 1994, stipulates a maximum fine of $150,000 and/or up to 5 years imprisonment for any serious breaches.

We recommend that you take legal advice immediately if you are issued with any sort of infringement notice. It is of course preferable to enquire before use to ensure you comply with the law and do not breach authors’ rights.

Underlying message

Business owners should be aware that most Christmas Carols will have legal rights attached to them under the Copyright Act. Before using any songs associated with Christmas, be sure to investigate whether there are current rights, and whether a licence through APRA or PPNZ should be sought.

Make sure your business doesn’t end up with a red nose this Christmas; come and see one of our attorneys who will be sure to point you in the right direction.

Results of Government Review of Data Protection Laws

Tue, 11 Dec 2012 00:00:00 +1300

The Government has recently issued a notice indicating it has completed its review of New Zealand’s data protection regime for agricultural compounds (including veterinary medicines). The Government indicates it has agreed to some amendments to the relevant provisions in the Agricultural Compounds and Veterinary Medicines Act. In making its decision, Government took into account feedback from stakeholders on policy options in a discussion paper released at the end of 2011.

Implementation of the changes will require amendment of the Agricultural Compounds and Veterinary Medicines Act 1997 (and potentially the Hazardous Substances and New Organisms Act 1996). Officials are working on the necessary amendments, with a view to the changes taking effect from late 2013.

The review analysed New Zealand’s data protection settings in three areas:

innovative agricultural compounds;
new uses and reformulations of non-innovative compounds; and
reassessments of existing compounds.

The Government notice states it has agreed to the following:

Innovative agricultural compounds

This refers to compounds that are, or contain, an active chemical ingredient that has not been previously registered in New Zealand.

The review found that the current five year period of protection was appropriate, and as a result Ministers have agreed to retain the status quo of five years data protection for innovative agricultural compounds.

However, in order to encourage the registration of additional uses, it will now be possible to seek an extension of the five-year period of protection by one year for each additional use that is registered within three years of initial product registration, up to a maximum of three extra years. This would give a potential maximum of eight years of protection for the original data.

This change is being introduced because the review found that a number of important New Zealand horticultural crops and commercially farmed animals are considered “minor” commercial crops or species internationally, so products are not registered for use on them. The change is intended to encourage the registration of these additional “minor” uses in the New Zealand market.

It has also been agreed that the definition of “innovative agricultural compound application” will be amended so that

“innovative” means an active that has not previously been granted full registration in New Zealand at the time of the application; and
where there has been a previous application for provisional registration, an application for full registration is not restricted to the original applicant.

The current definition potentially inhibits the development of uses for innovative compounds that may have been referred to in applications for provisional registration, but which, for various reasons, have not proceeded to full registration.

New uses and reformulations of non-innovative compounds

This refers to compounds that are, or contain, active chemical ingredients that have been previously registered in New Zealand.

Currently there is no data protection provided for new uses or reformulations. The review found that the lack of data protection in this area may be inhibiting the registration and development of uses and products for the New Zealand market. As a result, a three-year period of data protection will be introduced for new uses and reformulations. This is intended to provide an incentive to register additional uses and reformulations of existing products in the New Zealand market.

Reassessments of existing approved compounds

There is currently no protection provided for data supplied to the regulator for the purposes of a reassessment. The review found that the costs associated with the options for data protection in this area are likely to outweigh the benefits. Thus there will be no change from the status quo (no data protection).

What does not kill me, makes me stronger: Nietzsche, Kanye and copyright

Tue, 11 Dec 2012 00:00:00 +1300

In 2006, Vince P (Vincent Peters), who describes himself as an “up-and-coming hip-hop artist and songwriter”, wrote a song called “Stronger”. The hook of this song plays on Friedrich Nietzsche’s aphorism, “What does not kill me, makes me stronger”:[1]

What don’t kill me make me stronger

The more I blow up the more you wronger

You copped my CD you can feel my hunger

The wait is over couldn’t wait no longer

Vince P obtained a meeting in November 2006 with John Monopoly, the manager of the superstar Kanye West. He wanted Mr Monopoly to be his executive producer. He played Mr Monopoly some of his recordings, including “Stronger”, and left him with a CD that included this track. Mr Monopoly apparently agreed to be Vince P’s producer as long as Vince P could secure record label funding. Vince P failed to get a record company deal, and the project was abandoned.

In July 2007, Kanye West released a single entitled “Stronger”, which went to #1 on several charts and quickly sold more than three million copies worldwide. The first four lines of the Kanye “Stronger” are as follows:

N-N-N-now th-th-that don’t kill me

Can only make me stronger

I need you to hurry up now

Cause I can’t wait much longer

There were several other similarities in the verses of the two songs.[2] Notably, both songs have a line about Kate Moss. Vince P’s song begins “I ain’t from Europe but I wear Lacoste”; Kanye references Christian Dior and Louis Vuitton. It has been suggested that none of these famous names from the world of European and British fashion is commonplace in hip hop lyrics.

Vince P felt aggrieved. He registered his copyright in his “Stronger” track and sued Kanye and his record companies for copyright infringement in the United States. However, the defendants moved to have Vince P’s claim dismissed and were successful at first instance and again on appeal.[3]

The US Court of Appeals for the Seventh Circuit considered the matter afresh. It accepted (for the purposes of the appeal) that Mr Monopoly and Kanye West “had ample access to Stronger (VP), and that this access gave West an opportunity to copy the song.” However, the Court was not persuaded that the similarities alleged by Vince P rose to the level of copyright infringement.

Judge Wood, delivering the judgment of the Court, accepted Kanye’s submission that the phrase “what does not kill me makes me stronger” had appeared in many songs over the past century; indeed, she went so far as to call the saying ubiquitous. Her Honour denied that Kanye’s song infringed Vince P’s rhyme pattern: methods of expression and lyrical forms cannot be protected by copyright; and Kanye’s rhyme scheme was not identical to Vince P’s. Finally, as regards the mention of Kate Moss, Judge Wood observed, first, that the lines were different (Vince P, “Trying to get a model chick like Kate Moss”; Kanye, “You could be my black Kate Moss tonight”); secondly, “analogizing to models as a shorthand for beauty is, for better or for worse, commonplace in our society”; and thirdly, there can be no copyright in facts or personal names.

Readers might be surprised by this result. Indeed, a US commentator notes that the Court appeared to have lost sight of the test of the “total concept and feel” of the copyright work and the allegedly infringing work.[4]

In New Zealand, infringement consists in copying “the work as a whole or any substantial part of it”.[5] Copyright infringement “focuses on what has been taken, the similarities. Differences are of less moment.”[6] In a leading case about dress designs, Justice Hillyer said:[7]

… the best test … is simply that something is a copy if it brings to mind the original. In other words, a copy is a copy if it looks like a copy, and even to my untutored eye, looking at the two dresses I would have no hesitation in holding that one was a copy of the other. The multiplication of coincidences is such that it could not be accidental.

This analysis is applicable to literary works, including lyrics, as well as to artistic works. Vince P may have fared better under New Zealand copyright law. As far as his US copyright goes, however, the judgment of the Seventh Circuit is the end of the matter: he does not appear to have appealed from it. We can assume that he is taking Nietzsche’s philosophy to heart.

[1] Was mich nicht umbringt, mach mich stärker. Nietzsche, Götzen-Dämmerung (1889), “Sprüche und Pfeile”, 8.

[2] The lyrics of the two songs are reproduced in the appendix to the appeal decision: Peters v West, United States Court of Appeals, 7^th Cir, No. 11-1708, 20 August 2012.

[3] Peters v West, United States District Court for the Northern District of Illinois, Eastern Division, No 10 C 3951, 3 March 2011; affirmed Peters v West, United States Court of Appeals, 7^th Cir, No. 11-1708, 20 August 2012.

[4] Bruce E Boyden “Seventh Circuit to Form 19: Drop Dead!” (30 August 2012) Marquette University Law School Faculty Blog < http://law.marquette.edu/facultyblog/2012/08/30/seventh-circuit-to-form-19-drop-dead/> and sources cited.

[5] Copyright Act 1994, section 29(2)(a) (emphasis added).

[6] Bleiman v News Media (Auckland) Ltd [1994] 2 NZLR 673 (CA) at 679.

[7] Thornton Hall Manufacturing Ltd v Shanton Apparel Ltd (No 2) [1989] 1 NZLR 239 (HC) at 246.

Businesses to benefit from international trade mark registration

Mon, 10 Dec 2012 00:00:00 +1300

(Click to view PDF of press release)

After years of waiting, New Zealand has finally acceded to the Madrid Protocol. This means that from 10 December 2012, New Zealand businesses can utilise an international trade mark registration system to protect their brands in over 85 countries in a more efficient and cost effective manner. A list of current member countries can be found at www.baldwins.com/members-of-the-madrid-protocol.

Conversely, overseas businesses will also be able to extend the scope of an existing International Registration (“IR”) to cover New Zealand.

There is an immediate and substantial cost saving if you file an IR in a number of countries. This is because it is a single application instead of several applications for each country which each incur local agent fees. It will still be necessary to engage a local agent if an objection to registration is received in a particular country.

As the IR is administered as a single registration, it will be simpler and more cost effective to renew the trade mark and to attend to changes of address/name and ownership.

The owner of an existing IR can designate further countries as more countries accede to the Madrid Protocol.

While the majority of industrialised countries are members of the IR system, there are currently some notable exclusions namely Canada, India and most of the countries in South America. You will need to file separately into each one of these “excluded countries” to obtain protection.

If you only wish to protect your brand in two or three countries, the cost of setting up an international trade mark registration may be more expensive than filing in each country the “old fashioned” way.

If you are a local business and your “home” application or registration (upon which an international trade mark application is based) is successfully challenged or is unable to be registered, the international application will fail. Separate applications will need to be filed with agents in all required countries. Prior to filing an international application it is therefore advisable to ensure that your home application or registration, is secure.

While new to this country, the IR process is not new to Baldwins. We have assisted our Australian clients obtain IR and we have the experience and systems in place to manage large scale international filing programmes with ease. While this is an exciting opportunity for New Zealand businesses, one size does not fit all. Come and talk to us to see if an IR is right for your business.

To view our introductory video click here.

The International Trade Mark System – What is in it for New Zealand Businesses?

Mon, 10 Dec 2012 00:00:00 +1300

On 10 December 2012 New Zealand implemented the long awaited International Trade Mark (ITM) registration system, also known as the Madrid Protocol, heralding the most significant development on the trade mark scene for years. New Zealand finally joins 86 other member countries in the ITM system, including most major trading partners, and no doubt membership will continue to grow.

The ITM system will provide export focused businesses with an alternative route for securing trade mark protection in overseas markets in a cost effective and efficient manner. It will also enable owners of ITM’s to maintain and manage their trade mark portfolio with greater ease and at lower cost.

The ITM system allows for a single trade mark application to be filed through the World Intellectual Property Organisation (WIPO) based in Geneva, rather than filing separate applications in each jurisdiction where protection is sought. The ITM application designates individual jurisdictions where protection is required, and once WIPO has accepted the application it passes details of the application to the designated national trade mark offices without the need for foreign trade mark attorney involvement and associated cost.

Each designated national trade mark office then examines the application against their national requirements for grant of registered trade mark protection, and if it complies, WIPO is notified and protection is granted in that jurisdiction to the same extent as if the trade mark had been registered nationally. It is also possible to designate new jurisdictions where registration under an ITM is required – an important feature as membership of the ITM system grows.

However, the potential benefits of the ITM system will not necessarily apply to all New Zealand businesses looking to take advantage of it. For example, significant cost savings are only likely where a business is looking to protect its trade mark in a number of jurisdictions, and if trade mark protection is required in only a handful of jurisdictions, it may be more cost effective to seek national protection in each jurisdiction of interest. Obtaining good strategic advice from trade mark professionals will be crucial.

The ITM system is also not without its “fish hooks”. If the application encounters problems during the national examination phase in the designated jurisdiction, it will be necessary to appoint a local trade mark attorney to deal with those issues and therefore earlier cost savings may quickly be lost. Pre-filing trade mark availability searches will continue to play a vital role in selection of a new trade mark, and assessing whether the ITM or national route is the best way of securing protection.

Furthermore, each ITM registration must be based on a New Zealand home trade mark application or registration. Critically the ITM registration and each national designation will be dependent on the home registration for a period of 5 years. This means that any changes affecting the home registration over this period will automatically be reflected in the ITM and national designations. This vulnerability is tempered to some extent by being able to convert ITM designations into national registrations, but again earlier cost savings may quickly disappear if conversion is necessary to avoid losing protection.

Smaller New Zealand businesses focused on the domestic market may also be impacted by the ITM system. It is expected that the number of requests for registered trade mark protection in New Zealand will increase markedly following implementation of the ITM system in New Zealand, as was the case in Australia where almost 5500 applications were received in the first year (2001-02) peaking at more than 22000 in 2007-08. If steps have not been taken by smaller businesses to secure their trade marks through registration in New Zealand, this will leave the door open for foreign businesses to acquire potentially conflicting rights.

The full impact that the ITM registration system will have in New Zealand remains to be seen. However, it is certainly a positive step towards further integration of the New Zealand economy in the global market for goods and services, a step New Zealand exporting businesses should welcome.

This article was originally published in the Chartered Accountants Journal.

Chris Ross is a senior associate at Baldwins Intellectual Property. Chris works primarily in the areas of trade marks but also advises on passing off and Fair Trading Act matters. He specialises in providing advice on trade mark availability, filing and prosecution, as well as transaction and disputes involving trade marks.

Don't fear intellectual property changes under TPP – lawyer

Fri, 07 Dec 2012 00:00:00 +1300

New Zealand will be encouraged to be bolder about changes to the intellectual property framework within the Trans-Pacific Partnership today.

Law firm Baldwins Intellectual Property will encourage negotiators to shake off fears about what the United States wants from TPP trade talks in an address to the 15th round of talks in Auckland this morning.

As a technology exporter, the US is primarily concerned about extending intellectual property (IP) rights, with a focus on the extension of patents for pharmaceuticals.

But New Zealand, a technology importer, is concerned about undue extensions of IP rights and does not want to give anything away – particularly control of the government’s drug buying agency Pharmac.

Baldwins' partner Wes Jones says New Zealand needs to be more confident that its companies will also benefit from proposed changes to the IP framework.

“The IP side of TPP presents an opportunity to increase investment in New Zealand and will make it easier for local innovators to obtain IP protection in TPP countries – which will grow NZ business and increase our export revenue.”

The changes could help create more successful technology exporters such as Fisher & Paykel, Glidepath, Lanzatech, Xero, Fonterra, Navman, Gallaghers and Icebreaker, Mr Jones says.

“To succeed and grow, these companies all look to markets outside of New Zealand. They all need to have commercially relevant IP rights available to allow an adequate return on R&D investment and to encourage them to continue to invest and grow.”

Within TPP negotiations, New Zealand should focus on opportunities to reduce procedural barriers to obtaining IP rights in all the countries that are a party to the negotiations, not just the US, he says.

Challenges on the IP side

The challenge for most New Zealand innovators is how to protect IP in target markets and then how to generate a return from that protected IP.

Concerns have been raised about the US requirements for a WTO Trade Related Aspects of Intellectual Property (TRIPS) plus an approach to IP within the TPP negotiations.

So far, New Zealand’s approach to the TPP negotiations appears to be one of fear that any change in the current levels of IP rights will stifle innovation and increase health costs here.

But Mr Jones says a targeted expansion of IP rights could actually increase innovation here and international investment in New Zealand’s pharmaceutical, IT and agricultural sectors, for example.

“Part of that targeted expansion may involve pharmaceutical patent term extensions resulting from delays in the registration process. Health costs may grow, but only as a result of any delays in registering the medicines in New Zealand,” Mr Jones says.

“The more efficient the registration process is, the less impact that expansion of intellectual property rights will have.

“To encourage New Zealand companies to develop into exporting entities, the risks involved in obtaining intellectual property rights internationally need to be reduced as much as possible.”

Mr Jones suggests the following issues could be addressed in trade talks around proposed IP changes:

Requirements to legalise and notarise documents in South American countries.

Patent attorney privilege in Canada.

Unity of invention differences between the US and the World Intellectual Property Organisation (WIPO).

Extension of the registered design priority period to 12 months.

Mr Jones will outline these benefits in his address to the TPP talks today.

This article was originally published on The National Business Review (http://www.nbr.co.nz)

Second infringing file sharing case dropped by RIANZ

Wed, 05 Dec 2012 00:00:00 +1300

In October 2012, Baldwins acted for an account holder accused of file sharing under the controversial “three strikes" or "skynet" law. After the account holder filed submissions with the Copyright Tribunal identifying a large number of defects in the claims, RIANZ withdrew the case entirely. It was previously seeking a total of $2,669.25 for the alleged sharing of 5 songs.

Now, RIANZ has dropped a second case brought before the Copyright Tribunal. This time, RIANZ sought a total of $4,675 for the alleged sharing of 11 songs. However, the account holder had not received any of the warning or infringement notices sent by his or her internet protocol address provider (IPAP), Slingshot.

Again, non-compliance with the technicalities of the procedure has resulted in defective claims. RIANZ has issued as many as 18 cases with the Copyright Tribunal. However, it will have to ensure that the technical details of its claims (and the notices issued by IPAPs) are correct if it intends to succeed in any of these. It is also reliant on the IPAPs to issue the notices correctly (for example, to the correct account holders) – an obligation imposed on them under the Copyright Act amendments. It remains to be seen whether legal action could be taken against IPAPs who are not adequately fulfilling their obligations.

The New Zealand music industry remains in an interesting position. It currently offers a wide range of legal sources for music – from pay-per-song downloads on iTunes, to free (ad-sponsored) streaming subscriptions on Spotify and Pandora. Yet, thousands of New Zealanders are still said to be illegally sharing music each month.

Under the infringing file sharing legislation, it is the account holder who may be held liable for any instances of illegal file sharing.

If you are an account holder, have you ensured that your house, flat, or business is adequately protected? Are you sure that your internet connection is not being used by someone who has installed file sharing software on his or her computer?

If you are a copyright owner, are you applying to issue infringement notices? For more information or help with such matters, please contact us.

Opportunity in Myanmar

Mon, 03 Dec 2012 00:00:00 +1300

Myanmar’s re-entry into the global community has been fast tracked by recent visits from world leaders Barack Obama and John Key. The country’s strategic location and economic potential offer a unique opportunity for international partnership. However, a secure investment infrastructure is required.

Robust protection of intellectual property rights is essential for those seeking to sell their trade marked goods and services in Myanmar. Presently, there is no acknowledgement of these rights or their international applicability.

Trade Marks

Myanmar does not have specific trade mark legislation. However, some general laws can offer limited protection and remedy for infringement and might provide inroads for developing a more comprehensive framework in the future.

Under the Registration Act 1909, a trade mark owner can register a Declaration of Ownership. This Declaration will be published in the local newspaper as a cautionary note to others not to infringe on the trade mark owner’s registration.

A Declaration of Ownership will not create proprietary rights in a trade mark. Use and reputation of the mark must be shown to prevent infringement. This is similar to the protection afforded by the common law in other jurisdictions. A Declaration of Ownership is prima facie evidence of these factors, which can be used in actions or claims under passing off, the Specific Relief Act and the Merchandise Marks Act. However, even if rights in a trade mark are recognised, others can use the mark in connection with dissimilar goods.

Patents and Industrial Design

There is no legislation specific to patents and industrial design. However, use and reputation can be established through a Declaration of Ownership under the Registration Act. Relief is also available under the Specific Relief Act.

Copyright

Myanmar recognises copyright in literary and dramatic works under the Copyright Act 1914. To claim copyright in published material, the work must be published in Myanmar. For unpublished works, the work must be created in Myanmar or the author must be a citizen of Myanmar.

Experts consider the Copyright Act an insufficient safeguard. An alternative strategy of protection is to trade mark specific elements of a work, such as logos, designs, phrases and symbols. However, this has its limitations as outlined above.

Myanmar recognizes that intellectual property protection must be implemented if it is to attract the powerful international investment necessary for its advancement. In the next year, the Myanmar Parliament is expected to introduce legislation to protect trade marks, patents, copyright and industrial design. Myanmar can benefit from its knowledge of the existing intellectual property systems of neighbouring jurisdictions and it has ensured compliance with the values and clauses of international instruments, such as the TRIPS Agreement.

The future is now for Myanmar. The country offers both opportunities and challenges for those seeking to expand their brand into this new frontier. We at Baldwins are excited to offer our intellectual property expertise to those who would like to explore this potential.

This article was written with assistance from Lucy Hopman (lucy.hopman@baldwins.com).

Are search engines liable for the content of search results?

Fri, 23 Nov 2012 00:00:00 +1300

The internet has revolutionised the way in which media is provided and accessed worldwide. Publications of various kinds are accessible from almost anywhere, and search engines provide a means to easily find and access the information we want most. At the fore of these is Google, an internet giant whose name has become almost synonymous with “online search”.

Google search in a nutshell

The Google search engine has been refined over the years to become the fastest, potentially most accurate, and undeniably most widely used online search engine. The technological process for a Google search is relatively complex but can be summarised as follows.

Each search inquiry is submitted to hundreds of Google server machines, which simultaneously consult a range of cached data from Google’s index (consisting of billions of web pages). The machines then return the best matching content to the searcher in the form of links to websites and “snippets” of information from each corresponding website. The caching and matching of data is governed by complex algorithms that work automatically in order to return your search result in a fraction of a second.

But, if Google displays snippets of websites’ content, are the results of the search considered a “publication”? And if so, can search engines, as “publishers”, be held liable for the content of the search results?

Liability for defamation

These questions were raised in defamation proceedings in the recent case of A v Google New Zealand Limited HC Auckland, CIV 2011-404-002789, 12 September 2012.

The plaintiff (A) is a psychiatrist who sought to sue Google for defamatory statements contained within its search result snippets. The snippets, comprised of information published on a United States website, were revealed upon searching for A’s name in Google. Although Google had removed the snippets on A’s request, they continued to appear each time the US website changed and was re-added to Google’s index.

A then brought proceedings, claiming that Google NZ had defamed him by publishing the content in its search results. Google NZ sought to strike out the claim on the basis that the true defendant in any such proceedings should be the parent company, and owner and operator of the search engine, Google Inc. Google NZ also argued that it was not a “publisher” (for example, because its search process is automatic), or that if it was a publisher, its search result snippets were merely innocent dissemination or neutral reportage.

While Google succeeded in applying to strike out A’s claims on the basis that it was the incorrect defendant, Associate Judge Abbott left open the possibility “to hold that a search engine is a publisher but with access to the defence of innocent dissemination”. Part of that determination may involve asking whether the automatic search result process contains a “stamp of human intervention”.

A finding against Google could potentially open search engines up to other forms of liability. For example, if search results provide a link to pirated material, would displaying this content be considered copyright infringement by the search engine? Findings of this nature could seriously compromise the way in which search engines such as Google operate, and potentially stifle our unfettered access to information online.

Should Google be worried? Will the average Googler be affected? Respond or follow us on Twitter for more.

Congratulations to "flying Kiwi" Sir Ken

Thu, 15 Nov 2012 00:00:00 +1300

Baldwins would like to congratulate Sir Ken Stevens on being named the 15th "flying Kiwi" at the HiTech Awards in Wellington on 12 November 2012.

Sir Ken Stevens, founder of baggage handling technology firm Glidepath, joins previous achievers such as Sir Angus Tait, Sir William Gallagher and Fisher & Paykel founders Sir Woolf Fisher and Maurice Paykel in the HiTech hall of fame.

Trevor Laughton, chief technology officer at award sponsor Tait Communications, said Sir Ken was a rugby and yachting enthusiast and "all round good guy" with no ego who had shared his wisdom and knowledge with other exporters and devoted himself to education, working with schoolchildren and teachers to find career paths into business.

Philip Thoreau, the Baldwins partner who has for over 30 years lead handling of the complex developmental, production and international market areas critical to Glidepath’s intellectual Property commercialisation says, “Sir Ken’s recognition is richly deserved, not only for his own business success which is self-evident, but for his perpetual encouragement and optimism for others to do likewise; all done with a genuine “have a go then” love for people and a boyish wink for good luck!”

You can view the original article here: www.stuff.co.nz

Legal reasons for (and against) enforcing plain packaging on cigarettes

Wed, 14 Nov 2012 00:00:00 +1300

In August, we wrote that the High Court of Australia had declared that the Tobacco Plain Packaging Act 2011 (Cth) did not breach section 51(xxxi) of the Constitution. The Court has now published the reasons for its decision: JT International SA v Commonwealth of Australia [2012] HCA 43.

Chief Justice French provided an historical overview of intellectual property rights. He noted that intellectual property rights are negative. To take a well-known example, owning copyright in a film gives the owner the right to stop others from showing the film, but it does not follow that he has a positive right to show the film himself.

The Chief Justice noted British American Tobacco’s submission that “rights to exclude others from using property have no substance if all use of the property is prohibited.” However, section 51(xxxi) provides for legislation for “[t]he acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws”. His Honour said that while the packaging controls did impinge on the plaintiffs’ enjoyment of their intellectual property rights, this did not involve “the accrual of a benefit of a proprietary character to the Commonwealth which would constitute an acquisition.”

Justices Gummow, Hayne, Crennan, Kiefel and Bell agreed with the Chief Justice. Justice Gummow added an argument from the famous United States Supreme Court judge, Justice Brandeis, that “restriction imposed to protect the public health, safety or morals from dangers threatened is not a taking.” Justices Hayne and Bell said that even assuming there was a “taking”, this would not affect the statute, as there was not an “acquisition” within the meaning of section 51(xxxi).

Justice Heydon, dissenting, accepted British American Tobacco’s submission that while, as a matter of form, the legislation had not deprived the proprietors of their proprietorship, in substance it had deprived them of everything that made the property worth having. He said further that “the Commonwealth’s purposes were achieved by nullifying many of the proprietary rights of the proprietors and passing to the Commonwealth the corresponding benefits and advantages relating to the ownership or use of property – particularly control over the appearance of the cigarettes and their packaging. That control was as intense and ample as that which the proprietors had formerly enjoyed.” Accordingly, section 51(xxxi) of the Constitution was engaged. Justice Heydon noted that both sides accepted that tobacco products cause harm, but he said that it was more controversial whether reducing the use of intellectual property on their packaging would reduce that harm and that even if it would, the legislation was still unconstitutional. His Honour concluded: “The flame of the Commonwealth’s hatred for that beneficial constitutional guarantee [of compensation] may flicker, but it will not die.”

Justice Heydon’s final statement, while strongly expressed, corresponds with the fear expressed by some intellectual property lawyers and brand owners that tobacco packaging could be the thin end of the wedge, with alcohol and even food liable to follow. This consideration, along with the argument that plain packaging will not actually stop people from smoking, is likely to be a factor when plain packaging is debated in World Trade Organisation proceedings. New Zealand does not have an entrenched constitution like Australia’s, where the High Court can strike down unconstitutional legislation, but it does have international obligations by virtue of its membership of the WTO. Those interested in intellectual property and consumer law, as well as public health, will watch the WTO proceedings with considerable interest.

I got 99 problems and the Patent and Trademark Office is one: Branding your baby

Wed, 14 Nov 2012 00:00:00 +1300

Music superstars Beyoncé and Jay-Z have hit the headlines this year for applying to register the name of their firstborn child, Blue Ivy, as a trade mark. When a Boston wedding planner succeeded recently in registering her business’s name, BLUE IVY, it was widely reported that the famous couple’s application had been abandoned.

In fact, a search with the United States Patent and Trademark Office reveals that the application is still alive. USPTO records also show that a clothing boutique in Sturgeon Bay, Wisconsin, had registered its name, BLUE IVY, as a word and design mark last year, before Blue Ivy Carter was even born – it had been trading since 2000. Will Beyoncé and Jay-Z still be able to turn their daughter’s name into a brand?

For those who may not be familiar with the celebrity couple, Beyoncé is one of the biggest female pop stars of the past two decades. She started out as the lead singer of Destiny’s Child in the late 90s, Atlanta rappers Outkast used her name as a byword for female adoration back in 2004, and she has made some remarkable music videos (including one with Lady Gaga). Jay-Z has a similarly long career as a rapper. One highlight of this was also in 2004, when the music producer Danger Mouse mixed the vocals from Jay-Z’s landmark Black Album (famous for such tracks as “99 Problems”, itself a loan from an earlier track by Ice-T) over the music of the Beatles’ famous White Album to make The Grey Album, one of the most celebrated “mash-up” albums ever.

Jay-Z and Sir Paul McCartney were quite happy with the project, but EMI, which owned the copyright in the Beatles’ records, was displeased that Danger Mouse had not obtained its permission and prohibited sales of the album. It became a bootleg classic, and Danger Mouse, until then an underground celebrity, has since become world-famous.

But we are concerned here with trade marks, rather than copyright, and with merchandise rather than music. Headlines around the world trumpeted that Blue Ivy Events had stymied Beyoncé and Jay-Z’s trade mark bid. Some celebrated this as being a victory for a small entrepreneur over a billionaire power couple. In fact, there was no contest. Blue Ivy Events registered the trade mark BLUE IVY for the categories of event planning and wedding planning. Beyoncé’s company BGK Trademark Holdings LLC has applied for registration of BLUE IVY CARTER in 14 classes of goods and for entertainment services and may succeed on most if not all of them.

So how did the mass media get this story so wrong? They overlooked the fact that when you apply to register a trade mark, it is always for specific goods or services and not across the whole spectrum. You should apply for all the goods and services which you may use for your brand but not for those outside your area of interest. Whether you are just starting out or are already a billion-dollar business, we are always happy to advise you about protecting your brand.

Appearances can be Deceptive – An Update on the Scope of Registered Designs

Tue, 13 Nov 2012 00:00:00 +1300

Registered designs can provide a cost effective way of creating exclusivity for your products, particularly where aesthetics are important. They can be especially useful in preventing knock-offs. Below we discuss some important decisions that consider infringement of the right.

Dyson Limited obtained UK registered design protection for one of its cylinder vacuum cleaners, the DC02. Its competitor, Vax, produced a competing cleaner called the Mach Zen.


Dyson DC02	Vax Mach Zen

Dyson sued Vax for registered design infringement at the UK High Court and subsequently appealed to the UK Court of Appeal. The Court of Appeal upheld the decision of the High Court, deciding that Vax did not infringe Dyson's registration because the two designs did not produce 'the same overall impression' on the informed user. The Court of Appeal held that the two cleaners were 'different designs', the Dyson cleaner being' smooth, curving and elegant', the Vax cleaner being 'rugged, angular and industrial'.

The Court confirmed that the notional 'informed user' is neither a designer nor a technical expert, but is reasonably discriminatory and has a relatively high degree of attention.

Expert evidence was supplied to try to define the informed user, and the overall impression made by the designs. Dyson also provided nine written summaries of features of the DC02. The judges dismissed this list as being an attempt to define the DC02 in terms of patent claims rather than considering the appearance of the DC02 as normally seen. Importantly, the judge determined that there was a technical reason for the nine features and that this limited the design freedom of the designer. The informed user would therefore not consider the similarities listed by Dyson to be significant.

The judges confirmed that the most important factors in a UK registered design case are the appearance of: 1) the registered design; 2) the allegedly infringing object; and 3) the prior art.

This decision confirms the UK infringement test as being a simple visual comparison between the appearance of the two designs, and that registered design protection in UK can be relatively narrow.

New Zealand uses a different test being whether the article alleged to infringe has ‘substantially the same appearance’ as the registered design. As with the UK, the scope of protection can be narrowed if relevant prior designs are identified. NZ law also requires a statement of novelty to be filed which defines the scope of protection provided. In Brand Developers v Ezibuy, abdominal exercisers were compared as shown below:


Registered Design	Alleged Infringement

Importantly, the statement of novelty of the registered design in question stated that ‘….. novelty resides in the features of shape and configuration of the exercise machine having a tubular ring and a pair of pivotally mounted knee rests movably supported on the tubular ring, as shown in the accompanying representations’.

In this case, relevant prior art was identified showing that the dual, incomplete circular ring arrangement of the alleged infringement was known before the registered design was filed. This, in conjunction with the limiting statement of novelty filed, meant that the registered design could not protect the broad concept of any circular ring in conjunction with movable knee pads. Or put another way, the registered design was limited to the single, complete circular ring as shown in the photos. This case illustrates the potentially limiting effect of prior art, and also the care needed in not filing an unduly limiting statement of novelty. Nonetheless, the test for infringement of a NZ registered design may offer broader protection than that in UK.

In NZ design infringement cases, there will often be a separate cause of action regarding infringement of copyright, for example in the appearance of the Dyson cleaner. To succeed on this ground would require establishing a causal link between the product and the alleged copy, to prove that copying had taken place. Infringement can be more easily decided based on copyright since the infringer need only take something substantial from the design, which may occur even if there are differences. UK and EU law provides a similar right called ‘unregistered design right’ or ‘UDR’ which also requires copying to be established to succeed. Unlike NZ industrial copyright, the term of EU UDR is very short at only 3 years.

In Australia, recent decisions seem to be strengthening registered design owners’ rights. Nonetheless, the recent case of LED v Roadvision highlights the need for care in selecting what is shown in the drawings/photos filed in the application as this will define the scope of protection. This case related to replacement rear light units for vehicles. The design registrations concerned included views of the rear of each light unit, these being held to be sufficiently different from the rear of the alleged infringing unit that the units were not substantially similar in overall impression. This was despite the fact that this feature would not be seen when the units were mounted on the vehicle. So in this case, the design registrations arguably included non-essential features which ultimately were held to limit the scope of protection such that infringement was avoided.

In every jurisdiction, the scope of protection is defined by what is shown in the drawings or photos filed with the registered design application. In some jurisdictions the scope of protection can be further defined by a statement of novelty or monopoly. These cases confirm that considerable care needs to be taken when filing a registered design application to ensure that the scope of protection is as broad as possible.

Trust and respect wins at NZ Law Awards for Baldwins

Mon, 05 Nov 2012 00:00:00 +1300

Baldwins’s recent work in the intellectual property industry has been recognised at an award ceremony honouring the best firms in the industry.

Baldwins Intellectual Property won the Canon Intellectual Property Law Award at the eighth annual New Zealand Law Awards 2012 in Auckland last week.

"We have a level of trust with Baldwins greater than any other professionals we deal with. We know they are always working in our best interests, and have earned our utmost respect” read the award citation, quoting one of the many voting clients.

Baldwins was described as a firm that provides excellence in client service, and possesses specialist expertise in advising across a broad range of IP law and practice issues, which include commercial applications of IP assets, design, copyright, trademarks and patents, enforcement and prosecution of IP rights, and minimising the risk of IP infringement.

"A thoroughly deserved achievement. Well done to everyone at Baldwins. I think the words quoted from your client would be agreed with by many, they certainly echo my sentiments." - Julien Truesdale, Baldwins client

To view the 2012 finalists, click here.

Lego, popsicle sticks and brains wins Watson top award

Fri, 02 Nov 2012 00:00:00 +1300

James Watson (17) from Burnside High School in Christchurch has been declared grand winner of the 2012 Bright Sparks Awards. He received the Bright Sparks - Baldwins Intellectual Property Young Inventor of the Year Award – $1000 cash and a year of mentoring from Duncan Schaut, one of the firm’s patent attorneys.

James Watson with Duncan Schaut

The Bright Sparks competition is run by The Skills Organisation to encourage young people to experience electronics directly through a project-based approach. Since the year 2000 smart kids as young as 9 to 18 from all over the country have created amazing and imaginative inventions in a bid to win their age category.

James’ invention, George the Rubik’s Cube Solver, is an amazing robot that is made out of popsicle sticks and Lego and is capable of solving a Rubik’s Cube on its own – all you need to do is enter the panel arrangement and click go.

“I’ve been able to solve the Rubik’s Cube for a few years now and I always wondered if I could make a robot do the same thing.”

James received his award in Wellington, at an awards evening held at the Council Chambers, and attended by a mix of other finalists, parents, teachers, technology industry leaders, university and community leaders, and politicians.

The standard of projects this year was outstanding, with some truly dazzling examples of young kiwi ingenuity – examples of other projects include a website to help children with Down Syndrome, a toaster you can operate with your smartphone, a home-made 3D Printer and a clever trolley that will alert you when you’re close to an item on your shopping list.

To view all the Bright Sparks projects in action, including video and information about the inventors, visit brightsparks.org.nz

George the Rubik's Cube Solver

James Watson and George the Rubik's Cube Solver

Finalists and guest presenters

Overall winners

1st Overall (and winner of the 2012 Bright Sparks - Baldwins Intellectual Property Young Inventor of the Year Award): James Watson, Burnside High School, George the Rubik’s Cube Solver

Best Work in Progress – Junior: Te Kura Toitu o Te Whaiti Nui-a-Toi , Rainforest Climate Model

Best Work in Progress – Senior: Huba Nagy, Cashmere High School, 3D printer

People’s Choice Award (determined by public online voting): Matthew Bridle, Hauraki Plains College, Point-to-Point Emergency Text Communicator

In the age categories

12 years and under

1st place: Nicholas Wilks, Homeschool, Bulls-eye Target

2nd place: Caitlin Ryan and Jade Graham, Fairfield Intermediate, Intelligent Auto Bike Light

13 – 14 years

1st place: William Wilks, Karamu High School, Bluetooth Toast

2nd place: Nathan James, Burnside High School, Smart Trolley

3rd equal: Jenna Bellve and Abbey Silsons, Opunake High School, Remote Weather Stations

3rd equal: Molly Balding, Northcross Intermediate, Makaton Website

15 - 16 years

1st place: Sam Mathews, Morrinsville College, Bituser Automated Cloud Communication Device

2nd equal: Harrison Carnell, Pakuranga College, Radio-Controlled Sumobot

2nd equal: Aaron Wong, Mt Roskill Grammar School, Time Map

3rd place: Jonathan Abplanalp, Opunake High School, Volcano Alert

17+ years

1st place: James Watson, Burnside High School, George the Rubik’s Cube Solver

2nd equal: Juan Robertson, Hamilton Boys High School, Robotic Pull Focus Unit

2nd equal: Fabian Cook, Tararua College, Modular Connection

3rd equal: Sohail Abdulla, Mt Roskill Grammar School, Glass Cleaner Robot

3rd equal: Conor King, Mt Roskill Grammar School, Blurb 2012

For more information or to feature one of these talented youngsters, please contact Christina Campbell, Communications Adviser from The Skills Organisation, on 09 583 1343, mob 027 413 5927 or christinac@skills.org.nz

Bright Sparks

Bright Sparks is an initiative from The Skills Organisation that aims to develop a strong pool of talent to propel the future growth of its industries. Bright Sparks works directly with schools and young people to get them on the pathway to a rewarding electrotechnology career. There are over 2300 active members of the Bright Sparks website and email club and more than 150 secondary schools are currently involved in the Bright Sparks programme. For more information visit brightsparks.org.nz

The Skills Organisation

The Skills Organisation is an industry training organisation responsible for ensuring skilled people are available to work in fifteen key industries. Recognised by government and our industries as the national standards setting body, The Skills Organisation works with industry to develop skill standards and qualifications, manage national training systems, provide skills leadership and subsidise industry engagement in national qualifications training. For more information visit skills.org.nz

Surfing the Social Media Wave

Fri, 02 Nov 2012 00:00:00 +1300

More and more people are jumping on the social media platform and using Facebook®, Twitter®, YouTube® and Linked-In® to promote themselves, their goods and services. A recent case determined by the Advertising Standards Authority (ASA) has however highlighted the dangers potentially associated with such campaigns.

The case involved Hell Pizza® and in particular its "Facebook Confessional" competition where users were invited to make comments on the company's wall on Facebook. Hell Pizza is well known for being a company that likes to court controversy in its marketing campaigns. Its Easter billboard campaign, featuring a bun decorated with an inverted pentacle symbol and the words: "For a limited time. A bit like Jesus" garnered the most complaints to the ASA in 2011. Hell Pizza's 2006 "Lust Pizza" random mail out is the most controversial advertisement in ASA history attracting record 685 complaints after condoms were sent to random letterboxes.

Unsurprisingly, given the company's predilection to shock, some comments posted on the Facebook Confessional page "pushed the boundaries" resulting in a number of complaints being lodged with the ASA. The case was settled prior to a decision being issued and the Confessional page as removed.

Earlier this year the Australian Advertising Standards Board found that the Smirnoff Facebook page was a “marketing communication tool” and, therefore, subject to advertising regulation. In addition, the Board stated that the Australian Code applies to content generated by advertisers as well as material or comments posted by users or friends. Click here for a link to the decision.

The ASA Guidelines

In light of the Australian decision and in order to clarify its own position on social media, the ASA has provided guidance to assist parties to determine what constitutes an "advertisement" on social media. The guidance note also provides some clarity on when material added by others ("user-generated content") on social media is considered "advertising" and, therefore, comes under the auspices of the ASA and its Codes of Practice.

An advertisement is defined broadly to be “[A]ny form of advertising…which promotes the interest of any person, product or service, imparts information, educates, or advocates an idea, belief, political viewpoint of opportunity”.

The ASA considers that it has the right to look into any matter where the advertiser has a ‘reasonable degree of control’ over the social media platform in use and where it is promoting a brand or service to the public. Taking this to its extreme, a wide variety of promotional or opinion based postings on social media platforms will be captured, including re-posting of any such material.

If, therefore, any material posted on your platform is misleading, deceptive or offensive, your organisation could be called to account by the ASA or, if the content is accessible to Australian users, the Board.

The ‘stronger’ arm of the courts

The ASA and the Board can only recommend that advertising material that is in breach of their respective Codes be removed. They have no power to enforce that recommendation. Potentially more serious sanctions can and most likely will be imposed by the New Zealand and Australian courts for misleading or offensive advertising by way of social media platforms. These include injunctions, awards of damages and fines.

For example, in 2009 the Australian Competition and Consumer Commission (ACCC), investigated a company called Allergy Pathway and contended that the company’s diagnoses and treatments were, putting it kindly, ineffective. The Federal Court of Australia agreed and ordered Allergy Pathway to cease publishing the relevant representations, to publish corrective advertising, and to carry out a detailed compliance programme.

In 2011, the ACCC brought a further action against Allergy Pathway, this time contending that Allergy Pathway should be held accountable for misleading statements made by others on its Facebook page and Twitter account. The Court agreed. Allergy Pathways was, therefore, held to account on the basis that it was aware of the user generated content, accepted general responsibility for that content and failed to remove it. Allergy Pathways received fines for contempt and further orders requiring corrective conduct. You can view the decision here.

While this case is Australian and based on contempt of court, you could face the same type of complaint and similar sanctions under the New Zealand Fair Trading Act 1986. It also has important implications in relation to breaches of enforceable undertakings under the amendments to the FTA proposed in clause 26 of the Consumer Law Reform Bill.

What can you do to ensure you don't fall foul of the ASA or FTA?

Do you have a social media policy? While you are responsible for you own content, you may also be responsible for the content of others. Compliance with the policy should be monitored and you should regularly review social media sites to ensure that any misleading, offensive or harmful material is removed;

Have you got a disclaimer on your platform? If not you should also consider inserting the following as recommended by the ASA here;

Are you paying a third party to use a Twitter account to endorse or promote an organisation or its products and services? if so, ensure the third party uses the #ad hashtag.

We can help you draft a suitable compliance policy, review directories for inappropriate postings and review intended advertising to ensure compliance with the Codes of Practice.

Should you need expert guidance please contact either Penny Catley or Deborah Kessell-Haak.

Return to the House for Natural Health Products Bill

Fri, 02 Nov 2012 00:00:00 +1300

The Natural Health Products Bill has returned to the House for debate in Parliament following the Health Select Committee's report on the Bill.

The Bill seeks to introduce regulation of low risk natural health products in New Zealand and bring us into line with regulation in overseas export markets. The intention of the Bill is to ensure natural health care products such as vitamin supplements meet certain thresholds and there is consistency in the industry for manufacturers and consumers alike.

The Select Committee has recommended the the Bill's title is amended to the Natural Health and Supplementary Products Bill to clarify that the Bill covers both natural and synthetic products and that the products may contain excipients, and has proposed an amendment to require the Act to come into force no later than 3 January 2014.

The Bill requires the establishment of a Natural Health and Supplementary Products Regulatory Authority to be administered by the Ministry of Health and an advisory committee to provide expert advice to the Authority. The Authority will be separate from Medsafe to ensure independence.

The Select Committee has recommended an amendment to the Bill to express an underlying principle of the Bill that the evidence which supports health benefit claims made for natural health and supplementary products may be either scientific evidence (produced from empirical studies or repeatable experiments) or traditional evidence (derived from use of a substance based on beliefs, knowledge or practices passed down from one generation to the next).

The Select Committee has acknowledged the difficulty in distinguishing between a natural health or supplementary product and a food or medicine and has highlighted honey as an example which could fall in all three categories depending on the product claims made for the product in question. It is considered to be unduly onerous for goods such a herbal teas which claim certain benefits to be captured by the Bill and to be subject to the associated compliance and regulatory requirements. It has therefore proposed amendments to define a natural health or supplementary product as one which is not a food or one which is not presented as a food. Food is further defined under the Bill. Further amendments to define a natural health or supplementary product as one that is not any medicine, related product or medical device have been proposed.

The Bill provides for the prescription of fees by the Authority and the Select Committe has proposed the introductions of clauses to guide the setting of such fees.

The Bill will now enter the next stage and will be debated in Parliament, most likely in early 2013.

Baldwins takes top spot at 2012 Asia IP Awards

Mon, 29 Oct 2012 00:00:00 +1300

Baldwins has been named the best New Zealand trademark firm at the 2012 Asia IP Awards.

The firm won the New Zealand Trademark category, which was announced at an awards gala event in Chiang Mai, Thailand on 26 October.

"We officially congratulate you and the firm on winning the New Zealand Trademarks award at last Friday’s Asia IP Awards in Chiang Mai, and being officially named as the 2012 Asia IP New Zealand Trademark Firm of the Year."

Partners Philip Thoreau and Wes Jones attended the awards ceremony and accepted the New Zealand Trademark award on Baldwins' behalf.

Baldwins acts for account holder in one of the first infringing file sharing cases

Fri, 26 Oct 2012 00:00:00 +1300

In September 2011 the Government introduced controversial legislation which made an account holder liable for illegal online file sharing. This legislation is known as the "three strikes" or "skynet" law. The regime requires ISPs to send infringement notices to their customers on behalf of copyright owners. After three notices, the copyright owner can take a case against the account holder and the Copyright Tribunal can award fines of up to $15,000 against the account holder.

It has taken nearly a year for the first cases to be brought against account holders. One of those was against a young university student flatting with four others in Wellington. The Recording Industry of New Zealand (RIANZ) took the case in relation to five songs that were sitting in a flatmate's file sharing software on a private computer. The account holder did not have any file sharing software on her own computer; nor did she know that a flatmate had such software.

The account holder came to Baldwins Intellectual Property for assistance and after submissions were filed at the Copyright Tribunal, RIANZ withdrew the case. Although the result is a huge relief for the account holder, the details of the case illustrate why the legislation is considered controversial, and outline a number of lessons for both account holders and copyright owners.

What was the case about?

RIANZ claimed $2,669.25 against the account holder for the five songs (two of which were in fact the same song). This was made up of $1,075.50 as the cost of the music (based on RIANZ's claim that, on average, songs are shared 90 times by file sharing software), $373.75 in fees, and $1,250 as a deterrent amount.

Once RIANZ filed the case against the account holder, she was given two weeks to file submissions. The account holder’s submissions identified a large number of defects in the notices issued by the ISP, as well as the claim by RIANZ. Many of these related to the timing of the notices and the requirement that the notices detail certain information. The submissions also challenged the amount that RIANZ was claiming, and its reliance on the calculation of 90 downloads per song, as well as the need for a deterrent penalty when it was not the account holder who held the file sharing software.

This particular case is a lesson for both account holders and copyright owners. Account holders must appreciate that they are responsible for anyone using their internet account. This applies to people flatting, parents, employers, libraries and cafés offering internet access. They should also take heed of warnings received, even if in error. It is also a lesson for copyright owners to ensure that technical details of their claims and the notices issued by ISPs are correct before taking a case against an account holder. The legislation, while controversial, is purposefully very specific in this regard.

There are at least six further cases still before the Copyright Tribunal. It is not known when the Copyright Tribunal will issue its determinations or whether the remaining claims were issued with more procedural veracity than the present claim was.

The controversial legislation is due for further consideration in 2013, when the Government will have to decide whether or not the provisions should extend to file sharing over mobile networks.

Paper: Triflate anion and ligand influences in silver(I) coordination polymers of four isomeric dipyridyl ketone oximes

Mon, 15 Oct 2012 00:00:00 +1300

Abstract

The synthesis and X-ray characterisation of four isomeric dipyridyl ketone oxime ligands, 4,4′-dipyridyl ketone oxime, L44, 3,3′-dipyridyl ketone oxime, L33, 2,4-dipyridyl ketone oxime, L24 and 2,3-dipyridyl ketone oxime, L23 is described. X-ray structural characterisation of the precursor ketones 3,3′-dipyridyl ketone, L1, and 2,4-dipyridyl ketone, L2, is also reported for comparison. Four AgCF3SO3 complexes of the dipyridyl ketone oxime ligands were prepared and structurally characterised, [Ag(L44)2](CF3SO3), 1, {[AgL33](CF3SO3)}∞, 2, [AgL24(CF3SO3)]∞, 3, and [Ag2L23(CF3SO3)2]∞, 4. The structural role of the CF3SO3− anion in the formation of Ag(I) coordination polymer networks, together with the effect of the varying pyridyl substitution patterns of L44, L33, L24 and L23 was investigated. In 1 the CF3SO3− anion was unbound and disordered. It was encapsulated in the channels of a honeycomb 3D H-bonded structure. In 2 the CF3SO3− anion remained unbound, being encapsulated within the centre of a helical polymer chain. In 3 the CF3SO3− anion was weakly bound to the Ag(I) ion and as such decorated the side of a bowed 1-D chain. The two different CF3SO3− anions in 4 adopted a range of binding modes from monodentate, bis-monodentate to tris-monodentate with the Ag(I) ions and gave rise to the formation of an unusual CF3SO3− bridged 2-D network.

Bibliographic details

Victoria J. Argyle, Laura M. Woods, Marina Roxburgh, Lyall R. Hanton; Triflate anion and ligand influences in silver(I) coordination polymers of four isomeric dipyridyl ketone oximes, Crystal Engineering Communications (2013), 15, 120-134

CrystEngComm

Click here to view the paper.

(CrystEngComm, 2013,15, 120-134)

DOI: 10.1039/C2CE26449H

Received 07 Sep 2012, Accepted 12 Oct 2012

First published on the web 15 Oct 2012

Baldwins named as finalist in this year's NZ Law Awards

Fri, 12 Oct 2012 00:00:00 +1300

Baldwins is delighted to be named a finalist in the Canon Intellectual Property Law Award category at this year's New Zealand Law Awards™.

The awards, which are in their eighth year, celebrate and reward excellence in client service by law firms, barristers and mediators as judged by their clients, and by in-house legal teams as judged by their legal peers.

Six firms have been shortlisted for the category. The winner will be named on Thursday, 1 November 2012 at a black tie event in Auckland.

For more information visit http://www.lawawards.co.nz/

New Privacy Law Created in New Zealand

Wed, 10 Oct 2012 00:00:00 +1300

The recent High Court decision in C v Holland [2012] NZHC 2155 (24 August 2012) has created a new law in New Zealand protecting individuals against an invasion of solitude or seclusion.

In 2005, the Court of Appeal affirmed that there is a breach of privacy where the publication of private facts would be considered highly offensive (Hosking v Runting [2005] 1 NZLR 1 (CA)). The decision in C v Holland has, for some circumstances, done away with the need for publication to have occurred.

The facts

C was a young woman who often stayed over at a house co-owned by her boyfriend and Mr Holland. Mr Holland covertly installed a camera in the roof space above the bathroom and toilet and secretly made video recordings of C undressing and showering. Mr Holland downloaded the recordings onto a hard drive but did not publish them. C and her boyfriend subsequently discovered the recordings. Unsurprisingly, C became extremely distressed and commenced an invasion of privacy action against Mr Holland.

Justification

Justice Whata provided very thorough and logical reasoning for his decision to create a new privacy action, stating that:

The value of privacy cannot be doubted – it is expressed in a number of international conventions on human rights and domestic laws already recognises specific privacy rights, such as the right to be free from unreasonable search and seizure;
Aspects of privacy have already been transformed into rights. It is therefore too late to say that judges in New Zealand cannot adjudicate on the boundaries of privacy rights;
Parliament has not indicated that it a “no-go” area for the Courts;
Privacy concerns change with technological advancements and the Courts should be able to respond;
Existing protections are not adequate – the Hosking tort is not applicable because there has been no publication and surveillance or intrusion per se is not actionable.

The new tort of intrusion upon seclusion

To establish a claim under the tort of intrusion upon seclusion, a plaintiff must show:

(a) an intentional or unauthorised intrusion;

(b) into seclusion (namely intimate personal activity, space or affairs);

(d) that is highly offensive to a reasonable person.

Justice Whata explanined that “intentional” meant “an affirmative act, not an unwitting or simply careless intrusion” (accidentally blundering into an occupied bathroom would not qualify) and that “unauthorised” did not include consensual or lawfully authorised intrusions. The last two elements of the test are directly from the Hosking test.

Implications

This decision has obvious concerns for police and media. In some circumstances, police do not need a warrant to conduct surveillance. It may be that a number of standard surveillance activities will fall foul of the new tort. Media will have to consider how it gathers information since the obtaining of the information could breach privacy rights even when it is not published. However, media should be familiar with this type of test because the Broadcasting Standards Authority already applies a similar principle against interference with an individual’s seclusion or solitude.

It will be interesting to see how the Court of Appeal or the Supreme Court will treat this decision. However, it may be some time before the opportunity arises as no appeal of the High Court decision is expected and Justice Whata’s decision stands until a similar case is heard.

Changes to European Patent System

Tue, 09 Oct 2012 00:00:00 +1300

The European Patent System has been in place for over 30 years and can provide useful patent protection in most European countries via a central application process at the European Patent Office.

The geographical coverage of a European patent can be broad and the quality of patents granted relatively high but the European patent system has often been criticised for being expensive. One reason for this is that once the European patent is granted, it has to be ‘validated’ in each individual country required, usually involving paying an official fee to each national patent office, and filing a translation of some or all of the text of the granted patent into the local language. If multiple countries are required, these fees and translation costs can mount up. An additional disadvantage is that once granted, the European patent has to be enforced individually in each separate country in which infringement is taking place. Thus if infringement is occurring in more than one European country, multiple court cases might be required.

It has therefore been proposed for some years to provide a European ‘unitary’ patent which simplifies and cheapens the procedure.

Some changes have been agreed in principle to remove the individual validation requirements such that in the future a European patent can be granted and validated via a centralised procedure at the European Patent Office. Likewise, it has been agreed that to keep the patent in force, only a single annual renewal fee will be required, rather than individual renewal fees in each country. The law has not yet been updated to reflect these changes but it is hoped that this will be done in early 2013.

In a significant further step, following Hungary’s presidency of the EU in 2011, the locations of the Unitary Patent Court have now been agreed, settling on a compromise between the central court being located in Paris, with further courts in London and Munich. London will handle chemistry/human necessities cases, with Munich handling mechanical engineering and Paris handling all other subject matter.

This will enable an infringement action to be brought at a single court in Europe, covering infringements taking place throughout Europe. Combined with the other previously agreed features of the unitary patent system, the cost savings to business should be significant.

As a counter to the above however, some detailed provisions relating to the operation of the unitary court are still being debated, and some countries, including the UK, have expressed concerns that the unitary patent system might represent a step backwards in terms of the court procedure. It is also to be noted that Italy and Spain have not signed up to the proposed new system. Nonetheless, these developments bring the prospect of cheaper patents in Europe a significant step closer.

Whilst, the costs of a European patent application can seem daunting, under the current system it is generally the case that a European patent application will be cost effective if protection in four or more countries (including the UK if necessary) is required. The new European system, when finally agreed, should be considerably more attractive.

Help – someone has registered my trade mark!

Tue, 09 Oct 2012 00:00:00 +1300

If you have not protected your trade mark by obtaining a trade mark registration, it will come as a huge shock if someone else registers the same trade mark for the same goods or services as yours and then objects to your use.

What can you do in this situation?

To make matters worse for businesses with trade marks they use but haven’t registered, they can expect to see an increase in the number of foreign trade mark owners registering trade marks in New Zealand, due to the introduction in December 2012 of an International registration system (“the Madrid Protocol”) in New Zealand. This will undoubtedly lead to more disputes between parties over ownership of trade marks.

If use is made of a trade mark that is registered by another party, that use is trade mark infringement at first appearance. New Zealand law does provide defence options. However, in most cases these require a proactive step. These options include:

If a trade mark is used continuously, for longer than the other party has used and from before the other party’s application, a defence to trade mark infringement based on Continuous Use may be available.

Your own registration can also provide a defence to infringement. One way of obtaining registration would be to establish Honest Concurrent Use with the other party’s trade mark. Important factors include the extent of your use, whether any instances of confusion between the marks have occurred and the honesty of your adoption and use of the mark.

Negotiating with the other side to achieve a Co-existence agreement may be an option. This could include provision of Consent by the other party to your ongoing use and registration of the trade mark.

If the other party has acted in Bad Faith, an action to remove the registration may be appropriate. An example of this may be if a distributor registers the principal’s trade mark without approval.

If your trade mark has been used and you have built up a Reputation in the mark before the other side filed their application, then an action to remove the registration based on consumer deception and confusion, breach of the Fair Trading Act provisions and/or Passing Off may be appropriate.

Although the above options exist, the actions are significantly more complex and are associated with greater business risk than holding registered trade marks of your own at the outset. As a registered trade mark owner you will be in a stronger position with greater certainty of the ultimate outcome and in our experience will be much less likely to need to enforce any registered trade mark rights you may establish and hold. Obtaining a registration almost always saves you significant time and costs in dealing with conflicts with other parties, as the Commissioner of Trade Marks will object on your behalf to any future filed conflicting applications. Monitoring the Register is also recommended in case there is an Office oversight based on insufficient knowledge of your market sector and the terms and brands used, as well as to provide a useful insight into future trends in the industry.

Given the December 2012 introduction of the Madrid Protocol, now is an excellent time for us to review your business branding and ensure that adequate protection and follow up monitoring is in place for your key brands.

Croatia to be the 28th country to join the EU

Mon, 08 Oct 2012 00:00:00 +1300

After seven years of negotiations, Croatia is on course to join the EU in July 2013. The accession treaty has been signed and now needs to be ratified by the other EU countries.

This will make Croatia the 28^th country to join the EU, following Bulgaria and Romania in 2007. Macedonia, Iceland, Montenegro and Serbia are all in negotiations to join the EU too. Turkey has not yet been granted permission to join.

All EU countries are covered by the Community trade mark and design systems in Europe, the coverage extending automatically whenever a new country joins. This applies not only to new trade mark and design applications, but also to existing trademark and design registrations.

Confusingly, the European Patent System does not directly correspond to the EU member countries, but already covers European countries beyond the EU, such as Turkey and Iceland for example. Major changes to the European patent system are also in discussion, which should result in significant cost savings for NZ businesses.

We are happy to offer detailed advice and costings on protecting your invention, branding or product design in Europe.

‘Tis Life for the haka Ka Mate

Wed, 03 Oct 2012 00:00:00 +1300

On 30 August 2012, the Crown and Ngāti Toa Rangatira initialled a deed of settlement containing various acknowledgements, and cultural and financial redress, for Crown breaches of the Treaty of Waitangi.

Among the redress is specific recognition of Ngāti Toa as kaitiaki (guardians) of the haka Ka Mate, particularly given that their ancestor Te Rauparaha composed the haka. This recognition will be by way of unique legislation not only acknowledging the importance of Ka Mate to guardians Ngāti Toa, but also requiring attribution of Te Rauparaha and Ngāti Toa by any person using the haka commercially.

While the wording of the legislation has yet to be agreed upon, the deed of settlement provides that any commercial use or public communication of Ka Mate is to clearly and reasonably-prominently identify Te Rauparaha as both the composer of Ka Mate and a chief of Ngāti Toa.

The right of attribution does not apply to the use of Ka Mate in public performance (such as by kapa haka groups), for educational purposes, or in any work for the purpose of criticism, review, or news reporting. It also does not require Ngāti Toa’s consent or input to the manner or form of use of Ka Mate, and does not provide for any compensation or damages for any unauthorised (or inappropriate) use.

If a person making commercial use of Ka Mate fails to sufficiently identify Te Rauparaha or Ngāti Toa, representatives of the iwi may enforce the right of attribution in court. The exact form of the legislation is not yet known.

Intellectual property rights lawyer Maui Solomon, also involved in the WAI262 claims, says that Ngāti Toa is pleased with the deal and has achieved what claimants sought from the Waitangi Tribunal so many years ago. It is understood that the Government is still considering what action to take as a result of the Waitangi Tribunal’s recommendations in the WAI262 report, although the report no doubt played an important role in the present settlement.

Earlier this year, attempts to register as a trade mark various phrases of the haka Ka Mate highlighted the unsuitability of Western intellectual property concepts (such as trade mark and copyright) for the protection for Māori taonga. Ngāti Toa had applied to register a range of well-known phrases such as KA MATE (‘tis death) and KA ORA (‘tis life).

Baldwins represented New Zealand souvenir business Prokiwi International Limited in its successful efforts to prevent registration of the phrases of the haka Ka Mate as trade marks. Prokiwi opposed Ngāti Toa’s applications on the basis that the haka Ka Mate is part of New Zealand culture and heritage, and that traders and sports teams should be free to use it without fear of trade mark infringement.

The Assistant Commissioner of Trade Marks upheld the oppositions, with the result that the haka Ka Mate remains in the public domain (Te Runanga O Toa Rangatira Incorporated v Prokiwi International Limited [2012] NZIPOTM 14). The oppositions raised interesting issues about the appropriate way to protect our indigenous and cultural heritage.

It appears that much thought is being given to these issues, with the deed of settlement reflecting the Crown’s willingness to test innovative strategies in the protection of our cultural heritage. The WAI262 report, released earlier this year, confirmed the desirability for the Crown and Māori to work together in balancing cultural interests and taonga with the rights of the New Zealand public.

A shady victory

Mon, 24 Sep 2012 00:00:00 +1200

In an article in Issue 192 (NZLawyer 7 September 2012), this author discussed the ruling of Judge Marrero that a single colour can never serve as a trade mark in the fashion industry[1].

In Round 2 of this legal saga[2], Christian Louboutin (“Louboutin”) has won a technical victory against its rival Yves Saint Laurent (“YSL”). The Federal Appeals Court reversed District Court Judge Marrero’s earlier ruling and upheld Louboutin’s trade mark registration to the colour red for outer soles.

Judge Jose Cabranes, who wrote for the unanimous three-judge panel, explained that Judge Marrero's conclusion was based on an incorrect understanding of the doctrine of aesthetic functionality:

"We see no reason why a single-colour mark in the specific context of the fashion industry could not acquire secondary meaning – and therefore serve as a brand or source identifier – if it is used consistently and prominently by a particular designer that it becomes a symbol”.

Based on the evidence submitted by Louboutin, it was plain to the Appeals Court that the red sole had the requisite distinctiveness to merit trade mark protection.

Harley Lewin, lawyer for Louboutin welcomed the decision: “We are happy to have achieved a victory … We are pleased that our central premise, that colour on the red sole can be a trade mark … we consider this to be a significant win, not only for Louboutin, but for the fashion industry in general”.

However with magnanimous diplomacy, the Appeals Court affirmed Judge Marrero’s order to the extent that it also declined to protect the use of red lacquered soles “in all situations”.

Judge Cabranes expressly noted, for instance, that YSL’s use of a red outsole on monochromatic red shoes would not infringe on Louboutin’s trade mark because the evidence demonstrated the red sole to be an identifying mark of Louboutin only when used with a different coloured top:

“it is the contrast between the sole and the upper that causes the sole to ‘pop’ and to distinguish its creator”

Consequently, the Appeals Court modified Louboutin’s trade mark registration to a red lacquered outer sole that contrasts in colour with the rest of the shoe.

For its part, YSL has also described the ruling as “a total victory for us”. David Bernstein, the lawyer who represents YSL said that “it makes it clear that trade marks can’t be used in an anti-competitive way”.

In summary, this pragmatic decision has safeguarded Louboutin's trade mark rights by maintaining the validity of its colour mark, albeit limited to contrasting colour. By the same sleight of hand, the ruling has also preserved YSL's commercial freedom to continue to retail its monochromatic red shoes.

The case has been remitted back to Judge Marrero to consider YSL’s ancillary claim for damages for alleged interference with its business. It would be unsurprising if the parties reach a more harmonious resolution to offset legal costs. It appears to this author that the ruffled feathers of two fickle fashion beasts have more or less been victoriously soothed.

This article was published in NZLawyer, October 2012.

Also by Maria Sun: 17/08/2012 - The Red Tape Surrounding Colour Trade Marks

[1] Louboutin SA v Yves Saint Laurent America, Inc, 778 F Supp 2d 445 (SDNY 2011)).

[2] Christian Louboutin et al v. Yves Saint Laurent America, Inc., 2^nd US Circuit Court of Appeals

IPONZ prepares to increase fees, mandate electronic communication, and accede to three international trade mark treaties

Wed, 19 Sep 2012 00:00:00 +1200

New trade mark regulations are being drafted with the aim of being implemented by the end of the year.

Proposed Regulations include:

An increase in official fees for the first time in 13 years. By international comparison the fees are still reasonable. The most notable change is the introduction of a fee for filing a revocation action.
Making electronic communication with the Intellectual Property Office (IPONZ) through its online case management system compulsory. A consequence of this is that the definition of “address for service” will be amended to require an electronic address.
Prescribing regulations needed for New Zealand’s accession to:
- The Singapore Treaty on the Law of Trademarks (Singapore Treaty);
- The Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Trade Marks (Nice Agreement); and
- The Madrid Protocol Relating to the Madrid Agreement (Madrid Protocol).
Making general amendments to regulations that are described as ‘minor and technical’. The aim of these amendments are business efficiency and clarification of some regulations that have caused uncertainty (such as Regulation 32- Extensions of time) as well as clarifying the processes and requirements for proceedings in the IPONZ Hearings Office.

The regulations are expected to be in force by 10 December 2012.

Samoa: New Trade Mark Laws

Wed, 19 Sep 2012 00:00:00 +1200

The Intellectual Property Act 2011 will come into force in Samoa from 1 October 2012 and supersedes some sections of the previous Trade Marks Act 1972.

The important provisions relating to trade marks are highlighted below.

No re-registration provisions

The Act has removed the ability to re-register a granted foreign trade mark in Samoa. Previously, registration could be obtained by providing a certified copy of a United Kingdom Trade Mark Registration, a European Union (CTM) Registration, or other foreign, in relation to goods only.

The new legislation requires applications to be filed directly with the Registrar under the local system.

Service marks available

The new trade mark registration system now provides for local registration for goods and/or services.

New priority provisions

Although Samoa is not a member of the Paris Convention, the new Act allows applicants to claim priority from applications filed in a member state, such as New Zealand, if a corresponding application is filed in Samoa within 12 months.

Nice Classification

The Act has adopted the 9^th Schedule of the Nice Classification.

Non-traditional marks available

The Act expressly notes that shapes, colours, sounds, scents and taste are eligible for trade mark registration in Samoa subject to compliance with other provisions in the Act.

Collective trade marks

Under the Act, a collective association can apply for a collective trade mark. The purpose of a collective mark is to indicate the origin or common characteristic of goods of services of members of a collective association from those of persons who are not members of the collective association.

Curiously the Act has not made provisions for the registration of certification marks.

Duration and renewals

Under the Act, a trade mark registration will have an initial term of 10 years from the filing date of the application. Following this, the mark is renewable for periods of 10 years.

Provisions have also been made for a grace period to make renewal payments after the expiry date of the registration however this will be subject to a late renewal fee.

The Regulations which accompany this Act have also been promulgated but its contents are yet to be published.

Patents Bill Passes Second Reading in Parliament

Thu, 13 Sep 2012 00:00:00 +1200

The Patents Bill had its second reading in Parliament on 12 September 2012, over four years after being first introduced to replace New Zealand’s dated Patents Act 1953.

The second reading gave Members of Parliament their first opportunity to debate changes to the Patents Bill proposed by the Commerce Select Committee in March 2010 and by the Government in a Supplementary Order Paper dated 28 August 2012.

Unsurprisingly, there was near-universal support in Parliament for progressing the Patents Bill to modernise New Zealand’s patent law, with the Bill comfortably passing its second reading. However, a number of MPs made it clear that their continuing support for the Bill was contingent upon the rejection of a proposed amendment to the exception from patentability for computer programs.

Patentability of Computer Programs

The second reading was dominated by debate focussed on the Minister of Commerce Craig Foss’s controversial Supplementary Order Paper proposing an amendment to the broad exclusion of computer programs from patentability. As outlined in a previous article, deficiencies in the exclusion led to the introduction of the Supplementary Order Paper which proposed amending the wording of the Bill to correspond with similar exclusions in the United Kingdom and Europe.

Opponents of the Government’s proposed amendment argued that the amended wording would in fact allow patents for a wide variety of computer programs, asserting that this would favour only large foreign companies at the expense of innovation in New Zealand’s software industry.

Instead, the opposition supported adoption of an alternative amendment proposed in a subsequent Supplementary Order Paper submitted by Labour party communications & IT spokesperson, Clare Curran (as outlined in an earlier article). That amendment specifies that the broad computer program exclusion proposed by the Commerce Committee “does not prevent an invention that makes use of an embedded computer program from being patentable.”

However, it is highly debateable whether this alternative amendment is any clearer or complies with New Zealand’s obligations under the TRIPS agreement, which requires that patents be available for inventions in all fields of technology provided that they are new, inventive, and industrially applicable. The Government’s amended exclusion, on the other hand, represents a significant limitation to patentability compared with the existing Patents Act 1953 (which places no limitation whatsoever on the patentability of computer programs) while addressing concerns regarding TRIPS compliance and the lack of legal precedents for assisting in interpreting and applying the exclusion.

Next Steps for the Patents Bill

Having passed the second reading, the Patents Bill will in due course proceed to the committee of the whole House, giving Members of Parliament the opportunity to debate in detail the provisions of the Bill and amendments proposed in the Supplementary Order Papers, and to propose any final changes.

It is not yet clear whether the Government will have the numbers required to adopt its proposed amendment to the computer program exclusion or, alternatively, whether the opposition will prevail with their alternative limitation.

Once the House agrees to the final form of the Patents Bill, it will proceed to a third reading and a vote by Parliament on whether the bill will be passed. It is rare for a Bill to be rejected at such a late stage. If passed, the Bill will become law upon receiving the Royal assent, although transitionary provisions mean that the existing Patents Act 1953 will continue to have effect for existing applications.

Proposal for Alternative Wording for the Qualification around the Exclusion of Computer-Related Inventions from Patentability

Wed, 12 Sep 2012 00:00:00 +1200

Labour MP Clare Curran has proposed a last minute change to the limitation of the extent to which software inventions may be excluded from patentability. Ms Curran objects that the qualification by Craig Foss (Minister of Commerce) that only inventions that relate to a computer program as such should be excluded from patent protection is ambiguous. While this wording may seem a little convoluted, it has been adopted in other jurisdictions and case law exists clarifying what it means. In broad terms, an invention which is implemented using software is generally patentable and mere schemes, algorithms or data presentation or manipulation generally are not.

Ms Curran proposes amending the qualification such that the broad exclusion to the patentability of software does not extend to inventions that make use of an embedded computer program. Without any definition as to what constitutes embedded software, it is difficult to see how such a change would provide for improved certainty for patent applicants or those against patent protection. She perhaps mistakenly concedes this by commenting that her proposed wording leaves “the boundaries of embedded software to be determined by the Government on a case-by-case basis as appropriate”. This hardly seems desirable, requiring patentees and opponents to go through costly litigation to determine their position.

That said, with the Government keen to pass the Bill as soon as possible and Ms Curran 's comment that Labour will vote against it at the third reading if their amendment is not accepted, Labour appear to be in a strong position, particularly with the Green party having taken a similar stance as Labour during progression of the Bill.

NZ Law Awards names Baldwins as a finalist in this year's awards

Mon, 10 Sep 2012 00:00:00 +1200

Baldwins has been nominated in the 2012 New Zealand Law Awards™ (Law Awards).

The firm is delighted to be named a finalist in the Canon Intellectual Property Law Award category.

The awards, which are in their eighth year, provide clients with the opportunity to reward their lawyers for the work they have done for them over the past year. Run annually by NZLawyer magazine, the Law Awards reward excellence in client service as determined by clients.

Voting is open until 27 September 2012. To vote, you can register here or, if you have already registered, you can vote here. When registering, you will need to specify whether you have instructed a law firm in the last 12 months – this will determine the categories you are eligible to vote for.

The winner will be announced at the Law Awards black tie ceremony on Thursday, 1 November 2012 in Auckland.

From the lab bench to the boardroom

Fri, 07 Sep 2012 00:00:00 +1200

The idea of using your organisation’s Intellectual Property (IP) as a means to achieve commercial success is often bandied around with little or no explanation about exactly how this can be done. We provide below a brief outline of an IP strategy that can lead you from the bench to the boardroom.

Understanding your current and potential IP assets

The first step in developing a successful IP strategy is finding out exactly what IP you currently have by conducting an IP audit. This systematic review of the IP assets owned, used or acquired by an organisation should include all staff and should provide an element of education in what constitutes existing and potential IP.

Existing IP assets can include patents, trademarks, registered designs, plant variety rights, trade secrets or copyright owned by the organisation, and any IP licensed to or from third parties. Less obvious IP assets include work manuals, databases, methods, publications and product/process know-how.

The IP assets of most relevance to scientists will often be patents that protect inventions. Patents can provide protection for new chemical compounds, compositions, apparatus, methods of production, methods of treatment of diseases, isolated or recombinant nucleic acids/proteins or non-naturally occurring microorganisms and other subject matter. However, an effective IP strategy will also assess and consider using other forms of IP such as registered designs, trade secrets, copyright and trade marks.

Once the IP assets have been identified, the ownership of those assets should be assessed. There will often be IP clauses in funding, collaboration, consultancy or employment contracts that determine who owns any IP developed and attaches conditions to the use of that IP. If it is unclear which party owns a particular asset this should be cleared up as soon as possible to avoid lengthy and costly disputes down the line. As a general rule of thumb, if IP is generated by an employee in the normal course of their employment, then the IP will belong to the employer. This is especially true if the employee is employed as a researcher/innovator whose role is primarily to generate knowledge and IP.

The next step is to determine the extent of use of the asset and to evaluate the importance and value of the IP assets identified. Most organisations are able to evaluate the relative importance of the asset in comparison to other assets held by the organisation. This relative evaluation is likely to take into account factors such as how closely the asset is aligned with the organisation’s core goals, the expected longevity of the IP asset (i.e. is the patent/trade mark about to expire?) and how exclusive/unique the asset is (i.e. is it a minor improvement to standard laboratory practice or a ground-breaking new technology?).

Dollar valuation of IP assets is an extremely tricky proposition due to the array of factors that can affect the value, such as market demand, competitor activity, rate of technological change, logistical capability etc. A good place to start is to ask how much it would cost to replace the IP asset if it were lost or how much income the asset is expected to generate in the next few years.

The value of some IP assets relies on external factors over which the organisation may have little or no control. An IP audit should identify where and how these factors could present risks to the organisation’s IP position and the value of its assets. For example there may be a risk if the main IP asset of an organisation is a person or team with knowledge of techniques or processes. If the person/team leaves, the IP position/value may be compromised. Similarly, there is a risk if the IP assets of the organisation rely entirely on the provision of a licence by a third party or rely on a single supplier for an essential product. If the licence is not renewed or the supplier ceases trading, it could have a catastrophic effect on the organisation.

Using your IP assets

Once an IP audit has been completed, you should consider how these IP assets align to your organisation’s goals and therefore how they can best be used. Businesses generally want to see a financial return for their investment, but increasingly this can also be said for Universities, Crown Research Institutes (CRIs) and many University-based institutes. As this transition to a more commercially focused academic sector continues, recognising and understanding IP is becoming a more important part of a researcher’s intellectual arsenal.

The commercial use of IP assets can be broadly broken down into three categories – direct use of the IP, licensing and sale.

For example, an organisation discovers a new polymer and a method of producing the polymer and obtains patent protection. Direct use of the product would involve the organisation producing and selling the polymer to customers in New Zealand and other countries in which the patent has been granted. Patent rights are territorial therefore the patent is only valid where applications have been made and patents granted. This means that the organisation could not prevent other parties from making and selling the polymer in countries where a patent has not been granted.

Licensing of IP assets can provide revenue to the licensor where manufacture or sale of the product by the licensor alone would have been difficult or expensive. It can also enable smaller players to expand into new markets that would otherwise not have been logistically or economically feasible. Universities have traditionally seen the patent right as an endpoint in itself. The core business will be to licence or sell the patent right.

Licensing can also be used in more complex arrangements to suit the business purpose and marry different parties’ capabilities and expertise. Among these arrangements are cross-licensing (you license technology X to me and I’ll license technology Y to you) and strategic alliances (I license technology X to you and you market/produce technology X for me). Licensing of IP assets is a common outcome with New Zealand based organisations due to the logistical and financial hurdles encountered with commercialising technology in major overseas markets.

Sale of the IP asset is a good way to quickly raise funds and profit from an unused or underused resource. In contrast, royalties from licensing can take time to accrue and are dependent on the competency of the licensee in utilising the asset.

Freedom to operate

Even if the generation of IP assets for commercial gain is not the goal, an understanding of IP is advantageous so that steps can be taken to avoid infringing the IP of other parties. This is generally termed “freedom to operate” (FTO) and requires an awareness of the rights of other parties and ensuring that your activities do not infringe those rights.

If you do not want to patent an invention it can be advantageous to publish your work. Since a patent is only granted for novel inventions, the invention cannot have been previously published or be otherwise known. Therefore defensive publication of your research can block other parties from being granted a valid patent which could block your research.

Using IP analysis to direct your organisation

An understanding of how your organisation’s IP assets fit into the IP landscape can guide your future research direction and help understand risks and opportunities for commercialising technologies. A patent landscape analysis identifies patent rights that already exist around a specific concept. The scope and density of patents around particular technologies or disciplines is analysed and compared to an organisation’s IP assets and capabilities. Areas of technology or particular disciplines that have sparse IP “vegetation” are identified as opportunities for development. Such an analysis also helps to determine obstacles that may hinder an organisation’s commercialisation goals or freedom to operate.

A sustainable IP strategy for tomorrow’s world

An integral part of a successful and sustainable IP strategy is the continual re-assessment of IP assets and the promotion of a culture that fosters and rewards the awareness and creation of IP. Promotion of these factors enables organisations to recognise, assess and potentially capitalise on commercial opportunities in a timely and efficient way.

I can’t believe it’s not Marmite!

Wed, 05 Sep 2012 00:00:00 +1200

In the recent highly publicised dispute, Sanitarium and brand MARMITE have once again been thrust into the spotlight, this time by the media, to justify their actions in preventing a shipment of 2000 jars of British Marmite from entry into their New Zealand market. The British shipment was intercepted upon entry to New Zealand by Customs with which Sanitarium has lodged a customs notice for detaining goods infringing their MARMITE trade mark registration.

The recently labelled “Marmageddon” has arisen from the temporary closure of Sanitarium’s earthquake damaged Christchurch factory, suspending production of the spread until at least October and leading to a heightened demand for substitute products. This perhaps is one of the motives behind Kaiapoi-based Rob Savage’s shipment of the British Marmite to New Zealand. Interestingly, it seems some British expats have in the past been able to get their hands on small quantities of the British spread in New Zealand. Retailers in New Zealand tend to stock the product marketed under the “Our Mate” brand. “Our Mate” is available to consumers throughout New Zealand seemingly without interference from Sanitarium. “Our Mate” and MARMITE being dissimilar trade marks, there is very little likelihood of confusion resulting.

The importation and sale of the British Marmite product would appear to be a clear cut case of simple trade mark infringement. The word Marmite is identical to the registered trade mark of Sanitarium, as are the goods, both being yeast based products. Under the Trade Marks Act 2002, trade mark rights are territorial i.e. in this case cover New Zealand, the fact the British Marmite product can be sold in the United Kingdom is irrelevant when considering the New Zealand marketplace. A registered trade mark is infringed where:

A third party uses an identical trade mark in business in respect of any goods/services that the trade mark is registered; or
A third party uses an identical or similar trade mark in business in respect of the same or similar goods/services as covered by a registered trade mark, if that use would be likely to deceive or confuse; or
A registered trade mark is well known in New Zealand in relation to any goods/services, and use of the infringing trade mark takes unfair advantage of, or is detrimental to, the distinctive character or reputation of the well known trade mark

These remedies are not available to a company which does not hold a registered trade mark.

Sanitarium is all too familiar with this type of negative publicity. This case virtually mirrors one several months ago where a Nelson-based importer of British WEETABIX was ordered to remove the infringing articles from his shelves. WEETABIX was not identical to Sanitarium’s WEET-BIX, but it is clearly sufficiently similar for deception or confusion to be likely. Sanitarium would appear to be well within their rights as registered trade mark owners of both WEET-BIX and MARMITE.

Trade mark registration enables companies such as Sanitarium to employ border protection strategies as cost effective means of combating and controlling the unauthorised importation of competing articles including counterfeits, into the country. Trade mark owners holding registered trade marks can lodge notices with Customs which empower Customs to intercept and detain goods at the border which Customs determines are counterfeit and infringe the registered trade mark identified in the notice. If the importer does not agree to surrender the notice, the trade mark owner has ten days within which to issue court proceedings. Sanitarium would appear to understand the value of their New Zealand brands, and the long-term benefits in registering their trade marks.

Trade mark registration is the key to various brand protection opportunities. Lodging customs notices allows you to intercept counterfeit goods before they get the market, and prevent third parties from taking advantage of your market and potentially damaging your reputation.

Will New Zealand pirates really walk the plank?

Wed, 05 Sep 2012 00:00:00 +1200

All has been quiet on the file-sharing front since two internet users were issued with their third-strike notices in June 2012. The third-strikes (enforcement notices) were the first of their kind under the Copyright (Infringing File Sharing) Amendment Act 2011, carrying the potential threat of proceedings before the Copyright Tribunal and a maximum fine of $15,000.

Surprisingly, neither of the enforcement notices, which were issued on behalf of the Recording Industry Association of New Zealand (RIANZ), proceeded to a hearing before the Copyright Tribunal. The opportunity for RIANZ to elect a hearing in respect of those notices lapsed in July, with no public explanation being given.

However, according to a Ministry of Justice spokesperson, RIANZ has now applied for three internet users to be brought before the Copyright Tribunal and fined for their alleged copyright infringement. While there are still many checks to be made before this can happen, the applications by RIANZ show that it wishes to send a clear public message to New Zealand file-sharers.

The targeting of individual file sharers has a long history in America, where between 2003 and 2008, around 35,000 lawsuits were said to have been filed by the Recording Industry Association of American (RIAA) against individuals accused of illegal file sharing.

Assuming that the current applications have been made in accordance with the Act (within 35 days of the relevant enforcement notices and adequately detailed) and the proceedings are allowed, these might well be the first reported proceedings under any three-strikes system for copyright infringement. New Zealand copyright lawyers have been eagerly awaiting results in other three-strikes jurisdictions, such as France, although the debate overseas has largely focussed on the legality of internet termination.

Consequences for a third-strike under the French HADOPI system include a potential fine and/or the temporary disconnection of internet connection. However, after 1 million warning letters, 99,000 second-strikes, and 314 referrals for potential disconnection, no punishment has issued for internet users receiving their third-strikes.

The French Government is now reviewing whether HADOPI is achieving its goals, or simply costing money. Culture Minister Aurelie Filipetti has gone on record to say that HADOPI has been nothing but a waste of money, estimating costs to be in the region of €12 million (NZ$19 million) per year. This figure is in addition to the higher costs involved for internet service providers and higher subscription fees being paid by internet users as a result of the system.

New Zealand’s infringement notice fees ($25 per notice, payable by the copyright owner or representative, such as RIANZ) are currently under review by the Ministry for Economic Development. While the current maximum fine is set at $15,000, fines issued by the Copyright Tribunal could be as low as a few hundred dollars.

Regardless of quantum, it appears that New Zealand will be one of the first countries in the world to follow through with its three-strikes legislation.

Misleading and deceptive conduct – the ongoing “AdWords” saga

Mon, 03 Sep 2012 00:00:00 +1200

Protection of brands online is an ongoing struggle. Over the years trade mark owners have fought against cyber-squatting, online parodies and inappropriate use of their brands on social media sites. The battle is often against misleading or deceptive conduct, including conduct which suggests an association with and endorsement of products when no such association or endorsement exists.

In more recent times, trade mark owners are battling use of their brands as “reserved” keywords in the context of search engines. In the world of Google, these reserved keywords are known as “AdWords”.

About AdWords

Google Adwords are the text based advertisements that appear at the top and sometimes on the right hand side of all of Google’s search results. If there aren’t any advertisements showing at the top or right-hand side of the page, no one is advertising under those keywords.

Google searches produce two distinct types of search results in response to search queries:

“Organic” search results which are displayed free of charge and listed in order of relevance (as determined by a complex algorithm developed by Google).
“Sponsored link” results which link to advertisements created by companies that have reserved an AdWord with Google to direct user traffic to their websites.

Advertisers are charged every time a sponsored link is clicked on by a user. This “pay-per-click” system produces significant revenue for Google.

Many brand owners find their competitors have reserved their brands as AdWords.

Reserving a competitors brand as an AdWord can allow competitors to place their advertisement ahead of genuine search results for another brand, thereby potentially diverting internet traffic away from the true brand owner.

In the Courts: Australian Competition and Consumer Commission (“ACCC”) v Google Inc. [2012] FCAFC 49

The issue of AdWords has been dealt with through the Courts in overseas jurisdictions, including Europe, the United States and Australia. While a competitor’s conduct in purchasing another trader’s brand as an AdWord has frequently be found in most jurisdictions to amount to misleading and deceptive conduct, search engine operators have largely been absolved of any liability – often being described as a mere conduit.

In April this year in a landmark decision, the Full Federal Court of Australia unanimously upheld an appeal by the ACCC against Google in relation to Google’s AdWords service.

The case concerned the use of sponsored links[*] compared to organic search results. The Full Court found that using Google AdWords to trade on a competitor’s business or reputation is not only a breach by the competitor which placed the advertisement, but also a breach by the search engine provider which displayed the infringing words in its search results.

Google’s AdWords were found to have breached the prohibition of misleading and deceptive conduct under section 52 of the Trade Practices Act 1974 (Cth) (now the Competition and Consumer Act 2010 (Cth)) by publishing advertisements falsely representing a connection between Google’s customers and competing businesses. Google’s conduct and the function of its AdWords facility meant that Google was doing more than merely passing on the statements of the advertiser.

Unsurprisingly, Google sought special leave to appeal the Full Court’s decision. On 22 June 2012, Google was granted special leave by the High Court of Australia. Google’s notice of appeal was filed on 28 June 2012 and the ACCC’s notice of contention was filed soon after on 5 July 2012. The outcome of the appeal will likely be closely watched by trade mark owners and search engine operators worldwide. Watch this space.

The New Zealand position

New Zealand’s equivalent to Australia’s Competition and Consumer Act 2010 is the Fair Trading Act 1986 (“FTA”). To date, the New Zealand courts have not been asked to determine whether the use of AdWords infringes trade mark rights or amounts to misleading or deceptive conduct in breach of the FTA. However, any New Zealand court will likely be highly persuaded by the outcome of the Google Inc. v ACCC appeal.

Avoiding misuse of AdWords

Businesses need to be aware of their own liability if using competitors’ names and trade marks in advertisements using Google’s AdWords program. We recommend only reserving AdWords in relation to words or phrases that are related to your own business and activities.

It is possible to prevent a competitor from misusing your name and trade marks via AdWords. Google has an “AdWords trade mark complaint” process and Google customers can also opt their brand out of the AdWords system. In order to “opt out” you need to have a registered trade mark and be a Google customer - you then simply submit an online form to Google identifying your Google customer identification number and your registered trade mark details. As is so often the case, a trade mark registration is the first line of defence.

[*] Since the Australia Full Federal Court decision, Google has replaced the phrase “sponsored links” with the phrase “Why these Ads?”. Clicking on the “Why these Ads?” phrase takes the user to a page with further information as to how the links were generated and, by signing into the user’s Google Account, the ability to alter their Ad preferences and opt-out of receiving sponsored links.

What do the changes to Convention Countries in New Zealand and Australia mean for you?

Thu, 30 Aug 2012 00:00:00 +1200

New Zealand

The new Patents, Designs and Trade Marks Convention Order 2012 came into force on 23 August 2012. This updates the list of countries from which convention priority can be claimed.

The list now recognises our close Pacific island neighbours, Samoa and Tonga, but not Vanuatu, which became the newest signatory to the World Trade Organisation on 24 August 2012.

The newly added “convention countries” are:

African Intellectual Property Organisation (OAPI)
African Regional Intellectual Property Organisation (ARIPO)
Andorra
Benelux Office for Intellectual Property (BOIP)
Bhutan
Cape Verde
Comoros
Eurasian Patent Organisation (EAPO)
European Patent Office (EPO)
Montenegro
Nepal
Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM)
Patent Office of the Cooperation Council for the Arab States of the Gulf (GCC Patent Office)
Samoa
Saudi Arabia
Serbia
Seychelles
Tonga
Yemen

Amended “convention countries” are:

Bolivia, Plurinational State of (amended from Bolivia)
Ecuador (amended from Equador)
European Union (amended from European Communities)
Kyrgyz Republic (amended from Kyrgyzstan)
Venezuela, Bolivarian Republic of (amended from Venezuela)

New Zealand (NZ) is not listed as a convention country, despite being a signatory to the Paris Convention. This raises an issue as discussed below.

Claiming Convention Priority under the Patent Cooperation Treaty

It is not possible to claim convention priority when entering national phase in NZ from a PCT application that has a NZ priority application. Therefore, where a priority application is filed in NZ, a NZ applicant should file a complete-after-provisional application before the end of the priority period. One way of addressing this is to file the priority application overseas. However, NZ resident applicants require permission from the Intellectual Property Office of New Zealand (IPONZ) if they plan to file their first application for patent protection outside of NZ. The current Patents Bill does not address this issue.

Claiming Convention Priority under the Madrid Protocol

All going to plan IPONZ could be ready to accept Madrid Protocol filings by the end of this year. Australia has been a member since 2001.

Under the Madrid Protocol, an international application may be based on either a registration with the office of origin (a “Basic Registration”) (generally IPONZ in the case of a NZ based applicant and IP Australia for an Australian based applicant) or on an application for registration filed with the office of origin (“Basic Application”).

An international application may claim convention priority from a Basic Application for all or some of the goods and services covered by the Basic Application or Registration if filed within 6 months of the Basic Application.

Australia

Australia has taken a somewhat more modern approach that will allow its list of convention countries to be maintained on a continual basis.

From 15 April 2013 the definition of “convention country” will be revised and the requirement that countries be individually listed in the Australian Trade Marks Regulations 1995 (the Regulations) will be removed. Instead, the Regulations will refer to internet addresses where authoritative lists of convention countries may be sourced.

Patents Bill - Changes to Computer Program Exclusion Proposed

Wed, 29 Aug 2012 00:00:00 +1200

Almost two and a half years after the Commerce Select Committee presented its report on the Patents Bill, progress is again being made towards the replacement of New Zealand’s dated Patents Act 1953. After languishing in the Parliamentary Order Paper for many months, the Patents Bill has suddenly been propelled up the list and a second reading of the Bill in Parliament now appears to be imminent. On 28 August 2012, the Government released a Supplementary Order Paper (No. 120) proposing a number of amendments to the Patents Bill. Among numerous relatively minor changes is an amendment and qualification to the Commerce Committee’s proposed exclusion of computer programs from patentability.

The unexpected recommendation to exclude computer programs from patentability was undoubtedly the most controversial change to the Patents Bill recommended by the Commerce Committee in its report of March 2010. Lauded by advocates of free and open source software but widely criticised by both local and foreign patent applicants and patent attorneys, the exclusion came contrary to previous indications that there would no change to the existing practice of granting patents for computer-implemented inventions.

Most concerning, however, was the scope of the proposed exclusion which appeared to go far beyond those of other jurisdictions such as the United Kingdom and Europe which have for some time excluded from patentability computer programs “as such”. The Supplementary Order Paper replaces the previous exclusion by stating that a computer program “as such” is not considered an invention for the purposes of the Patents Bill.

Similar exclusions elsewhere have been interpreted as meaning that computer-implemented inventions are patentable only if they make an inventive “technical contribution” to the art, or solve a “technical problem” in a non-obvious way. That is, a novel and inventive method or scheme will no longer be patentable subject-matter merely due to the fact that it is performed by a computer, as is presently the case. It is likely that the qualified exclusion will therefore have the effect of precluding patents for computer-implemented schemes, rules and methods for performing mental acts, playing games or doing business, for example, while permitting patents for “embedded systems” and the like as intended by the Commerce Committee.

Opponents of so-called “software patents”, who ironically previously lobbied the Commerce Committee for adoption of the exclusion of the United Kingdom and Europe, have subsequently vehemently opposed any suggestion that New Zealand should adopt such a qualification upon the broad exclusion recommended by the Commerce Committee, and are unlikely to be pleased at the amendment proposed in the Supplementary Order Paper. However, the amendment goes a long way towards addressing concerns regarding inconsistency between the wording and intent of the previous exclusion, uncertainty as to the scope of the exclusion in view of the inapplicability of foreign precedents, and inconsistency with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Previous examination guidelines that issued based on the broader exclusion will need updating and it remains to be seen what impact the change will have on what is eligible for patent protection. It may well be that patent examiners will implement the exclusion in the same way but they should now be able to allow claims that involve software at some level.

TA MOKO

Tue, 28 Aug 2012 00:00:00 +1200

It is now well recognised in intellectual property law that the indigenous rights needs to be taken into account at least when securing exclusive registered protection for trade marks in the name of persons or organisations to use in trade.

The recently published WAI262 report confirmed the desirability for the Crown and Maori to work in partnership as far as practicable to ensure recognition of taonga and preserve interests of iwi and hapu balanced against other rights available to others in New Zealand. More recently, attempts to register as a trade mark phrases of the KA MATE haka has highlighted the unsuitability of a trade mark registration for cultural protection for Maori taonga. Rather, the exclusivity provided by trade mark registration looks to the inherent nature of trade marks to “distinguishing the goods or services of one person from those of another person” in an economic and a commercial operation – i.e. in “the course of trade”.

It is heartening therefore to see that in view of the proximity of New Zealand to Australia, New Zealand cultural sensitivities are acknowledged by IP Australia.

Cloudy Bay Vineyards has taken steps to ensure its own Maori trade identifier for its flagship wine TE KOKO does not cause offense to Maori or other groups. The brand has been chosen in consultation with Maori and has since grown in international repute. When faced with the similar trade mark TA MOKO accepted for registration in Australia, Cloudy Bay Vineyard lodged an opposition on the basis that the trade mark TA MOKO was confusingly similar, and that in addition it was an identifier of Maori tapu. Their argument was that the trade mark TA MOKO was likely to be scandalous under s42 of the Australian Trade Marks Act 1995 as the moko (ta moko) is the sacred facial tattoo characteristc of Maori and Maori strength of character.

Cloudy Bay Vineyards submitted evidence of the confusing similarity of TE KOKO with TA MOKO. In addition, they had the support of expert evidence of Ms Te O Kahurangi Waaka, the Chair of the Maori Trade Marks Advisory Committee who looked at the extent to which TA MOKO may be “scandalous”. In Ms Te o Kahurangi Waaka’s evidence, the concerns of Maori in New Zealand and interestingly also in Australia were highlighted. Particular consideration was paid to the impact of the use of TA MOKO – an indication of tapu – on alcoholic beverages. In her evidence, Ms Te o Kahurangi Waaka concluded use of TA MOKO on alcoholic beverages was likely to be offensive and scandalous not only to Maori in Australia but also to many other New Zealanders currently living in Australia.

The Registrar at IP Australia issued a decision in favour of Cloudy Bay Vineyards. TA MOKO was deemed to be confusingly similar with TE KOKO and therefore unable to be registered. On the point of whether TA MOKO was also scandalous under s 42 of the Australian Trade Marks Act 1995, the Registrar commented : “having regard to the extensive evidence and submissions which have been put before me concerning this issue, I am satisfied that the proposed trade mark “TA MOKO”, in embodying a Maori expression which has particular cultural significance and which accordingly would be likely to be regarded as offensive by members of the Maori community and others, falls within the scope and meaning of “scandalous”…”

As recognised by both the New Zealand and Australia Intellectual Property Offices, indigenous rights are a factor considered and those rights must be balanced against the purpose of trade marks. Commerce and culture can be mixed to produce a winning formula but care and consideration is needed to ensure boundaries of cultural and related sensitivity are not crossed. Brand choice is therefore a matter which should be made in partnership with your intellectual property advisor and in line with a clear and focused intellectual property strategy.

InternetNZ approves .kiwi second level domain

Mon, 27 Aug 2012 00:00:00 +1200

InternetNZ has approved the creation of the .kiwi second level domain in the .nz domain name space. This expands the range of domains available to register by allowing the registration of domains such as baldwins.kiwi.nz.

The application for the creation of .kiwi.nz was received in April 2012. Following a public consultation process, the Domain Name Commission recommended to InternetNZ that the .kiwi second level domain be created.

Authorised registrars will be able to take registrations from 11 September 2012. However, as part of the policy in introducing a new .nz second level domain, a threshold of registrations must be received before the domain is made active. The threshold set for kiwi.nz to be established is 500 registrations in the first month. If 500 applications for .kiwi.nz are not received, .kiwi.nz will not be made active.

If you are interested in pursuing a .kiwi.nz domain for your brand, please contact us for more information.

This article was written with assistance from Shiv Narayan

Patent law reform back on the government agenda

Tue, 21 Aug 2012 00:00:00 +1200

Patent law reform is finally back on the government agenda. Given the current government push on building innovation, it would have been surprising if it hadn't been. Many of us working in the intellectual property field have, however, been wondering why it has been taking so long to get to the top of the pile of tasks for the government to complete. Sound legislation is part of an important framework for protecting innovation and setting us on the same footing as the rest of the world.

To refresh your memories, New Zealand's patent legislation, the Patents Act 1953, is ancient, in global terms. It is virtually the same as the UK Patents Act 1949, which Great Britain dropped in 1977, and Australia in 1990. We are light years behind our trading partners. To give an example, it is still technically possible for someone to see an invention being used overseas, bring that invention back to New Zealand and claim a patent for it. That is not possible in any of the major countries with which we trade.

For years, the patent attorney profession has been pushing for reform. Discussion papers and exposure drafts of bills grew mildew in damp back corridors. Finally, in July 2008 a new Patents Bill was introduced. It took 10 months before it got its first reading. It was referred to the Commerce Select Committee with submissions due in July 2009. The Select Committee reported in March 2010. The Bill was then split into two parts, one dealing with reform of legislation on patents, and the other on the patent attorney profession.

There are still some issues to be resolved in the legislation but the announcement tucked away on page 20 of the government's Building Innovation Report released on 21 August can only be greeted with relief and the hope that it will move a lot faster than it has done before.

Law Commission releases Ministerial Briefing Paper and draft Bill on cyber-bullying

Tue, 21 Aug 2012 00:00:00 +1200

In a proposal that, if adopted, would put New Zealand on par with jurisdictions such as the United Kingdom, Australia and the United States, the Law Commission has released a Ministerial Briefing Paper and an accompanying draft Bill aimed at combating cyber-bullying in New Zealand.[1]

The Law Commission’s work was fast tracked by Parliament this year, following incidents such as the posting on YouTube of a video taken from a cell phone showing girls at a Wanganui High School beating a fellow student unconscious and a spate of similar incidents overseas, including where cyber-bullying has resulted in the victim’s suicide.

The principal recommendations of the Ministerial Briefing Paper include:

Introducing a new offence, applicable to those 14yrs old and above, to target digital communications which are “grossly offensive or of an indecent, obscene or menacing character” and cause harm;
The establishment of approved agencies (such as NetSafe) to conduct mediation of complaints about cyber-bullying;
The establishment of a Communications Tribunal comprising a District Court Judge and an expert internet advisor to deal with complaints about cyber-bullying that are not resolved at mediation;
Increasing awareness and appropriate management of cyber-bullying in schools.

The Bill seeks to implement the above recommendations and provides a framework for a Communications Tribunal to hear complaints of cyber-bullying made by not only the victims of cyber-bullying, but also their parents and guardians (where appropriate), School Principals and the Police. The Tribunal would consider serious complaints involving significant harm to the victim, against a set of broad communication principles. The remedies that the Tribunal would be able to order include an apology from and naming of the offender, as well as the correction of material, removal of harmful material, and provision of details of an offending party from website owners.

The Tribunal itself would not be able to award monetary compensation or impose criminal sanctions, but non-compliance with any order made by the Tribunal would see the non-complying party liable upon conviction to a fine of up to $5,000 or up to three months’ imprisonment. In cases of serious offending, an amendment to the Summary Offences Act 1981 would see an offender face upon conviction a fine of up to $2,000 or up to three months’ imprisonment.

The Bill would also amend other relevant legislation including the Human Rights Act 1990 and the Crimes Act 1981.

[1] Law Commission: Ministerial Briefing Paper “Harmful Digital Communications: The adequacy of the current sanctions and remedies” August 2012; Communications (New Media) Bill 2012.

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The Red Tape Surrounding Colour Trade Marks

Fri, 17 Aug 2012 00:00:00 +1200

In the trend dependent world of fashion, having a brand that will command a consumer’s attention long enough to lead to a sale is something well worth defending. This article reports on a recent legal battle between fashion heavy weights, Christian Louboutin (“Louboutin”) and Yves Saint Laurent (“YSL”), which has left both parties seeing red.

In 1992, as a tongue-in-cheek attempt to revive a pair of stilettos considered to “lack energy”, Louboutin painted the bottoms with red nail polish. Springboarding from that point, virtually all Louboutin shoes have been similarly gilded, and the shiny red outsoles have metamorphosed into a venerated visual cue of Louboutin.

As endorsement of the reputation residing in the red outsoles, in 2008 the United States Patent and Trade Mark Office granted Louboutin a trade mark registration for “a lacquered red sole on footwear”. In August last year, Louboutin sought to rely upon this registration to injunct YSL from selling monochromatic shoes featuring red outsoles[1]. YSL in turn, counterclaimed for the cancellation of Louboutin’s trade mark registration.

Round one of the case was heard before Judge Victor Marrero of the New York District Court. Marrero conceded that upon seeing the red outsole, “cognitive bulbs flash to associated ‘Louboutin’”. Yet despite the acknowledged visual association, Marrero considered the use of colour in fashion to be “aesthetically functional” in nature and therefore incapable of appropriation as a trade mark:

“…Because in the fashion industry colour serves ornamental and aesthetic functions vital to robust competition, the court finds that Louboutin is unlikely to be able to prove that its red outsole brand is entitled to trade mark protection.”

Marrero surmised that because the fashion industry is “dependent on colours”, Louboutin’s registration would deplete other competitors of a limited resource:

“…Louboutin’s claim would cast a red cloud over the whole industry, cramping what other designers would do, while allowing Louboutin to paint with a full palette”.

The Doctrine of Aesthetic Functionality and the Colour Depletion Theory

In order to fully comprehend Marrero’s judgment, it is necessary to take a step back and briefly consider the doctrines being relied upon.

If a trade mark is aesthetically functional, it cannot be a trade mark. The fact that it is functional means that others are likely to want to use it and it should not be monopolised.

An offshoot of the aesthetic functionality doctrine is the ‘colour depletion theory’. This reflected the concern that since the number of colours in the world is arguably finite, to grant exclusive rights to a colour would deplete the available stock and, deprive another trader from using the same or similar colour. It was therefore standard practice for the United States Patent and Trademark Office to decline single colour marks.

Following years of inconsistent practice around the protectability of colour marks, the colour depletion theory was finally examined and rejected by the US Supreme Court in the Qualitex[2] decision. In this case, the court accepted that colours can, and do play an important part in a brand’s identity. While a single shade of colour was unlikely to be inherently distinctive, it was acknowledged that distinctiveness can be acquired by consistent and sustained use. The Supreme Court concluded that colour marks and their validity should be based upon individual fact-based examinations of the function that the colour serves and not from the viewpoint of incremental depletion.

The Counterclaims – why the colour depletion theory is flawed

It appears to this author that Marrero reasoning has deviated from the accepted law in Qualitex by perpetuating a theory that imposes an unreasonable restriction on the acquisition of trade mark rights. This will be fleshed out further below.

Incorrect application of facts

Marrero erroneously construed Louboutin’s registration as “a claim to the colour red”. This is not the case and as Louboutin rightfully asserts, he does not own a colour per se. What he owns is a specific colour in a specific place. By expanding Louboutin’s claim to “red”; Marrero fails to acknowledge that Louboutin’s mark is unusual both in its placement and hue. While the outsole of a shoe itself is indisputably a functional thing, once coated in a bright and unexpected colour, it takes on a decorative mantel, becoming an object of distinction.

Ultimately, to be eligible for protection, a mark must be capable of distinguishing the products it marks from those of others. To prohibit a visually appealing mark on the basis of its aesthetic success cuts against trade mark law’s ultimate goal of consumer protection:

“An appealing trade mark that performs source-identifying functions is not rendered unprotectable simply because it is the element of value itself. To hold otherwise would mean that simply because a consumer likes a trade mark or finds it aesthetically pleasing, a competitor could adopt and use the mark on its own products”.[3]

By pre-emptively placing a blanket ban on colour marks in fashion, Marrero has put the cart before the horse. If consumers are purchasing YSL’s shoes in the mistaken belief that the shoes are Louboutin’s, then this demonstrates that (a) Louboutin’s trade mark is fulfilling its function, and (b) that YSL is infringing Louboutin’s trade mark.

The critical assessment is not whether Louboutin’s registration deprives the fashion industry of the use of the colour red but rather if other shoe designers would be unable to compete effectively without that extra ornamental finish on their shoes.

Incorrect application of the colour depletion theory

Marrero draws parallels between fashion and art and posits that:

Just as an artist requires free access to all colours for creative expression, so too does a fashion house for its designs. Colours are per se aesthetically functional and allowing a monopoly over colour, at least with the fashion industry would be anti-competitive.

After delineating fashion as a unique trade dependent on colour, Marrero anachronistically reconjures the colour depletion theory:

“Awarding one participant in the designer shoe market a monopoly on the colour red would impermissibly hinder competition among other participants. YSL has various reasons for seeking to use red on its outsoles”.

The colour depletion theory relies on the tenuous assumption that shades of colour are inherently more difficult to differentiate than words, graphics or shapes. This theory underestimates the capabilities of the average consumer to discern these subtleties of colour the purchasing power they portray.

As noted by Tiffany & Co.[4] in its evidence filed in support of Louboutin; Marrero had “adopted a sweeping and unprecedented per se rule against granting trade mark protection to any single colour that is used on a “fashion item” even where the colour has achieved “secondary meaning” and is associated with a single brand.

There is no basis for presuming that a consumer’s judgement call on difference in shading would be compromised because it is being applied to fashion. In reality, while fashion designers may share a closer working relationship with the medium of colour, the degree to which two colours are confusingly similar should not vary from one industry to the next. One can even argue that given the seasonal nature of the industry and the pervasive use of colour, fashion designers face an even more arduous threshold of acquiring distinctiveness. Customers of clothing and footwear are not accustomed by nature to making an assumption about the origin of goods on the basis of a single colour in the absence of a graphic or textual element. The fact that Louboutin has been able to foster such recognition for its red outsoles is testament of its investment to the colour.

Colour serves as a powerful insignia of trade origin. It would be difficult to argue that consumers would not recognise the industry specific hues of the New Zealand Post Red, the Coca Cola Red, the Westpac Red or the Vodafone Red. When properly recognised by the consumer, a colour provides powerful shorthand of trade origin. Recognition of the source also conveys related information about the characteristics and quality of the product produced by the source.

Slippery slope

What’s to stop invoking the depletion theory in any future litigation involving other limited elements? After all, the same scarcity concerns arguably apply to letters of the English alphabet, Arabic numerals, Roman numerals and descriptive words. Determining the likelihood of confusion among colour shades should be no different or difficult than the context of letters or descriptive words.

As with any other trade mark infringement test, the court must apply a holistic test and consider a plethora of factors to assess likelihood of confusion between the marks. To paraphrase an apt summary of the issue from Qualitex:

“there is no rule absolutely barring the use of colour alone as a trade mark … so long as the colour mark meets the ordinary requirements of trade mark law, including use in commerce, acquired distinctiveness, indication of source and non-functionality, there is no per se bar to registration.”

Room for improvement - New Zealand laws provide more certainty

The author disagrees with the blanket exclusion imposed by Marrero on the registrability of colour in fashion. However there is merit in the argument pressed by YSL that Louboutin’s current registration for a “lacquered red sole” is unduly broad and unclear. By virtue of its registration, it is possible for Louboutin in theory to prevent competitors from using a broad spectrum of red hues. Or what about pink, for example? Nevertheless this lack of clarity is not limited to the fashion industry, or even just colours. The question of what is a similar trade mark is usually a vexed question.

The New Zealand definition of a trade mark expressly extends to singular shades of colour. However, before a colour mark is acceptable for registration, an applicant must file both a representation of the precise colour or a written description of the mark. The most common description utilised is the number specified under the Pantone indexing system. In practice, the application must further include an explanation of how the mark is applied to the goods and/or services or interest. The author contends that if Louboutin were required to provide initial specificity of its mark’s Pantone shade[5] this would strike a viable balance between protection of source identifying elements and certainty as to the breadth of protection.

The Next Round

Once in an interview with the New Yorker, Louboutin quipped that “the shoe is very much an x-ray of social comportment”. Fittingly, his gorgeous shoes have now radiated attention to an uncertain segment of intellectual property law.

Louboutin vehemently disagreed with Marrero’s decision and has appealed to the US Court of Appeals for the Second Circuit. The requested cancellation of Louboutin’s mark has accordingly been deferred until a ruling is made on the injunction. Just how the Court of Appeal will rule on the relevancy of the colour depletion theory is shading up to be a very important decision.

This article was published in NZLawyer, September 2012.

[1] Louboutin S.A. v. Yves Saint Laurent Am., Inc., 778 F. Supp. 2d 445 (S.D.N.Y. 2011)

[2] Qualitex v Jacobson Products, 514 U.S. 159 (1995)

[3] Au-Tomotive Gold,Inc v Volkswagen of Am., Inc., 457 F/3d 1062, 1074 (9^th Cir. 2006)

[4] Owners of the famous “robin’s-egg blue” in connection with jewellery and tableware

[5] The exact shade of Louboutin’s red is Pantone 18.1663 as indicated by the corresponding European Union registration

Australian cigarette plain pack ruling – what does it mean for New Zealand

Thu, 16 Aug 2012 00:00:00 +1200

Australia’s High Court has given the country’s plain pack cigarette legislation a constitutional pass mark. The Tobacco Plain Packaging Act 2011 will come into force on 1 December 2012 as planned. From that date, all cigarette packs sold in Australia must be sold in olive green packs, adorned with health warnings rather than the brands of their manufacturers.

The Act survived a constitutional law challenge mounted by the tobacco companies that it breached section 51(xxxi) of the Constitution which allows parliament to make laws on “the acquisition of property on just terms”. The tobacco companies argued that the legislation extinguished their intellectual property rights in the trade marks they used to sell their products.

At this stage we do not know the reasons why the High Court reached its decision: its judgments are yet to be released. We do know that it was not unanimous but was by majority of the seven judges of the court.

The tobacco companies have apparently accepted the ruling: given no further appeals are possible, the Australian High Court being the country’s top-ranking court, that concession is of itself unsurprising.

They have not however given up. The tobacco companies’ fight will presumably switch to the international arena where complaints have been lodged with the World Trade Organisation from Ukraine, Honduras and the Dominican Republic, claiming the laws unduly restrict their trade with Australia.

Other countries, such as New Zealand and the United Kingdom, are also moving to introduce legislation along similar lines. The New Zealand government is currently consulting on such legislation, with a consultation paper being released last month.

New Zealand does not have the same constitutional provision as Australia so an identical constitutional challenge could not be brought if similar plain packaging legislation were to be introduced here. Differently mounted challenges may however be possible.

The tobacco companies have previously said they will challenge any New Zealand legislation. The Australian High Court decision, while not directly applicable in New Zealand, will therefore still make interesting reading. Any legislation which is enacted is also likely to be met with a complaint to the World Trade Organisation.

Olympic sponsors’ rights and ambush marketers’ attempts to hijack the London Games

Thu, 09 Aug 2012 00:00:00 +1200

The intensity surrounding brand protection and ambush marketing has almost reached fever pitch at London 2012.

With the authorities on high alert, brand owners, desperate to benefit from any Olympic publicity, are busily devising marketing and advertising campaigns to cash in on the association that official sponsors have paid millions for.

With an estimated worldwide viewing audience of 4.8 billion people over the course of the Games, it is no wonder that brand owners are jostling to get their piece of the action.

But with sponsors paying millions of dollars to be an official London 2012 sponsor, the London Organising Committee of the Olympic and Paralympic Games (LOCOG) are taking a very strong handed approach to ensure that these sponsors get a good return on their investment.

Official sponsors pay top dollar to fund the Games, and in return expect exceptional exposure through their association, to build their brand profile, connect with the public and lift sales.

Marketers’ attempts to ambush events and create an association with the Olympics, damages the investment of genuine Olympic sponsors, and risks the Olympic Organising Committee’s ability to fund a successful Olympic Games.

With the ever increasing cost of sponsorships, sponsors are demanding a greater return on their investment. When marketers engage in ambush marketing the exclusivity to a sponsor is lost, along with the value of sponsorship for the future.

Corporate sponsorship is fundamental to the operational cost of events like the Olympics, and any loss in the sponsorship value will impact on the financial ability of the organisers, and consequently the event as a whole will suffer.

LOCOG has been delegated the responsibility of legal guardian of the Olympic brand and is granted extensive powers under the London Olympic Games and Paralympic Games Act 2006, and the Olympic Symbol (Protection) Act 1995. The former has been labelled as the most comprehensive piece of legislation on marketing and advertising yet.

Under these Acts, businesses that do not adhere to the rules and are involved in ambush marketing can find themselves subject to criminal proceedings. The regulations, which provide for a clean zone of 200m around the designated stadiums, and include the water and sky, are intended to help keep these guerrilla marketers at bay.

Although officials have been given unprecedented power to remove temporary advertising structures, prevent mass giveaways outside venues, and remove counterfeit goods from sale, the temptation to free ride for some businesses has already proven too much with a number of cases before the authorities.

One notable instance includes the highly publicised “Paddy Power” billboard campaign which states: “Official sponsor of the largest athletics event in London this year! There you go, we said it.” In an explanatory note underneath, the billboard states that the sponsorship is of an egg and spoon race in the town of London in France. This cheeky advertising stunt has been allowed to continue after lawyers got involved, although LOCOG raised serious concerns about the campaign.

With the London Olympics being hailed as the first truly digital event, the internet is also being heavily policed. Any material deemed to be infringing sponsors’ exclusive rights will be taken down. In addition to monitoring of social media websites such as YouTube, Facebook and Twitter, there is also extensive monitoring of live broadcasts for ambush marketing advertisements and unauthorised commercial overlays.

Conclusion

Ambush marketing blurs the consumers’ view as to which companies have official Olympic links, by both directly and indirectly creating associations with the Olympic Games, with the intention of gaining the benefits of an Olympic partner.

Sponsors should be able to benefit from good publicity from an event, and protect the substantial investment that is made to ensure that viewers get an Olympics of the highest quality.

As entertaining as some of these ambush tactics may be, ambush (or guerrilla) marketing attempts erode the rights of the official sponsors and have a negative impact on sponsorship as a whole, consequently affecting the quality of Olympic Games in the future.

New Requirements for New Zealand Companies

Thu, 09 Aug 2012 00:00:00 +1200

The Companies and Limited Partnerships Amendment Bill (introduced to Parliament on 13 October 2011) has passed its first reading and has now been referred to the Commerce Committee for consideration. Submissions are due by 6 September 2012. The Bill aims to increase confidence in New Zealand’s financial markets and company regulation, and ensure that New Zealand remains a trusted place to do business. To achieve these aims, the Companies Act 1993 (and the Limited Partnerships Act 2008) will be amended.

The proposed changes in the Bill are in response to growing concerns that New Zealand’s incorporation process is being misused by individuals and groups (particularly those offshore) in order to carry out criminal activities, thereby damaging New Zealand’s international reputation.

Among the key proposals in the Bill are new requirements for New Zealand companies. Most notably, once the Bill is enacted, each New Zealand registered company will need to have either:

a director living in New Zealand; or
a director living in an “enforcement country”, ie any country (which will be specified in the legislation) that can enforce New Zealand judgments imposing criminal fines under relevant legislation such as the Companies Act 1993); or
a New Zealand resident agent who is legally responsible for the company’s administrative affairs.

The Bill contains a number of requirements relating to the appointment, removal, duties and offences of resident agents, as well as relating to the duty of directors and employees to provide information to resident agents.

In addition to the requirements applying to companies, new requirements are also proposed in relation to limited partnerships (with a broadly similar effect to those relating to companies). Finally, breaches of certain directors’ duties are criminalised.

The new company requirements will come into force on the date which is 12 months after the Bill is enacted (unless this is brought forward by an Order in Council). Companies which are incorporated before this date have a further 6 months in which to comply with the new requirements (and any failure to comply with them may result in the removal of the relevant company from the New Zealand Companies Register).

We will provide further updates as to the progress of the Bill but, in the meantime, please contact us if you would like to discuss how we can assist you to comply with the new requirements.

Does a brand new look mean a brand new brand?

Wed, 08 Aug 2012 00:00:00 +1200

Your company obtains a trade mark registration for its logo. Some years later, you modernise your packaging and logo with a fresh new look. Do you have to go through the registration process again? Is there a way around this?

Trade mark law requires you to make genuine use of the mark you have registered. If you do not, then a third party may be able to remove the mark from the register on the grounds of non-use (“non-use revocation”). The law allows a trade mark to be varied from the form in which it was registered, but only to a certain extent. To work out whether use of your new logo will be sufficient to defend against non-use revocation of your old registered logo, we must first consider the differences between the marks. We must then consider whether those differences alter the “distinctive character” (under New Zealand law) or “substantially affect the identity” (under Australian law) of the mark.

Examples of differences which have been found to alter the distinctive character, or substantially affect the identity of a mark include the following:

Splitting the word Goldenbake into two words “golden” and “bake” and representing them one on top of the other, rather than side by side, and in different lettering and colouring compared with the original logo, and without the distinctive rounded rectangular border included in the original logo.[1]
Presenting the words VAPOUR ACTION in a foreign language, using the same imagery and stylisation but different words and using the American spelling of the word “vapor” (i.e. “vapour”) in the mark. Each of these examples was found to alter the distinctive character of the mark.[2]
Obscuring the word “market” in the mark MaltMarket Bar & Kitchen, so that the dominant words in the mark were Malt Bar & Kitchen. This was done by separating the word “market”, reducing its size and inserting it horizontally into the "l" in "Malt".[3]

One option to avoid the problems associated with a change of stylisation for a logo mark might be to register the words within the logo in plain type at the outset. It is generally established that registration of a word mark allows for use of the words in various special scripts or with embellishments, without the risk of non-use revocation.[4] However, if your stylisation goes too far, then the risk remains. This is particularly risky where the logo includes a figurative element (e.g. an animal image), unrelated to the words present in the logo or the goods and services you are using it upon. Furthermore, if the design of your logo is particularly important to you, registering a stylised logo increases your chances of being able to stop a competitor adopting a similar look and feel. In these cases, both forms are normally registered.

Every new logo will need to be assessed on a case by case basis. If you have recently changed the look of your branding, we recommend Baldwins IP review your current registrations to ensure that they still provide adequate protection.

[1] Goodman Fielder New Zealand Ltd v George Weston Foods (NZ) Ltd IPO T13/2007, 26 March 2007

[2] Cadbury Ireland Ltd’s Registrations IPO T04/2007, 29 January 2007

[3] Tricarico v Dunn Bay Holdings Pty Ltd. [2012] FCA 271

[4] Morny Ltd's Trade Mark (1951) 68 RPC 55

TLD Transformation Underway

Fri, 03 Aug 2012 00:00:00 +1200

A rapid transformation of the internet landscape is underway. By “Reveal Day”, 13 June 2012, ICANN (the Internet Corporation for Assigned Names and Numbers) had received 1,930 applications for global Top-Level Domain names (gTLDs). While a few of these applications are for the same name, so that the actual number of new gTLDs will not be quite as high as 1,930, there will still be an enormous increase of gTLDs from the mere 18 that are currently used worldwide (the most common of which are .com, .org and .net).

Does this mean that the world of domain names, staid and predictable until now, will turn into a kind of Wild West? This seems unlikely. ICANN has published all the applications and allowed a 60-day comment period from 13 June until 12 August 2012. This means that every application is visible to any person, corporation or organisation concerned to protect their name or brand.

The list of applications links to a comments menu, where you can either post a comment or view others’ comments. These comments will be assessed by an ICANN evaluations panel before a decision is made whether to approve the application. Bear in mind, however, that applicants can make their own comments in reply. If you really want to object, there is a “dispute resolution” procedure for the filing of formal objections, which will be considered by an external body. There are four categories of objection:

If string confusion (that is, similarity between domain names) is a potential problem, your objection will be considered by the International Centre for Dispute Resolution.
Objections on the basis that the objector’s legal rights are violated will go to the World Intellectual Property Organization.
“Limited public interest” objections, on the grounds that the gTLD string applied for goes against generally accepted legal norms of morality and public order that are recognised under principles of international law, are the responsibility of the International Centre of Expertise of the International Chamber of Commerce.
The International Centre of Expertise is also responsible for “community” objections, to the effect that there is substantial opposition to the gTLD application from a significant portion of the community that the gTLD string is targeting.

ICANN expects to allow objections to be filed until January 2013 (ie “approximately seven months” after Reveal Day, which was 13 June 2012).

Trade mark owners have the further option of the Post-Delegation Dispute Resolution Procedure (Trademark PDDRP), but only if they believe that they can prove that the registry itself, rather than parties that have registered in it, has profited from trade mark infringement.

ICANN has promised that a Uniform Rapid Suspension System (URSS), providing an arbitration service for a few hundred US dollars, will be in place by the time the first gTLDs are launched next March. And for an even more modest fee, IP owners can have their rights authenticated with the Trademark Clearinghouse, which Deloitte and IBM are running: rights owners who have signed up will be notified of a competing domain name application.

With these services, ICANN is aiming to ensure a much more diverse internet without endangering intellectual property rights or damaging the public interest or community interests. There is much that is still uncertain and it will be very interesting to watch how this transformation of the internet will play out.

The Australian Innovation Challenge Awards 2012 - $70,000 in cash prizes

Fri, 27 Jul 2012 00:00:00 +1200

The Australian Innovation Challenge offers $70,000 in cash prizes for innovations in seven professional categories and an eighth category – Backyard Innovation – open to the general public for inventions at an advanced stage of development.

Any individual or team can enter provided their innovation, project or invention is ‘driven from Australia’. Innovations for the public good as well as those with commercial potential will be considered.

There is a $5,000 cash prize for the winning entry in each professional category, $10,000 for the Backyard Innovation category and a further $25,000 for the overall winner. The seven professional categories are health, minerals and energy, ICT, education, manufacturing and hi-tech design, community services, and environment, agriculture and food.

All entries will be judged by four equally-weighted criteria,

Scientific or technical excellence and novelty
Nature and extent of potential benefits and national or international impact
Sustainability and lack of negative environmental impact
Adoption and/or commercialisation plan, including explicit ‘go to market’ strategy or plans for securing public adoption

Professor Mark Kendall of the Australian Institute for Bioengineering and Nanotechnology and his team won the overall prize in 2011 with their innovative stamp-sized Nanopatch™ for delivering vaccines. Not only would it eliminate the dreaded needle, Nanopatch™ is cheaper to produce than the needle-and-syringe delivery method and does not need to be refrigerated. The technology has been backed by Australian and US venture capital firms and clinical trials are expected to start by 2015.

The challenge rules state that entries must have freedom to operate, and suggest that potential entrants seek legal advice prior to entering as all submitted details may become public knowledge. We recommend that legal advice is sought prior to entering. Public disclosure of intellectual property (IP) can limit the options available for protecting it and in many cases steps must be taken to protect the IP prior to disclosure. Public disclosure of an invention prior to filing a patent application can invalidate the application.

Entries close 12 August 2012. Further detail and the online entry form can be found at www.theaustralian.com.au/innovationchallenge.

This article was written in conjunction with Heather Wawryniuk.

Flexible roll over protection? Award winning!

Thu, 12 Jul 2012 00:00:00 +1200

What happens when a quad bike rolls over? If they are fitted with the typical rigid roll bar they eventually come to a rest. But what damage do riders suffer when they are pinned between the rigid roll bar and the ground, and what damage is done to the bike?

Inventor Vernon Suckling of Ag-Tech Industries Limited has the solution - the Lifeguard™ flexible roll over bar. The Lifeguard™ flexible roll over bar recently won the Golden Standard Innovation award at the annual Fieldays at Mystery Creek in Hamilton. The Fieldays are the largest agricultural event in the Southern Hemisphere and New Zealand’s premiere agricultural show.

Lifeguard™flexible roll over bar - Award winning? Absolutely. Life saving? Definitely.

Many people are hurt or killed by roll over accidents on quad bikes. Where they survive the roll itself they may then be subsequently injured or unable to free themselves because they are pinned between the rigid roll bar and the ground with a large amount of weight from the quad bike holding them there.

The Lifeguard™ flexible roll over bar deflects on hitting the ground and arrests the roll. More importantly it flexes around any user that is pinned underneath it and allows them to easily escape.

The patent pending technology has broader applications in the agriculture industry where protection of people and equipment is desirable.

Importantly, the Lifeguard™ flexible roll over bar springs back to its original shape when the quad is rolled upright again or the load is otherwise removed. Traditional rigid roll bars may need replacement and can damage the bike at their mounting points.

Madrid Protocol - International Trade Mark Registrations Possible from Dec 2012

Thu, 12 Jul 2012 00:00:00 +1200

New Zealand has adopted new legislation to join the Madrid Protocol, a system for international trade mark registration. It is anticipated that New Zealand’s membership of the Madrid Protocol will take effect from December 2012.

This could impact on you if you’re a New Zealand individual or business that:

Owns a trade mark
Trades overseas or plans to trade overseas; and
Plans to protect its trade mark through trade mark registration

How does it work?

The Madrid Protocol provides a single procedure for the registration of a mark in any country/region that is party to the Madrid Protocol.

Currently, 86 countries have adopted the Madrid Protocol. New Zealanders will be entitled to own an international registration.

Advantages: one registration, multiple markets

Protection can be readily sought in countries that may traditionally have been bypassed.
Cost-effective mechanism to protect a trade mark overseas.
The international registration is administered by WIPO (World Intellectual Property Office). This means that renewal, and any subsequent changes to details such as names, addresses, ownership, and assignments are managed centrally. This will have significant cost advantages.
As trading activities expand and develop, additional countries can be added to the international registration by making subsequent designations.
An international registration lasts for 10 years and is renewable for subsequent periods of 10 years each.

Disadvantages

The ability to transfer or sell an international registration is restricted because the registration can only be owned by a person who is a national, domiciled or has a real and effective industrial or commercial establishment in a Madrid Protocol member country.
An international registration can only designate Madrid Protocol countries. It does not give a ‘worldwide trade mark’.
The international registration is dependant on the “basic” application/registration for five years – for most New Zealand businesses the basic application or registration will be an earlier New Zealand trade mark application or registration. Any changes to the basic application or registration will also apply to the international registration. It is important to ensure that the basic application or registration is not limited, cancelled or abandoned in this period. If the basic application or registration is cancelled or abandoned, the international registration can be transformed to national applications however, this will eliminate any cost savings gained through the international registration.

Some key points to consider in deciding whether Madrid Protocol is for you:

If you are interested in protecting your trade mark in a number of overseas countries then an international registration may make it easier and potentially cheaper to do so.
Renewals and the recording of changes of details can be done via WIPO instead of with each national office. This will simplify and reduce the cost of dealing with and maintaining trade mark protection in multiple countries.
You can add new designated countries to your international registration as and when new markets arise.
Your New Zealand application or registration must be robust. If it does not secure registration or is cancelled within 5 years of the registration, your International registration will fall over and you will need to decide whether to incur the time and cost of transformation to national applications.
You may need to be more aware of what other trade marks are being filed in New Zealand, and by whom.

Australia – Patenting genetic materials

Wed, 11 Jul 2012 00:00:00 +1200

Australia – Patenting genetic materials

The patenting of genetic materials continues to be a hot topic in Australia. In 2010, a Private Members Bill was introduced into Parliament, calling for exclusion of biological materials which are identical or substantially identical to such materials as they exist in nature. In 2011, the Patent Amendment (Human Genes and Biological Materials) Bill 2010 was rejected on recommendation of the Senate Legal and Constitutional Affairs Legislation Committee because of the broad scope and unintended, widespread effects of the bill. The bill’s sponsors are undeterred by that setback and intend to introduce a new amendment bill “to ban gene patents” in the near future. Meanwhile, this year the Federal Court is the first Australian court to consider whether isolated genes are patentable subject matter in the case of Cancer Voices Australia v Myriad Genetics Inc.

Patent Amendment (Human Genes and Biological Materials) Bill 2010

The private members bill was sponsored by Liberal senator Bill Heffernan, Labour MP Melissa Parke and independent senator Nick Xenophon and introduced to Parliament in 2010. The sponsors questioned the 2008 actions of Myriad and its exclusive Australian licensee, Genetic Technologies, attempts to enforce their rights over a genetic test for breast and ovarian cancer. With the stated aim of “amend[ing] the Patents Act 1990 to prevent the patenting of human genes and biological materials existing in nature”, the proposed amendment excluded from patentability

“…biological materials including their components and derivates, whether isolated or purified or not and however made, which are identical or substantially identical to such materials as they exist in nature”

and explicitly defined biological materials to include DNA, RNA, proteins, cells and fluids.

Rejection of the Bill in 2011

In September 2011 the Senate Legal and Constitutional Affairs Legislation Committee recommended the Senate not pass the bill. The committee members expressed their concern that the Bill did not effectively address the stated problem, and that while the amendments focussed on resolving a specific issue they were likely to “have a large number of unintended consequences across the entire patent system with indeterminate impacts on a range of industries and sectors.”

These impacts include obscuring the distinction between discovery and invention, a likely adverse impact on investment and research and development, and finally implications for Australia’s obligations under international agreements, including the Trade Related Aspects of Intellectual Property Agreement (TRIPS) which requires patent protection in all technology areas.

The Intellectual Property Laws Amendment (Raising the Bar) Act 2011

In April 2012, the Intellectual Property Laws Amendment (Raising the Bar) Act 2011 was enacted. The Act includes raising the requirements to obtain patent protection in Australia and introducing an experimental use exemption to patent infringement. These changes relate to all areas of technology and they should go a long way to addressing concerns regarding the breadth of protection provided to inventions in genetic technologies, and restrictions on research in this area, without the need to specifically exclude such inventions from patent protection.

A New Bill Expected Soon

The sponsors of the Patent Amendment (Human Genes and Biological Materials) Bill 2010 do not appear to be satisfied that the changes introduced by the “Raising the Bar” Act 2011 adequately address their concerns regarding gene patents. In May 2012 Labour MP Melissa Parke appeared on Australian television news programme Lateline, stating that she is “intending to introduce a [new] private member's bill to ban gene patents.” Ms. Parke again made reference to Myriad and Genetic Technologies. While the Bill has not yet been finalised or made public, text that appears to refer to section 18(2) of the Patents Act 1990 regarding non-patentable inventions was clearly visible on the programme

(b) genetic materials that exist in nature, or are the same as or not markedly different from those existing in nature, whether such materials are in situ, isolated or purified;

(c) any method that involves the mere comparison of genetic materials or genetic sequences in the provision of a diagnosis for a human being.

(2A) A reference in subsection (2) to genetic materials includes, but is not limited to, DNA or RNA whether in whole or in part or in fragments, however made.

Of note is the broad definition of genetic materials, and the ambiguity of the phrase “the same as or not markedly different from those existing in nature”, and that genetic testing is specifically covered by part (c).

AusBiotech, the Australian Biotechnology industry body, has called for informed debate stating support for research exemptions and access to such tests. However they express the belief that the patent system is a reward for research and development investment which ensures long-term technology development and public access. This view is echoed by many commentators who believe that making genes non-patentable would be detrimental to innovation and investment in medical research in Australia.

Gene Patent Cases Before the Courts

Gene patents held by Myriad have recently been challenged in the US Court of Appeals, and are currently being challenged in the Federal Court of Australia. In July 2011 the US Court of Appeals held that genetic sequences isolated from their natural environment are valid, and therefore Myriad’s gene test patents are also, focussing on the chemical features of and differences between naturally-ocurring and isolated DNA.

In March 2012 the US Supreme Court set aside that decision and ordered the Court of Appeals to reconsider Myriad’s patents in light of its decision on Prometheus’ patent which found the measurement of blood concentration of a drug metabolite for dosage calibration to be invalid on the basis that it contributed “nothing of significance” to the natural law of drug metabolism a “well understood, routine, conventional activity already engaged in by the scientific community.” The Court of Appeal’s decision is eagerly awaited.

Concurrent litigation in the Australian Federal Court regarding patent no. 686004, brought by Cancer Voices Australia is the first time an Australian court has considered whether isolated genes are patentable subject matter. Patent no. 686004 concerns the BRCA1 gene (associated with some forms of breast cancer) and associated genetic tests. The current position in Australia is based on a 1995 decision by the Australian Patent Office, held by the Federal Court of Australia, that an isolated gene can constitute an “artificially created state of affairs” that is not “a mere chemical curiosity or mere discovery”.

The Australian Myriad case is currently before the court and decision is one that will be watched with interest by the biotechnology sector, as will the progression of Melissa Parke’s private member’s bill.

The future

While there is some uncertainty regarding the future of patents for human genes in Australia, they are currently allowed, and those working in this field should continue to consider patenting as a valid option for protecting their intellectual property. In addition, patent attorneys can assist in devising a patent filing strategy which will ensure an invention has the strongest chance of gaining protection under the current laws, considering any decisions handed down by the Courts.

This article was written with assistance from Harriet Sandstad.

Energy awards finalists include Baldwins clients

Wed, 11 Jul 2012 00:00:00 +1200

Finalists for The Deloitte Energy Excellence Awards have been revealed and some of Baldwins' clients have made the list.

The Deloitte Energy Excellence Awards provide "an annual opportunity to recognise excellence and achievement across the electricity, oil, gas and petroleum industries".

Finalists include:

Innovation in Electricity award - sponsored by Gentrack

Counties Power – Field computing – an Android approach
Mighty River Power – Glo-Bug
WEL Networks – WEL Networks Smart Grid – WELconnect – Building an intelligent network and modernising WEL’s distribution business

Energy Project of the Year award – sponsored by ITL

GNS Science – The Petroleum Exploration Geoscience Initiative (PEGI)
Shell Todd Oil Services – Extending the life of an energy giant – Maui
OMV – New Zealand’s Great South Basin – frontier basin exploration

Excellence in Health & Safety award - sponsored by Siemens

Orion– Health and safety during emergency response
Tenix – Making health and safety personal
Transpower Alliance – Safety and culture journey

Environmental Excellence award – sponsored by PEPANZ

Energy for Industry – Transitioning to a lower carbon economy
Mighty River Power – A partnership approach to environmental management
Transpower Alliance – Environmental excellence down the wires

Young Energy Executive of the Year – sponsored by ABB

Tony Sumner – Contact Centre Manager, Meridian Energy *
Paul Goodeve – General Manager, Operations Support, PowerCo *
Jonathan Hill – Corporate Communications Manager, Z Energy *

Energy Executive of the Year – sponsored by Transfield Worley

Harvey Weake – Managing Director, Methanex
Doug Heffernan – Chief Executive, Mighty River Power
Russell Shaw – Chief Executive, Top Energy *
Mike Bennetts – Chief Executive, Z Energy *

Lines Company of the Year - sponsored by TE Connectivity

Orion
PowerCo *
Top Energy *

Energy Retailer of the Year – sponsored by Chapman Tripp

Powershop
Tiny Mighty Power

Overall Energy Company of the Year – sponsored by Port Taranaki

Genesis Energy
Mighty River Power
Z Energy *
TrustPower

* Baldwins client

Baldwins clients among marketing awards finalists

Wed, 11 Jul 2012 00:00:00 +1200

Finalists for the 2012 TVNZ NZ Marketing Awards have been revealed and some of Baldwins' clients have made the list.

As the TVNZ NZ Marketing Awards enter its 21st year of celebrating innovation and creativity in marketing, this year’s theme, ‘Everything Marketing’, aims to "make the 2012 Marketing Awards inclusive and accessible". Entries were welcomed from every marketer who has performed work to be proud of – "because every marketing story is unique, and all are valuable".

Finalists include:

Industry awards

2degrees Mobile – The Mission Continues
ANZ New Zealand – RWC2011 Activity
Arthritis New Zealand – Arthritis, It Could Surprise You
Bank of New Zealand – Kick Off! The Plunket Appeal Jersey Swap, BNZ’s 2012 Plunket Appeal Activation
Bank of New Zealand – Closed For Good 2012 Volunteering Initiative
Boundary Road Brewery
Christchurch City Council – Share An Idea
ecostore – Brand Transformation *
Fairfax Media *
Farmers Trading Company – Farmers Club
Fast Fresh & Tasty Ventures – Fast Fresh & Tasty
Fisher & Paykel Healthcare – Optiflow *
Fonterra Brands (New Zealand) – Two x Finalists – Symbio Probalance Yoghurt Launch
Fonterra Brands (New Zealand) – Anchor Strong
Frucor Beverages – Mountain Dew Ambassador Programme *
Frucor Beverages – Two x Finalists – Mountain Dew – New Flavour Launch & Skate Pinball Campaign *
Frucor Beverages – h2go Cash Caps *
Frucor Beverages – Two x Finalists – Discovering Our Blue Side – The Launch of V Blue *
GE Money – Gem Visa Launch
Goodman Fielder New Zealand – The Launch of Vogel’s Gluten Free Range *
Hewlett-Packard New Zealand – Two x Finalists – HP Winter Garden *
Kellogg (Aust.) Pty. – Nutri-Grain Ironman Sponsorship
Kiwibank – Two x Finalists – Offset Mortgage *
Kiwibank – Two x Finalists – Green Ops *
MediaWorks TV – Feels Like Four
Mount Cook Alpine Salmon – Saikou Sushi Grade Salmon
New Zealand Rugby Union – Investec Super Rugby 2012: Be Part of It!
NZ Transport Agency – Give way
Panasonic New Zealand – Panasonic Lumix
Paper Plus Group – Paper Plus Brand Relaunch 2011 *
Pfizer New Zealand – Pfizer Avigra Launch
Pfizer New Zealand – Two x Finalists – Building Informed Quitting with Champix
Pfizer New Zealand – Two x Finalists – Viagra = Avigra
Positively Wellington Tourism – The Wondrous Wellington Advent Calendar
Powershop – Two x Finalists
RedWitch Analog – The Seven Sisters
Refresh Renovations
Safekids New Zealand – Safekids NZ Child Driveway Run Over Awareness Campaign
Sanitarium Health and Wellbeing NZ – Sanitarium Game Plan
State Insurance – With You In The Water *
The Business – Bellamagia Hosiery
The Electricity Authority & Ministry of Consumer Affairs – Two x Finalists – What’s My Number Consumer Information Programme *
Volkswagen New Zealand
Yellow® – Yellow® Toolbox *
Z Energy – Two x Finalists – Z Is For New Zealand (the launch of Z) *

Judges Awards

ANZ New Zealand – Two x Finalists – RWC2011 Activity
Bank of New Zealand – Closed For Good 2012 Volunteering Initiative
Boundary Road Brewery – Three x Finalists
Dollop Foods – Dollop Puddings
ecostore – Three x Finalists – Brand Transformation *
Farmers Trading Company – Four x Finalists – Farmers Club
Fast Fresh & Tasty Ventures – Two x Finalists – Fast Fresh & Tasty
Fonterra Brands – Symbio Probalance Yoghurt Launch
Frucor Beverages – Mountain Dew Ambassador Programme *
Frucor Beverages – Four x Finalists – Mountain Dew - New Flavour Launch & Skate Pinball Campaign *
Frucor Beverages – Two x Finalists – Discovering Our Blue Side – The Launch of V Blue *
Goodman Fielder NZ – Three x Finalists – The Launch of Vogel’s Gluten Free Range *
Hell Pizza – Pizza Roulette
Hewlett-Packard New Zealand – Two x Finalists – HP Winter Garden *
Kiwibank – Three x Finalists – Offset Mortgage *
Kiwibank – Four x Finalists – Green Ops *
Lion – Te Hana Launch Campaign
Lion – Speight’s Cider
Loyalty New Zealand – Fly Buys/New World In-Store Christmas Event DM Campaign
Loyalty New Zealand – Fly Buys/New World Wine Sale Campaign
MediaWorks TV – Two x Finalists – Feels Like Four
Mount Cook Alpine Salmon – Five x Finalists – Saikou Sushi Grade Salmon
New Zealand Rugby Union – Investec Super Rugby 2012: Be Part Of It!
Paper Plus Group – Three x Finalists – Paper Plus Brand Relaunch 2011 *
Pfizer New Zealand – Two x Finalists – Pfizer Avigra Launch
Pfizer New Zealand – Two x Finalists – Viagra = Avigra
Powershop
RedWitch Analog – Three x Finalists – The Seven Sisters
Refresh Renovations
Safekids New Zealand – Safekids NZ Child Driveway Run Over Awareness Campaign
Sanitarium Health and Wellbeing NZ – Sanitarium Game Plan
The Business – Two x Finalists – Bellamagia Hosiery
The Electricity Authority & Ministry of Consumer Affairs – Three x Finalists – What’s My Number Consumer Information Programme *
Volkswagen New Zealand – Two x Finalists
Yellow® – Yellow® Toolbox *
Z Energy – Four x Finalists – Z Is For New Zealand (the launch of Z) *

Individual Awards

Glow Consulting Ltd - Claire Jackson
Boundary Road Brewery Ltd - Ben Shaw
Mitre 10 - Sophie Rose Nicholas
Lion - Andrew Hill
J.H Whittakers & Sons Ltd - Jasmine Griffin
Westpac New Zealand - Ian Moody
Volkswagen New Zealand - Denise Goodwin
Unitec Institute of Technology - Jeanette Paine *
MediaWorks TV - Renee Colquhoun
Auckland University of Technology - Nick Swallow *
Hewlett Packard NZ - Maddy Simpson *
carboNZero Holdings - Alan Carnaby
NZ Transport Agency
BrandCom
New Zealand Magazines - Tim Gray *
Mars New Zealand - Aurelia Moly
Air New Zealand

* Baldwins client

USPTO issues guidance on eligibility of subject matter involving ‘laws of nature’

Wed, 11 Jul 2012 00:00:00 +1200

On July 5 2012, the United States Patent and Trademark Office (USPTO) issued guidelines to its patent examiners regarding the patentability of claims relating to ‘laws of nature’ in light of the Supreme Court decision in Mayo Collaborative Services v Prometheus Laboratories, Inc. These guidelines ‘2012 Interim Procedure for Subject Matter Eligibility Analysis of Process Claims Involving Laws of Nature’ override the previously issued preliminary guidelines.

The Supreme Court decision in Mayo Collaborative Service v Prometheus Laboratories regarding a method of optimising therapeutic efficacy of a non-novel drug based on levels of blood metabolites found the invention to be ineligible as it was a ‘law of nature’,

“[T]he combination [of administering a known drug and measuring blood metabolites] amounts to nothing significantly more than an instruction to doctors to apply the applicable laws when treating their patients.

These instructions add nothing specific to the laws of nature other than what is well-understood, routine, conventional activity, previously engaged in by those in the field.”

Based on this decision the guidelines provide for three fundamental enquiries when analysing claims with respect to ‘laws of nature’:

Is the invention a processes or series of steps?
Does the claim relate to a natural principle and is that natural principle a limiting step or element of the claim? That is, a law of nature, natural phenomenon or relationship that occurs naturally – “the handiwork of nature occur[ring] without the hand of man”.
Are there additional elements or steps that integrate the natural principle beyond simply applying it to “ensure the claim amounts to significantly more than the natural principle itself”? The scope of the claim should be narrow enough to not prevent others from using the natural principle in a well-understood, routine or conventional fashion.

If the claim does not pass this enquiry it will be rejected as non-eligible subject matter.

While the USPTO guidelines apply to all technologies, the memo states that the main impact is expected to be in biotechnology, pharmaceutical and chemical inventions.

The guidelines are an interim measure as cases likely to further impact this area, including Association for Molecular Pathology v Myriad Genetics, are being reheard. A comprehensive update to the guidance is expected once these cases are resolved.

The full memo including the framework for analysis and examples of how it is expected to be applied is available from: http://www.uspto.gov/patents/law/exam/2012_interim_guidance.pdf

If you require further details regarding the guidelines or how they may affect your patent position, please do not hesitate to contact us.

This article was written with assistance from Harriet Sandstad.

How to protect your IP at the upcoming trade fairs in Hong Kong

Tue, 10 Jul 2012 00:00:00 +1200

Every year, numerous trade fairs are organized by the Hong Kong Trade Development Council (“HKTDC”) and held at the Hong Kong Convention and Exhibition Centre.

Some exhibitors take this opportunity to display and solicit orders for copied or otherwise infringing products.

It is possible and vital, to take immediate action against such exhibitors by:

filing on-the-spot complaints with the HKTDC for the immediate removal of any displayed infringing products; and

serving cease and desist letters to the exhibitors and perusing for compliance after the fairs have finished.

The upcoming fairs in 2012/2013 are:

Date	Event
3-6 July 2012	HKTDC Hong Kong Fashion Week for Spring/Summer
18-24 July 2012	HKTDC Hong Kong Book Fair
20-22 July 2012	Better Living Expo – for Beauty, Well-Being & Senior Products, Cooking & Dining, Hobbies & Learning and Value Shopping
16-18 Aug 2012	HKTDC Hong Kong International Tea Fair
16-18 Aug 2012	International Conference & Exhibition of the Modernization of Chinese Medicine & Health Products
16-20 Aug 2012	HKTDC Food Expo
5-9 Sept 2012	HKTDC Hong Kong Watch & Clock Fair
13-16 Oct 2012	HKTDC Hong Kong Electronics Fair (Autumn Edition)
13-16 Oct 2012	electronicAsia
27-29 Oct 2012	HKTDC Hong Kong International Building and Decoration Materials & Hardware Fair
27-30 Oct 2012	Eco Expo Asia – International Trade Fair on Environmental Protection
27-30 Oct 2012	HKTDC Hong Kong International Lighting Fair (Autumn Edition)
28-30 Oct 2012	Sports Source Asia
7-9 Nov 2012	HKTDC Hong Kong Optical Fair
8-10 Nov 2012	HKTDC Hong Kong International Wine & Spirits Fair Coinciding with Asian Logistics & Maritime Conference on 8 Nov 2012
6-8 Dec 2012	HKTDC World SME Expo
6-8 Dec 2012	HKTDC Inno Design Tech Expo Coinciding with “Business of Intellectual Property Asia Forum” on 7 Dec 2012
7-9 Jan 2013	HKTDC Hong Kong International Licensing Show
7-10 Jan 2013	HKTDC Hong Kong Toys & Games Fair
7-10 Jan 2013	Hong Kong International Stationery Fair
7-10 Jan 2013	HKTDC Hong Kong Baby Products Fair
14-17 Jan 2013	HKTDC Hong Kong Fashion Week for Fall/Winter
14-17 Jan 2013	HKTDC World Boutique, Hong Kong
31 Jan-3 Feb 2013	HKTDC Education & Careers Expo
5-9 March 2013	HKTDC Hong Kong International Jewellery Show
18-21 March 2013	Hong Kong International Film & TV Market (FILMART)
6-9 April 2013	HKTDC Hong Kong International Lighting Fair (Spring Edition)
13-16 April 2013	HKTDC Hong Kong Electronics Fair (Spring Edition)
13-16 April 2013	HKTDC International ICT Expo
20-23 April 2013	HKTDC Hong Kong International Home Textiles and Furnishings Fair
20-23 April 2013	HKTDC Hong Kong Houseware Fair
27-30 April 2013	HKTDC Hong Kong Gifts & Premium Fair
27-30 April 2013	Hong Kong International Printing & Packaging Fair
May 2013	HKTDC Hong Kong International Medical Devices and Supplies Fair

To enforce your IP rights, the HKTDC will be prepared to accept infringement complaints on the basis of one of a registered trade mark or design or granted patent in Hong Kong or proof of subsistence and ownership of Copyright by the complainant, or an affidavit of copyright ownership.

If are concerned with any of the goods displayed at the fairs, or would like us to engage a private investigator on your behalf we are able to work closely with our Hong Kong associates to help you protect your intellectual property.

Pinterest – Beware what you pin and who’s pinning you!

Fri, 06 Jul 2012 00:00:00 +1200

What is Pinterest?

In the past year, Pinterest has become one of the most visited social networking sites, rivalling Twitter and Facebook in popularity. It enables the creation of online pinboards whereby you can “pin” images, including images from other websites.

Intellectual Property Issues

Pinterest has proved popular to both personal and business users. However, the copying of images and brands on Pinterest can in many cases constitute trade mark and copyright infringement.

This is a serious issue for both intellectual property owners and Pinterest users. It could also have serious consequences for Pinterest itself, with some commentators saying that it is just another website facilitating intellectual property infringement and likening it to Napster.

Tips for Copyright and Trade Mark Owners

The following are steps you can take to protect your trade marks and website content against unauthorised copying or ‘pinning’.

Copyright Protection

Include copyright statements on your website (e.g. © 2012 ABC Limited).
Include script in your website that prevents ‘right click’ copying
If you believe a Pinterest user has infringed your copyright, you can file a complaint with Pinterest.
Pinterest has created a ”nopin” metatag for website owners advising would be copiers that pinning isn’t permitted.
If you are a Pinterest user, other users are permitted to ‘re-pin’ content on your pinboard. Users are encouraged to credit sources. However, as this doesn’t always occur, you can consider including a watermark on your images.

Trade Mark Protection

Register your trade mark - A trade mark registration is proof of ownership and provides you with a 10 year national monopoly in that mark.
Use the ™ on unregistered marks and the ® on registered marks on your website.
If you believe that someone has infringed your trade mark on Pinterest, you can file a complaint with Pinterest.
Consider registering the Pinterest vanity url (e.g. pinterest/your brand) before someone else does.

Warnings for Pinterest Users

If you are a Pinterest user, you are contractually bound by their Terms of Service and agree to the following:

not to infringe IP rights
indemnify and defend Pinterest in legal claims
submit to the laws of California
be bound by changes to the Terms

If you breach the Terms, Pinterest can terminate your account. However, if you ‘pin’ or copy an image containing someone else’s brand or copyright work without their permission, you could face a law suit.

A rule of thumb to avoid potential liability is to either pin your own content or content you have permission to use. Some websites include a ‘Pin me’ tab permitting Pinterest users to pin from that site.

Looking Ahead

Due to the intellectual property infringement risks, the future of Pinterest is unclear. Its terms of service and IP policies may change and an IP infringement test case could arise before long so watch this space. In the meantime, if you don’t want to be a party to the first test case, be careful what you pin and watch who’s pinning you!

Music and Copyright Law

Wed, 04 Jul 2012 00:00:00 +1200

Jessie J is the latest musician to face allegations of copyright infringement in 2012. The claims against the British singer relate to her hit single, Domino, which has become far more popular than the song allegedly copied from.

American singer and songwriter, Will Loomis, has accused Jessie J of infringing the copyright of certain compositional elements of his song, Bright Red Chords. In particular, Loomis refers to the melody for the verses of each song, calling them “substantially similar”.

Loomis is now seeking upwards of US$150,000 (NZ$190,000) in damages. The claim has been filed in a United States District Court in Newport, California.

Jessie J’s case follows several high-profile accusations in 2012, including claims against Sir Elton John, Jay-Z and Kanye West, Delta Goodrem, and the Beastie Boys.

In April, Sir Elton John was accused of copying the lyrics of a poem written by Guy Hobbs, and using those lyrics in his song, Nikita. Hobbs claims that he wrote his poem, Natasha, in 1982, and sent the poem to Big Pig Music, Elton John’s publishing company, in 1984.

Elton John’s Nikita was then released in 1985 by labels Rocket Records (in the UK) and Geffen Records (in the US). The lyrics of both works tell of a cold-war romance, with Natasha referring to a Russian cruise ship waitress and Nikita referring to a German bodyguard.

Hobbs claims to have noticed the similarities between Natasha and Nikita in 2001, but only filed his infringement claims on 26 April 2012. After 26 years since the song’s release, Sir Elton John has stated that he is “surprised and disappointed” by the claims, which he believes are baseless.

In addition to the usual copyright infringement issues, the lengthy delay raises statute of limitations issues. United States copyright law sets a maximum commencement period of 3 years for civil claims. Hobbs may simply have waited too long to initiate his case.

In relation to the Beastie Boys, a claim was lodged on 3 May 2012 by Tuf America, a hip hop label owning the rights to Trouble Funk’s 1982 singles Drop the Bomb and Say What? The four members of the Beastie Boys and their label, Capitol Records, were named as defendants just one day before band member Adam Yauch (alias “MCA”) died from cancer.

Tuf America is seeking punitive and exemplary damages, as well as a permanent injunction forbidding the sale of the Beastie Boys’ related albums, claiming that the defendants have all continued to profit from the unauthorised and repeated sampling of Trouble Funk’s singles.

Again, the case raises statute of limitations issues, with the relevant recordings being made over 20 years ago. However, Tuf America claims that the Beastie Boys fraudulently concealed their use of the samples, which meant that their use was not discovered until recently. This claim has been made despite the samples being publicly listed online for many years.[1]

The claims also relate to a different era – one in which artists, especially hip hop artists, regularly sampled from other songs without considering licensing issues. 1980s albums such as the Beastie Boy’s “Paul's Boutique”, and Public Enemy’s “Fear of a Black Planet” are said to contain hundreds of samples, which would have been economically impossible to license for use under today’s standards.[2]

All of the above cases involve issues of whether the works in question are “substantially similar”. In the US, it is an affirmative defence that a person has made only de minimis use, that is, use so minor that the average listener would not recognise it. Other defences include fair use, which in the US covers a broader range of activity than under New Zealand law – although the extent to which fair use will apply depends on how much of the work has been copied, and for what purpose.

In New Zealand and Australia, copyright infringement involves an analysis of whether a “substantial part” of an original work has been copied, and whether the two works in question are “objectively similar”. The most detailed discussion in recent years is last year’s “Kookaburra” appeal: EMI Songs Australia Pty Limited v Larrikin Music Publishing Pty Limited [2011] FCAFC 47.

In that case, Larrikin Music Publishing, who owned the rights to Kookaburra sits in the old gum tree, successfully sued the members of Australian band Men at Work on the basis that the flute riff in their hit Down Under sounded too much like the Kookaburra song. On appeal, the decision was upheld by the Full Court of the Federal Court of Australia.

While copyright decisions regarding music appear to be, at times, unpredictable in their result, there are a few general points to note:

Most music cases are settled before reaching court: for example, the Kanye West and Jay Z example referred to above, where claims brought by notorious litigant Syl Johnson were dropped after a confidential settlement was reached.[3]
Of those cases that do reach court, many are defended on the basis of non-infringement, despite the relative ease of alleging plagiarism: for example, Francis Day & Hunter Limited v Bron [1963] 1 Ch 587 (CA).
Where an artist is aware of a song, it may be easier to prove that they copied that song (whether consciously or subconsciously): see EMI Songs Australia v Larrikin Music Publishing [2011] FCAFC 47, discussed above, and Bright Tunes Music Corp v Harrisongs Music Ltd 420 F Supp 177 (SDNY 1976).

If you would like more information or help with copyright matters, please contact us. Baldwins offers a full range of intellectual property services, including strategy advice and litigation services.

[1] http://www.whosampled.com/sampled/Trouble%20Funk/

[2] There was a landmark copyright and sampling case in 1991 (Grand Upright Music Ltd v Warner Bros Records, Inc, 780 F Supp 182), where Irish-English singer and songwriter Gilbert O’Sullivan successfully sued American rapper Biz Markie for his maliciously unauthorised use of the 1972 hit single Alone Again (Naturally). From 1991, artists were forced to be more careful in their licensing of samples. Biz Markie’s following album was entitled “All Samples Cleared!”

[3] Johnson has previously brought claims against Cypress Hill, Jefferson Airplane, Kid Rock, and Michael Jackson.

Copyright Infringement: A Worldwide Update

Fri, 29 Jun 2012 00:00:00 +1200

File sharing in various forms has been a major focus for many copyright owners in the past few years. Cases of alleged infringement include Kim Dotcom’s “MegaUpload”, Richard O’Dwyers “TV Shack”, resilient “The Pirate Bay”, and of course peer-to-peer sharing via torrent software.

After a new-years bout of legal activity, mid-2012 appears to be in a lull.

As to the major stories, Kim Dotcom is awaiting his extradition hearing of 6 August 2012. The United States wants him extradited from New Zealand to face copyright, racketeering and money laundering charges.

In the meantime, Mr Dotcom’s lawyers have argued that the removal of relevant data from New Zealand by the FBI was illegal, and should be returned for the purposes of the New Zealand trial. On 15 June 2012, Justice Winkelmann ordered that the FBI are to copy and return the data, comprised of 150 terabytes and 10 million emails. Whether or not all of the data will be copied and returned in time for the August hearing remains to be seen.

On 28 June, Justice Winkelmann also ruled that search warrants used in the Dotcom manor raid were invalid as they authorised the seizure of irrelevant material. In acting on the invalid warrants and seizing a broader range of material than was required, the search and seizure was illegal. The fact that the police continued to hold irrelevant material was also taken to show that the scope of the warrant was exceeded.

From 4 July, arguments will be made regarding whether data and other assets seized are relevant and admissible in respect of the copyright charges.

In a similar situation in the UK, Richard O’Dwyer, the 24 year old accused of mass copyright infringement, is awaiting his extradition appeal on 30 July 2012. Unlike the millions of dollars alleged to have been made by Mega Upload, Mr O’Dwyer’s website, TV Shack, is said to have earned a modest $290,000. Also unlike Mega Upload, TV Shack did not host copyright material – it simply provided links for users to access the copyright material.

Despite this, Mr O’Dwyer’s extradition to the United States was approved at first instance. His current appeal seeks to overturn that decision.

The Pirate Bay, one of the world’s most resilient (and self-professed) copyright infringers, has been the subject of several lawsuits. More recently, these suits have involved claims by copyright holders that internet service providers (ISPs) are indirectly liable for copyright infringement if they knowingly allow their users to access The Pirate Bay.

In April 2012, The London High Court ruled that both users and operators of The Pirate Bay infringe copyright. For this reason, Justice Arnold ordered all major British ISPs to block access to The Pirate Bay. Six major ISPs, said to account for 92% of the United Kingdom’s internet connections, have now blocked all access to The Pirate Bay.[1]

Similar results have been reached in other European countries, with blocks now in place in Denmark, Belgium, Germany, Finland, the Netherlands, Italy, and Greece. (Note that other jurisdictions, such as Australia, have refused to find ISPs liable for the actions of their users.[2])

The European Commission, as of 4 June 2012, has also launched a public consultation on procedures for notifying and acting on illegal website content. The public consultation focuses on the uneven approach within the European Union relating to the obligations of website service providers who are aware of illegal content being hosted on their websites.

There is also more to come in Australia this year, with telecommunication company Optus awaiting a decision on its application for special leave to appeal to the High Court, following the Federal Court’s decision in National Rugby League Investments Pty Limited v Singtel Optus Pty Limited [2012] FCAFC 59.

In that case, the Full Federal Court unanimously overturned the judgment of Rares J at first instance, and held that Optus' TV Now service infringed the copyright of the Australian Football League, the National Rugby League and Telstra Corporation by allowing users to stream television broadcasts of AFL and NRL games to their mobile devices. As Optus was making the copies for streaming on mobile devices, it could not invoke the copyright exception of private use.

Coming full circle back to New Zealand, two accused file-sharers have escaped punishment following their third-strike notices under the Copyright (Infringing File Sharing) Amendments. The Recording Industry Association of New Zealand (RIANZ) did not apply for the cases to be heard before the Copyright Tribunal, meaning that the strikes for the two accused have been set back to zero.

It is unclear why the decision was made, or whether RIANZ intended to let the opportunity lapse. However, the decision (or lack thereof) is surprising given that RIANZ has been among those complaining that the costs involved in filing copyright notices is too high.[3] Each of the accused was potentially liable for up to $15,000 before the Copyright Tribunal.

The legal bulk of these copyright battles continues below the surface, with the media only reporting major outbreaks and game-changing decisions. However, it appears that a slow evolution of copyright in the digital era is underway.

[1] There are ways of overcoming the blocks currently in place. However, the legality of such methods, such as use of proxy servers and virtual private networks (VPNs) has not yet been tested.

[2] Roadshow Films Pty Limited v iiNet Limited [2011] FCAFC 23; [2012] HCA 16.

[3] The Ministry of Economic Development is currently undertaking a review of the $25 fee currently charged by ISPs for processing each infringement notice.

ENSID Technologies Ltd takes out Best Use of Commercialisation of Innovation Award

Mon, 25 Jun 2012 00:00:00 +1200

Air New Zealand Cargo ExportNZ Auckland Awards 2012 winners were announced Friday night at a gala dinner held at the Langham Hotel in Auckland.

The Baldwins Intellectual Property "Best Use of Commercialisation of Innovation" Award is awarded to a company recognised for excellence in the commercialisation of innovation to achieve a profitable and self-sufficient business.

This year's winner ENSID Technologies Ltd is a global pioneer of polymer RFID (radio frequency identification) transponder tags manufactured using patented plastic infusion technology for using on tracking animals, fish and more.

The other category finalists were:

Straker Interactive Ltd (provides online translation for documents and multi-lingual websites),
enlight photo Ltd (designs and creates practical, inventive products and software for photographers).

Ross Clarke, Michael Vukcevic – CEO, Baldwins Intellectual Property

Joe Regan - Director, Alison Clarke - Managing Director, Ross Clarke – CEO, ENSID Technologies

Other award winners and finalists are:

Inaugural Exporters Champion for Exemplary Services to Export

Sir Ken Stevens (acknowledging Sir Ken’s ongoing service to New Zealand business. Sir Ken was New Zealand 2007 Export Champion and knighted the following year for services to export. Since then he has led trade missions to China, Vietnam and Malaysia, and addressed countless occasions to encourage businesses and inspire students.

Supreme Award and Winner of the Westpac Exporter of the Year Award 2012 (Total sales over $35 million)

The Supreme Award winner is selected by all the award judges from the winners of each category. The Westpac Exporter of the Year is a company recognised for excellence in building extraordinary and sustainable export growth.

Winner: Temperzone Ltd (designs and manufactures air conditioning systems for commercial, industrial and residential applications).

The other finalists in this category were:

Jack links NZ Ltd (manufactures beef snacks that are a good source of protein and iron, with fewer calories, fat and carbs per serving than most other snacks),
GMP Pharmaceuticals Ltd (manufactures natural health products of Australia and New Zealand origin such as complementary medicines, dietary supplements, functional foods and infant formula).

QBE Insurance Exporter of the Year (total sales under $35million)

A company recognized for excellence in building extraordinary and sustainable export growth.

Winner: Canary Enterprises Ltd (manufactures value-add dairy and selected non-dairy products, such as butter medallions, butter sheets, clarified butter and apricot cream cheese disks).

The other category finalists were:

Patton Ltd (makes and supplies components for refrigeration, air conditioning or mechanical services system, such as condensing units, air-cooled condensers, unit coolers, dry coolers and water chillers),
Temprecord International Ltd (produces temperature recording equipment used in food processing, scientific processes and other industries).

TNT Express Emerging Exporter of the Year

A company recognized for excellence in getting started to secure a sustainable export business.

Winner: Madeblunt Ltd (designs and markets innovative umbrellas using patented technology trademarked as the “Blunt umbrellas” brand).

The other category finalists were:

NZ New Milk Ltd (produces premium, quality infant formula that is consumer specific, in packaging individualized to the customers’ specification),
Worldwide Access Ltd (sells online and ships New Zealand products fast to customers in North America, Europe and Asia, a new way of exporting enabled by technology),
Brolly Sheets Ltd (designs and makes waterproof bedding and chair pads, and toilet training aids).

Endace Hi-Tech Exporter of the Year

A company recognized for excellence in building extraordinary and sustainable export growth, working in the areas of electronic, computer software and hardware, IT systems or other products based on these technologies.

Winner: Orion Health Ltd (is a major software developer, providing world class leading healthcare integration software and clinical workflow solutions to hospitals and other health organisations worldwide).

The other category finalists were:

Xlerate Ltd (develops, delivers and integrates GPS vehicle tracking and telematic solutions to large and small scale commercial fleets and consumer vehicles),
Compac Sorting Equipment Ltd (produces turnkey solutions and equipment for sorting and packing fruit).

Baldwins Intellectual Property Best Use of Commercialisation of Innovation

A company recognized for excellence in the commercialisation of innovation to achieve a profitable and self-sufficient business.

Winner: ENSID Technologies Ltd (is a global pioneer of polymer RFID (radio frequency identification) transponder tags manufactured using patented plastic infusion technology for using on tracking animals, fish and much, much more).

The other category finalists were:

Straker Interactive Ltd (provides online translation company for documents and multi-lingual websites),
enlight photo Ltd (designs and creates practical, inventive products and software for photographers).

BDO Deal of the Year

A company recognised for the strategic planning that underpinned the successful deal, and which received recognition for the innovation, tenacity and calibre of the deal executed since January 1st 2011. The market position achieved since is critical.

Winner: Compac Sorting Equipment Ltd (designs and builds highly sophisticated turnkey solutions and equipment for sorting and packing a wide variety of fruit).

The other category finalists were:

EasiYo Products Ltd (manufactures and markets a unique yogurt starter system),
Superyacht Interiors NZ Ltd (designs, manufactures and installs super yacht interiors of uncompromising quality anywhere in the world).

Background

The Air New Zealand Cargo Auckland Export Awards are run by the Export New Zealand Auckland based at the Employers and Manufacturers Association. All businesses with a base in Auckland are eligible to enter any of the six categories.

(The ExportNZ Bay of Plenty division also runs annual export awards with winners in their BNZ Bay of Plenty ExportNZ Awards 2012 announced on June 29.)

www.hookedonexport.co.nz

Ka Mate haka denied trade mark protection

Fri, 22 Jun 2012 00:00:00 +1200

The All Blacks are famous not just for their rugby prowess, the best in the world of course, but the haka they perform before each game. This haka, or war dance, is known as the “Ka Mate” haka. The Ka Mate haka is attributed to a Maori tribe called Ngati Toa. The words of the haka itself have little, if anything, to do with rugby, but the Ka Mate haka has become synonymous with the All Blacks, other New Zealand sports teams and New Zealand in general.

In 1999, trade mark applications for the full text of the Ka Mate haka were made. Those applications spent more than ten years before the Intellectual Property Office of New Zealand before being abandoned. Then in 2010, Ngati Toa made applications for four phrases out of the Ka Mate haka as separate trade mark applications. Despite the longer versions being consistently rejected by the Intellectual Property Office of New Zealand, the four shorter versions were accepted almost immediately.

What then happened was that one of Baldwins’ clients, Prokiwi International Limited, a New Zealand souvenir supplier, received a letter from the New Zealand Rugby Union asking Prokiwi to stop producing a souvenir tea towel with the words of the Ka Mate haka and images of what the New Zealand Rugby Union claimed were All Blacks on it. The letter pointed out that Ngati Toa had made trade mark applications. Ngati Toa then wrote to Prokiwi as well. Prokiwi then instructed Baldwins to oppose the trade mark applications. Both parties filed evidence and a hearing was held in March 2012.

Prokiwi’s primary argument in the opposition was that the Ka Mate haka is part of New Zealand culture and heritage, and traders and sports teams should be free to use it without fear of a trade mark infringement action.

Prokiwi’s argument was accepted, and the oppositions were upheld, and the trade mark applications refused.

The oppositions raised interesting issues about the appropriate way to protect indigenous and cultural rights. One of Ngati Toa’s concerns, understandably, is to prevent inappropriate and offensive performances and uses of the Ka Mate haka. A trade mark registration would be more restrictive than just inappropriate and offensive performances and uses though, and the Assistant Commissioner who decided the opposition ruled that the Ka Mate haka should remain in the public domain.

Who's in at the Top Level Domain

Thu, 21 Jun 2012 00:00:00 +1200

Having your own top level domain has proved attractive to a number of the world's top brands, despite the high costs. ICANN has just released its long awaited list of applicants for top level domains, for which there are 1,930 applications. While there are a number of applications for descriptive words such as "film" or "news" (which is particularly sought after with seven applicants), many of the world's leading brands have applied as well. There are too many to name in detail but it is interesting to review them. For the curious, here is a link to the ICANN list: ICANN Applied for New gTLD Strings

The luxury brands such as Gucci and Hermes are there, as are the car manufacturers such as Audi, BMW, Chevrolet, Bugatti, Ford, Kia, Toyota and Jaguar, among others. Sony, Apple and Samsung are there in the technology world and in the financial arena we see Bloomberg, Barclays Bank, and National Australia Bank. Macys has applied but Harrods hasn't. Zara, Old Navy and Walmart are in, but none of the main antipodean department stores have applied.

Google and Amazon are competing for a number of names, such as .game and .search. Google has 100 applications and Amazon 76.

Some of the pharmaceutical companies have applied, such as Pfizer, Abbot Laboratories, Boehringer and Teva. Eli Lilly has applied for Cialis, but not for its company name.

Among the city names, the city of Melbourne has applied for Melbourne, and the NSW state government for Sydney. Noone seems to want Auckland, Wellington or Christchurch. Given that it costs $US185,000 to apply for the domain name and previous estimates are that it could cost $US1m to set up and operate a domain in the first couple of years (once examination and opposition costs are included), that is probably not surprising.

So what happens now? There is a 60 day comment period, which began last week. Individuals or organisations are required to show they have a legitimate claim to the domain for which they have applied and there is an opposition period of seven months during which those who consider their intellectual property rights are infringed by a particular domain name application can apply. Where there are multiple applicants there will be an auction.

None of these new domains will be operating until 2013.

Le Cordon Bleu Succeeds on Appeal

Wed, 20 Jun 2012 00:00:00 +1200

Le Cordon Bleu, the famous French culinary school, recently won its appeal to register its name in relation to meat, poultry and game and meat extracts in New Zealand. Baldwins represented Le Cordon Bleu at the hearings before the Intellectual Property Office of New Zealand and the High Court.

Le Cordon Bleu’s application was rejected by the Intellectual Property Office of New Zealand, and by a hearings officer, because it was said to be a laudatory term which lacked distinctive character. The hearings officer held that “cordon bleu” meant something of high quality, and the addition of the word “Le” did not save the application.

The High Court overturned the hearings officer’s ruling finding that:

“Le” adds a distinctive element.
“Le Cordon Bleu” is a proper noun used exclusively by Le Cordon Bleu for over 100 years.
The French nature of the mark introduces an “exotic flavour”.
The translation of “Le Cordon Bleu” is “the blue ribbon” and that has no direct literal connection to meat, poultry and game, and meat extracts.

The success in the High Court coincides nicely with the opening of the first Le Cordon Bleu Culinary School in New Zealand in September this year. It was also an important case for Le Cordon Bleu as it was the only application to be rejected by the Intellectual Property Office of New Zealand, and the success in the High Court complements its existing trade mark portfolio in New Zealand.

Like the Champagne case in the 1990s, the win by Le Cordon Bleu in the High Court demonstrates that New Zealand consumers are discerning, and appreciate the qualities that these trade marks denote.

New Zealand domain names: second level domains proposed

Wed, 06 Jun 2012 00:00:00 +1200

The Domain Name Commission is calling for submissions to its proposal to extend the .nz domain name space by allowing anybody to register domain names at the "second level". This would mean that, for example, baldwins.nz would be a valid domain available to register. At present, .nz domains can only be registered at the "third level". For instance, baldwins.co.nz.

Historically, there has not been widespread support for changing .nz to allow registrations at the second level. However, there is a growing trend internationally to permit second level registrations. For example, there are now over two dozen countries that allow registrations at both the second and third levels. The introduction of second level domains, therefore, allows New Zealand to adopt international best practice.

However, if the proposal is implemented, the annual domain registration cost for many organisations may double. This is because organisations will have to pay for two domain names (both baldwins.co.nz and baldwins.nz) to ensure that third parties do not secure one of those domain names. If organisations fail to register both domains, then they risk allowing confusion in the marketplace.

The Domain Name Commission has proposed that there will be a "Sunrise Period" where existing .nz domain name holders can register the second level variant of their name before public registrations open. As part of the proposal, where two or more domain registrants currently own the same domain name at the third level - for example, two different owners for baldwins.co.nz and baldwins.org.nz - then the second level domain will not be able to be registered unless the consent of the other third level domain name holders is received.

The closing date for submissions on the proposal is midday Thursday 27 September 2012.

This article was written with assistance from Shiv Narayan

Australia Moves to “Raise the Bar” on Patentability

Wed, 06 Jun 2012 00:00:00 +1200

Executive summary

The Australian Patents Act 1990 has recently been amended. The amendments have the
effect of increasing the threshold for inventive step, the standard of disclosure required, and
the usefulness of the invention claimed. New provisions exempting infringement for acts
done for experimental purposes, or for the purposes of gaining regulatory approval, are
already in force. The remainder come into force on 15 April 2013. The new provisions will
apply to applications for which a Request for Examination has not been filed prior to the date
of their coming into effect.

The Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (“the Act”) received Royal
Assent on 15 April 2012. The Act contains amendments to all of Australia’s principal IP related
legislation, but the purpose of this document is to comment on the amendments to the Patents Act
1990.

The purpose of the Act

The amendments to the Patents Act are intended to address concerns that the threshold for granting
patents in Australia is too low, and that patentees are not required to disclose enough information about
their invention. The Act addresses four key areas of patentability:

1. It removes restrictions on the information which can be considered when assessing whether the
subject matter of a patent application is sufficiently inventive to justify the granting of a patent.

2. It increases the threshold for determining whether the patented invention is sufficiently useful to be
the subject of a patent.

3. It raises the standard of disclosure of the invention necessary in the patent specification.

4. It adds to the grounds which the Commissioner of Patents can consider when deciding whether to
grant or revoke a patent, and makes the standard of proof required consistent across all grounds.

What are the most important changes?

The Act contains over 50 changes to the Patents Act 1990. Some of the more important changes are
summarised below.

1. Introduction of a new exemption to infringement for acts done solely for “experimental purposes”.

2. Introduction of a new exemption to infringement for acts done solely for gaining “regulatory
approval” in Australia or elsewhere. This new section does not apply to “pharmaceutical patents”,
as defined in the Patents Act 1990.

3. Applying the “balance of probabilities” standard across all grounds examined. This also applies to
opposition and re-examination.

4. Inventive step is now assessed against the common general knowledge anywhere in the world.

5. Removal of the requirement that inventive step arguments be based on “information that a skilled
person…could, before the priority date of the relevant claim, be reasonably expected to have
ascertained, understood and regarded as relevant”. Any publicly available information is now
potentially relevant.

6. Addition of a requirement that the patent specification disclose a “specific, substantial and credible
use” for the invention claimed.

7. The options for amending the specification of a pending application have been reduced. The new
provisions will prevent amendment of the specification by addition of material that the skilled person
could not have directly derived by reading the specification as filed.

8. Increasing the level of disclosure required of the specification of an application (and a priority
document) from providing “fair basis” for a claim, to providing “support” for the claim across its full
scope.

9. Changes to divisional practice, including allowing for regulations which will limit the time for filing a
divisional application to three months after acceptance of the application is published, regardless of
whether the application has been opposed.

10. Addition of a provision confirming that a patent is not invalid merely because it was granted to the
wrong person.

When do the changes come into force?

Most of the provisions of the Act will take effect from 15 April 2013, although the new “experimental use” and “regulatory approval” exceptions to patent infringement came into immediate effect with the passing of the legislation.

The critical event for determining whether most of the new provisions will apply to an application is the
filing of a Request for Examination. In general the new provisions will not apply to applications for
which a Request for Examination has been filed prior to the day the provisions come into force.

What action should I take?

To avoid an application being held to the more rigorous standards implemented by the Act, you should
ensure that any planned Australian applications are filed in Australia, and that a Request for
Examination is filed, before 15 April 2013. This may mean filing PCT national phase applications
before the 31 month deadline (in some cases many months before), or even filing some cases as Paris
Convention applications rather than via the PCT national phase.

You should also ensure that any planned divisional applications are filed (and a Request for
Examination filed) before that date, and that Requests for Examination are filed on all currently pending
applications before 15 April 2013.

We expect that there will be a large increase in the filing of Requests for Examination in the upcoming
months, particularly as the 15 April 2013 deadline draws nearer. This temporary “blip” in examination
requests may lead to increases in the delay before a first examination report issues (which can already
be 18 months or more after the Request for Examination is filed). If you want to avoid this extra delay
then we recommend that you file a Request for Examination as soon as possible.

The main points to consider when preparing patent specifications for filing in Australia are the new
requirement to disclose a specific, substantial and credible use for the invention claimed, and the
requirement that the specification provide “support” for the invention across the entire breadth of the
claims.

The Act contains a number of other changes not mentioned above. Please let us know if you require
any further information on these, or any other aspect of Australian intellectual property law.

Intangible Cultural Heritage in New Zealand/Aotearoa: A National Perspective

Wed, 06 Jun 2012 00:00:00 +1200

Intangible Cultural Heritage in New Zealand/Aotearoa: A National Perspective

Benjamin A R Sullivan

‘Puritia ngā taonga tuku iho a ngā tupuna hei tiki hūia mā ngā uri whakatupu a Aotearoa’

‘Keep the treasures handed down by the ancestors as an adornment for the descendants yet to be born in New Zealand’

Māori whakatauki (proverb)

From the first appearance of indigenous Māori inhabitants almost 1000 years ago, with the integration of European settlers during the 19^th century, and when observing the ethnic heterogeneity of its population today, the history of New Zealand (in Māori: Aotearoa) paints an unrivalled portrait of cultural development and evolution. With such rich and diverse heritage it is therefore, to many, surprising that New Zealand has chosen to abstain from adopting the 2003 United Nations Convention for the Safeguarding of Intangible Cultural Heritage (hereafter: the Convention). This paper will briefly discuss how much of New Zealand’s intangible cultural heritage, specifically its indigenous Māori heritage, could reliably fall within the protection mandated by the Convention, and describes several of these examples in detail. The paper then addresses the reasons given by New Zealand’s government for its abstention from the Convention. Finally, this paper outlines specific national measures and mechanisms in place, which ensure that an adequately suitable framework is in place (given the sensitive and unique treatment given to New Zealand’s intangible cultural heritage) and simultaneously demonstrate a strong level of commitment to the overarching principles of the Convention.

New Zealand’s Intangible Cultural Heritage

The Convention states that intangible cultural heritage is manifested in the following domains:[1]

oral traditions and expressions, including languages, as a vehicle of the intangible cultural heritage;
performing arts, such as traditional music, dance and theatre;
social practices, rituals and festival events;
knowledge and practices concerning nature and the universe; and
traditional craftsmanship.

New Zealand exhibits an enormous wealth of tradition and culture, many examples of which would fall suitably within the bounds of the Convention. This paper concentrates primarily on examples of Māori intangible cultural heritage (mātauranga Māori) because most, if not all, of the government’s efforts in safeguarding national heritage and tradition are concentrated on the protection of its indigenous heritage.

The identification of intangible cultural heritage often focuses on tangible elements to which a spiritual dimension is attached. For example, the Historic Places Act 1993 recognises places of spiritual value to Māori, specifically those having “intangible characteristics where no visible feature or evidence is present but where a significant event or traditional activity took place”.[2] These may include battlefields, places of religious or ritual significance, fishing grounds etc. Other examples include taunga waka (ancestral canoe landings), mahinga kai (places where food was procured) and landscape features marking the boundaries of iwi (tribes) or hapu (clans) or associated with mythological events. Another important example of mātauranga Māori is te reo, the Māori language, which is discussed later in this paper. The concept of mātauranga Māori also covers aspects of Māori traditional knowledge and concerns “the retention and protection of knowledge [involved in] ngā toi Māori (arts), whakairo (carving), history, oral tradition, waiata (songs) … and rongoā Māori (medicine and healing)”.[3] Due to the abundance of mātauranga Māori, concerns are typically raised over international targeting of traditional knowledge systems. It is for this reason that New Zealand plays an important role in securing its own unique cultural heritage, and possibly why it remains hesitant to bind itself under international legal regimes that may control how it does so. When attempting to classify New Zealand’s cultural heritage it is important to remember that Māori “adopt a highly holistic view of the universe, in terms of which there is no watertight distinction between the tangible and the intangible, between the physical and spiritual, the dead and living, the past and future, and the people and the land”.[4] The concept of taonga[5] is representative of all these aspects.

Issues for New Zealand

Upon learning of the 2004 visit to New Zealand by UNESCO’s then Director-General Mr. Koichiro Matsuura, Māori Chief Tumu Te Heuheu of the Ngāti Tuwharetoa tribe declared, with regards to the 2003 UNESCO Convention, that New Zealand was satisfied and willing to “share with the largest number possible the very extensive experience it has gained in this domain. Intangible heritage is an essential element of the cultural diversity of the Pacific region; it is one of our irreplaceable resources”.[6] However, although supportive of the concept of the safeguarding of New Zealand’s intangible cultural heritage, several government departments consulted on the Draft Convention raised concerns over the desirability of adopting a single, legally binding instrument to protect intangible heritage.

Cultural Property of Indigenous Peoples

In New Zealand, the Treaty of Waitangi Te Tiriti o Waitangi[7] offers protection to Māori tāonga, a concept that includes both tangible and intangible elements. It has therefore been established that the Crown and Māori together have an obligation in preserving, protecting, and promoting intangible cultural heritage.[8] For New Zealand, the Convention as it stands does not sufficiently reflect the importance of the intangible cultural heritage of indigenous peoples in particular, in this instance the Māori. Maui Solomon, a Māori barrister and indigenous lawyer from New Zealand, admits that “Māori culture and imagery is a powerful branding tool for New Zealand. But Māori want to have control over how and to what extent this should happen. They do not want their culture or values denigrated or portrayed in an offensive manner. Accurate and culturally appropriate portrayal of Māori values or traditions will not only protect those values but also enhance the commercial value of any product it may be associated with. But it is for Māori to finally determine what it and what is not appropriate for commercial exploitation and how the benefits of that are to be shared.”[9]

Problems of Definition

The Ministry for Culture and Heritage Te Manatu Taonga (hereafter: MCH) recognises an inherent problem in defining something that is intangible. Māori cultural heritage is inextricably bound to the concept of ‘wairua’, a life essence that underpins the very nature of all culture and heritage. Wairua can roughly be defined as ‘spirit’, ‘soul’ or ‘quintessence’ and embraces the spirit of a person, which exists beyond death. The relationship between tangible and intangible cultural heritage is therefore inextricably linked, and compartmentalising this or separating the two is likely to prove too challenging. Te Puni Kōkiri, New Zealand’s Ministry for Māori Development[10] advised that for Māori, separating the process (intangible culture) from the product (tangible culture) is not possible. Furthermore, it suggested Māori would be uncomfortable with the Convention’s description of ‘language’ as a vehicle for the values and beliefs of culture (article 2.2(a)), because for Māori language is a tāonga in itself. Reservations have therefore been expressed that ‘language’, under the Convention, is not seen as a cultural heritage in its own right. Te reo Māori, the Māori language, is considered one of the most significant aspects of mātauranga Māori, and was the subject of Waitangi Tribunal Claim Wai 11 brought in 1985.[11] Here it was claimed that the Crown “had failed to protect te reo Māori”[12] as required by Article 2 of the Treaty of Waitangi.[13] The claimants proposed that the language be made ‘official’ for the purposes of enabling its use “as of right”[14] in Parliament, the courts, Government departments, public bodies and local authorities. Recommendations in support of the claimants’ cause were made by the Waitangi Tribunal[15] and have resulted in its legislative recognition as an official language of New Zealand (Māori Language Act 1987).

In response to the draft Convention Te Puni Kōkiri also suggested that ‘safeguarding’, which uses the term ‘protection’, has connotations of ‘freezing’ heritage, potentially imposing undesirable limits on the natural evolution and development of cultures.[16] Furthermore, the MCH noted that the definition also includes ‘preservation’, which has the potential to allow public access to some traditional knowledge without appropriate cultural permission.[17]

Inventories

Kate MacDonald, Senior Policy Advisor of the Ministry for Culture and Heritage Te Manatu Taonga, states that “New Zealand’s abstention was motivated by concerns with the substantive obligations of the Convention, including in particular the appropriateness of creating an international ‘register’ of forms of intangible cultural heritage”. The compilation of an inventory of intangible cultural heritage in New Zealand, which Ms. MacDonald describes as “the key deliverable of the Convention”, is considered physically and politically impossible given the exceptional nature of Māori cultural heritage and the sensitivity with which it is treated. Many indigenous peoples, including Māori, “are skeptical about the use and benefits of inventories as a way of safeguarding intangible cultural heritage”.[18]

In New Zealand, considerable consultation with affected communities would be needed to compile an inventory of this nature. Through this process it is unlikely consensus would be reached on what should be included in such a document.[19] Te Puni Kōkiri and the Ministry of Economic Development have stressed Māori reluctance to document intangible cultural heritage in this way, explaining that creating hierarchies of value and inventories that are publically and globally available may make the information more readily available to those who might want to appropriate it and could thus achieve the opposite effect to safeguarding.[20] Indeed, while the intent of establishing an inventory of Māori intangible cultural heritage is to safeguard, there remains a risk that this could have the unintended consequence of releasing information into the public domain, thereby increasing the risk of inappropriate exploitation or desecration of that heritage.[21] In a similar vein, Te Puni Kōkiri is also concerned with the issue of open access to privileged information or specialised knowledge held by tōhunga.[22] Furthermore, putting Māori intangible cultural heritage into an ‘official’ documented form may not take into account the evolution and change of cultures over time. Were New Zealand to accede to the Convention, and accept that intangible cultural forms are ‘fluid’, it is possible that inventories would have to be frequently revisited and revised, which would result in extensive and ongoing consultation.[23] Furthermore, in New Zealand there could be considerable debate over claims of authenticity and accuracy, especially when more than one group is claiming ownership of a cultural form.[24]

Relationship to Existing International Agreements

Officials from the Ministry of Foreign Affairs and Trade, in 2003, raised concerns over the impact of the Convention on other international agreements to which New Zealand is already party, particularly the General Agreement on Trade and Tariffs (GATT) and the General Agreement on Trade in Services (GATS). It is believed that there is scope for conflict between measures countries might employ to protect their cultural heritage and countries’ obligations to these agreements.[25] There is a concern that a trading partner might cite the Convention in moves to block New Zealand agricultural products on the grounds that such measures were necessary to ‘ensure the safeguarding of intangible cultural heritage’ such as traditional farming practices.[26] In other words, New Zealand farm produce may be excluded from export on the basis that traditional farming methods were considered intangible cultural heritage, requiring protection. In addition, should New Zealand accede to the Convention, under international law it would take precedence over earlier treaties/conventions to which New Zealand are already a signatory, should they impact differently on the same issue; therefore, obligations to the 2003 Convention could override those under previous treaties or conventions.

Costs of Accession

According to MCH the initial direct cost of Convention membership would be 1% of the annual UNESCO fee paid over two years (approximately NZ$18,000).[27] Furthermore, indirect costs would be borne through drawing up inventories, developing a formal policy, identifying a responsible body and supporting any additional functions required in the areas of education, access, research, training and documentation; these have been assessed as at least $260,000 per year.[28] New Zealand benefits from a suitably pro-active government, which has already incorporated significant protection for aspects of intangible cultural heritage into the country’s legal framework, government policies and cultural programmes (as mentioned later in this paper). Given the resources currently directed towards this work in New Zealand it is therefore difficult to see what benefits could be derived from membership, which could justify the additional costs associated with accession to the Convention.[29]

Intellectual Property Issues

The National Library of New Zealand Te Puna Mātauranga o Aotearoa responded to the 2003 draft Convention by suggesting more work could be done at a national level on the intellectual property protection of traditional cultural expressions before New Zealand considered accession to the Convention.[30] The Ministry of Economic Development also detected a lack of clarity regarding the relationship between the Convention and intellectual property law, expressing confidence that its current work on Traditional Knowledge sufficiently addresses aspects of the Convention already.[31] Other international agreements and organisations are believed to have greater scope and applicability in protecting Māori culture and heritage. Among these are WTO, Trade-related Aspects of Intellectual Property Rights (TRIPS), WIPO’s Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore, and the UN Declaration on the Rights of Indigenous Peoples. New Zealand participates in and cooperates extensively with WIPO, and the Ministry of Economic Development has declared “that this forum is more appropriate than [the] UNESCO Convention … [as it is] more sensitive to the differing needs of different communities, more likely to produce practical strategies for communities and governments, and therefore more likely to attract international support”.[32]

In relation to the protection of traditional knowledge, traditional cultural expressions (or folklore) and access to genetic resources and benefit sharing, WIPO is already in a position to offer New Zealand a sufficient range of practical tools aimed at enhancing the intellectual property interests of holders of cultural heritage. WIPO already plays an important role in assisting New Zealand in developing draft legal mechanisms, preparing documentation toolkits to aid communities in documenting their traditional knowledge and in the longer term, formulating intellectual property-related guidelines for the safeguarding of intangible cultural heritage based on the full range of experiences surveyed, further consultations and wide inputs.[33]

Of recent importance is the Wai 262 Claim, concerning intellectual property and the protection of Māori intangible cultural heritage. This Treaty of Waitangi claim was brought against the New Zealand Crown in 1991 by six iwi.[34] The claim “is about the place of Māori culture, identify and traditional knowledge in New Zealand’s laws, government policies and practices. It concerns who controls Māori traditional knowledge, who controls artistic and cultural works such as haka and waiata, and who controls the environment that created Māori culture.”[35] After 20 years the Waitangi Tribunal[36] released its Report in July 2011.[37]

The Report discussed the Māori concept of intangible cultural heritage, stressing “[m]ātauranga Māori and taonga works are not like land or other physical resources. They are products of the hearts and minds of the communities who have created them and … the value in these things is not in exclusively possessing them, but rather in sharing them.”[38] Furthermore, the Treaty of Waitangi “envisages the Crown-Māori relationship as a partnership, in which the Crown is entitled to govern but Māori retain tino rangatiratanga (full authority) over their taonga.”[39] However, the Tribunal noted the deficiencies in current laws and government policies, which rather than strengthen this partnership, instead marginalise Māori and allow others to control and appropriate key aspects of Māori culture. The report suggested current laws, for example, “allow others to commercialise Māori artistic and cultural works such as haka and tā moko without iwi or hapū acknowledgement or consent … They allow others to use traditional Māori knowledge without consent or acknowledgment. They provide little or no protection against offensive or derogatory uses of Māori artistic and cultural works … [and] sideline Māori and Māori cultural values from decisions of vital importance to their culture.”[40]

The Tribunal, however, also recognised that in the context of modern New Zealand full authority over taonga will not always be possible, noting that the interests of iwi and hapū will “instead have to be balanced alongside the interests of other New Zealanders.”[41] For this reason, the Tribunal concluded, “the Treaty does not provide for exclusive ownership of mātauranga Māori or the intangible aspects of taonga works … [However,] New Zealand should have a duel strategy: first, to introduce a regime to protect mātauranga Māori and taonga works; and secondly, to advocate for the broad uptake of minimum standards of protection in the international community, whether in large multilateral or smaller free trade agreements.”[42] Despite promoting international cooperation and collaboration, the Report does not mention the 2003 UNESCO Convention and its potential application in regard to Māori intangible cultural heritage. Whether the Tribunal’s recommendations for law and policy reform will serve to catalyse New Zealand’s accession to the Convention remains to be seen. Furthermore, opinion is divided over the true scope and effectiveness of the Tribunal’s decision. It has been argued the Tribunal’s findings were “highly political, weak and had missed the point.”[43] According to Māori party MP Rahui Katene, “there is no Māori control over things Māori, which is what the original claim called for. It is all about partnership, which is fine, but I think Māori will still be treated as a junior partner.”[44]

Current Framework

Although New Zealand’s statutory framework for the protection of cultural heritage “tends to focus on the identification, recording and safeguarding of tangible cultural heritage”,[45] steps have been taken in New Zealand to incorporate protection for aspects of intangible cultural heritage, through the development of targeted legislation, government policies and cultural programmes. Despite it’s “inability to adopt the Convention as it is … New Zealand continues to be a strong supporter of the protection and promotion of intangible cultural heritage”.[46] Various Government Departments, Ministries, Crown Entities and Agencies are currently invested in intangible cultural heritage protection – a list of these can be seen in the accompanying Appendix. Legislation and domestic policies are also in place, aimed at protecting aspects of intangible cultural heritage (see Appendix). Furthermore, the New Zealand government acknowledges that development of strategies to protect intangible cultural heritage “is very likely to straddle a range of policy areas including intellectual property, cultural heritage policy, conservation and environmental concerns”.[47] Therefore, as it currently stands, a targeted (rather than universal) framework appears more suited to New Zealand for safeguarding and preserving the intangible cultural heritage. While issues concerning indigenous peoples’ cultural heritage and intellectual property rights continue to ignite debate, however, it remains to be seen whether reform, on a level with UNESCO’s benchmark, is inevitable.

Conclusion

For New Zealand, the promotion, protection and preservation of its intangible cultural heritage remains a necessary component to recognising and cherishing its rich historical heritage. Whilst several social, political and logistical reasons have been cited as preventing New Zealand from becoming a party to the 2003 Convention, it is undeniable the strategic tools already in place will continue to observe the Convention’s principles and will not prevent constructive dialogue between New Zealand and UNESCO in the future.

Appendix

Government Departments, Ministries, Crown Entities or Agencies

Archives New Zealand

Archives NZ is the official custodian of New Zealand’s public archives. It gathers, stores and preserves a wide range of material, including many national treasures (for example, the Treaty of Waitangi) and plays an important role in documenting the relationship between the Crown and Māori. See www.archives.govt.nz

Te Puni Kōkiri

See footnote 4.

Department for Internal affairs (including Office of Ethnic Affairs)

Provides resources, advice and information on issues affecting ethnic communities in New Zealand. “In 2011, the Office of Ethnic Affairs will release a government responsiveness toolkit for government agencies. This toolkit is a resource for government agencies to develop policies and services that are responsive, accessible and culturally appropriate for all New Zealanders”. See www.dia.govt.nz and www.ethnicaffairs.govt.nz

Ministry for Pacific Island Affairs

The MPIA is the Government's premier adviser on policies and interventions to promote the social, economic and cultural development of Pacific Islander communities in New Zealand. See www.minpac.govt.nz

Department of Conservation

The DOC is concerned with the protection of New Zealand’s natural and historical heritage. It manages around 10,000 Māori sites (including places of economic, spiritual and military significance). See www.doc.govt.nz

Ministry of Economic Development

The MED works to promote the effective functioning of New Zealand’s economy. In the context of intangible cultural heritage protection, the Ministry contributes directly to the development of intellectual property rights policies in the areas of traditional knowledge and indigenous heritage. See www.med.govt.nz

Ministry of Education
The National Library of New Zealand

The purpose of the National Library, as defined in the National Library of New Zealand Act 2003, is “to enrich the cultural and economic life of New Zealand and its interchange with other nations, as appropriate, by: collecting, preserving, and protecting documents, particularly those relating to New Zealand, and make them accessible for all the people of New Zealand, in a manner consistent with their status as documentary heritage and taonga; supplementing and furthering the work of other libraries in New Zealand; and working collaboratively with other institutions having similar purposes, including those forming part of the international library community”. See www.natlib.govt.nz

Ministry for Culture and Heritage

The MCH leads government work in the arts, heritage, broadcasting and sports sectors providing advice on legislation, policy and sector development. The Ministry also plays a crucial role in managing activities that support and promote New Zealand’s cultural heritage. See www.mch.govt.nz

Agencies funded through Government Departments or Ministries

Te Matatini

Te Matatini aims to promote the awareness, importance and appreciation of traditional Māori performing arts through fostering all aspects of tikanga Māori, essential to its preservation and development. See www.tematatini.co.nz

Māori Language Commission

The Commission’s goal is to empower Māori to maintain and generate language development amongst their communities, whilst maintaining and disseminating Māori language resources. See www.tetaurawhiri.govt.nz

Creative New Zealand

CNZ is the national arts development agency cultivating, investing in and advocating for all New Zealand art and culture. See www.creativenz.govt.nz

New Zealand Historic Places Trust

The NZHPT employs specialist Pouarahi (Māori heritage advisors) and other regional staff throughout New Zealand. Pouarahi and NZHPT staff (including archaeologists, architects and planners) provide advice to iwi and hapu on Māori heritage preservation, conservation, protection and management. They also provide advice on strategies, mechanisms and management tools available to iwi and hapu to exercise and manage their kaitiakitanga (intangible cultural heritage). See www.historic.org.nz

New Zealand Music Industry Commission

See www.nzmusic.org.nz

New Zealand On Air

See www.nzonair.govt.nz

Radio NZ International

See www.mzi.com

Māori Television

See www.maoritelevision.com

Te Papa

New Zealand’s national museum has implemented several bicultural programmes and partnerships (both Māori and Pakeha) for the interpretation of collections through indigenous knowledge systems, oral traditions and beliefs. See www.tepapa.govt.nz

Te Māngai Paho

Te Mangai Paho is a Crown Entity established to make funding available for the production of Maori language television programming. See www.tmp.govt.nz

Royal New Zealand Ballet

See www.nzballet.org.nz

New Zealand Symphony Orchestra

See www.nzso.co.nz

Legislation promoting or providing safeguards for intangible cultural heritage, particularly Māori Te Matatini (for all see www.legislation.govt.nz)

Māori Language Act 1987

Recognises Te Reo Māori as an official language of New Zealand.

Protected Objects Act 1975

Regulates the export of protected New Zealand goods, the illegal import or export of protected goods, and the sale, trade and ownership of Māori taonga.

Arts Council of New Zealand Toi Aotearoa Act 1994 (ss 13 and 14(1))

Establishes the Arts Council of New Zealand, and in outlining the principal functions of the arts board recognises the unique role of Māori as tangata whenua “people of the land” and their importance in contributing to the management New Zealand’s art and culture.

Broadcasting Act 1989 (ss 36 and 53B)

Provides for the regulation of New Zealand’s broadcasting services, consistent with continued promotion of Māori language and culture.

New Zealand Māori Arts and Crafts Institute Act 1963

Established the New Zealand Māori Arts and Crafts Institute, an organisation created to counter the impending threat of the loss of traditional Māori arts. There are currently two schools of art devoted to whakairo (carving) and raranga (weaving).

Radio New Zealand Act 1995 (s7 – the Charter)

Establishes Radio New Zealand, directing it to promote ‘a range of New Zealand programmes, including information, special interest, and entertainment programmes, and programmes which reflect New Zealand's cultural diversity, including Maori language and culture’.

Television New Zealand Act 2003 (s12 – the Charter)

Establishes Television New Zealand, instructing it in its programming ‘to enable all New Zealanders to have access to material that promotes Māori language and culture’.

Historic Places Act 1993

Established the New Zealand Historic Places Trust for the purpose of preserving, marking and recording places of historic interest in New Zealand.

Museum of New Zealand Te Papa Tongarewa Act 1992

This Act establishes the purpose of New Zealand’s national museum Te Papa: ‘Te Papa is a forum for the nation to present, explore, and preserve the heritage of its cultures and knowledge of the natural environment in order to: better understand and treasure the past; enrich the present; and meet challenges for the future’.

Local Government Act 2002

Domestic Policy for Protecting Intangible/Tangible Cultrual Heritage

Marae (Māori communal or sacred meeting place) preservation

Funded through the New Zealand Historic Places Trust and the New Zealand Lottery Grants Board

Te Māori Manaaki Taonga Trust

The Trust provides expert training for Māori museum staff.

Niu FM

See www.niufm.com

Iwi Radio Stations

See www.irirangi.net

Kōhanga Reo and language nests for Pacific Island peoples

Te Kōhanga Reo is a total immersion Māori language family programme for young children from birth to six years of age. See www.kohanga.ac.nz

Kura Kaupapa and Wānanga

These are Māori immersion schools where philosophy and practice reflect Māori cultural values with the aim of revitalising Māori language, knowledge and culture. See www.tkkmmokopuna.school.nz

Te Papa’s Karanga Aotearoa Repatriation Programme

Te Papa “is undertaking a formal repatriation programme of kōiwi tangata Māori and koimi Moriori (Māori and Moriori ancestral remains) to New Zealand and to hapū/iwi communities of origin. The New Zealand government has agreed to fund Te Papa Tongarewa to undertake this work on its behalf”. See http://www.tepapa.govt.nz/aboutus/repatriation/Pages/overview.aspx

[1] Convention for the Safeguarding of Intangible Cultural Heritage 2003, art 2.3

[2] “Maori Heritage Ngā Taonga Tuku Iho no Ngā Tupuna” New Zealand Historic Places Trust at www.historic.org.nz/ProtectingOurHeritage/MaoriHeritage.aspx

[3] Paul Myburgh “New Zealand / Aotearoa” in T Kono (ed) The Impact of Uniform Laws on the Protection of Cultural Heritage and the Preservation of Cultural Heritage in the 21^st Century (Martinus Nijhoff Publishers, Leiden, 2010) 639, at 660.

[4] Ibid, at 661.

[5] For Māori, tāonga is a treasure. A tāonga “has far more than artistic value. It has spiritual value, it may tell stories about people or places, and it may link its creator back to ancestors of earlier generations”. See Case Study Report: New Zealand, Safeguarding of the Traditional Maori Arts, Te Puia, New Zealand Māori Arts and Crafts Institute, ACCU International Partnership Programme for Safeguarding of Intangible Cultural Heritage 2009-2010, available at http://www.accu.or.jp/ich/en/training/casestudy_pdf/09_10/case_study_report_nz.pdf

[6] Office of the Spokeswoman, Preservation of cultural landscapes and the intangible cultural heritage in the Pacific region, 14 October 2003.

[7] The Treaty of Waitangi is often described as New Zealand’s founding document. Signed in 1840, it forms an agreement in both English and Māori between the British Crown and around 540 Māori rangatira (chiefs). Its effect was to give Britain sovereignty over New Zealand territory and Māori the rights of British subjects, whilst still recognising Māori ownership or ‘stewardship’ of their lands and properties. Historically, controversy has arisen over the translation and scope of application of the treaty. Nowadays, it is usual to refer to the intention, spirit or principles of the Treaty. The Treaty of Waitangi is not integrated directly within New Zealand’s domestic law, except where its principles are referred to in Acts of Parliament. The exclusive right to determine the meaning of the Treaty now rests with the Waitangi Tribunal. Created in 1975, this commission of enquiry is authorised to investigate the Crown's alleged breaches of the Treaty. See www.nzhistory.net.nz

[8] Kate Macdonald, Ministry for Culture and Heritage Te Manatu Taonga. Private Email.

[9] Maui Solomon, Intellectual Property Rights and Indigenous Peoples Rights and Obligations, paper presented to the workshop on instruments for access and benefit sharing from genetic resources and related traditional knowledge issues at Global Biodiversity Forum 15, UNEP Headquarters, Gigiri, Nairobi, Kenya, 2000, available at http://www.inmotionmagazine.com/ra01/ms2.html.

[10] Te Puni Kōkiri is “the Crown’s principal adviser on Crown-Māori relationships”, guiding Māori public policy and advising the Government on “policy affecting Māori wellbeing and development”. See http://www.tpk.govt.nz/en/

[11] See http://www.waitangi-tribunal.govt.nz/scripts/reports/reports/11/2580F91B-5D6F-46F4-ADE0-BC27CA535C01.pdf

[12] Myburgh, above n 2, 659.

[13] Treaty of Waitangi, Article the second (English): Her Majesty the Queen of England confirms and guarantees to the Chiefs and Tribes of New Zealand and to the respective families and individuals thereof the full exclusive and undisturbed possession of their Lands and Estates Forests Fisheries and other properties which they may collectively or individually possess so long as it is their wish and desire to retain the same in their possession; but the Chiefs of the United Tribes and the individual Chiefs yield to Her Majesty the exclusive right of Preemption over such lands as the proprietors thereof may be disposed to alienate at such prices as may be agreed upon between the respective Proprietors and persons appointed by Her Majesty to treat with them in that behalf.

[14] Myburgh, above n 6, 659.

[15] See Myburgh, above n 6, 659.

[16] Macdonald, above n 3.

[17] Ibid.

[18] Ibid.

[19] Ibid.

[20] Ibid.

[21] Ibid.

[22] Tōhunga are expert practitioners in the Māori culture of a particular skill or art; they may include expert priests, healers, teachers, builders or carvers.

[23] Macdonald, above n 3.

[24] Ibid.

[25] Ibid.

[26] Ibid.

[27] Ibid.

[28] Ibid.

[29] Ibid.

[30] Ibid.

[31] Ibid.

[32] Ibid.

[33] Ibid.

[34] Ngāti Kuri, Ngāti Wai, Te Rarawa, Ngāti Porou, Ngāti Kahungunu and Ngāti Koata. See Ministry of Economic Development, “Information Sheet: Treaty of Waitangi Claim Wai 262”, available at http://www.med.govt.nz/templates/Page____1207.aspx.

[35] Waitangi Tribunal, “Time to Move beyond Grievance in Treaty Relationship, Tribunal Says”, available at http://www.waitangi-tribunal.govt.nz/news/media/wai262.asp.

[36] The Waitangi Tribunal is a permanent government commission of enquiry, established in 1975 to consider and make recommendations on claims brought by Māori about Crown acts or omissions that breach the promises made in the Treaty of Waitangi. See ibid.

[37] Full Report available at http://www.waitangitribunal.govt.nz

[38] Ibid, 43-44.

[39] Waitangi Tribunal, above n 33, 1.

[40] Ibid, 2.

[41] Ibid, 3.

[42] Wai 262 Report, above n 35, 52.

[43] Marty Sharpe, Maori don’t own NZ’s wildlife, stuff.co.nz, available at http://www.stuff.co.nz/national/politics/5222360/Maori-don-t-own-NZs-wildlife.

[44] Ibid.

[45] Myburgh, above n 6, 658.

[46] Macdonald, above n 3.

[47] Andrew Brown “Ministry of Economic Development Announces Work Programme on Traditional Knowledge” (2003) Andrew Brown Queen’s Counsel, available at www.andrewbrown.co.nz

Guest Post Tim Stirrup on the Narrow Entrance Ramp to Brazil’s Green Patent Fast Track

Fri, 01 Jun 2012 00:00:00 +1200

Tim Stirrup is an expert in the field of biotechnology (particularly molecular biology, plant science and bioinformatics). Tim provided a blog post to Green Patent Blog which is a blog covering intellectual property issues in clean technology.

http://www.greenpatentblog.com/2012/05/30/guest-post-tim-stirrup-on-the-narrow-entrance-ramp-to-brazils-green-patent-fast-track/

New Zealand High Court says ‘No’ to Milking the Discovery Process

Wed, 30 May 2012 00:00:00 +1200

New Zealand’s Chief High Court judge has recently re-affirmed the New Zealand courts’ disapproval of fishing expeditions by parties during discovery. The decision has also highlighted the difficulties of suing only the contributory infringer in proceedings for infringement of process or use style clams.

DairySense LLC (DairySense) owns a patent claiming the use of a system where parameters about milk stored on a farm are transmitted to a dairy factory, which then makes determinations about the quality of the milk and when to pick it up.

BayCity Technologies Limited (BayCity) sells a remote data logger marketed as being suitable for the dairy industry (as well as for other uses). DairySense sued BayCity for patent infringement, accusing BayCity of contributory infringement.

New Zealand dairy giant Fonterra Co-operative Group (Fonterra) acts and relies on the data transmitted to it from the logger. DairySense did not consider it “commercially prudent” to name Fonterra as the primary infringer.

The only defendant was therefore DairySense as the contributory infringer.

During the proceedings, DairySense sought details and even disassembly of BayCity’s logger. The orders sought were very broad and were not even restricted to use in the dairy industry or use by the primary infringer.

The High Court Rules for patent proceedings require the plaintiff to provide particulars of alleged breaches giving at least one instance of each type of infringement. Additionally, a party may not request discovery in support of an alleged infringement not specified in the statement of claim. DairySense argued that these rules did not apply since contributory infringement is a tort to be determined under common law (not being specifically provided for in the patent legislation)and therefore these were not strictly patent proceedings.

Winkelman CJ held that the same policy of restricting discovery underpinning proceedings generally also applied here. Consequently she held the application for further discovery was for documents not sufficiently closely related to the infringement proceedings. Her Honour also held that even if DairySense did not wish to pursue Fonterra in the proceeding, it must still be identified as the primary infringer.

This outcome highlights weaknesses in process/use claims as well as contributory infringement actions. There are provisions for indirect infringement in the Patents Bill 2008 but this bill is still languishing at the bottom of the parliamentary order paper.

BayCity Technologies Ltd v Uttinger & Another HC AK CIV 2006-4-4-7709 [21 March 2012]

This article was written for www.managingip.com.

Innovation to Industry Japan Initiative

Wed, 23 May 2012 00:00:00 +1200

The Ministry for Science and Innovation has made a new grant available through the International Relationships Fund. The grant is designed to support local science-based business in the biomedical, health and functional food areas in developing commercial links with Japan. Up to NZ$90,000 is available via a contestable process.

International Relationships Fund

The International Relationships Fund supports activities that nurture international science and technology contacts and research collaboration. The aims of the fund are to advance New Zealand’s national interests by:

Promoting New Zealand as a centre for innovation and establishing world-leading research programmes of strategic interest
Increasing international partners’ co-investment for projects
Increasing funding, skills and capabilities able to be sourced from outside New Zealand

Innovation to Industry Japan Initiative

The specific aim of the Innovation to Industry Japan Initiative is to develop commercial links with Japan in order to enable New Zealand science-based products to enter the Japanese market. Focus is on biomedical, health and functional food as New Zealand expertise in these areas is recognised in Japan.

A grant of up to NZ$90,000 (GST Excl.) is available to registered companies, Crown Research Institutes and Tertiary Institutes.

Proposals are required to provide detailed information as to how the project’s purpose will be achieved and demonstrate that the project will:

Showcase specific world-class New Zealand research capabilities, technologies and products to potential Japanese commercial partners,
Strengthen existing connections and create new ones and,
Increase practical knowledge about Japanese partners’ interests, expectations and protocols in such collaborations.

Assessment criteria include knowledge and links with New Zealand and Japanese operators in the appropriate area and at least one project team member fluent in Japanese.

Applications close at 12pm 31^st May 2012. Decisions will be announced 29^th June 2012.

Applications must be submitted via the MSI Portal. Registration is required to do this. Further details and the full Request for Proposal document are available from:

http://www.msi.govt.nz/get-funded/research-organisations/types-of-funding/funding-for-international-relationships/.

This was written with assistance from Harriet Sandstad.

From “cool to criminal”: a warning for internet service providers

Thu, 10 May 2012 00:00:00 +1200

In the early 2000s, few would have grasped the worldwide legal ramifications for offering file sharing software and services. Following Napster, file sharing technology was new and exciting, consumers were embracing the idea, and service providers saw golden business opportunities.

One of the service providers was Kim Dotcom. Mr Dotcom saw the great potential in ‘cloud’ or ‘digital locker’ services long before many others. He sought legal advice and consulted the provisions of the United States Digital Millennium Copyright Act.[1] After satisfying himself that he was protected from the actions of his users as an “online service provider” under US law, his company set about making its millions.

Of course, we all know that the Mega Upload story does not end there. While many users of the Mega Upload website were not breaking the law, there were many others who were using it for improper purposes (for instance, copyright infringement). Furthermore, this was known to the company. Legal issues were bound to arise. Their resolution is likely to prove fascinating.

Mr Dotcom’s case is not the only example of a service provider being pursued by copyright owners. Copyright owners seeking reparation, or at least positive action, from service providers include The Pirate Bay website, the English BT Net and Newzbin2 cases, and the recent Australian iiNet cases.[2]

Only recently have other file sharing services begun to fully appreciate the risks and recognise that they may be liable in a contributory sense for the actions of those using their websites. To quote US law professor Peter Swire, file sharing service providers in the wake of the Mega Upload saga “have gone from cool to criminal all at once”.[3]

The new ISP in town: FYX

On 7 May 2012, Auckland company, Maxnet, launched its own internet service provider (ISP), called FYX. In addition to providing internet protocol addresses, FYX is also offering its customers access to geo-blocked websites such as Netflix and Hulu.

Geo-blocking is a form of technology used to prevent internet users from accessing websites from specific countries. The list of websites that are blocked off to New Zealand internet users includes Netflix, Hulu, BBC iPlayer, and many other on-demand or video streaming websites. Even certain youtube and iTunes content may be blocked from time to time.

The core issue here is the territorial nature of intellectual property, and the licensing of that intellectual property. Basically speaking, a copyright owner has the right to decide who gets to use, listen to, or watch its material.

The movie studios have licensed companies like NetFlix, Hulu, and Australasian QuickFlix, to stream certain movies to users who pay a subscription fee. However, these subscriptions are limited, territorially speaking.

The contractual terms of sites like NetFlicks and Hulu do not for instance allow New Zealand users to access content on the websites, even if they are willing to pay the subscription fee. It is not simply an issue of an arbitrary internet roadblock that has been placed in the way of the users – it all comes back to who has been authorised to access the copyright material.

It is unclear at this stage how FYX intends to conduct its service. It is possible that FYX will offer a type of Virtual Private Network (VPN) service, the likes of which are offered by a handful of companies and already used by many New Zealanders. What is clear is that FYX intends to use technology that circumvents geo-blocking for its users.

Many will argue that FYX is not doing anything wrong – it is simply offering a service. However, there will still be the issue of whether internet users use FYX’s services for illegal purposes, for example, breaching the terms of websites like NetFlix. This may involve breach of contract or copyright infringement or both. The Mega Upload case suggests that service providers embarking on such projects should be wary.

FYX has stated on its website that it:

“does not guarantee access to any particular or specific websites or content, but works to improve the overall accessibility of content from around the world.”

It also states:

“Many websites, whether available because of Global Mode or not require you to agree to terms and conditions before you start using its service. Global Mode does not negate you from these responsibilities or act on your behalf.”

In other words, buyer beware: the onus is on you. But that’s not necessarily the end of the story for the ISP. We’ve seen a worldwide trend of service providers being held liable (in a contributory, joint, or conspiracy sense) for the actions of their users, regardless of what warnings they give.

Depending on exactly what FYX is offering, and how it goes about offering it, it may later be liable in some manner for copyright infringement or breaches of contract by its users.

Infringing File Sharing

As a side note, the ISP entering this field will also have to ensure that the blocking mechanism it uses does not allow internet users to freely and illegally share copyright files. The Copyright (Infringing File Sharing) Amendments placed certain obligations on ISPs.

As to the issue of geo-blocking, the issue has not yet been legally regulated or tested, and as such, ISPs should be wary of exploiting the business opportunities they see before them.

[1] In particular, refer to Digital Millennium Copyright Act 1998, Title II: the Online Copyright Infringement Liability Limitation Act.

[2] Roadshow Films Pty Limited v iiNet Limited [2011] FCAFC 23; [2012] HCA 16.

[3] http://abcnews.go.com/blogs/technology/2012/01/file-sharing-sites-scatter-after-megauploads-shutdown/

New Zealand to introduce plain cigarette packaging despite problems in Australia

Tue, 01 May 2012 00:00:00 +1200

Australia took a world first step last year in passing legislation mandating plain packaging of tobacco products. Now, while the Australian Government goes in to battle with tobacco companies over the legality of its actions, New Zealand makes its first move in the same direction.

The Australian regime requires all cigarettes, pipe tobacco and cigar products sold in Australia to be in plain olive-brown packets with branding, trade mark logos, colours and promotional text removed and only the plain printed brand name featured.

The New Zealand Government has agreed in principle to introduce a regime in line with Australia following a public consultation process to be carried out later this year.

In Australia the legislation has faced widespread opposition from tobacco companies. The Australian Government is currently involved in a High Court action with major tobacco companies who consider the legislation amounts to an appropriation of their property by the government without the compensation required by law.

If the New Zealand Government proceeds with plain packaging legislation, they are likely to face similar legal challenges from tobacco companies claiming an illegal confiscation of proprietary rights in their intellectual property.

However, New Zealand also has obligations under the Framework Convention on Tobacco Control which includes policies around packaging of tobacco products. Having committed to a goal for New Zealand to be smoke free by 2025, the sentiment is that the Government needs to take drastic measures to achieve this.

Nevertheless these obligations sit side by side with New Zealand’s intellectual property obligations such as those imposed by World Trade Organisation treaties and other obligations under free trade agreements.

New Zealand considers itself to be an exemplary free trade citizen, a status that could be jeopardised by legal action at the World Trade Organisation, such as that initiated against Australia, if the decision is made to introduce similar plain packaging legislation.

New Zealand could also face multimillion dollar lawsuits undertaken by tobacco companies under free trade agreements. Investment chapters in free trade agreements allow companies to initiate lawsuits themselves against Governments on the grounds that the value or profitability of their investments are seriously affected by new policies introduced by the Government.

Phillip Morris is currently using such agreements to challenge the Australian tobacco legislation and while New Zealand has different agreements in place, it is likely to fall foul of the same fate especially in light of the proposed Trans-Pacific Partnership Agreement which New Zealand is due to ratify later this year and which would give those kinds of powers to US investors, providing a more direct pathway for the tobacco companies to sue.

Prime Minister John Key is nevertheless confident that the Government can proceed with plain packaging if they wish to do so on the basis of advice from Trade Ministers that there is nothing in current trade agreements which precludes New Zealand imposing plain packaging.

Nevertheless, there is no doubt that tobacco companies will fiercely push back against the legislation with every legal argument available to them to retain their rights in highly valued trade marks and branding.

Susan Jones, Head of Corporate and Regulatory Affairs at British American Tobacco New Zealand has voiced what is likely to be the shared attitude of the entire New Zealand tobacco industry which is that they “will take every action necessary to protect…intellectual property rights as would any other business faced with the removal of their brands”.

Even if following the proposed consultation process plain packaging legislation is passed in New Zealand, the Australian experience demonstrates this will only be the beginning of the matter in terms of how successfully the legislation can be implemented.

This article was written with assistance from Katherine Wesolowski katherine.wesolowski@baldwins.com

Domain Name Jurisdiction Challenged

Wed, 25 Apr 2012 00:00:00 +1200

In 2006 the New Zealand Domain Name Commission, the body that administers .nz domain names, established a dispute resolution procedure.

A recent Dispute Resolution Service decision was a first for one of the experts deciding .nz domain name complaints, Sir Ian Barker QC. In this case the respondent disputed the jurisdiction of the Commission.

The respondent, Irae Family Trust, registered the domain name allphones.co.nz on May 14 2008. On November 15 2011 the complainant, Allphone Retail and AMT Group filed a complaint with the Commission.

Irae Family Trust was given until December 15 2011 to file its response. Tim Jackson, a trustee of the Irae Family Trust, sent a response disputing the requirement for a response to be filed in the prescribed manner. Jackson also disputed the Commission’s jurisdiction in the case. He refused to provide a response until clear evidence of the Commission’s jurisdiction and extent of legal authority was received.

As the respondent did not file a response the Commission treated the complaint as undefended and instructed the expert to make a decision. Jackson again emailed the Commission maintaining that the respondent was not obliged to file a response in the prescribed manner.

As the expert’s jurisdiction had been challenged, he was obliged to consider this issue, despite the respondent’s failure to file a response. Even after 12 years of experience in deciding domain name disputed, the jurisdictional challenge was a first for the expert.

The decision reviewed the manner in which the domain name was first registered and subsequently renewed. In all cases of registration and renewal Barker noted that as part of the registration process the registrant signed the standard form agreement with the registrar. The dispute resolution policy was clearly detailed within the registration agreement and the respondent had also acknowledged in the registration agreement that it had read and understood the policies.

Once the issue of jurisdiction had been reviewed the expert went on to examine the merits of the complaint and upheld it.

This article was written for www.managingip.com.

Alleged pirates to walk the plank

Tue, 24 Apr 2012 00:00:00 +1200

The first enforcement (third strike) notices have now been issued to alleged copyright infringers in New Zealand.

New Zealand brought the ‘three strikes’ or ‘skynet’ law into force in September 2011, under the provisions of its Copyright (Infringing File Sharing) Amendment Act 2011. The Act seeks to provide a mechanism by which copyright owners can issue warnings to internet users illegally sharing copyright files.

Since 1 November 2011, the Recording Industry Association of New Zealand (RIANZ) has sent a steady stream of complaints to New Zealand Internet Protocol Address Providers (IPAPs), mostly in relation to the alleged sharing of pop and R&B music.

Only after being issued with three strikes (each strike being at least 28 days apart) can the alleged copyright infringer be required to appear before the Copyright Tribunal, which can impose a fine of up to $15,000. As of 20 April 2012, at least two enforcement (third strike) notices have been issued – one by TelstraClear, and one by Vodafone.

At this stage, there is no way of knowing who the alleged pirates are, or what files they have been accused of sharing. It also remains to be seen what level of fines will be imposed by the Copyright Tribunal.

Meanwhile in Australia, the third biggest internet service provider (ISP), iiNet, has successfully defended claims from a group of 34 Australian and US film and television companies. The entertainment companies alleged that iiNet had authorised or enabled copyright infringement by allowing its users to download copyrighted material (see Roadshow Films Pty Limited v iiNet Limited [2011] FCAFC 23; [2012] HCA 16).

The Australian High Court has again ruled in iiNet’s favour, dismissing the entertainment companies’ appeal. It has been held that the extent of the ISP’s power is “limited to an indirect power to determine its contractual relationship with its customers” and does not extend to taking positive steps to ensure that its customers are not infringing copyright.

The ISP is now said to have proposed a graduated response model, whereby an independent body mediates the interests of all parties in accordance with “community standards”. The system would be relatively similar to that employed under New Zealand copyright law, or the voluntary graduated response system of the US.

Other countries to implement graduated response laws include Great Britain, France, South Korea, and Taiwan. To date, there have been no reports of fines (or other penalties, such as internet disconnection) being imposed under any of the regimes.

Global health initiative aims to use IP to combat neglected diseases

Mon, 23 Apr 2012 00:00:00 +1200

A new programme has been set up with the aim of encouraging pharmaceutical companies and the global health research community to share intellectual property (IP) assets and expertise. The programme is being promoted by the World Intellectual Property Organisation (WIPO) and aims to foster the development of drug treatments, vaccines and diagnostics for malaria, TB and neglected tropical diseases.

The new initiative, called WIPO Re:Search, will allow qualified researchers access to IP assets owned by selected pharmaceutical companies and research organisations. The assets will be made available under royalty-free licences to qualified researchers anywhere in the world in a drive to develop more effective treatments. The assets are publicly available for view here and they include patents, lead compounds and associated data, unpublished results, regulatory data and dossiers, screening technologies and expertise/know-how in pharmaceutical research and development. The programme, which is administered by the non-profit organisation Bio-Ventures for Global Health (BVGH) will also offer the opportunity for researchers to work directly with scientists at pharmaceutical companies to advance R&D on these diseases.

The initiative includes the establishment of a “Partnership Hub” to be run by BVGH. This hub will foster collaboration between the organisations while BVGH will provide licensing support to the collaborators. As WIPO Re:Search moves forward, it is hoped that offerings from current partners will continue to grow while new providers join and contribute further to the information, compounds, and services available.

WIPO Re:Search is open to all organisations that agree to allow a selection of their IP relating to neglected tropical diseases to be licensed on a royalty-free basis for research and development in any country. The participating organisations must also offer medicines covered by the shared IP assets to be sold on a royalty-free basis in, or to, least developed countries.

The impressive list of industry backers means that there exists real potential to open up the research vaults of some of the big players to allow access to research institutions and NGOs keen to develop new treatments. Alnylam Pharmaceuticals, AstraZeneca, Eisai, GlaxoSmithKline, Merck Sharp & Dohme, Novartis, Pfizer, and Sanofi have signed up to collaborate with a number of research organisations including the U.S. National Institutes of Health (NIH), California Institute of Technology, the Center for World Health & Medicine, the Drugs for Neglected Diseases initiative, Fundação Oswaldo Cruz (Fiocruz), Massachusetts Institute of Technology, Medicines for Malaria Venture, PATH, the South African Medical Research Council, the Swiss Tropical and Public Health Institute, the University of California, Berkeley, and the University of Dundee (UK). It is hoped that the initiative will facilitate new partnerships to develop treatments for the diseases that are often prevalent in very poor populations.

The development of treatments for malaria and tuberculosis is mentioned specifically but other diseases classified as “neglected tropical diseases” are also to be targeted. This term encompasses less well known tropical diseases and conditions including Buruli ulcer, Chagas disease (American trypanosomiasis), cysticercosis, dengue/dengue hemorrhagic fever, dracunculiasis (guinea-worm disease), echinococcosis, endemic treponematoses (yaws), foodborne trematode infections (clonorchiasis, opistorchiasis, fascioliasis, and paragonimiasis), human African trypanosomiasis (African sleeping sickness), leishmaniasis, leprosy, lymphatic filariasis, malaria, onchocerciasis, rabies, schistosomiasis, soil transmitted helminths, trachoma, tuberculosis, podoconiosis, and snakebite.

The provision of free medicines to poorer populations appears to be a growing facet of pharma company behaviour and the WIPO Re:Search programme fits well with these strategies as well as potentially providing a new perspective on shelved research programmes.

It’s Linsane: my catch-phrase one minute, nek minnit… someone else’s?

Thu, 05 Apr 2012 00:00:00 +1200

There’s been much talk recently about the plight of those who have coined or been the subject of catch-phrases, only to find that someone else is profiting from the catch-phrase by being the first to register it as a trade mark. This article examines the pitfalls of being popular, and suggests how you can protect your own catch-phrase from others who wish to exploit it.

One unfortunate example is skateboarder, Levi Hawken. Levi was catapulted to fame after a YouTube clip featuring Levi coining the catch-phrase “Nek Minnit” went viral. Nek minnit (as Levi would say) an Auckland company capitalised on Levi’s popularity by applying to register the mark NEK MINIT in relation to soft drinks. Budget clothing company Supré also seized the opportunity to profit from Levi’s catch-phrase selling t-shirts emblazoned with “Nek Minute”, without Levi’s consent.

On a grander scale, when Jeremy Lin of the New York Knicks applied to register the trade mark LINSANITY, a catch-phrase referring to the meteoric rise of the previously unknown basketballer, he found that two quick-thinking Americans had registered the mark first. Lin also discovered that, a year earlier, a Chinese basketball manufacturer had registered Lin’s full name as a trade mark in China and was selling merchandise featuring the mark.

What are the consequences for Lin and Levi? Luckily for Lin, in the US (and New Zealand) an applicant cannot register a mark that clearly identifies a living individual without that individual’s consent. Lin should therefore have no difficulty obtaining the registration of LINSANITY for himself. In China, however, first registrations assume priority over everyone else, which means that Lin and sponsor Nike face an expensive legal battle to gain ownership of the mark if they wish to sell any merchandise in China with Lin’s name on it.

After Levi appeared on television to discuss his woes, the Auckland company that applied for registration of NEK MINIT agreed to sell Levi the trade mark “for a few [hundred] bucks”. Without this concession, Levi would have also faced a pricey legal battle to establish that he was the true owner of the NEK MINIT trade mark. Because Levi had no prior registration of any Nek Minnit related trade mark, he would be relying solely on his reputation to do this. In Supré’s case, the risk of a finding that Levi is also the true owner of the “Nek Minute” mark appears to be a battle that Supré is willing to wage, no doubt in the knowledge that Levi is an individual of limited financial means.

As surprising as it sounds, Lin and Levi could learn a valuable lesson from Charlie Sheen. Sheen found himself in considerable strife last year when he spouted dozens of outrageous catch-phrases on television including, “I am not bi-polar, I am bi-winning!”, “tiger blood”, and “defeat is not an option.” Sheen got his own back though by registering (through a newly formed company) 34 trade marks that captured the content of his outbursts. Anyone that sought to capitalise on Sheen’s popularity (including one company that applied to register TIGER BLOOD in respect of soft drinks) has been promptly sent cease and desist notices from Sheen’s attorneys.

Another trade mark success story is that of AMI Insurance in the late 1990s. AMI fashioned a successful advertising campaign using graffiti styled billboards and television advertising to dramatise the potentially nightmarish consequences of a fictional “Party at Kelly Browne’s”. AMI registered a number of “Kelly Browne” related trade marks as a result, and profited (both financially as well as from further publicity) from licensing those marks to others. For example, AMI permitted the Otago Rugby Union to use the slogan, “Party at Tony Brown’s” (Tony Brown at the time being an Otago rugby player) for a big home game. AMI also successfully prevented the registration of other similar marks, such as KELLY BROWN BEER.

So, to use a Sheen-ism, what do winners do?

apply to register catch-phrases. Registration counts as notice to the world (or at least, to your jurisdiction) that you are the owner of the catch-phrase. Once the catch-phrase is registered, the trade marks can be enforced against against anyone that infringes, as well as licence the rights to those that will further promote your catch-phrase; and

apply to register the catch-phrase sooner, rather than later. If someone else gets in first, there will be legal costs in opposing the application, or in trying to get back the trade mark at a later date. As the Lin example shows, this is even more important in China, where being first to register is everything.

Baldwins welcomes new chief executive

Tue, 03 Apr 2012 00:00:00 +1200

Baldwins Intellectual Property is delighted to announce the appointment of its new Chief Executive, Michael Vukcevic.

Michael is a highly experienced business leader with a varied and dynamic career. He most recently held the chief executive position at Pharmaceutical Solutions Limited, a clinical research organisation across New Zealand and Australia.

Prior to that, Michael was with Ernst and Young NZ/Oceania where he was an Executive Director for Business Development. He was also the Associate Awards Director for the Entrepreneur of the Year programme. Michael has also held various roles at Fonterra where he managed the formulated blends business (primarily focussed on the Japanese market) and Fonterra's main account, New Zealand Dairy Foods.

Baldwins' Chairperson, Sue Irwin Ironside said, “Michael's diverse background both in the executive roles he has held, along with the international commercial experience he has gained working in different markets, complements our global business and the delivery of specialist intellectual property business advice we offer to our clients.”

Michael, who has been with Baldwins since December, said he was enjoying the role so far and was looking forward to the opportunities that lay ahead.

“It is a privilege to join Baldwins at such an exciting time. Our teams of professionals work with the most innovative and creative companies in New Zealand and across the globe and are focussed on creating value and the protection of intellectual property rights. Being an integral part of the innovation ecosystem, which ensures there is an on-going incentive for our brightest and boldest to lift the tide in our economy, is indeed an honour as well as a huge challenge,” Vukcevic said.

For more information, visit: http://www.baldwins.com/michael-vukcevic/

12 April 2012 Deadline for New Generic Top-Level Domain Applications

Mon, 02 Apr 2012 00:00:00 +1200

Applications to register new generic top-level domains (gTLDs) will close on 12 April, 2012.

These domain names allow business names or brands to be registered as top level domains. The Internet Corporation for Assigned Names and Numbers (ICANN) has approved a plan to increase the number of gTLDs from the current limit of 22. gTLDs are domain name endings which come after the dot, such as .com or .info. This will allow domain names to end in almost any word in the any language, including business names or brands, such as .APPLE or .CANON, as well as geographical areas and keywords. ICANN hopes that the initiative will "unleash the global human imagination". It has the potential to radically change the way in which people locate information on the internet.

Any person or entity will be able to own and administer a gTLD. The privilege is not expected to be cheap, with estimates of the initial filing fee being approximately USD 185,000 and overall costs for the first 18 to 24 months estimated at between USD500,000 and USD1,000,000, once examination and opposition costs are taken into account.

While the new gTLDs will not be functional until 2013, the ability to make an application for a gTLD has been available from 12 January 2012 with the application period closing on 12 April, 2012. Additional application periods are expected in the future. Individuals or organisations will have to show that they have a legitimate claim to the domain they are buying, and an opposition process will be available where applications are made which allegedly infringe third party intellectual property rights. If there are multiple applications an auction process will take place.

Buying a gTLD differs from buying a domain name in that applicants are essentially applying to buy and operate their own registry. Applications follow a relatively complex format which require the provision of both technical and financial information from the applicant.

Brand owners who do not wish to register their gTLD will still have the opportunity to "defend" their brands from use by other parties:

from registration of their brand(s) as gTLDs by other parties;

from the use of their brand(s) as second level domain names used with the new gTLDs; and

through the use of a trade mark clearinghouse, uniform rapid suspension system (URS) and a post delegation dispute resolution procedure (PDDRP).

Should you have any queries please do not hesitate to contact Rosemary Wallis.

This update was written with assistance from Chloe Barker.

The continued war on Copyright (Infringing File Sharing)

Thu, 29 Mar 2012 00:00:00 +1300

Digital locker and streaming media services (in particular, Mega Upload and TV Shack) may have been the latest digital media services under fire, but file sharing remains a major issue for copyright holders worldwide. As of January 2012, BitTorrent surpassed the mark of 150 million active users (‘active’ meaning in use at any given moment).[1]

New Zealand’s Copyright (Infringing File Sharing) Amendment Act 2011 prescribes a three strikes system for internet users whose accounts are being used to illegitimately share copyright material. Prior to the Act’s introduction, New Zealanders were believed to be responsible for approximately 160,000 file sharing copyright infringements a month. On 1 November 2011, the first 75 complaints under the Act were sent from the Recording Industry Association of New Zealand (RIANZ) to Internet Protocol Address Providers (IPAPs).

While the Act did not bring about the flood of infringing file sharing warnings that was expected, there has been a steady flow of warnings from RIANZ. It is believed that several hundreds, or even thousands, of infringement notices have been issued, and that some internet users have even received their second warning notice. It is not believed that any enforcement notices (third strikes) have been issued at this point.

From day one, copyright owners have complained that the fee prescribed by the Regulations ($25 plus GST per complaint issued) is too high and would discourage copyright owners from makings complaints. As promised, the Ministry of Economic Development is now reviewing the $25 fee. Some copyright owners are calling for zero fees, while IPAPs say that $25 is an appropriate amount considering the amount of work required per infringement notice.

Submissions can be made to the Ministry of Economic Development until the end of April 2012.

In France, 165 internet users have been issued their third strike under the French three strikes (HADOPI) system. It has been reported that peer-to-peer file sharing in France has dropped by 26% (an estimated 2 million users) since the first notifications were sent in late 2010, and that iTunes sales have increased by 22.5%.

However, it has been estimated that enforcing the HADOPI system costs French Internet Service Providers (ISPs) €50 million a year. This cost has been reflected in ISPs’ increased monthly rates to their users (an extra approximately €5 per month). Internet users are therefore indirectly paying for the three strikes system in France, although ISPs have called on the Government for subsidies.

In the United Kingdom, the Digital Economy Act allows for a government approved authority, Ofcom, to enforce ISPs to monitor internet users’ accounts and send notifications if any copyright infringement is detected. Warning letters will be sent out and any user who receives three strikes in 12 months may face legal charges. Under this system, the government will pick up Ofcom’s costs, and ISPs will have to carry their own.

In Switzerland, file sharers have been afforded a certain level of protection by the decision in Swiss Federal Data Protection and Information Commissioner v Logistep AG, where the Federal Supreme Court ruled that collecting and tracking IP addresses of peer-to-peer file sharers was prohibited under current law. Copyright owners are calling for some system to be implemented in order to address the problem of file sharing.

Illegal file sharing is still identified as one of the largest issues by copyright owners worldwide. Many countries have recognised this and have begun to implement systems to deal with repeat infringement. Whether copyright owners will bear the costs of enforcement in each jurisdiction, or whether other parties (such as ISPs or internet users) will have to pick up the bill remains to be seen.

[1] http://www.bittorrent.com/company/about/ces_2012_150m_users

"Raising the Bar” – Australia’s new intellectual property legislation at a glance

Wed, 28 Mar 2012 00:00:00 +1300

The Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 has recently been passed by the Australian Senate and the House of Representatives[1]. It is expected that the resulting Act will receive Royal Assent in the near future. There is then a fixed 12 month period before most of the Act’s provisions come into force. It is therefore likely that the majority of the new legislation will take effect at the end of March or early April 2013.

Most of the Bill’s proposed amendments relate to the Patents Act. The main changes include:

Grace period

The existing Act provides some circumstances in which publication or use does not affect the validity of a later filed application. However, under the present provisions, secret use of an invention before filing can invalidate a patent. That is, a grace period is available after public use of the invention, but not after secret use. The Bill specifies that any use of an invention within Australia is not secret use and thus extends the availability of the grace period.

Inventive step

The Bill replaces the current assessment of inventive step in light of the common general knowledge in Australia with an assessment based on the common general knowledge in the art. That is, inventive step will be assessed with regard to global common general knowledge.

Utility

Lack of utility is not currently a ground for objection during examination. However, under the Bill, utility will be examined and a lack of utility will be an available ground of refusal.

Fair basis / support

The current Act requires that claim(s) “must be clear and succinct and fairly based on the matter described in the specification”. The Bill replaces the “fair basis” language with a requirement that claim(s) are “supported by matter disclosed in the specification”. “Support” means that “there must be a basis in the description for each claim; and the scope of the claims must not be broader than is justified by the extent of the description, drawings and contribution to the art”.

This seems to require a higher standard of disclosure (i.e. more comprehensive) than under the present law.

Divisional applications

The deadline for filing divisional application(s) will be three months from the date of advertisement of acceptance.

Modified examination

Modified examination based on a corresponding granted patent from another recognised jurisdiction will no longer be available.

Regulatory review and experimental use exceptions

The existing regulatory review exception will be extended to non-pharmaceutical goods (e.g. agricultural and veterinary compounds) for which government approval is required.

The Bill also introduces a specific statutory experimental use provision. This provision means that an act done for experimental purposes is not an infringing act. “Experimental purposes” are defined as including acts such as determining the properties of the invention, improving or modifying it or determining the validity of the patent.

Effect of the Act

The regulatory review and experimental use exceptions described above will take effect the day after the Act receives Royal Assent.

Other provisions of the Act will come into effect 12 months after Royal Assent. This means that if examination of a patent application is requested in the 12 month period after assent, the application will be subject to the lower examination standards of the existing Act.

[1] Further information about the Bill, including the text and Explanatory Memorandum is available at http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=s837

Conflicts of Interest at IP Firms Clarified

Wed, 28 Mar 2012 00:00:00 +1300

Most New Zealand patent attorney firms (the author’s firm included) advise a large number of clients, some of whom may be competitors. The New Zealand patent attorney profession is small and options for representation can be limited. The impact of this has been recognised previously by the New Zealand Court of Appeal in similar cases.

In July 2011 the High Court had the opportunity to review the duties owed to competing clients in The Baby Hammock Co v AJ Park Law.

The Baby Hammock Company (BHC) had sought advice from AJ Park Law about a baby hammock that it had developed. The advice was that a patent, registered design, or other protection was not available due to earlier publication.

Some time later, AJ Park agreed to act for Hushamok which also made baby hammocks. BHC discovered that Hushamok had obtained registered design protection for its products, and that AJ Park had assisted it to do so.

BHC alleged that in acting for Hushamok, AJ Park breached its fiduciary duties to BHC.

Although the Court was required to consider general conflict of interest issues, it was also required to assess the credibility of witnesses in determining what had occurred between BHC and AJ Park. The Court expressed disquiet concerning BHC’s evidence, in particular a series of emails produced by BHC about its relationship with AJ Park. For example, one email, dated August 10 2004, said “we are going to be working with AJ Park” when the first meeting between someone from AJ Park and BHC occurred by chance during a flight on 12 August 2004.

In Baby Hammock, the Court held that merely acting for competitors does not give rise to a disqualifying conflict. The critical issue was whether a duty to an existing client would be breached if, in acting for a competitor, the potential for future conflict arises. The Court held that:

The mere risk of future conflict is insufficient to found a breach of duty;
Mere commercial disadvantage experienced by all competitors is not enough, and the disadvantage must affect the IP rights of another client, and
Hushamok was entitled to secure IP rights effective against the world. Registered design protection did not carry any special adverse implications for BHC.

For some firms this decision simply confirms their conflict of interest policy, and for others, it provides useful guidance.

This article was written for www.managingip.com.

Hobbit highlights character merchandising pitfalls

Mon, 19 Mar 2012 00:00:00 +1300

Hitting news headlines worldwide is the story of a popular British pub by the name of The Hobbit, which has apparently been threatened with legal action by Saul Zaentz Company (SZC), on the basis that SZC owns “worldwide rights” to several brands associated with author JRR Tolkien, including THE HOBBIT. This story highlights the complex Intellectual Property issues which arise in the context of character merchandising. SZC allegedly holds the film rights to The Hobbit, but to what extent does this allow them to force a pub in Britain to change its name of 20 years?

Firstly, it is important to note that the alleged infringements of the pub extend beyond simply using the name THE HOBBIT. For example, images from the film appear on various materials, such as the face of Lord of the Rings star Elijah Wood on the pub’s loyalty card. This appears to be clear copyright infringement.

SZC appears to hold trade mark registrations for THE HOBBIT in Europe, including for food and beverage goods and services. However, as the pub has used the name for over 20 years, apparently since prior to SZC’s registrations, they may have a defence against trade mark infringements due to their longstanding use of the name. Furthermore, if SZC have not made genuine use of their trade mark for the relevant goods and services, then their registration may be vulnerable to cancellation for non-use once five years passes from the date of registration. At least some of their registrations appear to fall in this category. In New Zealand and Australia the non-use period is generally three years.

SZC may be able to pursue an action against the pub based on the tort of passing off. This would require SZC to prove they have a reputation in the relevant goods and services, which arguably they may not have. Furthermore, critical to a passing off action is the ability to show that customers of the pub will be deceived into thinking that the pub is associated with SZC and that this has caused SZC damage. In New Zealand at least, case law appears to be reluctant to extend the scope of passing off to character merchandising per se. The fact that a pub such as THE HOBBIT is arguably not trying to project a commercial connection with SZC or SZC’s officially licensed goods or services, but is rather trying to project an association with the character per se, is a key reason why passing off may not extend to such character merchandising. Furthermore, a defence to passing off may be available to the pub if they can show concurrent or antecedent rights in the name THE HOBBIT.

This story highlights the pitfalls of character merchandising, particularly when dealing with iconic works such as JRR Tolkien’s. At least some of the pub’s use may be defensible. However, it is more likely that this matter will settle privately than be pursued through costly litigation in the Court system. In the meantime, The Hobbit pub seems to be garnering increasing support through its Facebook page and has recently added the voice of British actor Stephen Fry to its collection of supporters. On the other hand, SZC appears to be painted as a bully, ultimately damaging its reputation and Lord of The Rings fan’s perception of the film and officially licensed merchandise. Overall, this highlights both the importance of securing correct authorisation from the relevant author or rights owner prior to commencing use as well as addressing any unauthorised use in a timely manner.

Kim Dotcom: sinner or saint?

Tue, 13 Mar 2012 00:00:00 +1300

Kim Dotcom has the whole world watching him. His interview last week on John Campbell’s show on TV3 is said to be the most watched Campbell Live clip ever. Much of the hype seems to be due to his larger than life personality, but it must surely also be the strange way in which he has come to fame: for intellectual property rights abuses. His website, Megaupload, is said to be the single biggest source of internet piracy in the world. The United States wants him extradited from New Zealand to face copyright, racketeering and money laundering charges.

How did all this come to pass? Dotcom says he has been operating his website for seven years (without being sued for copyright infringement thus far). His website allows users to upload material and share links, allowing others access. Some of the material stored and shared on his website will be legal. Other material will be illegal copies of songs, albums, TV shows and movies.

Dotcom says that he has done nothing illegal. He says that his website simply provides a platform for others to exchange material. He does not encourage users to exchange pirated material and, in fact, Megaupload’s terms and conditions prohibit it. He also says that his company removes pirated material as soon as it is brought to their attention. He says his company does not have the ability to monitor the enormous amount of traffic, nor to determine its legitimacy, no doubt.

The case raises interesting legal and moral issues. Dotcom is alleged to be a multi-millionaire. He has, therefore, profited from the piracy that has occurred on his website. One could make an analogy with a landlord. It is wrong for a landlord to collect rent from its tenants if those tenants are criminals and the rent is paid with the proceeds of crime? What about if the landlord knows that the tenants are manufacturing or dealing drugs from the premises. Is it wrong to still collect rent?

The United States Government says that Dotcom is part of a “worldwide criminal organisation” with harm to copyright holders in excess of $500 million.

The main issue for the New Zealand courts is whether, according to the laws of New Zealand, the conduct would justify a person’s trial if it had occurred in New Zealand.

Dotcom’s bail application was ultimately successful. So while he is allowed out of prison, his assets are frozen, and he claims that he has no access to funds, and his lawyers are working for free. His extradition will take place in August in the High Court at Auckland.

Women wanted for innovation

Thu, 08 Mar 2012 00:00:00 +1300

Today is International Women’s Day. Sue Irwin Ironside - chair of Baldwins Intellectual Property- takes the opportunity to discuss the innovation gender gap in New Zealand.

Let’s face it, men do tend to get the better deal when it comes to labels.

Women are cooks, men are chefs. Women are ball-breakers, men are assertive. But we have one label which we have not assigned a gender bias to, simply because women rarely receive a consideration.

That word is ‘innovator’.

This instantly brings to mind a male inventor in the Albert Einstein genre, or a marketing executive perhaps, from the nostalgic days of Mad Men.

Similar to the old jokes about doctors where the punchline reveals the doctor is in fact female, this is a warning sign that we need to bring our bank of innovative individuals up-to-date by encouraging female participation.

Women comprise more than half the population, yet they are under-represented in innovation figures with female inventors taking out less than 1% of all NZ patents[1]. We need to ask ourselves why this is the case and can we really afford to let half our economic potential go to waste?

We are no strangers to revolutionising the world by our ideals in equality, considering that in 1893 New Zealand led the way giving women the vote.

I would argue that we can lead the way again by encouraging women to innovate and utilising the Kiwi adventurous spirit to compete on a global scale. Building a more competitive and productive economy is one of the Government’s four key priorities and for New Zealand to realise its economic potential, we need to encourage innovation and in particular women innovators.

New Zealand has a great history of innovation, such as Richard Pearse who arguably was the first to fly; Ernest Rutherford who brought us back down to earth by splitting the atom; and more recently, AJ Hackett who turned a love of adrenalin sports into a multi-million dollar business. But really, who is to suggest that is it just the domain of our menfolk and how much could we achieve if we tapped such a source of previously unforeseen potential?

WOW founder (and Baldwins client) Dame Suzie Moncrieff took an idea to promote a rural art gallery that now, more than 25 years later is an important event on the international calendar. But perhaps New Zealand’s best known female innovator is Norma McCulloch, who in 2003 was named in the world’s top 10 women inventors for her Breath of Life resuscitator, by the Global Women Inventors and Innovators network.

Norma was a lifelong inventor. She grew up in Liverpool in the depression and in her case necessity really was the mother of invention. She began inventing in her childhood and continued to put her mind to solving problems for the rest of her life.

Women are just as capable of innovating as men and should be given adequate support networks to encourage their inventive spirit. These support networks are crucial as a lack of confidence is inevitable in people who have never been encouraged to shine, but as Nelson Mandela said in his 1994 inaugural speech, “Playing small does not serve the world. And when we let our own light shine, we unconsciously give other people permission to do the same.”

[1] Sunday Star Times, research from VictoriaUniversity, 12^th January 2012

Nek minnit: a lesson in protecting your assets!

Thu, 08 Mar 2012 00:00:00 +1300

Last night on TV One’s Fair Go, the story of Levi Hawken and his ’Nek Minnit’ success was in the spotlight again, but this time maybe not the spotlight that Levi wanted.

We all know the story of the 20 second You Tube clip which brought fame to Levi Hawken and fame to the words ‘Nek Minnit'. What Levi and his friends didn’t realise while having fun that day was that they had created something that they could profit from.

When anything popular is created, people will try to get a piece of that popularity—in this case, t-shirts and merchandise that allow the consumer to so show their support/connection to the You Tube clip.

Should Levi protect the trade mark ’Nek Minnit’? Yes the words were around and known, but before Levi's You Tube clip, could you have made money from them? Probably not.

Should others profit from someone else's fame or idea? Again, probably not.

Protecting your trade mark or any other intellectual property isn't something that should be easily dismissed. You never know who may try to profit from you.

A registered trade mark can be obtained in a minimum of six months, but once registered you may be able to take action against use after the filing date of your application.

Is it too late for Levi now? From the comments and support on Facebook after the Fair Go story it's clear to see who to public think should own the rights to 'Nek Minnit'. If you can show reputation to a trade mark then under the Trade Marks Act 2002 you should be able to obtain registered protection.

In Levi’s case it is good to see that Mr Vintage has acknowledged that the sales of their t-shirts were related to Levi’s use of the ’Nek Minnit’ phrase and are compensating him accordingly.

To date this isn’t the case with the clothing store Supré. While they are using ‘Nek Minute’ (different spelling) there is case law to say that different spellings aren’t enough to avoid confusion. Surely Supré realise that before the release of the You Tube clip they would not have made money from the ‘Nek Minute’ t-shirts.

With regards to the filing of the trade mark application by Makan Distiller, Levi would have had the opportunity to file an opposition against the registration, should the mark be accepted by the Intellectual Property Office of New Zealand (IPONZ). Fortunately, it was announced on Fair Go last night that Makan Distilers were prepared to withdraw their application with IPONZ if Levi wished to apply for the ‘Nek Minnit’ trade mark himself.

In any situation it's always better to have some protection than not. If in doubt, having a chat to us will help you head in the right direction.

iPad woes in China – Apple claims 'I Paid!'

Wed, 29 Feb 2012 00:00:00 +1300

When Steve Jobs unveiled a new tablet computer in January 2010, the Wall Street Journal touted that “the last time there was this much excitement about a tablet, it had some commandments written on it.”

It seems that Apple’s iPad lived up to the hype. In less than nine months the iPad held almost 90% market share and generated $9.5 billion in revenue.

The iPad has become an iconic phenomenon. But in a strange twist, Apple has found itself embroiled in a legal stoush with a company that claims it owned rights to the iPad mark in China almost a decade earlier.

Proview Shenzhen, is the Chinese subsidiary of Proview Group, a producer of LCD screens. In 2001 it registered a figurative iPad mark in China which was used to unsuccessfully launch a tablet computer.

Fast forward to 2009, Apple by proxy of “secret agent” companies, sought to register and acquire rights to the iPad name throughout the world. One of these secret agent companies negotiated a £35,000 sale with Proview’s Taiwan subsidiary for the rights to Proview Group’s entire portfolio of iPad trade marks registered in ten different countries.

After the launch of the iPad, Apple was informed that the Chinese trade marks were in fact owned by Proview Shenzhen and that this company had neither attended the trade mark negotiations nor had it formally transferred its rights to Proview Taiwan. Apple countered that even though the agreement was executed only by Proview Taiwan, the transaction was entered into collectively by Proview Group.

On December 5 2011, the local Shenzhen court ruled in Proview’s favour. It agreed that Proview Shenzhen was not involved in the negotiations and had not authorised an assignment of the iPad marks on its behalf. The court further ruled that it was Apple’s responsibility to have conducted due diligence to determine correct ownership of the iPad marks in China. Its failure to do so resulted in a contract that was not legally binding.

Apple was found to have infringed Proview’s trade mark rights and that distributors should stop selling iPads in China. Local officials began removing iPads from third party retailers in Shenzhen in early February 2012.

Apple has appealed the lower Shenzhen court’s decision to the Guangdong High Court. The appeal is now pending. In the meantime, Proview has expanded its legal arsenal by:

- commencing infringement lawsuits against iPad retailers in 40 cities;

- seeking a customs ban on all of Apple’s iPad shipments in and out of China; and

- suing Apple for trade mark infringement and applying for an interlocutory injunction to stop Apple from selling iPads in Shanghai.

Last week on February 24, the Shanghai court denied Proview’s injunction and agreed to suspend the trade mark infringement case in Shanghai pending the appeal before the Guangdong High Court.

There are several messages from this case. One is that a purchaser must conduct comprehensive due diligence prior to purchasing a trade mark or other intellectual property. A simple error could cost you millions of dollars in legal costs and lost revenue.

Another is to remember that China is a first to file country: that means that the first party to apply for a trade mark will own it. Even if trademarked products are being manufactured but not sold in China, it is worth applying for trade marks to prevent another party from usurpng your trade mark rights.

A third is that in China border protection stops infringing exports as well as imports: that means that Proview could stop iPads being made in China from being exported if it were to assert its trade mark rights.

Volvo Ocean Race Auckland Stopover Declared Major Event

Tue, 28 Feb 2012 00:00:00 +1300

An Order has been made under the Major Events Management Act 2007 ("the Act") which declares the Volvo Ocean Race Auckland Stopover to be a "major event". Accordingly, all protections under the Act will apply to the event. The event, organised by Auckland Tourism, Events and Economic Development Limited, includes four distinct parts:

the end of leg four of the round-the-world yacht race (which started in Sanya, China, on 19 February 2012 and which is expected to finish in Auckland on or about 8 March 2012);
a pro-am yacht race;
an in-port yacht race; and
the start of leg five of the round-the-world yacht race (starting in Auckland on 18 March 2012 and expected to finish in Itajai, Brazil, on 4 April 2012).

The protection period which has been declared runs from 5 March 2012 to 1 April 2012. During this period "association protections" will be in place which will prevent entities from forming unauthorised associations between themselves (and their products or services) and the event (otherwise known as "ambush marketing").

At this stage no clean zones, clean transport routes or clean periods, which would restrict street trading and advertising during the protection period, have been declared.

Two major event emblems and a number of major event words and combinations of words have been declared. These can be found in the Schedule attached to the order at http://www.legislation.govt.nz/regulation/public/2012/0007/4.0/DLM4268137.html

If you would like further information in relation to this article please contact Sue Ironside.

This update was written with assistance from Chloe Barker.

Cancer Voices Australia v Myriad Genetics Inc in the Federal Court of Australia

Mon, 27 Feb 2012 00:00:00 +1300

A landmark case which could have major implications for the Australian biotechnology sector was launched last week in the Australian Federal Court against patent holder Myriad Genetics and its Australian licensee, Genetic Technologies.

The case relates to a patent on isolated sequences of the breast cancer susceptibility gene, and their use in diagnostic testing for the presence of the BRCA1 gene. The gene is associated with a significantly increased risk of breast and ovarian cancers in women.

This case will consider the question whether a naturally occurring biological material, when isolated in a purified form from its natural environment, is an “invention”. To date, no Australian court has considered whether isolated genes are patentable subject matter.

Cancer Voices Australia seek to completely prohibit gene patenting and are challenging the grant of Australian patent 686004 on the ground that relates merely to the discovery of the genetic mutation. Under Australian law, discoveries are not considered patentable subject matter.

A similar case was heard in the US in 2010. A New York District Court judge ruled that Myriad’s US patent was invalid as DNA in an “isolated” form, where the DNA sequences are “substantially separated from other cellular components which naturally accompany native human genome sequences”, showed no marked difference from the sequences found within the human body. The case was later appealed to the US Court of Appeals for the Federal Circuit, which overturned the decision of the New York District Court. At the present time, the US patent remains in force.

The basis of the patent system lies in providing a fixed-term monopoly over an invention, in exchange for public disclosure of the invention. This in turn encourages research and innovation and allows researchers to recover some of the costs of carrying out such research. If the validity of patents covering gene sequences is called into question, this has the potential to cause significant detriment to the biotechnology research sector. Companies and research institutes may have less desire and impetus to invest in research and development if they are not able to obtain patent protection for their inventions.

The biotechnology sector will no doubt be watching this case with interest.

Update on ACTA

Tue, 21 Feb 2012 00:00:00 +1300

The Anti-Counterfeiting Trade Agreement (ACTA) has courted controversy ever since its inception in 2007, when several developing and non-developing nations began to discuss the formation of an international intellectual property rights-oriented treaty.

The negotiations have faced significant opposition from civil rights campaigners, Internet users, ISPs and individuals. Many are concerned at the lack of transparency attributed to what has become a highly secretive negotiation process. Others fear that the ACTA champions the global implementation of draconian Internet IP enforcement measures, aimed at combating online piracy and copyright infringement but curtailing rights to free speech and expression.

The backlash has increased significantly in recent months now that the text of the ACTA has been finalised and several parties to the Agreement, New Zealand included, have forged ahead and signed the instrument. Today, protests are continuing to take place throughout Europe with a petition calling for the ACTA’s rejection having already attracted over 1.75 million signatures.

Cause for Kiwi concern? Apparently not. According to the New Zealand government and Ministry of Economic Development any changes to current legislation will be minimal and uncontroversial. New Zealand’s intellectual property regime is arguably already at a stage where it is relatively compliant with the ACTA’s provisions. This is especially so given the recent legislative changes addressing illegal online file-sharing and expanding the powers of the New Zealand Customs Service in relation to intercepting and detaining imported counterfeit goods.

Perhaps the most significant change will be a further extension to border protection measures under the Copyright Act 1994 and the Trade Marks Act 2002 whereby the powers of Customs officials in relation to detaining goods that infringe copyright and registered trade marks will have to be extended to cover exported as well as imported goods. This is good news for rights holders who, as a result, will be able to have Customs intercept or suspend the release of export shipments of counterfeit goods.

Additionally, the ACTA anticipates criminal procedures and penalties directed at those who wilfully import counterfeit labels and packaging (not just the infringing goods themselves). The Courts’ powers for delivery up and disposal of counterfeit labels and packaging will also have to be extended accordingly.

Finally, we should anticipate changes to how the Copyright Act currently deals with technological protection measures (TPMs) and copyright management information (CMI) for works protected by copyright. The ACTA aims to replicate the WIPO Copyright Treaty and WIPO Performers and Performances Treaty (WIPO Internet Treaties), neither of which New Zealand is currently a party to.

The ACTA uses the term “performances” when referring to TPMs and any copyright works in respect of which TPMs are installed. The same is true also for “performances” subjected to CMI interference. Eventually, the Copyright Act will need to be amended in a manner that treats “performances” as copyright works when applying TPMs or CMI.

Ultimately, it is worth remembering that a State’s signature does not constitute a binding treaty action. Further consultation and discussion – supported by a national interest analysis of all proposed legislative and regulatory changes – is needed before New Zealand decides to ratify and become a State Party to the ACTA.

With panic and paranoia still spreading through Europe, it is comforting to hear the ACTA being described as having “given birth to an ocean full of red-herrings”. For New Zealand at least, the ACTA simply signals a promising move towards greater international cooperation in combating trade in counterfeit goods and pirated copyright works. The proverbial shark appears to have lost its bite.

For more information, visit the Ministry of Economic Development's website.

This article was written by Ben Sullivan (ben.sullivan@baldwins.com)

The Pirate Bay takes to the high seas

Wed, 15 Feb 2012 00:00:00 +1300

“The Boat that Rocked” may be a comedy film, but its history resides in a serious and true story. In the 1960s, in the wake of government crackdowns on illegal radio broadcasting, radio pirates took to the high seas. By broadcasting from international waters, radio pirates at the time removed themselves from local jurisdictions and sanction. Even New Zealand had a pirate radio station, Radio Hauraki, which operated illegally from the Hauraki Gulf in the late 1960s.

Recently, the infamous torrent downloading website, The Pirate Bay, shifted domain from the global “.org” to Swedish “.se”. Its aim is similar to that of pirate radio, namely, to remove itself from the potential reach of (United States) authorities. In the same vein, many businesses, such as MegaUpload, have previously considered Hong Kong to be a relative safe-haven for setting up dubious company fronts and hosting file servers.

Despite years of widespread publicity, scrutiny and investigation, The Pirate Bay reportedly remains the 75^th most visited website in the world, with over 31 million users, 5 million registered users and more than 3.5 million torrent files. Indeed, the Pirate Bay prides itself as being the “galaxy’s most resilient BitTorrent site”, with a history that now spans almost a decade.

Recently, the Swedish Supreme Court rejected the opportunity of The Pirate Bay’s founders to appeal their case from the Court of Appeal. The current imprisonment sentences (ranging from 4 to 10 months) and damages awards (totalling NZ$8 million) will, therefore, stand.

This, in addition to the recent shutdown of MegaUpload and the arrest of its founder Kim Dotcom, has prompted torrent and file sharing websites to take precautionary measures and underground tactics. For instance, the identities of The Pirate Bay’s current operators are unknown. While some have reported that website is now run by the controversial religious group the “Missionary Church of Kopimism”, the group’s founder Isak Gerson denies any connection.

The Pirate Bay’s move to “.se” is by no means the end of the matter. A Dutch Court recently ordered two of the Netherlands’ primary Internet Service Providers (ISPs) to block all access to The Pirate Bay. While the ISPs have complied with the Court Order, they have also stated their intention to appeal the matter. At the same time, a proposal is before the Dutch Parliament to extent current copyright laws to fall in line with the Court Order. These legal changes follow the recent British saga involving BTnet and the Digital Economy Act 2010.

In Australia, the third biggest ISP, iiNet, has successfully defended claims from a group of Hollywood studios that it had authorised or enabled copyright infringement by allowing users to download copyrighted material. The final appeal judgment will be released in the coming months, although it appears that the ISP will be successful in defending its position.

In China, Hong Kong’s Commerce and Economic Development Bureau has pledged that it is willing to work with the US Federal Bureau of Investigation and that it will establish an electronic crime investigation centre later in 2012. It aims to better scrutinise digital content hosted within its jurisdiction.

In New Zealand, the Copyright (Infringing File Sharing) Amendment Act 2011 operates to make file sharing of copyright material illegal. While the Act has received a lukewarm reception from all parties involved (from rights holders to ISPs to file sharers), it is clear that many countries are looking at practical measures for the prevention of copyright infringement, particularly by digital means.

Has Australia illegally stripped the tobacco industry's IP rights with plain cigarette packaging?

Wed, 15 Feb 2012 00:00:00 +1300

Australia has taken a world first step in passing legislation mandating plain packaging of tobacco products.

As of December 1, 2012, all cigarettes, pipe tobacco and cigar products sold in Australia will be required to be in plain olive-brown packets with no branding, trade mark logos, colours, or promotional text. The name of the brand of cigarettes will be featured on the pack in a standard colour, position and font.

The controversial legislation has faced widespread opposition from cigarette companies and raises serious legal issues having essentially negated the intellectual property rights gained by an entire industry sector in highly valued trade marks and branding. The Australian intellectual property office estimates that there around 3,000 trademarks for tobacco and tobacco products.

Cigarette companies are arguing that the legislation is unconstitutional and inconsistent with Australian intellectual property obligations such as those imposed by World Trade Organisation treaties.

Australia’s commitments under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement provide that:

“The use of a trademark in the course of trade shall not be encumbered by special requirements, such as ... use in a manner detrimental to its capability to distinguish the goods."

Tobacco giant Philip Morris is one of the companies taking action against the legislation by filing a claim for compensation on the grounds that the legislation has been passed acquiring valuable brands and intellectual property without providing any form of compensation.

Whether the legislation actually results in the unconstitutional acquisition of property by the Australian government is highly debatable.

The legal argument against the law being unconstitutional is based on the proposition that even though it is unconstitutional for the government to acquire property, including intellectual property, without compensation, the government will not actually be taking trademark ownership away from cigarette companies.

Cigarette companies will still be entitled to use product names on the packaging, albeit in a standardised font and style.

While technically legal ownership may not be acquired, forcing tobacco companies to remove trade marks and other valuable intellectual property arguably has the same effect with any ownership rights in such intellectual property rendered valueless and nullified.

Australian health minister Nicola Roxon is confident in the legality of the legislation claiming the government has taken legal advice. Legal experts consider that any World Trade Organisation challenge will fail because intellectual property rights agreements give governments the right to take measures necessary to protect public health.

The fight over plain packaging is one which will be keenly watched by governments around the world particularly in New Zealand, Europe and Canada where similar plans to curtail branding of cigarette products are under consideration.

How successfully Australia is able to combat the legal issues and implement the legislation is likely to be highly determinative of whether equivalent legislation is pursued elsewhere.

This article was written with assistance from Katherine Wesolowski (katherine.wesolowski@baldwins.com).

New powers for NZ Customs in war on counterfeit products

Wed, 08 Feb 2012 00:00:00 +1300

In New Zealand, counterfeiting continues to be a problem, with New Zealand Customs regularly intercepting shipments of counterfeit and pirated goods destined for the New Zealand market. Under the Trade Marks Act 2002, it is a criminal offence to import or sell goods with falsely applied registered trade marks. A product is considered a counterfeit when a registered trade mark is applied to products without the permission of its owner. Under the Copyright Act 1994, pirated goods are goods made without the authority of the copyright owner.

Recent changes to the trade mark and copyright legislation, however, ramp up the government approach to counterfeit products. These amendments create the role of “enforcement officers” within New Zealand Customs, who are given wide reaching powers which allow them to investigate instances of counterfeiting and pirating, and conduct search and seizure operations as part of their investigations.

The amendments allow New Zealand Customs and the National Economic Unit of the Ministry of Economic Development the authority to investigate and prosecute the trade mark and copyright offences in addition to existing police powers. Previous to the amendments, counterfeiting was not high on the police priority list for prosecutions, with only isolated cases reaching the courts.

Under the amendments, the enforcement officers are able to seize counterfeit goods without a warrant if they reasonably believe those goods are relevant to investigating offences under the Trade Marks or Copyright Act. The enforcement officers also have search and seizure powers, which allow them to seize goods without a warrant if those goods are in a public place such as a store and they have reasonable grounds to believe they are evidence of or relevant to investigating offices under that legislation. Customs officers can ask for documents relating to the products and require persons to attend for questioning: refusal to comply is itself an offence. They can also apply for search warrants to seize goods or documents in other circumstances.

Before the amendments, counterfeit goods imported into New Zealand could only be seized permanently by New Zealand Customs if the importer consented to forfeit them, or if the owner of the trade mark launched court proceedings against the importer. Predominantly the cost of court proceedings relating to individual shipments would far exceed the value of the products and New Zealand Customs had no option but to release the counterfeit goods to the importer.

It is anticipated that New Zealand Customs will most likely use the new powers to focus on major repeat offenders and importers of commercial quantities of counterfeit goods. Civil actions can still be brought by trade mark owners against those who infringe their rights All intellectual property rights holders should institute and continue to maintain border protection notices with Customs as these allow Customs to intercept large numbers of counterfeit items on a regular basis.

The beginning of .xxx domain name disputes

Thu, 02 Feb 2012 00:00:00 +1300

In the months leading up to the introduction of .xxx sponsored top level domains, thousands of companies worldwide rushed to defensively register their .xxx domains and thereby protect their brand names. Some companies publicly criticised the new scheme, stating that cybersquatting and domain name disputes would certainly increase.

Since .xxx domain names became generally available for registration on 6 December 2011, at least five domain name complaints have been lodged with the official dispute resolution bodies.

The first complaint was filed with the World Intellectual Property Organization (WIPO) on 29 December 2011 by VIPINDIRIM, the company behind eCommerce giant, Markafoni (reportedly valued at US$200 million). It appears that the domain name markafoni.xxx was registered on 6 December 2011 by an Istanbul registrant.

More recently, Virgin Group Limited and Twentieth Century Fox have filed applications with the National Arbitration Forum (NAF) in an attempt to gain control of the domain names richardbranson.xxx and FoxStudios.xxx respectively. The domain name FoxStudios.xxx was at the time listed on the online store eBay for sale at US$1,975,000.

Other official complaints relate to Valero.xxx and Heb.xxx.

More generally, there have been companies who regret missing the opportunity to register their .xxx domain names but have yet to make an official complaint. A Californian resident purchased the domain name HuffingtonPost.xxx, preventing the American news agency Huffington Post from registration. The registrant has already stated his plans to sell the .xxx domain name.

The cybersquatters behind MSNBC.xxx and NBCNews.xxx have also stated their intent to make money from their registrations rather than to use them for adult entertainment purposes.

However, not all is lost for those faced with the issue of cybersquatting. Any person or body claiming to be the rightful owner of a trade mark may apply to one of the official dispute resolution bodies, such as WIPO or NAF. All buyers of .xxx domain names have had to agree to arbitration to resolve any such issues. While the system in theory works on a “first come, first serve” basis, trade mark and domain name laws generally support trade mark owners, and admonish cybersquatters, making it more difficult to make money from the sale of domain names.

If you would like more information or help with searching or registering .xxx domain names, please contact us. Baldwins offers a full range of domain name services, including WHOIS searches, strategy advice, registration and domain name complaints.

The not-so-sweet dispute over Brown Sugar

Wed, 01 Feb 2012 00:00:00 +1300

The recent dispute between the Taihape-based Brown Sugar Café and the Nelson-based House of Brown Sugar Café highlights how important trade marks are to small businesses.

The matter gained media coverage in September last year when Brown Sugar Café (along with its sister business of the same name in Otaki) threatened to take legal action against House of Brown Sugar for infringing its registered trade mark “Brown Sugar Cafe”. Legal proceedings were filed late last year and, ultimately, Brown Sugar Café prevailed when House of Brown Sugar agreed to rename itself as Strawberry Bakehouse.

The owners of Brown Sugar Café were, somewhat surprisingly, seen as bullies, while House of Brown Sugar incurred significant legal costs in defending the legal proceedings and the additional expense of rebranding when its owners finally agreed to change the café’s name.

What can we learn from this bitter tale?

First, as a small business (or indeed any business) it is imperative to ascertain whether your intended (or existing) branding may infringe a registered trade mark. [1] In essence, this means that your branding or signage cannot be:

identical to a registered trade mark in respect of the same goods or services;
similar to a registered trade mark in respect of the same or similar goods or services, such that use of the branding/signage “would be likely to deceive or cause confusion”[2] amongst members of the public.

Second, a registered trade mark can be a powerful tool, even for a small business. With its trade mark registered for 18 years, Brown Sugar Café has successfully protected the words “Brown Sugar” on previous occasions by requiring eateries using the words “Brown Sugar” in their trading names to remove them. However, as the Brown Sugar Café case demonstrates, care must be taken in the approach to enforcing trade mark rights, as bad press may permanently damage the very mark the business seeks to protect.

The lessons from the Brown Sugar Café also ring true in the case of Giltrap Prestige and the New Zealand Rugby Union (NZRU). During the Rugby World Cup 2011, the NZRU was labelled as a bully by the public and press after requiring Giltrap Prestige (a car dealership in Auckland) to remove its sign “Go the All Blacks”, because the sign infringed the NZRU’s “All Blacks” trademark. Regardless of the general public’s sentiment in this particular example, the long-term value to NZRU of owning the “All Blacks” trade mark is clearly immense.

[1] While outside the scope of this article, we note that there are other intellectual property rights that businesses should be aware of when branding, including the non-statutory protections for goodwill and the statutory protections provided against misleading and deceptive conduct under the Fair Trading Act 1986.

[2] Section 89 Trade Marks Act 2002.

Australian Personal Property Securities Register

Tue, 31 Jan 2012 00:00:00 +1300

The Personal Property Securities Act 2009 (Cth) (PPSA) introduces in Australia a national law that will affect secured financing transactions involving personal property, including most forms of intellectual property (IP). Anyone who is selling, purchasing or licensing IP assets in Australia or is involved in financing transactions where IP is a security should, therefore, evaluate their arrangements in light of the PPSA.

Like the New Zealand regime, the Australian PPSA provides for the creation and enforceability of security interests in personal property, the determination of priority between competing security interests or other types of interests in the same personal property, and the establishment of a publically searchable register of security interests called the Personal Property Security Register ("PPSR" ). Most forms of IP, such as registered trade marks, patents, copyright, registered designs and licences, are personal property over which a security interest may be registered. However, the definition does not include trade secrets or unregistered trade mark rights.

The two key concepts under the PPSA are "attachment" and "perfection".

"Attachment" relates to the creation of the security interest between the parties. "Perfection" governs competing priorities between parties with an interest in the same property as well as subsequent purchasers or lessees.

Relevant to intangible property assets like IP, perfection occurs when the security interest has been completed, and recorded on the PPSR. Once so perfected, the registered security interest defeats any unperfected security interests and, with a few exceptions, any later registrations over the same assets.

In addition, any subsequent purchaser or lessee is bound by the perfected security interest and deemed to have notice of it.

Under the new system, IP Australia's registers will no longer be legal securities registers. Instead, from 30 January 2012, mortgages and other security interests recorded on the Patents, Trade Marks and Designs Registers have no legal effect. Consequently, existing and new security interests over Patents, Trade Marks, Designs and Plant Breeder's Rights will need to be recorded on the PPSR in order to maintain their priority. Therefore, if you are purchasing IP assets or using IP assets to secure obligations, the PPSR will need to be consulted and your interest registered.

It is important to note that security interests already recorded on IP Australia's registers will not be automatically migrated to the PPSR. Fortunately, secured parties that have interests recorded on IP Australia's registers prior to 30 January 2012 will have a transitional period of 24 months to 30 January 2014 in which to record these interests on the PPSR and maintain their priority. Nevertheless, interests may continue to be recorded on IP Australia's registers for other purposes. Secured parties may record their interests on the Patents, Trade Marks and Designs Registers to allow them to receive notifications, be given an opportunity to be heard, or given the opportunity to make submissions.

The introduction of the PPSR in Australia has many implications for business. As a result, it is critical that businesses understand how to correctly utilise the legislation in respect of their IP assets.

This article was written with assistance from Shiv Narayan (shiv.narayan@baldwins.com)

Megaupload shut down by US authorities

Thu, 26 Jan 2012 00:00:00 +1300

On 19 January, United States authorities shut down Megaupload.com, one of the world’s largest digital storage and file sharing sites, charging several people, including a number of New Zealand residents, with federal crimes including racketeering, money laundering and criminal copyright violations. In the wake of the shutdown, similar service providers, such as FileSonic, have nervously disabled all services allowing users to download each others’ files.

Megaupload offered an online storage, ‘digital locker’ or ‘cloud’ service where users uploaded digital content to servers controlled by Megaupload. So long as internet access is available, users have access to the stored content, enabling them to easily share that content between devices or with other parties. Everyone who has lost digital photographs or who has been forced into emailing themselves large files in order to share information with another computer or device will understand how useful this cloud technology can be when used for legitimate purposes.

Other mainstream providers such as Google Inc., Apple Inc. and Amazon.com, Inc. offer very similar services. So what is all the fuss and publicity about?

Essentially the fuss concerns revenue. Various estimates place the cost to United States copyright holders at more than $500 million in revenue lost through pirated material stored and shared through Megaupload.com (note that this figure is arguably an overestimate when one considers various economic principles such as deadweight loss). Yet the supporters of Megaupload and similar platform providers note that in addition to the exceedingly useful storage and sharing facilities, this technology provides the means for artists to derive income from their own material without going through the traditional industry middlemen. Both ‘sides’ have legitimate concerns and legitimate rights that need to be addressed.

From an intellectual property perspective, the central issues in this case will most likely be the extent to which Megaupload and associated persons (such as Kim Dotcom) can be held culpable for their own conduct in providing the ability to share content and, perhaps more importantly, for the allegedly infringing conduct of others. One very interesting aspect of the case is that federal prosecutors appear likely to argue that by offering a ‘reward’ to users that uploaded the most popular content to the site, Megaupload induced piracy. However, that argument presupposes that the most popular content will only be infringing content.

We cannot forget the legitimate users of Megaupload’s services who have lost access to their content for what may be a considerable time. From a technical perspective, this case highlights issues such as the importance of jurisdiction and the security of data stored offshore. If you are a legitimate user of cloud computing platforms, to what extent are you protected should your content suddenly become inaccessible? Where will you enforce any rights if your platform provider is located overseas and stores your information at multiple sites around the world? If you are a platform provider, to what extent can you protect yourself from liability to your users should their data be lost or accessed by unauthorised parties?

Copyright cases such as the Megaupload saga have also prompted some discussion of US laws. In particular, critics and media are focusing on the Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA), which have now entered a phase of redrafting, as well as various countries’ extradition treaties with the US.

In relation to the latter, 23 year old Richard O'Dwyer has recently been arrested in the UK while his website, TV Shack, is being investigated by US authorities. US copyright owners are calling for this case to be the first in which a British citizen is extradited from his own country to the US for a copyright offence. Unlike Megaupload, TV Shack simply provides links to other websites where users can access films and TV programs illegally. TV Shack does not host any files and appears to do little more than act as a search engine in the same way that Google and Yahoo do. Parallels have, therefore, been drawn between suing the hosts of such search engines and suing ISPs for providing the internet connection by which copyright infringements take place: see for example the BT Net and iiNet sagas.

Collectively, these cases illustrate that copyright owners, particularly major players from the US, will at times be given local courts’ leave to “sue the messenger”. However, the question of what level of wrongdoing, encouragement, knowledge of offending, or simply inadvertence is required by the service provider remains unanswered.

What's all the fuss over NUCKIN FUTS?

Wed, 25 Jan 2012 00:00:00 +1300

The modern world has become so clogged with sensory stimulation that businesses are resorting to shock advertising tactics or “shockvertising” to differentiate their products. Polarising vignettes capture the attention of buyers, evoke reactions and can equate to big profits. For example, the tongue-in-cheek slogans which are now synonymous with [New Zealand beer brand] Tui’s “Yeah Right” campaign has heightened awareness of the brand and help drive sales. It is, therefore, unsurprising that businesses are increasingly turning to controversial branding for memorability.

The Australian Intellectual Property office has recently drawn media attention to “offensive” trade marks after it accepted the trade mark NUCKIN FUTS for a snack containing nuts for registration. Section 42 of the Australian Trade Marks Act requires the Registrar to reject any mark which is regarded as shameful, offensive or shocking to the ordinary person. Following an assessment as to how the “ordinary person” with neither thick nor very thin skin would perceive the mark, NUCKIN FUTS was initially rejected as an “obvious spoonerism” and therefore shameful and inappropriate.

In arguing against the objection, the lawyer for the applicant argued that the words “f---“ and “f---ing” had over the passage of time become “part of the universal discourse of the ordinary Australian”. As a result, while some people may find NUCKIN FUTS distasteful, the brand could no longer be considered offensive. This argument was accepted by the Examiner on the condition that the products were not marketed to children.

The New Zealand Trade Marks Act contains a similar provision which requires the Commissioner not to register a trade mark if the Commissioner considers that its use or registration would be likely to offend a significant section of the community, including Maori. In practice, the assessment of what the hypothetical ordinary person would find “offensive” has been applied in a rather haphazard fashion. The Intellectual Property Office has rejected the mark BULLSHIT as offensive while determining the marks CNUT; FCUK and WNAK to be acceptable.

The rationale for these provisions is to prevent the registration of symbols that were used to promote ideologies which threatened the interests of society and the state. Arguably modern day consumers are less vulnerable to offence, more discerning of shockvertising, and more marketing savvy. If a brand is truly offensive, such as the recent “Libra gets girls” advertisement featuring a transgender model, it doesn’t take long for the storm of public criticism to blow the project to obscurity.

Therefore, the NUCKIN FUTS case marks an apt occasion to consider the appropriateness of these offense provisions. Do we still require trade mark examiners to act as gatekeepers of what brands should be considered socially offensive or can we gauge our own hense of sumour?

DC Comics fails to prevent registration of superhero character

Tue, 17 Jan 2012 00:00:00 +1300

DC Comics has failed in its attempt to oppose a trade mark application for a super hero character in relation to financial services in class 36.

In 2009 a New Zealand company, Superloans Limited, applied for a cape and tight wearing muscular super hero character with a shield like device with a $ sign in it on his chest.

DC Comics opposed based on the likeness to the Superman character and a variety of related trade marks.

The Assistant Commissioner considered four main issues: which marks had a reputation in New Zealand, whether the Superloans trade mark was similar to any DC Comics marks, whether the services were similar and whether deception and confusion was likely to result.

When considering which trade marks had a reputation in New Zealand, the Assistant Commissioner found that the stylised word SUPERMAN and the shield logo had a reputation. She did not make a finding in respect of the reputation of the Superman character itself.

The Assistant Commissioner found the Superloans mark would be perceived as being visually, phonetically and conceptually dissimilar and that it would not be perceived as being from the same stable as the SUPERMAN character or any of the DC Comics superhero characters. She pointed to various differences such as the cartoonish and comical nature of the Superloans mark, the fact the Superloan’s character is holding cash in his hand, and has a $ sign on his chest.

In respect of the services, the Assistant Commissioner found that DC Comic’s services relate to entertaining the public, whereas Superloans services are the provision of loans.

Unusually for a trade mark opposition, DC Comics pleaded copyright infringement. The Assistant Commissioner ruled that Superloans may be been generally influenced by superhero characters but had not copied the SUPERMAN character.

Overall, the opposition was unsuccessful, and pending an appeal, the Superloans superhero character can be registered.

New Zealand's Patent Office closed on 10 February 2012

Fri, 23 Dec 2011 00:00:00 +1300

The Intellectual Property Office of New Zealand (IPONZ) has announced that the Patent Office will be closed on Friday 10 February 2012.

The Office will close for technical work which relates to the new case management system for Trade Marks and Designs. This system goes live on Monday 13 February 2012.

The closure does not include the Plant Variety Rights Office, which will remain open on February the 10th.

For more details, visit http://www.iponz.govt.nz/cms/iponz/latest-news/patent-office-closed-10-february-2012

WIPO presents new licence option

Tue, 20 Dec 2011 00:00:00 +1300

One of the major challenges facing inventors, particularly those with little or no funding, is how to commercialise their invention. Auction sites such as Ocean Tomo, which holds its annual auction in April every year, are one option, but not many patents make the list. Another is identifying those companies operating in the relevant field and making cold calls: getting a foot in the door can be hard work and ultimately soul destroying for all but the most passionate.

Now there is to be a new option, available to all applicants for Patent Cooperation Treaty (PCT) international patent applications from the beginning of 2012. The World Intellectual Property Organisation (known as WIPO) is to allow all applicants who want to do so to list applications as being available for licence on the WIPO Patentscope website. Applicants can notify their interest in licensing either by submitting an extra form to WIPO or by simply notifying WIPO by letter. It will also be possible to include licensing terms.

This option is available from the date of filing the international application until the expiry of the 30 month period at which it is necessary for the PCT applications to be translated into patents in individual jurisdictions.

The option is available immediately for any new applications from the beginning of 2012. Existing applicants may also access it, but only after their application has been processed and sufficient details are available to match the request and the patent application.

General availability of .xxx sponsored top level domains

Wed, 14 Dec 2011 00:00:00 +1300

On 6 December 2011, .xxx sponsored top level domains became generally available for registration.

The .xxx scheme, approved by ICANN and administered by ICM Registry LLC, passed through three early registration phases. These earlier phases allowed for pre-registration by those who own adult industry trade marks, and blocking of certain domain names by those who own trade marks outside of the adult industry.

Latest developments

New Zealand companies that have recently blocked their trade marks from registration include TradeMe, the All Blacks and Air New Zealand. In the US, several Universities have taken similar measures to protect their names, including the University of Kansas, Michigan, Pittsburgh, Indiana, and Penn State.

A reported 80,000 domain names were taken off the market prior to general availability and now display the message “This domain has been reserved from registration.” This means that others will be prevented from using the blocked .xxx domain names and thereby tarnishing any good will or damaging reputation.

ICM has also removed over 4,000 domain names relating to public figures, such as obama.xxx.

For those who missed out on the opportunity to block certain .xxx domain names from registration, domains are now available for public registration. ICM has reported almost one million daily visits to the buy.xxx website, which shows where and how .xxx domain names can be purchased.

Advice for businesses

Businesses outside of the adult industry should consider whether others may wish to misuse their brand or company names to attract users to a .xxx website. For instance, it has been reported that domain names such as nzpolice.xxx remain open for registration and potential misuse. On the other hand, the domain name bnz.xxx has reportedly been purchased, and not by the Bank of New Zealand.

Registering a .xxx domain may now be the only way to ensure that someone else does not use your brand, company, or personal name in an inappropriate way. Registration costs can be as low as NZ$100 per year, and businesses and public figures looking to protect their names should weigh the small annual cost against the risk of potential misuse.

Those within the adult industry should also consider the advantages of moving from other domain names, such as .com or .net, to .xxx. The new .xxx domain names allow for clear identification that one’s website contains adult content and give a level of legitimacy to the adult industry as a whole. All .xxx domain names are also scanned daily for viruses, making them comparatively safer and more attractive to potential users.

If you would like more information or help with registering a .xxx domain name, please contact us. Baldwins offers a full range of domain name services, including WHOIS searches, strategy advice, registration and domain name complaints.

TPP and the exclusion of computer programs from patentability

Wed, 14 Dec 2011 00:00:00 +1300

Paul Matthews, the Chief Executive of the New Zealand Computer Society, has expressed concern in the National Business Review over the possible reconsideration of the exclusion of computer programs from patent protection. As we reported in previous articles, it was always possible that this proposed legislation, whether intentionally or not, could be used as a bargaining chip in the Trans-Pacific Partnership (TPP) negotiations. Those in support of the software exclusion appear concerned this may now be a real possibility.

It goes without saying that any agreement involves compromises, and we can only guess at whether this is actually being used to secure more favourable terms around Pharmac, the dairy industry or something else.

If the rumours of the change in policy do ring true, this does not mean that New Zealand would have to revert to the status quo of essentially all forms of technology being considered patentable. The US has limitations on what forms of invention are patentable and this includes limitations on which software inventions are patentable. It seems unlikely that the US could reasonably ask New Zealand to protect inventions not patentable in the US and a similar scope of exclusion could be enacted in New Zealand by adding just two words to the proposed legislation, as such. This wording has been used elsewhere to distinguish between software inventions that merely manipulate data and are not patentable, and those that address some form of technical problem and are patentable.

Those against software patents may not be pacified by such a change but as seen in some courts of Europe, with an exclusion along these lines being open to interpretation, it is possible to effect a broad exclusion even if it is not enacted as such. However, in the absence of economic evidence, we question the need for a broad exclusion of software from patent protection. As stated by Paul Matthews, software, IT services and high-tech manufacturing revenues have grown to $5 billion and are flourishing under the existing regime with software patentable, is there the need for change?

It isn’t all over: the full impact of the recent FA Premier League case is not yet clear...

Tue, 06 Dec 2011 00:00:00 +1300

Copyright in Live Broadcast: Football Association Premier League v QC Leisure and Karen Murphy v Media Protection Service Ltd

The Court of Justice of the European Union (CJEU) has recently given its much anticipated ruling in the joined cases of Football Association Premier League v QC Leisure and Karen Murphy v Media Protection Services Limited, referred to it by the High Court of England and Wales. The ruling relates to a number of aspects of IP rights, as well as the interplay between IP rights, freedom to provide services and competition law.

Factual matrix

The Football Association Premier League Ltd (FAPL) owns copyright in the live transmission by satellite of football matches and grants exclusive territorial broadcast licences for the matches, which gives licensees the right to exploit them financially.

The principal licensees in the UK are BSkyB and ESPN; NetMed Hellas, a Greek satellite broadcaster, holds a licence too.

Licensees are required to prevent their broadcasts from being viewed outside the exclusive territory through encryption and restrictions on the sale and use of decoders outside their territory. This is because the rights are not of equal value: BSkyB and ESPN, for instance, charge their subscribers considerably more than their European counterparts. In the UK, this restriction is underpinned by the provisions of the Copyright Designs and Patents Act 1988 (CDPA), which create criminal sanctions for use of decoder equipment to access broadcast signals without paying the appropriate fee.

Aided by intermediaries, some English pubs acquired Greek decoder cards and used them to show Premier League matches in the UK at a significantly lower cost than if they had paid BSkyB or ESPN.

The holder of broadcast rights in the UK claimed copyright over the telecast. It argued that the terms of the licence agreement prohibited satellite service providers from selling decoders outside their exclusive territory.

Main findings

The CJEU said that the sale and use of Greek decoding devices cannot be prohibited on the basis of the Conditional Access Directive (CAD). A foreign decoder will not be treated as an “illicit” device for the purposes of the CAD where it has been manufactured and marketed with the authorisation of the service provider, even if false information has been used to obtain it.

On the issue of the nature of IP rights in the broadcast, the Court held that the broadcasting of live matches from the country of origin – in this case, Greece – is an act of exploitation subject to IP rights and, according to the Satellite Broadcasting Directive, the authorisation for the broadcast by satellite must be granted for the country of origin. As NetMed Hellas had such an authorisation, the broadcast was lawful.

However, the CJEU ruled that the satellite broadcast in other countries that originates from Greece is not subject to IP rights. Even though EU law does not preclude a Member State from conferring protection on sporting events by virtue of protection of IP, Premier League matches are not eligible for protection under EU law. They cannot be classified as works within the meaning of the EU Copyright Directive, as they are not an intellectual creation of an author.

Despite the fact that the reproduction of the satellite decoder signal amounts to an act of reproduction within the meaning of Article 2 of the Copyright Directive, a defence to the reproduction right in Article 5(1) of that Directive applies. The act of reproduction—in addition to being temporary, transient or incidental, an integral part of a technological process, and a lawful use of a work—has no independent economic significance because it is incapable of generating an additional economic advantage beyond that derived from the reception of the broadcast. It is sufficient that the broadcast from Greece is authorised – no further authorisation for private reception is required.

While sporting events themselves cannot be protected under EU copyright law, copyright can exist in the opening and closing video sequence, the Premier League Anthem and logo, and pre-selected match highlights. Therefore, the act of broadcasting using a foreign decoder would amount to the communication to the public and therefore is an infringement.

The Court held that the broadcasting of the live matches in a pub constitutes an act of “communication to the public” under Article 3(1) of the Copyright Directive, and requires authorisation by FAPL.

The Court also found that provisions of the exclusive territorial licences and the provisions of the CDPA impose restrictions inconsistent with one of the fundamental principles of the functioning of the EU – the freedom to provide services and the free movement of those services. Those restrictions cannot be justified on the basis of protecting any interest FAPL may have in the IP content of the broadcast. Any legitimate interest FAPL may have in such a content – including receiving appropriate remuneration – does not extend to charging a premium for absolute territorial exclusivity of exploitation of live football matches.

Implications

Even though the Court’s conclusion that no authorisation is required for the broadcast that originates in one country in other countries can be viewed as an expansion of the exhaustion doctrine, whereby the first unrestricted sale of a patented item exhausts the patentee's control over that item, the CJEU carefully avoided the issue of exhaustion of rights as it would have very serious consequences for the broadcasting business.

In the European context, the ruling does not affect the ability of sports rights holders such as FAPL to grant exclusive licenses for the transmission of live football matches under EU law. However, it considerably limits the ability of such rights holder to invoke national legislation or contractual clauses concerning territorial limitations, which prevent the importation of the decoder equipment required to view the satellite transmissions. Nonetheless, rights holders will be able to prevent unauthorised use of the part of the broadcast content which is subject to copyright.

However, it is potentially open to right holders to sustain a degree of protection through limiting the licensees’ broadcasting rights to a certain language version, as well as applying territorial limitation clauses to prevent active sales of decoders, as opposed to absolute restrictions which also cover passive sales.

In addition, the judgement may be applicable to the broadcast by satellite of all copyright works. Further, it may be relevant not only to the use of decoders, but to all restrictions designed to grant absolute territorial protection.

The scope of the judgement is, to some extent, limited due to the fact that it relies on the specifics of the Satellite Broadcasting Directive and the country of origin principle integral to it – both in terms of its relevance to other broadcasting modes where the country of origin doctrine principle is not at play (e.g. online broadcasting), and applicability outside the EU. Nonetheless, New Zealand courts are likely to take the judgement into consideration when deciding similar cases.

The full impact of the ruling will become clear when the High Court gives its judgment, applying the CJEU decision to the facts of the case.

Written with assistance from Anna Parfjonova.

Ability to record licences in New Zealand removed

Fri, 18 Nov 2011 00:00:00 +1300

As of 16 September 2011 (when the New Zealand Trade Marks Amendment Act 2011 came into force), the ability to record licences has been removed, and all recorded licensees under the old provisions have been revoked.

What this means is that the rights of licensees to bring action against infringers is determined solely by the terms of the agreement (under the old provisions only a recorded licensee could bring an action, if permitted by the terms of the agreement). In the circumstances all trade mark licensees and licensors should review their licence agreements to ensure that this recent change to New Zealand trade mark law does not have implications for on going licence arrangements, particularly the right to bring action against infringers.

What New Zealand businesses need to know about our new copyright legislation

Fri, 18 Nov 2011 00:00:00 +1300

The Copyright (Infringing File Sharing) Amendment Act 2011, which came into effect on 1 September 2011, has already started to bear fruit and employers need to be aware that they could be affected. Internet Service Providers (ISPs) Telecom, Orcon, TelstraClear and confirmed this month that they had received their first notices, the majority of which related to alleged download of songs by Rihanna and Lady Gaga. All of the notices appear to be from the Recording Industry Association of New Zealand (Rianz). TelestraClear and Orcon received further notices on 9 November.

The new law requires that the recipient ISPs then serve notices on their account holders. After a third warning notice, right holders can seek damages of up to $15,000 from the account holder. It is possible some of these account holders could be businesses if it is their staff which are responsible for the downloads.

What is the Copyright (Infringing File Sharing) Amendment Act?

The legislation is aimed at combating copyright infringement over the internet through peer-to-peer file sharing services such as BitTorrent. File sharing is defined as a process whereby material is uploaded via or downloaded from the Internet, using an application or network that enables the simultaneous sharing of materials between several users which may, but need not, occur at the same time.

Therefore, downloading music in breach of copyright from websites which do not operate on a file sharing basis would not infringe the Act.

What do employers need to know?

Businesses should remember that under the provisions of the Act, it is the holder of the offending internet account who is liable – even though the account holder may not necessarily have engaged in illegal downloading. The liability is strict, the implication of which is that employers (as account holders) can be liable for the activities of their employees in breach of the Act.

While the Act does give the alleged infringer the right to challenge an infringement notice, the circumstances under which this can be done are rather limited. The alleged infringer would have to demonstrate that the party seeking damages does not in fact own copyright to the work in question; that the information recorded in the infringement notice is not correct; or that the notice was not issued in accordance with the procedure outlined in the Act.

The alleged infringer can only challenge a notice within 14 days of the date of the notice .

Employers should therefore take the “prevention is the best cure” approach by ensuring that their staff are aware of the implications of breaching the Act and by installing software which blocks access to peer-to-peer sharing websites.

For further details on the new law, see previous updates on the Baldwins website:

http://www.baldwins.com/new-zealand-file-sharing-legislation-passed/

http://www.baldwins.com/update-on-the-copyright-infringing-file-sharing-amendment-act-2011/

This article was written with assistance from Anna Parfjonova.

New Order Declares Two Upcoming Triathlon Events Major Events

Fri, 18 Nov 2011 00:00:00 +1300

Two upcoming triathlon events have been declared as major events under the Major Events Management Act 2007 (MEMA) in New Zealand.

The ITU Triathlon World Cup 2011 and the Triathlon World Championship Grand Final 2012, which will both be held in Auckland, were named in an Order that was passed in late October. The Order comes into force on 18 November 2011.

The Cup will take place on 20 November, while the Championship event will be a week-long festival next October and is anticipated to attract over 100,000 spectators and an international television audience of 25 million.

It is expected that more than $7 million will be pumped into the Auckland economy as a result of these events.

The Order identifies Triathlon World Champs 2012 Limited as the major event organiser for these events.

The Order also declares the “Auckland Triathlon ITU World Cup” and “Auckland Triathlon ITU World Championship Grand Final” to be major event emblems, and words associated with the events, or their combination, major event words. The protection periods for the major event emblems and words are from 18 November 2011 until 19 December 2011 for the World Cup, and from 1 January 2012 until 19 November 2012 for the Grand Final.

The MEMA aims to protect major event organisers and sponsors from illegitimate profiteering by parties who are not official sponsors of the major event – the so-called “ambush marketing tactics”. This is achieved by preventing such parties from advertising their goods and services, by suggesting that they are associated with a major event in some manner (ambush marketing by association) or attracting the attention of people attending the event (ambush marketing by intrusion).

While it is understandable that businesses will want to capitalise on the lucrative activities associated with such high calibre events, they should be aware of the provisions of the MEMA, and, in particular, ensure that they do not use the major event emblems and words in such a way as to suggest that there is an association between either them or their goods or services, and the events. A breach of the relevant section of the Act can be a criminal offence and carries a maximum fine of $150,000.

There are various exceptions to the Act, however. For instance, using a major event emblem that comprises the whole or part of the trade name of a business would not infringe the Act, and neither would an existing registered trade mark.

This article was written with assistance from Anna Parfjonova.

Baldwins takes top spot at 2011 Asia IP Awards

Tue, 15 Nov 2011 00:00:00 +1300

Baldwins has been named the best New Zealand patent firm at the 2011 Asia IP Awards.

The firm won the New Zealand Patent category, which was announced at an awards gala event in Manila in the Philippines on 11 November.

"We're thrilled to be acknowledged for our work in the patents area. It's certainly an honour for us to be recognised. I think it represents the fact we have a team of world-class patent attorneys who offer our clients a real depth of expertise across a range of disciplines," said Shelley Rowland, Head of the firm's Patent Department.

Baldwins was up against four other New Zealand firms in the Patent category and was also shortlisted in the New Zealand Trade Mark category.

Partners Philip Thoreau and Wes Jones attended the awards ceremony and accepted the New Zealand Patent award on Baldwins' behalf.

Australia and New Zealand to form Joint Body for Regulating Therapeutic Goods

Mon, 14 Nov 2011 00:00:00 +1300

Australia and New Zealand are to join forces to form the Australia New Zealand Therapeutic Products Agency (ANZTPA), which will regulate medicines, medical devices and medical interventions (such as cellular therapy). The new Trans-Tasman agency should provide greater health benefits for consumers, reduce regulatory costs for industry and improve efficiency for both governments.

Currently medicines and medical devices are regulated in New Zealand by Medsafe and by the Therapeutic Goods Agency (TGA) in Australia. In Australia, the TGA must approve medicines and medical devices sold in Australia. In New Zealand, however, Medsafe must only be notified of new medical devices going on sale: medical devices are not subject to a full approval process as in Australia. Once the ANZTPA is established, full approval will be required for medical devices in New Zealand as well as Australia.

In 2003, a treaty was signed by the Australian and New Zealand governments which envisaged a common regulatory framework for all therapeutic goods. However, the joint scheme did not proceed because New Zealand was not able to pass the required legislation. In June 2011, Prime Ministers John Key and Julia Gillard announced that the joint scheme would now proceed, although New Zealand will establish its own system for the regulation of natural health products.

In July 2011, Medsafe and the TGA began sharing resources, expertise and information in the first step of a five-year, three-stage plan to establish the ANZTPA. Products will still need to meet the regulations of each country until a common regulatory scheme is put in place. To this end, the Medicines Amendment Bill was introduced into Parliament on 13 October 2011.

The Bill removes strict and detailed approval requirements from the Medicines Act 1981 and allows new requirements to be prescribed by the Medicines Regulations 1984. While this allows for greater flexibility in updating approval requirements, there are concerns regarding lack of consultation with the public and industry, and that standards of approval will be dictated from across the Tasman – the ANZTPA will be based in Canberra.

The first reading of the Bill will have to wait until the next Parliament is in session in 2012, assuming it is amongst those bills carried over by the incoming government after the election.

This article was written by Claire McInnes. Claire is a patent attorney based in our Wellington office.

New Bill for Natural Health Products in New Zealand

Mon, 07 Nov 2011 00:00:00 +1300

The Natural Health Products Bill received support from both sides of the House after its first reading in Parliament recently. The Bill is also widely supported by the natural products industry in New Zealand.

The current regime is generally considered to be out of date and confusing due to its piecemeal structure – products for ingestion are covered by the Dietary Supplements Regulations 1985, while other natural health products are covered by the Medicines Act 1981.

The Natural Health Products Bill covers any product that contains only natural health product ingredients and is intended (by the manufacturer or importer) to be administered to a human being to bring about a health benefit.

A natural health product will not include food, medicines or controlled drugs, products to be administered by injection or application to the eye or ear, or products for the treatment of serious illnesses, ie. where self-diagnosis or self-management are not considered acceptable.

The purpose of the Bill is to ensure that natural health products are safe and provide the health benefits they claim. To achieve this, the Bill establishes an authority that will:

maintain a database of allowable and unallowable ingredients;
prescribe labelling requirements;
require notification (registration) for all natural health products sold in NZ;
prescribe manufacturing standards;
require the recall of a product;
require manufacturers to obtain a licence to manufacture; and
conduct safety assessments on propose new ingredients.

Additionally, the Authority will provide New Zealand manufacturers that export goods with an export certificate for their products if they obtain a licence to manufacture and file a product notification. This will aid exporters in complying with requirements in other countries, although it will not be compulsory for exporters not supplying the New Zealand market to have a manufacturing licence or to file product notifications.

While generally seen as a positive step for consumer protection and the natural products industry in New Zealand, there will of course be compliance costs and liabilities:

there will be application fees and annual fees for product notifications and manufacturing licences will have to be renewed every three years;
for manufacturing without a licence or selling a product without a notification, there will be a fine of up to $250,000 for a body corporate and up to $50,000 for an individual; and
for obtaining a notification by deception or knowingly endangering the health of the public, there will be a fine of up to $500,000 for a body corporate and up to $100,000 and five years imprisonment for an individual.

The Bill will go before the Health Select Committee next term and may be in force next year.

This article was written by Claire McInnes. Claire is a patent attorney based in our Wellington office.

Update on the Copyright (Infringing File Sharing) Amendment Act 2011

Fri, 04 Nov 2011 00:00:00 +1300

On 1 September 2011, the provisions of the Copyright (Infringing File Sharing) Amendment Act came in to force.

The proposed amendments to the Copyright Act brought about a rush of publicity and controversy in the months prior to their enactment. Internet users were concerned about infringement, businesses about vicarious liability, and Internet Protocol Address Providers (IPAPs) about additional obligations.

While the first two months of the new regime passed without incident, it was revealed on 1 November 2011 that at least 75 complaints had been sent from the Recording Industry Association of New Zealand (RIANZ) to various IPAPs. As these complaints must meet specific criteria under the Act, it is not yet clear how many will result in infringement notices being sent to alleged offenders.

Is this just the beginning? Nearly 33,000 infringement notices were issued in the first 12 months of the South Korean equivalent legislation, and 650,000 over a similar period in France. It is unlikely that the New Zealand numbers will reach this level, despite reports in 2010 that New Zealanders were committing over 160,000 file sharing infringements per month.

It is possible that the Act has already played an educational role. In 2009, Sweden introduced similar laws, which resulted in a 30% downturn in internet traffic. Some New Zealand IPAPs reported as much as a 10% downturn in the week following 1 September 2011, although the cause for this is uncertain and a long-term trend has not been reported. It is possible that, given the Act’s publicity, more internet users are aware of the illegality of their past behaviour.

Internet users intent on continuing their file sharing behaviour may have taken defensive measures, for example, by obtaining a proxy IP address or otherwise masking their true New Zealand IP address. There is currently no way of telling whether, or to what extent, this has occurred. Needless to say, such users are still in breach of the Copyright Act and are simply more difficult to detect.

The intentions of copyright owners, other than those of RIANZ, are unclear. The New Zealand Federation Against Copyright Theft (NZFACT), who acts on behalf of movie studios, has yet to decide whether to issue complaints under the Act. Other groups have suggested that the fee prescribed by the Regulations ($25 plus GST per complaint issued) is too high. While the fee does not appear particularly arduous, and barely covers the administrative costs borne by IPAPs, consider the vast number of notices that will need to be issued before one particular internet user has been issued with his or her third notice and is therefore liable for damages.

Copyright owners are also likely to be spending other costs in relation to the regime – for example, monitoring costs. Companies like MarkMonitor provide services to monitor file sharing, at a cost. It is uncertain whether copyright owners have engaged monitoring services or whether they are monitoring file sharing activity themselves.

Meanwhile, the New Zealand Government has also increased anti-counterfeiting powers, with the Trade Marks (International Treaties and Enforcement) Amendment Act coming into force on 7 October 2011. It remains to be seen what practical effect these amendments will have.

Brussels Court of Appeal orders release of .eu domain names registered by cybersquatter

Tue, 18 Oct 2011 00:00:00 +1300

The Brussels Court of Appeal has ruled in favour of EURid, the .eu European domain name registry, in a case involving the registration of nearly 9000 .eu domain names by a cybersquatter. Pursuant to an order made by the Court the domain names will be released on 24 and 25 October 2011 and will be available on a "first come, first served" basis.

A Ms Zheng had registered the domain names during 2006 and was found by the Court to have done so in bad faith. EURid had issued proceedings to terminate the registrations on the grounds that they were in breach of the .eu domain name registration regulations.

The Court of Appeal issued its decision on 21 September 2011 allowing the terminations. The domain names are currently being held in quarantine by EURid for 40 days prior to their release in accordance with the registry's usual practices.

A list of the domain names to be released is available on the registry's website at http://www.eurid.eu/en/eu-domain-names/zheng-case-revoked-names

Backorders can be placed for .eu domain names. A backorder attempts to gain priority over a domain name which is becoming available and is recommended should you have an interest in any of the revoked domain names. There is however no guarantee that such a backorder will be successful.

.eu domain names are available for registration for organisations, businesses or individuals based in the European Union. For further information please contact Rosemary Wallis.

Written with assistance from Chloe Barker.

Ambush marketing kicks-off in New Zealand

Thu, 13 Oct 2011 00:00:00 +1300

Those of you who are familiar with the game of rugby will be aware that New Zealand is currently hosting the Rugby World Cup 2011 (RWC). Travellers from around the world have been treated to a spectacle of sporting endeavour held in magical surroundings.

In recent years, intense interest has surrounded the outrageous activities of so-called ambush marketers at various worldwide tournaments, with the RWC in New Zealand being no exception. Instances of alleged ambush marketing have been reported even before the finals kick-off.

The Mermaid Bar, an adult entertainment venue in central Wellington, was warned it could face a $15,000 fine for instructing its staff to hand out flyers on the concourses of the Wellington Regional Stadium, within the tournament’s “clean zone” while wearing a miniature version of the ALL BLACK uniform. As an aside, Wellington Regional Stadium is usually called Westpac Stadium, but naming rights and signage have been removed during the tournament’s “clean period”.

UK company OPRO faced an allegation of ambush marketing after Samoan player Alesana Tuilagi, was fined $10,000 for wearing an OPRO branded mouthguard. Days later Alesana’s brother Manu, who plays for England, received the same fine for the same offence. OPRO Chief Executive Dr Anthony Lovat categorically denied an ambush marketing attempt, stating the brothers’ use was coincidental.

New Zealand helicopter company Helipro was warned after one of its helicopters, and associated HELIPRO branding, was sighted above the Wellington Regional Stadium allegedly holding passengers taking photographs during one of the pool matches.

Also in the spotlight has been use, or rather misuse, of the registered trade mark ALL BLACKS and the lengths the New Zealand Rugby Union (NZRU) will go to protect its brand. The NZRU has taken exception to:

use of the catch cry “Go the All Blacks” on a luxury car dealership’s street frontage that just happened to be on one of the main access points to Eden Park,
use of the phrase “ALL BLACK RACK” and accompanying NZRU registered fern devices by well-known New Zealand fashion designer Trelise Cooper in her Wellington store, and
a sale for “All Black Lingerie” on IM Lingerie’s store front. .

As the atmosphere reaches fever pitch and the world's focus intensifies, brand owners should remain vigilant. Perhaps a surprise attack is just around the corner.

Baldwins shortlisted for two awards in 2011 Asia IP Awards

Tue, 11 Oct 2011 00:00:00 +1300

Baldwins Intellectual Property has been named on the shortlist for the 2011 Asia IP Awards in the following award categories:

New Zealand Patents
New Zealand Trademarks.

Five firms have been shortlisted for each category. The winners will be announced at a gala event at the InterContinental Manila, Philippines, on November 11, 2011.

Asia IP Awards is an annual awards event organised by Asia IP, an intellectual property magazine focusing on Asia and the Pacific.

Baldwins shortlisted for two awards in 2011 Asia IP Awards

Tue, 11 Oct 2011 00:00:00 +1300

Baldwins Intellectual Property has been named on the shortlist for the 2011 Asia IP Awards in the following award categories:

New Zealand Patents
New Zealand Trademarks.

Five firms have been shortlisted for each category. The winners will be announced at a gala event at the InterContinental Manila, Philippines, on November 11, 2011.

Asia IP Awards is an annual awards event organised by Asia IP, an intellectual property magazine focusing on Asia and the Pacific.

NZ Law Awards names Baldwins as a finalist in this year's awards

Fri, 07 Oct 2011 00:00:00 +1300

Baldwins has been nominated in the 2011 New Zealand Law Awards.

The firm is delighted to be named a finalist in the Canon New Zealand Specialist Intellectual Property Law award category.

The awards, which are in their seventh year, celebrate and reward excellence in client service.

Voting is open until Tuesday 11 October 2011. To vote, you can register here or, if you have already registered, you can vote here. When registering, you will need to specify whether you have instructed a law firm in the last 12 months - this will determine the categories you are eligible to vote for.

The winner will be named on 10 November at a black tie event in Auckland.

New Zealand Government increases anti-counterfeiting powers

Fri, 07 Oct 2011 00:00:00 +1300

Counterfeiting is a serious problem in most countries around the world, New Zealand included. It doesn’t just happen in relation to luxury goods but also in relation to goods which can affect health and safety such as medicines, food and electrical goods. Up until today, counterfeiting could only be tackled by way of civil action by trade mark or copyright owners, or by the Police. Police are under-resourced in this area, and despite criminal provisions being introduced into the Trade Marks and Copyright Acts so that Police could prosecute people who import and sell counterfeits, there have been relatively few prosecutions.

The Trade Marks (International Treaties and Enforcement) Amendment Act came into force on 7 October 2011. The Amendment Act gives the National Enforcement Unit and the New Zealand Customs Service additional powers which previously resided only with the Police.

Both the National Enforcement Unit and the New Zealand Customs Service now have the ability to execute warrants and to prosecute offenders in relation to counterfeiting. The Amendment Act also provides the ability for the National Enforcement Unit to undertake search and seizure of counterfeits without a search warrant. Customs will also have the ability to non-warranted powers to seize counterfeits when counterfeits come within the control of Customs at the border.

It will also be an offence punishable by imprisonment for up to 6 months or a fine of up to $10,000 for an individual, or a fine of up to $50,000 for a body corporate, to deliberately withhold information requested by Customs or to refuse to be interviewed.

The National Enforcement Unit and the New Zealand Customs Service will focus on importers of commercial quantities of counterfeit goods, recidivist offenders and cases where there is a serious question of community health and safety.

Civil actions can still be brought and the Government is encouraging trade mark and copyright owners to protect their rights.

Update: IPONZ online filing facility now functioning

Thu, 29 Sep 2011 00:00:00 +1300

The Intellectual Property Office of New Zealand (IPONZ) has restored functionality to their online filing facility.

Update: IPONZ online filing closed until 12am NZDT, 29 September 2011

Mon, 26 Sep 2011 00:00:00 +1300

Due to a major hardware failure, the online filing facility at the Intellectual Property Office of New Zealand (IPONZ) is currently unavailable.

Searching and business transaction services on the IPONZ website will continue to be unavailable until 12am New Zealand Daylight Time (NZDT) on Thursday 29 September 2011.

Read the outage notice on the Ministry of Economic Development here.

If you have any concerns, please talk to your Baldwins contact person for assistance.

Big Blak Saks obtains injunction against competitor in passing off action

Mon, 19 Sep 2011 00:00:00 +1200

Big Blak Saks New Zealand Limited makes black rubbish bags. Its competitor D&A Marketing Limited does too. In a successful application for an interim injunction before the High Court at Auckland, Big Blak Saks alleged that D&A copied its four best selling rubbish bag lines to take advantage of Big Blak Sak’s goodwill.

Passing Off

While both a breach of the Fair Trading Act 1986 and passing off were alleged by Big Blak Saks, by agreement the application before Justice Williams concentrated on passing off as determinative of the issue under both causes of action.

In order to found a claim in passing off Big Blak Saks was required to show that:

it had developed goodwill in the get up of its rubbish sacks such that Big Blak Saks is recognised by consumers as the origin of those goods;

D&A had misrepresented its own rubbish sacks to the extent that the public would be confused into believing that D&A’s rubbish sacks originated from Big Blak Saks;

it had or was likely to incur damage by reason of that confusion.

Goodwill

D&A argued that the features of Big Blak Sak’s bags were all so mundane, common and functional that they could not create goodwill.

Justice Williams, however, disagreed holding that a combination of non-distinctive features can result in a distinctive get-up overall. Together these mundane elements produced a look that was quite distinct from any other product on the market. Over the 30 years that Big Blak Saks’ bags had been sold without any alteration to the get-up, these elements had become distinctive of Big Blak Saks.

Similarity

When the products were compared, Williams J concluded that with the exception of one particular bag, which was an entirely different colour, it was at least arguable that a purchaser seeing D&A’s products in isolation would believe they were bags produced by Big Blak Saks. Even when intermingled, it would not be obvious that the bags came from different suppliers.

When you look at the bags compared side by side in the figure below (D&A’s product at the top and Big Blak Saks bags at the bottom), it is not difficult to see why Williams J came to the conclusion he did as to the similarity of the products.

Damage

Big Blak Saks’ arguments in this regard concentrated on likely damage to its goodwill and reputation on the basis of the inferior quality of the D&A product and on trade diversion.

While the tests were less than comprehensive, Big Blak Saks was able to show through independent testing of the products that it was at least arguable that the D&A products were made of weaker plastic and were more easily punctured than the equivalent Big Blak Saks rubbish bags. Williams J accepted, therefore, that a consumer who had mistakenly purchased the D&A bags believing them to be produced by Big Blak Saks would find them to be inferior in quality with consequential damage to Big Blak Saks reputation.

While limited to sales data from only five supermarkets, the evidence as to loss of sales was sufficient to establish that Big Blak Saks’ market position is likely to be diluted if D&A was allowed to continue to sell the allegedly infringing bags.

Lesson to be learned?

It is easy to bemoan the expense of enforcing intellectual property rights. However, in the fast moving consumer goods market where purchasing decisions are made at speed and there is a bewildering array of competitor products, the reputation you hold in your brand is one of the key elements in making sure consumers make repeat purchases of your products.

The success of Big Blak Saks in defending against an encroachment on its rights, even where the individual elements that went into its trade dress get-up were less than distinctive, is a salutary lesson in this regard. In the FMCG market you have to know where your intellectual property lies, be willing to invest time and money into developing a good reputation in that intellectual property and then be willing to step up like Big Blak Saks and protect it.

It is a simple case of protect it…or lose it.

IP Australia introduces TM CHECK

Mon, 12 Sep 2011 00:00:00 +1200

Not all business names are created equal.

Your trade mark can be your business name, but your business name may not be available as your trade mark. Business names are not automatically trade marks, and may in fact already belong to someone else.

To help avoid the costly, time consuming trap of choosing a business name and then discovering you aren’t able to own the rights to use that name, IP Australia have developed TM CHECK.

TM CHECK is a simplified search for trade marks that have been applied for or registered with IP Australia. It is intended to provide the user with an indication only of what is registered but will return a maximum of 10 results.

Click here to access TM CHECK.

There is currently no equivalent provided through the New Zealand Companies Office.

If you have concerns that your business name is similar to another's trade mark, or would like advice as to how to register your business name as a trade mark, please contact us.

Big Business Bill creates trade mark rush

Thu, 08 Sep 2011 00:00:00 +1200

Baldwins is advising kiwi businesses with a strong export focus to protect their intellectual property before new legislation making trade mark registration here easier for overseas companies comes into force.

The new legislation, The Trade Marks Amendment Bill, which has passed through parliament and is awaiting royal assent, brings New Zealand in line with many countries around the world through the Madrid Protocol. The Protocol allows international organisations to register a trade mark in any country which uses the Protocol in one single procedure.

Philip Thoreau, partner at Baldwins Intellectual Property, says that kiwi businesses need to be prepared and should protect their brands before the new legislation comes into force, which is expected to be mid-2012.

“New Zealand companies need to take proactive steps in response to the new legislation and ensure they have protected their trade marks by registration before the legislation comes into force.”

“We are expecting there will be a significant increase in the number of trade mark applications filed in New Zealand by offshore competitors who are already members of the Madrid Protocol. At the touch of a button, large international corporates could severely inhibit future economic growth, from local startup companies to established exporters, blocking access to key markets,” he says.

Other countries in the Madrid Protocol are many of our major trading partners including Australia, China, USA, the United Kingdom, Japan, Switzerland, Korea, Singapore, the Russia Federation, and members of the European Union.

For further information click here.

Brand advertising: an overview and update on recent changes

Thu, 01 Sep 2011 00:00:00 +1200

Advertising is an integral part of building brand goodwill; it informs consumers, distinguishes products and services, and ultimately increases sales.

Advertising in New Zealand has to comply with the Advertising Standards Authority (ASA) Codes and relevant laws, such as the Fair Trading Act 1986 (FTA), the Medicines Act 1981 (MA) and the Medicines Amendment Regulations 2011. The Medicines New Zealand (MNZ) Code of Practice is also applicable.

The primary function of the ASA is to self-regulate advertising in New Zealand and introduce, monitor and amend the Advertising Codes of Practice.

There are 15 codes covering a variety of areas, including advertising directed at children, advertising food, gaming, liquor, and therapeutic and weight management products and services. They contain the basic principles by which advertisements are judged.

Complaints about advertisements can be made by members of the public and are heard by the Advertising Standards Complaints Board (ASCB). They can be about any aspect of an advert so long as a prima facie case for a complaint exists. If the complaint is accepted, the ASA will write to the advertiser, the advertising agency and the media with a copy of the complaint, requesting a response within 14 days. The Board will then make the decision whether to uphold the complaint. Advertisers have a right of appeal to the Advertising Standards Complaints Appeal Board (ASCAB).

Advertisers are not obliged to comply with the codes by law but have volunarily agreed to abide by them. If a complainant applies to the Advertising Standards Complaints Board, the complainant cannot also issue a court proceeding in relation to the same complaint. A complainant can therefore find this to be a cost effective method of resolving an advertising dispute.

If an advertisement is deemed to breach a code, the media organisation will remove it. Therefore, while avoiding court action, the advertiser may have to write-off the costs of an advertisement.

The advertiser may also be exposed to negative publicity, as all ASCB and ASCAB decisions are released to the media and available on the ASA website. In addition, there are legal expenses associated with defending an advert before the ASA.

There has been a rising number of complaints in recent years, reaching a peak in 2006 when 1557 complaints were received (compared to 679 the year before). It has remained steadily high since then, with 1164 complaints made last year. The top 3 products complained about in 2010 were consumer products, liquor and therapeutic and health and beauty products, with 141, 114 and 105 complaints respectively.

Liquor advertising witnessed the sharpest increase in complaints compared to 2009, which was likely to have been, at least to an extent, due to the introduction of the Code for the Naming, Labelling, Packaging and Promotion of Liquor. It came into force on 1 October 2009 and aimed to address the regulatory gap left by the Code for Advertising Liquor.

The Code for Advertising Liquor, which came into force on 1 September 2003, addressed advertising in all media but did not cover non-advertising forms of promotions, such as merchandising, packaging, product names, promotions and sponsorship.

Part of the ASA self-regulatory practice is the provision of copy advice: pre-vetting systems are in place for liquor (the Liquor Advertising Pre-Vetting System and the Liquor Promotions Pre-Vetting System) and therapeutic (the Therapeutic Advertising Pre-Vetting System) advertising.

Companies wishing to place adverts in the media are advised to seek copy advice, as it minimises the risk of withdrawal sanctions being taken by the ASA following a complaint. The high number of complaints relating to liquor and therapeutic advertising, however, indicates that companies are yet to make full use of these procedures.

In addition to the codes concerning advertising therapeutic goods and services, companies should also be aware of advertising provisions of the recent Medicines Amendment Regulations 2011.

The regulations, pursuant to the MA, came into force on 1 August 2011 and contain amendments to the Medicines Regulations 1984 and the Medicines (Standing Order) Regulations 2002.

Regulation 8 covers advertisements directed at consumers and, compared to the regulation it replaces, is more specific to different categories of medicines. It stipulates what must be included in every advertisement for medicines in four categories:

Prescription medicines;
Restriction medicines (can be sold or supplied only by a pharmacist);
Pharmacy-only or general sale medicines;
Medicines supplied by mail order, direct marketing or via the internet.

One of the requirements under subclause 1(e) is that an advertisement for a prescription medicine must contain a statement that the medicine has risks and benefits.

In relation to this, it should be noted that the MNZ Code of Practice – the latest edition (http://www.medicinesnz.co.nz/assets/2010-09-28-RMI-COP-Edition-15-Final.pdf) was published in October 2010 and became effective in January 2011 – also applies. It states that the information on the risks and benefits of the product contained in advertisements needs to be “balanced”.

A statement must be clearly printed or clearly spoken, or both.

The mandatory requirements do not apply to advertisements that do not refer to a therapeutic purpose, advertisements located at the point of sale and positioned immediately above, below or next to the medicine, labels, and price lists.

Regulation 11 contains provisions relating to what every advertisement for medicines and medical devices for health care professionals must and must not include. Its provisions relating to medicines distinguish between two broad types of adverts: those that enable the practitioner to reach a prescribed decision, and those that do not and are limited to certain messages.

Adverts for medicines falling into the first category must satisfy a long list of requirements – for instance, include the name and quantity of each active ingredient and a statement of appropriate precautions, any distribution restriction and contraindications, and must not include, among other things, “an unsubstantiated comparison with other medicines”.

Advertisers should also remember that the MNZ code prohibits direct product comparisons in advertising of prescription medicines.

Adverts for medicines falling into the second category must only satisfy some of these requirements, namely, contain the classification of the medicine, the name of each active ingredient, a statement of authorised uses of the medicine and appropriate precautions.

Section 59 of the MA still applies, and, in addition to the above requirements, any medical advertisement must contain the name and address of the person or business on whose behalf the advertisement is published; in the case of a body corporate, the address can be provided as the name of the place where the company has its registered office.

The newly inserted Regulation 58A relates to substances that are not medicines or related products for the purposes of the Act. Such substances include anti-dandruff hair products, anti-acne skin care products and barrier cream products. Thus, prior to taking any action, businesses should check whether their products are covered by Regulation 58A.

Medsafe is expected to publish guidelines which will include all the current requirements in one document in due course.

Brand owners should also keep in mind that advertising must comply with the Fair Trading Act. The Act prohibits conduct that is misleading or deceptive. Traders must not make misleading representations about the quality, origin, quantity, type or condition of goods or services. Omissions – failing to disclose information, which would create a false representation – are also covered.

Finally, on 20 June it was announced that the New Zealand and Australian Governments have agreed to proceed with a joint scheme for the regulation of therapeutic goods.

The joint scheme will be administered by a single regulatory agency, the Australia New Zealand Therapeutic Product Agency (ANZTPA), which will absorb the current national regulators – New Zealand's Medsafe and Australia's Therapeutic Goods Administration.

A three-stage approach over a five year period has been adopted to achieve the establishment of the ANZTPA. The first stage, which envisions the two regulators engaging in the process of sharing information and data, has already begun. The rules governing advertising of therapeutic medicine are therefore likely to change once the ANZTPA is in place.

Article written with assistance from Anna Parfjonova.

Updated RWC 2011 Major Events Management Act 2007 Guide Now Available

Wed, 31 Aug 2011 00:00:00 +1200

The Ministry of Economic Development has released an updated and expanded version of its “Rugby World Cup 2011 in New Zealand – A Guide to the Major Events Management Act 2007”. The guide is available on the Ministry’s website: http://www.med.govt.nz/upload/70086/MEMAGuide.pdf

One of the main aims of the Major Events Management Act 2007 (“the Act”) is to prevent the unauthorised association of goods, services, brands or providers with major events (“ambush marketing”), such as the Rugby World Cup 2011.

The main alterations relate to the intrusion protections (advertising within declared clean zones and transport routes). This is largely due to the fact that the clean zones and transport routes for the tournament have now been publicly gazetted.

The guide gives general information about clean zones, clean transport routes and clean periods, as well as exemptions which relate to these intrusion protections.

The Ministry has also given illustrations of what it deems to be acceptable and unacceptable behaviour under the Act. For example:

Any established, permanent signage on an existing business within a clean zone or clean transport route is acceptable.
Wearing branded clothing within clean zones or clean transport routes is acceptable, but it is not acceptable to do so in a co-ordinated effort with others with the intention of ambush marketing.
Street trading is not allowed within the clean zones or clean transport routes (except by RWC 2011 licensees).
Branded vehicles parked or travelling within clean zones or clean transport routes with the intention of attracting attention are prohibited unless going about their ordinary business, and also banned are airborne traffic such as blimps, skywriting and aircraft towing signs.
Distributing promotional flyers and product giveaways within clean zones and clean transport routes is also prohibited even if they do not create an association with the event.
Advertising of a nature which is outside a firm’s ordinary business activities both within a clean zone and from places outside the clean zone which are clearly visible from inside the clean zone is not allowed. The guide points out that both the advertisers and those accepting money from the advertisers for the placement of the advertisements will breach the Act.
Advertising of a nature which is outside a firm’s ordinary business activities along clean transport routes is not permitted.

While the issue of whether conduct breaches the Act is ultimately a matter for determination by the courts, the guide does give some pointers to the issues likely to provoke a response from those administering the event.

The guide has maps and descriptions of the clean zones and transport routes, as well as the declared clean periods, for the locations where RWC 2011 events will be held: Northland Events Centre, North Harbour Stadium, Eden Park, Waikato Stadium, Rotorua International Stadium, McLean Park, Stadium Taranaki, Arena Manawatu, Wellington Regional Stadium, Trafalgar Park, Otago Stadium and Rugby Park.

For further queries please contact Rosemary Wallis or Chloe Barker.

.XXX Domains

Wed, 17 Aug 2011 00:00:00 +1200

A sponsored top level domain (sTLD) has recently been approved by ICANN, intended for sites which contain explicit materials. The .xxx domain is to be used on a voluntary basis. The sponsoring organisation behind the sTDL is the International Foundation for Online Responsibility ("the Sponsored Community"), which fosters the idea that .xxx domains will facilitate the identification and blocking of such sites to prevent viewing by minors. Rather than filtering content - an often haphazard approach to preventing viewing of certain internet content - the .xxx domain would allow the entire .xxx sTDL to be blocked. Opponents argue that as the use of the .xxx domain is voluntary, explicit material will still be available throughout the internet.

From a registration perspective, unless there is reason for a party to believe that their name or brand may be registered as a .xxx domain and used by a third party in order to display offensive material, this cyber development is unlikely to be an issue. It is however possible to "block" your registered trade mark from being used in a .xxx domain name. The domain name will then resolve to a plain page which states that the domain name has been reserved.

Registrations will occur in four tranches:

Sunrise A: Those who own an adult industry trade mark and become members of the Sponsored Community and wish to register a .xxx domain name, or those who own existing global top level domains (gTDLs) or country code top level domains (ccTDLs) and who wish to register the same domain name as a .xxx domain name (7 September 2011 for a period of 30 days).
Sunrise B: Those who own a trade mark outside the adult industry and wish to block use of their trade mark with .xxx domain names (Also run from 7 September 2011 for a period of 30 days).
Landrush: From 24 October 2011 for 10 days those who are members of the Sponsored Community can register domains.
General availability: From 6 December 2011 the .xxx domains will become generally available.
Sunrise A applications will have priority over the Sunrise B applications.

If you would like to discuss further the possibility of registering or blocking a .xxx domain name, please contact us.

Article written with assistance by Chloe Barker.

Re-Compute - Patentability of Software in New Zealand Clarified, Again

Tue, 26 Jul 2011 00:00:00 +1200

Following widespread criticism of the draft guidelines put forward earlier in the year, the Ministry of Economic Development (MED) has released an Explanatory Note to clarify how the proposed exclusion from patentability of software inventions should be implemented when the New Zealand Patents Bill is finally enacted. Revised examination guidelines will be released in due course, most likely based on the Explanatory Note, provided this is more favourably received than the earlier guidelines.

The MED has maintained that the UK's Aerotel test will be used to assess the patentability of computer-related inventions, but in modified form. The first three steps of (i) properly construing the claim, (ii) identifying the actual contribution and (iii) asking whether the actual contribution falls solely within the excluded subject-matter field remain unchanged. However, step (iv) of whether the actual or alleged contribution is technical in nature is not to be used because there is considered to be no "technical requirement" under New Zealand law.

The reasoning behind the removal of step (iv) appears flawed, based on there being no explicit requirement for an invention to be technical under UK law and in the New Zealand Patents Bill but not considering in any detail why the step is there. The MED leaps to the conclusion that there is no basis for the fourth step under New Zealand law, skipping over the fact that by its definition, one would assume an "invention" to be somewhat technical in nature. Further, the UK Patents Act requires an invention to be capable of industrial application and New Zealand law requires an invention to be a manner of new manufacture, again pointing to a technical requirement although admittedly not explicitly using the word "technical".

Why remove the fourth step? Surely the requirement that the contribution is technical would seem appropriate

The proposed exclusion in New Zealand is different to that in force in the UK. Under UK law, only inventions that relate to a computer program as such are excluded whereas the exclusion in the New Zealand Patents Bill extends to all programs for computers. The "as such" wording means that programs for computers can be patentable in the UK if the invention does not relate solely to a computer program, but not in New Zealand. The exclusion in New Zealand was intended to be broader and the re-hashing of the Aerotel test attempts to remedy this.

Step (iv) of the Aerotel test was seen by the MED as a means for applicants to obtain patents for inventions which are intended to be excluded under New Zealand law. Essentially, step (iv) can be used to save an invention from the exclusion, even if it fails step (iii), by identifying whether the actual contribution is technical.

Consider the following example provided by the MED at the end of the Note relating to a program that improves the operation of a computer:

- A method of improving the operation of a computer by providing a way of indexing Dynamic Link Library (DLL) functions so as to ensure that the computer will continue to operate reliably after changes are made to the library.

The invention is a computer program with no interaction with anything outside of the computer. It is therefore excluded according to step (iii) but could potentially be saved under UK law (provided the invention was new and non-obvious) since while the invention is a computer program, the contribution is technical in nature - the operation of the computer is more reliable. This would not be possible under the proposed New Zealand legislation, no patent protection would be available and an innovator would have to rely on copyright. But at what cost? Copyright is a much narrower form of protection, it does not protect the underlying functionality of a computer program. For some software innovations, it may be the concept that is important, not how the program is coded, particularly where the innovation is relatively simple in hindsight easy to encode after the concept is publicly available. Copyright protection can therefore be meaningless.

It is accepted that the analysis in the test is somewhat contrived but it is difficult to see a way around it. Consider for the previous example if we had arrived at the invention being an improved machine at the end of step (iii) of Aerotel - would the invention be patentable? Bear in mind that the MED makes it clear in the Note that when assessing patentability, it is the substance of an invention which is important and not the precise claim wording and so is this a fair conclusion? The answer is a resounding no according to the MED, the consideration of the substance of an invention is seemingly purely for excluding inventions that may be saved by clever wording, rather than providing a more pragmatic basis for assessment of patentability.

Does this really help third parties assessing whether they infringe a patent or those making innovations that do qualify for patent protection as "embedded software"?

Consider the further example in the Explanatory Note, software that improves the operation of an electric motor:

- An electronically commutated electric motor where protection against fault currents is provided by using the width of the motor flyback pulses to control the current flowing in the motor windings. In the preferred embodiment, the pulse width data from the motor is fed to a program running on a microprocessor, the program’s output being used to control the motor current.

The motor itself is not new, it simply acts differently when controlled using the software. According to the proposed legislation, the software itself would not be directly protectable, only claims to the motor in combination with a microprocessor adapted to execute the coding and the steps of the method would be protectable.

Does the required claim wording not muddy what the contribution is and what is protectable? Many third parties will no doubt see a claim to a motor and assume that they cannot sell or make motors. Would it not be clearer if patents were more specificially directed to the actual new development (i.e., the software), rather than a piece of equipment that may run the software?

Further, consider who infringes such claims. Does a party that copies the software? Not directly. Should the copier be directly accountable or should it be the manufacturer of the motor or a device including the motor? A method claim may seem to remedy this but then the only direct infringers may be the end users, generally not a viable target for enforcing a patent. Consequently, enforcement of patents may prove to be more difficult and costly.

Where to from here?

Those involved in ICT will understand the difficulty in categorising software innovations into two boxes - patentable and non-patentable developments - but the somewhat simplistic approach taken by the Select Committee that proposed the exclusion has added to the problem. Excluding all programs for computers from patentability with the proviso that "embedded software" should remain patentable is difficult to implement and practitioners around the world will no doubt have baulked at the prospect of a re-running of the debate that a software invention may be patentable merely because it is hard-encoded. The breadth of what constitutes software and how it contributes to our everyday lives appears to have been missed but this is not surprising in view of the limited debate surrounding the exclusion and the absence of any economic evidence to support it.

The Explanatory Note does provide improved clarity over the earlier draft guidelines but to be fair, the guidelines set a low target. It is clear that, if the proposals in the Explanatory Note are adopted, a hard line will be taken with the exclusion from patentability applying where there is uncertainty. This will be a stark change from the existing position which provides one of the most favourable regimes for those seeking patent protection for software developments, surprising as New Zealand tries to push towards more of a knowledge-based economy. We remind software innovators that under the existing transitional provisions, patent applications filed before the new legislation is enacted will be assessed under the existing criteria and it would be worthwhile filing patent applications into New Zealand, including national phase applications, before the change is adopted. It is difficult to assess how quickly the legislation will be enacted, particularly in view of an election in November, but a 12 month timeframe seems reasonable.

While the Explanatory Note is clearer, there is still the underlying issue that since the proposed legislation excludes all software, any guidelines or explanatory notes will be discarded when patentability is assessed by the courts. Only time will tell.

There is no official mechanism for commenting on the Note and the deadline for subsmissions on the draft guidelines passed some time ago. However, as evidenced by the changes to the three strikes provisions for cutting off internet access for those illegally downloading copyright material, the government may yet be forced to re-consider their stance, particularly if pressure is exerted as part of the TPP negotiations. Was it pure coincidence that the guidelines were released while John Key was visiting the US?

The MED has maintained that the UK's Aerotel test will be used to assess the patentability of computer-related inventions, but in modified form. The first three steps of (i) properly construing the claim, (ii) identifying the actual contribution and (iii) asking whether the actual contribution falls solely within the excluded subject-matter field remain unchanged. However, step (iv) of whether the actual or alleged contribution is technical in nature is not to be used because there is considered to be no "technical requirement" under New Zealand law.

The reasoning behind the removal of step (iv) appears flawed, based on there being no explicit requirement for an invention to be technical under UK law and in the New Zealand Patents Bill but not considering in any detail why the step is there. The MED leaps to the conclusion that there is no basis for the fourth step under New Zealand law, skipping over the fact that by its definition, one would assume an "invention" to be somewhat technical in nature. Further, the UK Patents Act requires an invention to be capable of industrial application and New Zealand law requires an invention to be a manner of new manufacture, again pointing to a technical requirement although admittedly not explicitly using the word "technical".

Why remove the fourth step? Surely the requirement that the contribution is technical would seem appropriate

The proposed exclusion in New Zealand is different to that in force in the UK. Under UK law, only inventions that relate to a computer program as such are excluded whereas the exclusion in the New Zealand Patents Bill extends to all programs for computers. The "as such" wording means that programs for computers can be patentable in the UK if the invention does not relate solely to a computer program, but not in New Zealand. The exclusion in New Zealand was intended to be broader and the re-hashing of the Aerotel test attempts to remedy this.

Step (iv) of the Aerotel test was seen by the MED as a means for applicants to obtain patents for inventions which are intended to be excluded under New Zealand law. Essentially, step (iv) can be used to save an invention from the exclusion, even if it fails step (iii), by identifying whether the actual contribution is technical.

Consider the following example provided by the MED at the end of the Note relating to a program that improves the operation of a computer:

It is accepted that the analysis in the test is somewhat contrived but it is difficult to see a way around it. Consider for the previous example if we had arrived at the invention being an improved machine at the end of step (iii) of Aerotel - would the invention be patentable? Bear in mind that the MED makes it clear in the Note that when assessing patentability, it is the substance of an invention which is important and not the precise claim wording and so is this a fair conclusion? The answer is a resounding no according to the MED, the consideration of the substance of an invention is seemingly purely for excluding inventions that may be saved by clever wording, rather than providing a more pragmatic basis for assessment of patentability.

Does this really help third parties assessing whether they infringe a patent or those making innovations that do qualify for patent protection as "embedded software"?

Consider the further example in the Explanatory Note, software that improves the operation of an electric motor:

Where to from here?

Those involved in ICT will understand the difficulty in categorising software innovations into two boxes - patentable and non-patentable developments - but the somewhat simplistic approach taken by the Select Commitee that proposed the exclusion has added to the problem. Excluding all programs for computers from patentability with the proviso that "embedded software" should remain patentable is difficult to implement and practitioners around the world will no doubt have baulked at the prospect of a re-running of the debate that a software invention may be patentable merely because it is hard-encoded. The breadth of what constitutes software and how it contributes to our everyday lives appears to have been missed but this is not surprising in view of the limited debate surrounding the exclusion and the absence of any economic evidence to support it.

The reasoning behind the removal of step (iv) appears flawed, based on there being no explicit requirement for an invention to be technical under UK law and in the New Zealand Patents Bill but not considering in any detail why the step is there. The MED leaps to the conclusion that there is no basis for the fourth step under New Zealand law, skipping over the fact that by its definition, one would assume an "invention" to be somewhat technical in nature. Further, the UK Patents Act requires an invention to be capable of industrial application and New Zealand law requires an invention to be a manner of new manufacture, again pointing to a technical requirement although admittedly not explicitly using the word "technical".

Why remove the fourth step? Surely the requirement that the contribution is technical would seem appropriate

Consider the following example provided by the MED at the end of the Note relating to a program that improves the operation of a computer:

It is accepted that the analysis in the test is somewhat contrived but it is difficult to see a way around it. Consider for the previous example if we had arrived at the invention being an improved machine at the end of step (iii) of Aerotel - would the invention be patentable? Bear in mind that the MED makes it clear in the Note that when assessing patentability, it is the substance of an invention which is important and not the precise claim wording and so is this a fair conclusion? The answer is a resounding no according to the MED, the consideration of the substance of an invention is seemingly purely for excluding inventions that may be saved by clever wording, rather than providing a more pragmatic basis for assessment of patentability.

Does this really help third parties assessing whether they infringe a patent or those making innovations that do qualify for patent protection as "embedded software"?

Consider the further example in the Explanatory Note, software that improves the operation of an electric motor:

Where to from here?

Those involved in ICT will understand the difficulty in categorising software innovations into two boxes - patentable and non-patentable developments - but the somewhat simplistic approach taken by the Select Commitee that proposed the exclusion has added to the problem. Excluding all programs for computers from patentability with the proviso that "embedded software" should remain patentable is difficult to implement and practitioners around the world will no doubt have baulked at the prospect of a re-running of the debate that a software invention may be patentable merely because it is hard-encoded. The breadth of what constitutes software and how it contributes to our everyday lives appears to have been missed but this is not surprising in view of the limited debate surrounding the exclusion and the absence of any economic evidence to support it.

the US?

Vanuatu: New Trade Mark Law

Tue, 26 Jul 2011 00:00:00 +1200

Vanuatu has new trade mark laws. Trademarks Act 2003 (“the Act”) finally came into effect on 8 February 2011 in Vanuatu. The Act provides for a new trade mark registration system.

Previously, registration could only be obtained be providing a certified copy of a United Kingdom Trade Mark Registration, a European Union (CTM) Registration, or a registration obtained under any treaties to which a member state of the European Union may be a party, in relation to goods or services.

The new trade mark registration system now provides for local registration for goods and/or services.

The Act also creates the ability to apply for a collective mark, and recognises applications that contain indigenous culture. Any “indigenous” applications will be referred to the National Council of Chiefs for consideration.

The Act sets out the grounds for which an application can be rejected. These include trade marks which:

are not capable of being represented graphically;
contain certain signs (to be prescribed through regulation);
are not capable of distinguishing the applicant’s goods or services;
are scandalous or contrary to law;
are likely to deceive or confuse; or
are identical to another trade mark (the codified test for “identical” extends to substantially identical or deceptive similar).

The Act also establishes the ability to oppose an accepted application.

Registrations may be amended and/or removed by the Court or on application by an aggrieved person, on the grounds that a trade mark has become descriptive of, or is the name of, an article, substance or service within a relevant trade.

Trade marks registered under, the now repealed Registration of United Kingdom Trademarks Act [Cap. 81], remain in force under the Act.

A great deal of uncertainty still exists around how this new registration system will work. The Regulations have yet to be published. These Regulations will set out the prescribed form of an application, provide information as to “signs” that are not registrable, and detail the fee schedule.

Penny Catley discusses the Georgie Pie Trade Mark with The New Zealand Herald

Fri, 22 Jul 2011 00:00:00 +1200

Click the below link to read a New Zealand Herald article on the Georgie Pie Trade Mark including comments from Penny Catley.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10740013

WAI 262 Intellectual Property Recommendations

Mon, 04 Jul 2011 00:00:00 +1200

It has been 20 years in the making. The Waitangi Tribunal report on the claim known as “WAI 262” was released on Saturday 2 July 2011, 20 years after it was filed and more than four years after the evidence gathering closed.

The WAI 262 claimants argue that the Crown has failed to protect Māori interests in relation to indigenous flora and fauna, as well as a wide range of cultural knowledge and practices.

The report considers whether the Crown has been responsible for breaches of the Treaty of Waitangi and makes non-binding recommendations based on its findings.

The report covers some 1,000 pages and recommends reform of laws, policies or practices relating to health, education, science, intellectual property, indigenous flora and fauna, resource management, conservation, the Māori language, arts and culture, heritage, and the involvement of Māori in the development of New Zealand’s positions on international instruments affecting indigenous rights.

The two main areas of the report dealing with intellectual property are chapters one and two.

Chapter 1 relates to intellectual property in taonga works (treasured things). The report finds that current laws do not protect against derogatory or offensive uses or taonga works, nor against unauthorised public and commercial uses of taonga works or related knowledge.

The report recommends a system allowing for objections to derogatory or offensive uses of taonga as well as objections to commercial uses or proposed commercial uses of taonga works and related knowledge that do not have their consent. The report recommends the establishment of a commission to deal with these objections and main a register of cultural works.

The recommendations are said not to affect existing intellectual property rights and will not create new restrictions on private and non-commercial uses of taonga works.

Chapter 2 relates to intellectual property in the genetic and biological resources of taonga species. The report finds that current laws and policies do not recognise and support the concept of kaitiaki (cultural guardians) and allow others to conduct research, obtain intellectual property rights and commercialise genetic and biological resources without informing Māori or obtaining consent.

In respect of genetic and biological resources, the report recommends changes to:

The Hazardous Substances and New Organisms (HSNO) Act;

The laws and processes relating to patents and plant variety rights. These include the establishment of a Māori advisory committee to advise the Commissioners of Patents and Plant Variety Rights about whether inventions are derived from Māori traditional knowledge or use taonga species; establishment of a register of kaitiaki interests in taonga species; granting the Commissioner of Patents the power to refuse patents that unduly interfere with the relationships between kaitiaki and taonga; and introducing a legal requirement for patent applicants to disclose any Māori traditional knowledge used in research, and the source and the country of origin of any genetic or biological material contributing to the invention;

Decisions about bioprospecting in areas under Department of Conservation control be made jointly by the department and Māori with an interest that area (tangata whenua).

The Government is now considering the report and the recommendations saying that it has given them “food for thought”.

New Global Level Domain Names Approved By ICANN

Thu, 23 Jun 2011 00:00:00 +1200

Business names or brands will soon be able to be registered as top level domain names. The Internet Corporation for Assigned Names and Numbers (ICANN) has approved a plan to increase the number of generic top-level domains (gTLDs) from the current limit of 22. gTLDs are domain name endings which come after the dot, such as .com or .info. This week's approval will allow domain names to end in almost any word in the any language, including business names or brands, such as .APPLE or .CANON, as well as geographical areas and keywords. ICANN hopes that the initiative will "unleash the global human imagination". It has the potential to radically change the way in which people locate information on the internet.

Any person or entity will be able to own and administer a gTLD. The privilege is not expected to be cheap, with estimates of the initial filing fee being approximately USD 185,000 and overall costs for the first 18 to 24 months estimated at between USD500,000 and USD1,000,000, once examination and opposition costs are taken into account.

While the new gTLDs will not be functional until 2013, the ability to make an application for a gTLD will be available from 12 January 2012. Individuals or organisations will have to show that they have a legitimate claim to the name they are buying, and an opposition process will be available where applications are made which allegedly infringe third party intellectual property rights. If there are multiple multiple applications an auction process will take place.

Applications will follow a relatively complex format which will require the provision of both technical and financial information from the applicant.

Brand owners who do not wish to register their gTLD will still have the opportunity to "defend" their brands from use by other parties:

from registration of their brand(s) as gTLDs by other parties;
from the use of their brand(s) as second level domain names used with the new gTLDs; and
through the use of a trade mark clearinghouse, uniform rapid suspension system (URS) and a post delegation dispute resolution procedure (PDDRP).

Should you have any queries please do not hesitate to contact Rosemary Wallis.

Written with assistance from Chloe Barker.

Facton Ltd v Rifai Fashions Pty Ltd [2011] FCA 290 (30 March 2011)

Fri, 03 Jun 2011 00:00:00 +1200

Damages Awards For Trade Mark and Copyright Infringement

In this case Justice Bromberg of The Federal Court of Australia examined the law on damages in a case involving counterfeit goods. The decision summarises the principles for the award of damages and shows the importance of supporting claims with sufficient evidence.

The defendants – Rifai Fashions Pty Ltd and its director Mr Rifai – were knowingly selling counterfeit “G-Star” Products in Australia. The issue was the assessment of damages and, in particular, whether exemplary or additional damages could be awarded.

1. Compensatory Damages

The court assesses the award of damages under statute by way of similar considerations as are taken into account when assessing an award of damages in tort:

Damages are compensatory in nature and are awarded for the purpose of compensating for loss suffered and not to punish the respondent;
The measure of damages, so far as is possible, is to be the sum which will put the plaintiff in the same position as it would have been if it had not suffered the wrong; and
In relation to damages under s115(2) of the Copyright Act, an award of damages should reflect the depreciation to the value of the applicant’s copyright (as a chose in action) that resulted from the respondent’s infringing conduct.

On the onus and manner for assessing damages the following principles were noted:

The applicant bears the onus of proving depreciation or loss;
Where it is found that the respondent is a “wrongdoer”, damages should be liberally assessed, in the sense that inferences may be more readily drawn against a wrongdoer;
If a court is satisfied that damage has occurred, it must do its best to quantify the loss even if some degree of speculation and guess work is involved;
A stricter approach will be taken when an applicant has failed to adduce evidence that was apparently available to prove the loss claimed; and
If an applicant fails to discharge its onus, only nominal damages might be awarded.

In this case, there was evidence of sale of 140 counterfeit items valued at $9,213. Although the court noted that a significantly larger number could have been sold, it awarded only $9,213 in compensatory damages, as that was the limit of the evidence filed.

2. Damages for Loss of Reputation

The plaintiff also claimed its reputation was damaged, but the court held that it failed to show the basis of that damage. The evidence failed to distinguish between goodwill and reputation, and gave no value to goodwill or reputation. The court refused to speculate about value without appropriate evidence and therefore did not award damages for this claimed loss.

A claim must be supported by evidence; without a secure evidential foundation, the court is not willing to award damages.

3. Exemplary Damages

Despite signing a “Notice of Consent to Forfeit Goods” and consenting to the seizure of infringing goods, the defendants continued to sell counterfeit goods. The Court had to decide if this behaviour was particularly dishonest and justified an award of exemplary damages. Again it was held that in the absence of evidence on the elements of contumelious conduct (such as malice or spite), exemplary damages could not be awarded.

4. Additional Damages

The Court was prepared to award additional damages for copyright infringement. The Courts’ aim under this head is to punish, deter and strip the Respondents of the pecuniary benefits received from the sale of counterfeit goods. The Court held that in order to have a punitive effect, the additional damages do not need to be proportional to the compensatory award.

In making its final calculations, the court noted the following:

The proceeding costs, which the respondent has to pay;
The respondent forfeited goods to the value of $32,000;
The respondent accepted wrongdoing at an early stage, cooperated and made various admissions and concessions; and
The respondents’ poor financial position.

These considerations finally led to an award of $1,000 for additional damages.

5. Conclusion

Although circumstances in which exemplary, additional or other damages would be appropriate are common, it is essential to base any claims to such damages upon evidence. The court cannot act in these areas without an evidential foundation. It is therefore prudent to either seek such evidence (beyond mere speculative claims) or be prepared to draw back on such claims. It is arguable that this creates a practical costs bias in favour of infringers, as is so often the case in intentional intellectual property infringement cases.

Oyster bay keeps out Oystercatcher

Fri, 03 Jun 2011 00:00:00 +1200

World renowned New Zealand winemaker, Delegat’s Wine Estate Limited, which owns “Oyster Bay” wine, has successfully prevented registration of an application for the trade mark “Oystercatcher” by Oystercatcher Wines Limited.

The Assistant Commissioner has found that the dominance of the element “Oyster” in the Delegat’s trade mark, together with Delegat’s’ other “oyster” marks and the use which Delegat’s has made over the years together combine to make registration of the “oystercatcher” mark likely to confuse and deceive consumers.

Delegat’s has for many years used the OYSTER BAY device mark incorporating a scene of the bay, together with the word mark OYSTER BAY, and has also promoted the mark ‘SOMETIMES THE WORLD REALLY IS YOUR OYSTER”. It also has registered the mark “OYSTER”.

The Assistant Commissioner found that the OYSTER BAY mark is well known in New Zealand, and that the trade mark “SOMETIMES THE WORLD REALLY IS YOUR OYSTER” also had a sufficiently substantial reputation in the market. The acquisition of distinctiveness was central to the Assistant Commissioner’s decision.

The Assistant Commissioner noted the extensive sales of OYSTER BAY wine in New Zealand and overseas since 1990, the large range of outlets, the extensive advertising and promotion, that OYSTER BAY represented 12 percent of New Zealand’s wine exports, and was sent to 30 countries, its international success in both sales and awards, the fact that there was only one OYSTER BAY wine in each category of wine, and its high ranking in the Wine Intelligence Survey of consumers.

When comparing the marks, the Assistant Commissioner primarily compared the word mark OYSTER BAY with the word mark OYSTERCATCHER, while noting the device mark and the SOMETIMES THE WORLD REALLY IS YOUR OYSTER mark.

She noted both that the opposed mark could be stylised in the same manner as Delegat’s mark and also that she needed to consider the actual use of the mark by the opponent.

With respect to the idea of the mark, the Assistant Commissioner said that provided she left aside the actual use of the mark, the idea of the two marks was different – one being the name of a place and the other a wading shorebird.

However when she introduced the actual use of the mark into her analysis she found that the OYSTER element in the mark was the dominant essential feature of the mark and that the opposed mark was similar. OYSTER BAY wine was promoted by reference to the slogan and by particular reference to oysters. She noted that the market had been educated to recognise that the dominant element of the mark was “oyster”.

The fact that there were a number of other “bay” marks relating to wine also meant that the “oyster” element assumed much greater significance, and the expert evidence that consumers would use that as a shortcut to identify it in the purchasing process.

She also considered that OYSTERCATCHER might be wrongly perceived as being part of the OYSTER BAY family of marks.

When considering the position under section 25(1)(b), (which required the Assistant Commissioner to compare the opposed mark with the opponent’s trade mark registrations, as distinct from its actual use of the marks), the Assistant Commissioner found that the OYSTER registration was relevant, being the only element of the opponent’s mark an essential element in the applicant’s mark, together with the fact that the word “oyster” was at the fancy end of the continuum with respect to wine. She held that consumers would at least be caused to wonder that there was a connection in the course of trade between the applicant’s goods and the opponent.

Under section 25(1)(c), relating to prejudice to a well-known mark, the Assistant Commissioner also upheld the opposition, citing the similarity between the marks, the fact that the applicant’s mark was untested and the opponent which prized the quality of its wine would have no control over the quality, the exclusive association of “oyster” with the opponent’s wine, the detrimental effect on the opponent’s marketing strategy, blurring of the distinctiveness of the applicant’s association with “oyster” and the potential for the OYSTERCATCHER mark to free-ride on the success of the Delegat’s’ wines.

*Baldwins represented the opponent, Delegat’s Wine Estate Limited, in this opposition. The decision has not been appealed.

Streamlining IP Protection in Australia and New Zealand

Fri, 03 Jun 2011 00:00:00 +1200

Separated only by the Tasman Sea and isolated from major trading partners in Europe and the Americas, Australia and New Zealand have a long history of economic cooperation.

In August 2009, the Prime Ministers of both countries agreed upon a number of outcomes for removing regulatory barriers to trans-Tasman trade, contributing towards establishing a “seamless business environment” between the two countries - dubbed the “single economic market” (SEM).[1]

Several of those outcomes are of particular interest to owners of intellectual property in either or both of Australia and New Zealand.[2]

Trans-Tasman Trade Mark Regime

One of the proposed outcomes is the establishment of a single trans-Tasman trade mark regime.

This will involve an alignment of trade mark registration procedures in both Australia and New Zealand to eventually lead to a single trans-Tasman trade mark register. Initially, this is likely to be in addition to the existing national registers of Australia and New Zealand, but may eventually replace both national registers.

The trans-Tasman trade mark regime is intended to result in cost savings for applicants who would otherwise file applications in both Australia and New Zealand.

Single Patent Application Process

The second major IP-related outcome involves establishing a single patent application process by aligning the patent filing requirements in both countries to enable a single “portal” for filing applications. This presumably will involve filing a single application “electing” both Australia and New Zealand, before examination is carried independently in each country.

A “medium term” timeframe of five years was laid down for implementing both the Trans-Tasman trade mark regime and the single patent application process.

In a further announcement in February 2011, however, the Prime Ministers announced an agreement to extend the single patent application process to a single patent examination process, to achieve economies of scale and avoid duplication of effort in performing a separate examination in each country.[3] The intention of this change is to reduce prosecution fees for patent applicants, in addition to any potential savings on official filing fees from the single patent application process.

Under the single examination process, corresponding applications filed in both Australia and New Zealand will be examined in only one country. The law of both countries will be considered by the examiner where differences exist, and the examiner will thus allow or reject applications for patents in each country as appropriate.[4]

It is unclear at this stage precisely how the single examination process will be implemented, but it is likely that applicants will be permitted to amend their application independently for each country to overcome differences in law. These differences are likely to be substantial, such as the looming exclusion of computer programs from patentability in New Zealand and the significant changes proposed by the Australian government under the Intellectual Property Laws Amendment (Raising The Bar) Bill 2011.

The first stage towards implementation of the single examination process will involve merely the sharing of resources between IP Australia and the Intellectual Property Office of New Zealand (IPONZ). This will presumably include search results and examination reports, the latter of which are not currently open to public inspection at any stage under the current law in New Zealand.

Examination by a single patent office will be implemented as the second stage, giving the patent offices of each country the authority to allow a patent application for the other country.

It remains to be seen from what point the Trans-Tasman application will proceed as separate applications in each country. Ordinarily, an accepted patent application in either country would remain open to pre-grant opposition for a period of three months before proceeding to grant. However, no mention has yet been made of a centralised pre-grant opposition procedure.

At this stage, no plans for a single “Trans-Tasman” patent covering both Australia and New Zealand have been announced, but this would appear to be a natural progression from the single examination process and is consistent with the “single economic market” concept. The prospect of a trans-Tasman patent system thus remains a distinct possibility in the longer term.

Extending IP Across the Tasman

Australia is often seen by international clients as the more important market due to having the larger population, but the close relations between Australia and New Zealand make it relatively straightforward to introduce new products or services to both countries.

In particular, trade agreements between the two countries mean that many goods certified or approved for sale in one country can also be sold in the other, and service providers can generally provide services in both countries.[5]

A number of other factors also make New Zealand an attractive manufacturing base, test market, or entry point to the wider Australasian market, including a more favourable exchange rate, lower wages, skill availability, favourable time zone, “clean-green” image, ease of doing business,[6] and duty-free access to the Australian market, among others.

Obtaining formal IP protection across both Australia and New Zealand is, therefore, often a wise investment. The proposed outcomes will provide a more cost-effective means for doing so, but the logistics of implementing such a regime will require considerable development in view of the not insignificant differences between the patent laws of each country.

Baldwins Intellectual Property

Established in 1896, Baldwins has a long and proud history in the IP field in New Zealand.

All of Baldwins’ patent attorneys are registered to practice in both New Zealand and Australia, and regularly assist both local and international clients with prosecution of patent, trade mark, and registered design applications in both countries.

For further information, or to take advantage of our expertise and competitive fees in either country, please contact us.

[1]“Joint Statement of Intent: Single Economic Market Outcomes Framework” (2010) Ministry of Economic Development <www.med.govt.nz>.

[2]“Single Economic Market Outcomes Framework as Identified in Prime Ministers Rudd and Key’s Joint Statement of Intent, 20 August 2009” (2009) Ministry of Economic Development <www.med.govt.nz>.

[3]“Joint Statement by Prime Ministers Key and Gillard: February 2011 Report on Trans-Tasman Cooperation” (2011) The official website of the New Zealand Government <www.beehive.govt.nz>.

[4]“Integration of Patent Examination between Australia and New Zealand” (2011) IP Australia <www.ipaustralia.govt.nz>.

[5]“Exporter Guide - Australia - Country Brief” (2011) New Zealand Trade & Enterprise <www.nzte.govt.nz>.

[6]New Zealand placed third for 2011 in The World Bank’s rankings of economies for “ease of doing business,” ahead of the United Kingdom, United States, and Australia among others. See “Economy Rankings” (2011) Doing Business - World Bank Group <www.doingbusiness.org/rankings>.

Legal Protection for Traditional Knowledge

Fri, 03 Jun 2011 00:00:00 +1200

Recently, New Zealanders have expressed outrage at the unauthorised use of Maori symbols in relation to commercial products. Of particular note in recent weeks are HEITIKI infant formula and Mike Tyson’s instantly recognisable tattoo design, as featured in the blockbuster movie The Hangover Part 2.

HEITIKI infant formula is manufactured in New Zealand and sold both domestically and internationally by Kiaora New Zealand International. In its usual context, HEITIKI is said to be a Maori cultural icon, designating a particular style of ornamental pendant.

Some have described the HEITIKI infant formula as “cultural misappropriation”, “disrespectful”, and “representing the theft of cultural knowledge”.

Similarly, many Maori have criticised former tattoo artist S Victor Whitmill’s claims to copyright in Tyson’s facial tattoo design. Mr Whitmill has filed a copyright claim against the film studio releasing The Hangover Part 2, claiming that he designed the tattoo and that the film-makers have used his copyright without permission.

New Zealand Professor Ngahuia Te Awetuku, author of Mau Moko: The World of Maori Tattoo, has labelled Mr Whitmill as arrogant, stating “The tattooist has never consulted with Maori, has never had experience of Maori and originally and obviously stole the design that he put on Tyson.”

So what rights do cultural or traditional knowledge holders have in preventing commercial traders from using that cultural or traditional knowledge?

Trade Mark Protection

Generally speaking, trade marks provide exclusive rights to the registered owner. The registration of cultural or traditional knowledge, where possible, may assist in preventing the misappropriation by others.

In New Zealand, trade marks can also be refused if the use of the trade mark would be offensive to Maori.

The Heitiki trade mark was considered and approved by the Maori Advisory Committee in December 2010, despite some describing use of Maori words and imagery as cultural misappropriation. The Maori design for Mike Tyson’s tattoo on the other hand, is not the subject of any registered trade mark.

In both the HEITIKI and Mike Tyson tattoo examples, unless someone else had relevant earlier trade mark registrations, nothing could be done under trade mark law to prevent the HEITKI infant formula or Mike Tyson’s tattoo.

The trade mark registration system only protects items of cultural or traditional knowledge if they are registered in the first place, which means they have to meet all the criteria for registration as a trade mark.

Copyright Protection

In relation the Heitiki example, copyright law provides no assistance because there is no allegation that the producers of HEITIKI infant formula have copied anyone else’s copyright works. In the case of the Tyson tattoo, while the idea is clearly Maori, unless Mr Whitmill copied an earlier original copyright work, there is nothing that Maori can do, at least under copyright law, to prevent either the creation of the tattoo in the first place, or Mr Whitmill’s allegation of copyright infringement.

Patent Protection

There are also concerns that traditional knowledge is being used and patented by international traders and inventors without the consent or recognition of traditional knowledge holders. For this reason, traditional knowledge has been widely debated by the World Intellectual Property Organization (WIPO), although no definitive solution has been proposed.

To date, India is the only country in the world to have set up an institutional mechanism termed the “Traditional Knowledge Digital Library” (TKDL). The TKDL has enabled the cancellation or withdrawal of numerous patents attempting to claim the right to traditional knowledge.

The New Zealand Waitangi Tribunal will shortly issue a report on a claim relating to inappropriate use of indigenous flora and fauna. The claim has been pending for over 20 years. It is anticipated that the report may include recommendations to the Government on changes to intellectual property legislation and the treatment of traditional knowledge under those laws.

The use of traditional knowledge in trade raises more questions than answers. It would be difficult for a report such as the Waitangi Tribunal report to address all of the issues.

It is possible that further WIPO discussions lead to a similar global system or resolution. In the meantime, traditional knowledge holders can only attempt to rely on the narrow provisions of domestic intellectual property laws to prevent misappropriation.

[1] “Hei-tiki” is a Maori ornamental pendant, “hei” meaning to wear around one’s neck, and “tiki” being a mythical figure, a sacred or religious carving.

Rugby World Cup Clean Zones - News flash - Clean Zones , Clean Transport Routes and Clean Periods announced.

Wed, 11 May 2011 00:00:00 +1200

The government has finally announced the clean zones, clean transport routes and the clean periods which apply to areas around the grounds in which Rugby World Cup games will be played.

Clean zones are the grounds where the games are being played, the surrounding areas and any other area necessary to allow the major event activity to happen. Clean transport routes are motorways, state highways or train lines (or areas beside them) which are 5 km or less from the clean zone and likely to be used by those travelling to and and from the clean zones.

Clean zones and clean transport routes are operational during a declared “clean period” only. The roads around Eden Park are clean transport routes for much of the Rugby World Cup period. Other clean periods are much shorter and apply for only a few days around each of the zones where games are being played and their relevant transport routes.

Various restrictions apply to the clean zones and the clean transport routes during the clean period. Only street trading (selling, hawking, or giving away goods and services) or advertising which has the authorisation of the major event organiser is allowed within the clean zone. Further, any unauthorised advertising which is clearly visible from within the clean zone (including aerial advertising) is prohibited. Advertising is also prohibited within the clean transport route unless authorised by RWC 2011.

There are some limited exceptions such as those relating to personal clothing and the like genuinely worn by members of the public (where these are not being used to advertise at the major event) and advertising on transport vehicles carrying out their normal business. It is also permitted to have advertising on newspapers or magazines or televisions, radios or electronic devices where these are being used in a personal capacity and not for the purpose of intrusion advertising.

Penalties for a breach of these provisions carry penalties of up to $150,000.

A link to the gazette is attached.

http://www.dia.govt.nz/Pubforms.nsf/NZGZT/Supplement_RWCClnZn63May5.11.pdf/Supplement_RWCClnZn63May5.11.pdf

Written with assistance from Chloe Barker.

New Zealand File Sharing Legislation Passed

Fri, 15 Apr 2011 00:00:00 +1200

On 14 April 2011, the New Zealand Copyright (Infringing File Sharing) Amendment Bill was passed by 111 votes to 11. The Bill had been debated under urgency in the days prior to its final vote.

A brief history

In 2008, the government proposed the Copyright (New Technologies) Amendment Bill, and in particular, the controversial section 92A. Section 92A provided that Internet Service Providers (ISPs) were to operate a system whereby they were to issue warnings to a user of their service for copyright infringement. If there was repeated infringement, internet service could be disconnected.

While the Copyright (New Technologies) Amendment Act was passed, section 92A never came into force. There was considerable public outcry about the prospect of termination of internet services, the Act’s broad definitions and the burden on ISPs to enforce the regime. The definition of ISP, for example, included any person providing connections for digital online communications or hosting material on electronic retrieval systems, making schools, government departments, and businesses all potentially accountable as an ISP.

What changes have occurred under the new Amendment Bill?

The Copyright (Infringing File Sharing) Amendment Bill repeals section 92A of the Copyright Act and replaces it with a graduated “three strikes” approach to the issue of copyright infringements. The process also minimises the involvement of ISPs and leaves decision making in the hands of the Copyright Tribunal.

The Amendment Bill also addresses definitional concerns raised under the prior amendments, primarily by replacing the term “Internet Service Provider” with “Internet Protocol Address Provider” (IPAP). This change aims to exclude schools, government departments, and businesses that provide internet access but are not ISPs in the traditional sense, and to focus on the function of an ISP that is relevant to infringing file sharing, namely through the provision of internet protocol (IP) addresses.

A brief summary of the infringement process is provided below:

• A copyright owner who believes that his or her copyright work is being infringed by an account holder of an IPAP’s service may contact the particular IPAP to report misuse of their copyright works.

• The IPAP will contact the account holder and issue an infringement notice. The type of notice will depend on whether previous notices have been issued to that account holder:

i. A detection notice informs the account holder that he or she has downloaded copyright material and that their actions are illegal.
ii. A warning notice informs the account holder of his or her second copyright infringement (having already received a detection notice).
iii. An enforcement notice informs the account holder of his or her third copyright infringement (having already received a warning notice).

• After the IPAP has issued an enforcement notice, the copyright owner can then seek from the account holder reparation in the form of damages of up to $15,000. The account holder will be required to appear before the Copyright Tribunal, which has jurisdiction to hear illegal file-sharing claims.

• Account holders have the right to challenge any notice, make submissions to the Copyright Tribunal refuting the claims, and request a hearing if they disagree with any claim that they have infringed copyright.

The Amendment Bill currently holds in reserve the power of the Copyright Tribunal to order suspension of a repeat infringer’s internet account for up to six months. This may be activated at a later stage by an Order in Council, a decision which would likely attract much public attention. Commerce Minister Simon Power has stated that this element of the Act will not be brought into force unless the existing process proves to be ineffective.

Meanwhile, public opponents of the amendments have re-ignited a campaign to blackout their internet pages, a form of protest first publicised when section 92A of the current Act was introduced.

On the other side of the scale, the United States entertainment industry is pushing for the extension of copyright terms and re-examination of ISP liability for customer breach of copyright, while the Australian film industry is similarly pushing for ISP liability (Roadshow Films Pty Limited v iiNet Limited [2011] FCAFC 23).

Regardless, the provisions of the New Zealand Copyright (Infringing File Sharing) Amendment Bill will come into effect for ordinary internet services on 1 September 2011, and 30 September 2013 for cellular mobile networks.

LanzaTech strikes a double in NZBIO awards

Fri, 15 Apr 2011 00:00:00 +1200

Innovative Biotech company LanzaTech has been awarded Company of the Year at the NZBio 2011 Annual Excellence Awards.

LanzaTech first focused on proving it could ferment waste gases from steel mill flues to make a low cost ethanol. It took its patented process and microbe to the Glenbrook Steel Mill near Auckland and has been running a pilot plant producing ethanol for more than two years. Now it is working with global market players in China, Korea and India to scale plants that will produce commercial levels of ethanol. LanzaTech have been working with Baldwins Intellectual Property to ensure this technology is appropriately protected and can be used to it’s full potential in international markets.

Dr Sean Simpson, co-founder of LanzaTech, is thrilled LanzaTech has been recognised by its peers in New Zealand.

Dr Simpson also won the award for Young Biotechnologist of the Year, recognising him as an individual under the age of 40 whose work demonstrates the potential for future leadership in New Zealand's bioeconomy.

LanzaTech, founded in 2005, has offices in New Zealand, the United States and China. It is collaborating on projects in the steel, coal, oil, chemicals and biomass sectors in those countries as well as India and Korea. It is the recipient of multiple global awards in the clean energy and high tech sectors.

IMPORTANT CHANGES TO NEW ZEALAND’S DESIGN LAW

Wed, 06 Apr 2011 00:00:00 +1200

As of 19 April 2011, important changes to New Zealand’s design law came into effect due to the Designs Amendment Act 2010 http://www.legislation.govt.nz/act/public/2010/0015/latest/dlm2852841.html?search=ts_act_designs_noresel&p=1&sr=1

And its associated Designs Amendment Regulations 2011.

http://www.legislation.govt.nz/regulation/public/2011/0075/latest/dlm3614201.html?search=ts_regulation_designs_noresel&p=1&sr=1

The most important of these changes can be summarised as follows:

(i) An abandoned design application or lapsed design registration may now be restorable provided that applications are made for restoration within 3 months of abandonment or within 12 months of lapsing. Any opposition to such restoration is required within 2 months of the application being advertised in the Journal;

(ii) A 3^rd party which made use of the design while the application was abandoned or the registration was lapsed, or made preparations to do so, has continuing rights to use the design after restoration. Unfortunately, in our view, those rights , for 3-D designs, are more extensive than those the same 3^rd party would have in respect of any related copyright works , such as drawings or prototypes, so that the 3^rd party may have an ongoing defence against using the restored design registration but not against infringing the mutually inclusive copyright under the Copyright Act 1994 relating to the same 3-D design;

(iii) An applicant may now request that issuance of the Certificate of Registration is delayed by up to 15 months from the application date;

(iv) The Commissioner of Designs is now empowered to publish the basic details of pending design applications including their date, number, and those details appearing on the application form;

(v) Electronic communication between the applicant and the Commissioner of Designs is now permitted.

The above is intended to provide merely a brief review of this important new legislation. If any more detailed information or advice is required please do not hesitate to contact us.

New Partner Announcement - Three more reasons to rely on us

Fri, 01 Apr 2011 00:00:00 +1300

Promotion Announcement

Fri, 01 Apr 2011 00:00:00 +1300

Baldwins Intellectual Property announces two promotions to Senior Associate and a promotion to Associate. Jared Scarlett and Richard Clement have been made Senior Associates and Ben Halberg has been made Associate. All three are registered patent attorneys who specialise in preparing and prosecuting patent and registered design applications, providing validity and infringement advice, as well as management of patent and design portfolios for clients both local and overseas.

Jared Scarlett works primarily in the areas of patents. He has PhD in Biochemistry and specialises in helping clients protect their research investments in the biotech and health sectors.

Richard Clement comes from a mechanical engineering background and has a broad range of experience across engineering fields from building products and materials to power generation. Richard is in his final year of study towards an LLB.

Ben Halberg has technical expertise in the fields of electronics and software engineering, and particular experience with patents in the problematic areas of computer-implemented inventions and business methods.

Australian and New Zealand copyright law for databases, compilations, and directories

Thu, 17 Mar 2011 00:00:00 +1300

In December 2010, the Full Court of the Federal Court of Australia delivered another landmark decision for Australian copyright law. In Telstra Corporation Limited v Phone Directories Company Pty Limited [2010] FCA 44, the Court unanimously held that the Yellow Pages and White Pages telephone directories are not protected under the Copyright Act 1968 (Cth).

The findings of the Court can be summarised as follows. First, due to the high number of persons involved in the database creation process, it was not possible to accurately identify who provided the necessary authorial contributions. Secondly, the work was not the result of human authorship, but was generated by computer software. The directories were therefore not considered “original works” because their creation did not involve independent intellectual effort or the exercise of sufficient literary effort.

Given the importance of the directories to Telstra’s revenue, it is likely that the decision will be appealed to the Australian High Court. However, the Federal Court’s decision was unanimous, the chance of a reverse finding is unlikely.

New Zealand Copyright Law

This issue has not been determined in the New Zealand courts, however, it is likely that they will find the Australian analysis persuasive. That said, there are a number of differences between New Zealand and Australian copyright law that may prompt different decisions.

Under the New Zealand Copyright Act 1994, a “compilation” is defined to include “a compilation of data”., whereas the Australian Act does not contain a definition of “compilation”

The New Zealand approach to “original works” may also differ to the Australian approach. In the Court of Appeal case of University of Waikato v Benchmarking Services Limited (2004) 8 NZBLC 101,561, the determining factor for originality was deemed to be whether sufficient time, skill, labour, or judgment is expended in producing the work.The originality or creativity of the ideas embodied in the work may be considered less important than the work’s form of expression. In other words, compilations may attract copyright protection if sufficient time and labour has been expended in collecting, selecting, and arranging the data.

Implications

Producers of databases, compilations, and directories in Australia and New Zealand should be aware of the possible implications for their work. Producers of publicly available databases in Australia will need to accept that competitors can copy their data. For example, telephone directories, classifieds, real estate sites, and television guides are all comprised of data that may not be subject to copyright protection. Owners of private databases should also be wary, and should consider systems for the protection of their data, whether technological or contractual.

Of course, the decision is a positive one for technology innovators and newcomers to the market who will now be able to develop their own databases, without the fear of infringing copyright. More freely available information may be considered by some to be a positive. Owners of databases on the other hand, who rely on public databases as a source of income, are likely to be disappointed with the Court’s decision.

If New Zealand courts follow the Australian precedent, simply adding financial or human resources may not afford adequate protection to the resulting work. The New Zealand legislature may well be looked to for change or clarification in the coming years.

The European Directive

It should be noted that the European Union has a Database Directive 96/9/EC protecting databases, which “by reason of the selection or arrangement of their contents, constitute the author's own intellectual creation” (Article 3(1)). Article 7(1) further grants the producer of a database the copyright if he or she “shows that there has been qualitatively and/or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents to prevent extraction and/or re-utilization of the whole or of a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database”. Databases may be protected by copyright under certain circumstances amounting to substantial investment.

Australian copyright law as it currently stands, is very different to the European Directive. The position under New Zealand copyright law on this matter is less certain but it would seem that courts are more likely to make a decision in line with the European Directive than follow the Australian approach. However, producers of databases on both sides of the Tasman should be aware of the possibility of competitors copying of databases with impunity.

New Zealand Draft Computer Program Examination Guidelines Unclear

Thu, 17 Mar 2011 00:00:00 +1300

In March last year, the Commerce Select Committee reported back to parliament on the Patents Bill 2008, a long-awaited update to New Zealand’s patent law. The Select Committee recommended that computer programs be specifically excluded from patentability.

The exclusion has the support of both the leading and opposition political parties and it is inevitable it will come into force following enactment of the new Patents Act.

The exclusion is particularly surprising given New Zealand’s previous stance which held a broad range of technologies, including business methods, to be eligible for patent protection. It therefore appears that New Zealand might become among the first countries to reverse their position and exclude previously-patentable software-related inventions from patentability by statute.

In its report, the Select Committee acknowledged the difficulty in drafting an exclusion which would exclude computer programs from patentability but allow patents for “worthy” inventions, such as those involving “embedded software”.   The Select Committee opted for drafting a broad statutory exclusion, stating simply that “a computer program is not a patentable invention”. This was on the basis of questionable advice that this wording “would be unlikely to prevent the granting of patents for inventions involving embedded software”.

The Select Committee declined the opportunity to provide at least some degree of limitation and clarity of the scope of the exclusion by adopting wording similar to that of the European Patent Convention (EPC) or the United Kingdom’s Patents Act 1977 (namely that the exclusion only applies to inventions relating to computer programs “as such”). Instead, the Select Committee recommended that the Intellectual Property Office of New Zealand (IPONZ) develop examination guidelines for inventions containing embedded software.

On 20 December 2010, IPONZ released draft examination guidelines for inventions involving computer programs, seeking feedback and providing a glimpse at the potential future patentability requirements for computer-implemented inventions in New Zealand.   Submissions on the draft guidelines close on 11 March 2011. This does not provide an opportunity to debate the proposed wording of the exclusion in the Act.

Scope of the Exclusion

Given that the Select Committee’s intention for the guidelines was to clarify the continued patentability of inventions involving embedded software, it is peculiar that the draft guidelines do not mention at all this area of particular interest. Rather, the guidelines seek to provide a more general approach which may be applied to all manner of computer-implemented inventions.

In preparing the draft guidelines, IPONZ has looked to other jurisdictions for guidance.

The Australian Patents Act 1990 does not contain any exclusion for computer programs, but the draft guidelines correctly note that the patentability requirements are otherwise very similar. This is due to the judicially-developed interpretation of the “manner of manufacture” requirement common to both countries, with the seminal Australian NRDC decision followed by the New Zealand courts.

The EPC exclusion for “programs for computers… as such” is briefly addressed (despite having been dismissed by the Select Committee), but disregarded due to “differences in the way the patentability requirements are interpreted and applied”. It is not entirely clear to what those “differences” relate.

A footnote states that European “decisions around the term ‘technical effect’ are relatively unsettled and have been a source of division between the English courts and the EPO [European Patent Office] tribunals”. However, the Enlarged Board of Appeal of the EPO in 20102 found that while case law had developed on the issue over time, the EPO’s stance was now well established and was being consistently applied. Consequently, there was no divergence in case law under the EPC. Recent decisions of the UK courts have also attempted to reconcile the difference in approach to patentability between the UK and Europe.

The European approach to patentability specifies that patent eligibility should be determined independently of any consideration of prior art, as such considerations are “more appropriate for the purpose of examining novelty and inventive step than for deciding on possible exclusion” . The guidelines make no mention of this, let alone the 2010 opinion of the Enlarged Board of Appeal2 regarding patentability of programs for computers which provides an excellent summary and guidance regarding the European approach.

UK case law on the issue of the patentability of computer programs finds greater favour in the draft guidelines, apparently due to “substantial similarities” between the patentability requirements of the UK Patents Act 1977 and the Patents Bill 2008 (again despite the Select Committee’s rejection of such an approach). In particular, the UK Aerotel test from the English Court of Appeal is considered in detail in the draft guidelines with approval of the “broad principles”, if not the “specific elements of the test itself”.

The draft guidelines propose that New Zealand adopt a marriage of Australian, New Zealand, and UK case law based upon the first three steps of the Aerotel test of:

(1) construing the claims;
(2) identifying the actual contribution; and
(3) determining whether the contribution falls solely within the excluded area.

The fourth step, checking whether the contribution is “technical” in nature, is considered unnecessary in view of the “manner of manufacture” requirement which the guidelines incorporate in the second step.

In essence, the draft guidelines specify that the inventive concept or contribution over the prior art must not fall solely within the excluded area, whether that be the specific exclusion for computer programs or existing common law exclusions from the “manner of manufacture” definition, such as a “mere scheme or plan” or “presentation of information”. This signifies a departure from existing law, which defines an invention as including “an alleged invention”, which was deleted from the Patents Bill by the Select Committee. This definition has been interpreted by the Courts to mean that the issue of whether the claimed invention is new (i.e. makes a contribution to the prior art) is not to be considered when determining whether the claims relate to an invention (i.e. a “manner of manufacture”), similar to the European approach to patent eligibility.

The guidelines surprisingly make no reference to the Symbian case, a significant UK decision which narrowed the scope of subject-matter excluded from patentability under the Aerotel test. In Symbian, the Court of Appeal rejected the position of the UK Intellectual Property Office that the exclusion from patentability for “programs for computers… as such” had the effect of excluding any computer program unless it had a novel effect outside a computer. The court instead held that "a technical innovation, whether within...or outside the computer will normally suffice to ensure patentability", allowing a patent for software for mapping functions in a Dynamic Link Library (DLL) that improved reliability and performance in a computing device. Thereafter, the UK Intellectual Property Office was obliged to take a broader view on what is patentable.

The question thus remains as to whether the New Zealand Patent Office will follow Symbian and other more recent and future UK decisions, or whether the different wording of the New Zealand exclusion and adoption of the guidelines will result in strict adherence to the approach of Aerotel. However, in view of the omission of the “as such” limitation in the Patents Bill 2008, it is likely that UK decisions since Aerotel will be given little weight.

Manner of Manufacture

While it is not surprising those drafting the guidelines would review foreign precedents regarding the application and extent of exclusions from patentability for computer programs, it is concerning that the guidelines also seek to apply several Australian decisions on the more general and largely unchanged patentability requirements of the Patents Bill 2008, in particular the “manner of manufacture” requirement which has long been a requirement for patentability in New Zealand.

The guidelines suggest that the “physical effect” requirement for a “manner of manufacture” from the Federal Court of Australia decision in Grant v Commissioner of Patents applies in New Zealand, in addition to the well-established requirements of the NRDC case adopted by the New Zealand courts.

Also cited are the Australian Patent Office decisions of Peter Szabo and Associates and Invention Pathways Pty Ltd in support of the statement that “The performance of a method on or with physical apparatus, even where physical changes in the apparatus occur have been held not to be a manner of manufacture. The physical changes must be of consequence in that they are central to the contribution (invention) and not peripheral.”

Until these cases are applied by the New Zealand courts, they are persuasive rather than binding. However, their inclusion in the guidelines suggests that IPONZ is trying to further limit the “manner of manufacture” requirement which may be applied during examination.

Business Methods

Under the present law, claims directed to “pure” business methods have been rejected on the basis of case law which excludes a “mere scheme or plan” from the definition of an invention as a manner of manufacture.

However, such methods are at present generally patentable when clearly linked to some mode of carrying out the invention. Claims to computer-implemented methods and systems for doing business are therefore common in New Zealand.

Under the proposed adaptation of the Aerotel test, it appears likely that IPONZ would object to any business method claims regardless of their form because only method claims which result in an “artificially created state of affairs”1 and a “physical effect”5 would be allowable according to the draft guidelines. However, since the legislators have not adopted any specific exclusion of business methods to date, such practice by IPONZ may be open to challenge.

Software claims allowable in theory?

While the Patents Bill and draft guidelines appear to be bad news for software and business method patent applicants, the door to software patents is left ajar, albeit only slightly. Referring to the UK decision in Astron Clinica , the draft guidelines note that claims to computer programs may be granted in principle, provided the claimed invention clearly consists in a patentable method which the program is intended to carry out.

This appears to be an attempt to confirm the patentability of “embedded software” itself, which the Select Committee stressed should remain patentable despite the exclusion of computer programs from patentability.

It also appears to address the potential concern that claims to novel and inventive methods would be granted while claims directed specifically towards computer programs performing the same method would be rejected.

However, given the difference in wording between the UK and New Zealand exclusions, it remains to be seen whether the New Zealand courts will follow this decision and allow logic to prevail.

Conclusion

It is currently expected that the Patents Bill will be enacted in late 2011, to commence in 2012.

While the draft guidelines have been issued for comment from interested parties and are likely to be amended as a result of that feedback, the gist of the guidelines has been revealed and is unlikely to change significantly.

It is not clear whether the New Zealand approach will take into account recent and future developments in UK case law due to the clear difference in law arising from the omission of the “as such” wording in the proposed New Zealand legislation.

The likely impact of the guidelines in their final form is unclear - they are, at the end of the day, merely examination guidelines which may or may not prevail in the New Zealand courts. Significant uncertainty will remain until the issue is tested in that venue, which may take some time given the size of the New Zealand market. That said, it is likely that IPONZ will interpret the exclusion broadly, and it remains to be seen whether, in view of the conflict with the clear and express wording of the proposed legislation, patent protection will remain available for any invention relating to a computer program (including “embedded software”) or whether the courts will follow UK case law since Aerotel and potentially narrow the exclusion.

In the meantime, there are likely to be significant grey areas and resulting uncertainty not only for patent applicants, but also any third parties hoping to rely upon the computer program exclusion for freedom-to-operate reasons.

Transitional provisions in the Patents Bill mean that applications made under the Patents Act 1953 will "generally continue to be dealt with under that Act". To avoid the uncertainty regarding the scope of the proposed computer program exclusion, it would be prudent for applicants to consider filing any patent applications for computer-implemented inventions in New Zealand before commencement of the Patents Act 2008, if possible.

[1] N.R.D.C.’s Application [1961] RPC 134

[2] G 3/08 - Patentability of programs for computers, Enlarged Board of Appeal of the European Patent Office

[3] Aerotel/Macrossan [2006] EWCA Civ 1371

[4] Symbian Ltd v Comptroller General of Patents [2008] EWCA Civ 1066

[5] Grant v Commissioner of Patents [2006] 69 IPR 221

[6] Peter Szabo and Associates Pty Ltd [2005] APO 24 at [38]

[7] Invention Pathways Pty Ltd [2010] APO 10

[8] Astron Clinica Ltd & Ors v The Comptroller General of Patents, Designs and Trade Marks [2008] EWHC 84 (Pat)

Christchurch Earthquake

Fri, 04 Mar 2011 00:00:00 +1300

Last week, on Tuesday, 22nd February 2011, the city of Christchurch was struck by a major earthquake. The New Zealand Government has declared a State of National Emergency and is focusing on dealing with the aftermath of this tragedy.

The scale of the damage and the trauma is widespread. It has only been a few months since the last big earthquake in the same region and the country as a whole is in shock.

As yet, we are unsure how the building where we have our office has survived, but we are thankful that none of our staff have been hurt or lost. We also have many clients based in Christchurch but have yet to hear from all how they are. We understand that our colleagues of the patent attorney profession who are resident in Christchurch are relatively less affected. Unfortunately, visitors and students from many other countries have gravely suffered, been injured, or been lost in the earthquake. It is a sombre situation and we are deeply saddened and concerned.

Sue Ironside
Chair of Partners

Limited Time for Adding a Class or Classes to Trade Mark Applications in New Zealand

Mon, 28 Feb 2011 00:00:00 +1300

From time to time, a New Zealand trade mark applicant may face an objection under Section 31(2) of the Trade Marks Act 2002, stating that the goods or services within the filed application are incorrectly classified.

Depending on the importance or nature of the service, the applicant can either delete the goods and services from the incorrectly classified class, or file submissions in support of the goods or services classification in the current class.

A further option is to add an additional class to the trade mark application and transfer the incorrectly classified goods into the added class.

Regulation 43 of the Trade Marks Regulations 2003 provides:

An applicant for registration of a trade mark may apply to the Commissioner for a class or classes to be added after the application has been filed.
The Commissioner may allow the addition of the class if:
     a) The applicant for addition is made within 1 month after the application for registration is filed; and
     b) The applicant is accompanied by the fee prescribed for the application to register in 1 class; and
     c) The goods or services to which the additional class or classes relate are within the original specification.
The Commissioner must not extend the deadline in sub clause (2)(a).

The applicant therefore has a strict time frame of one month from the date of filing of the application to add an additional class or classes to the application.

The interpretation of a “month” is taken from Section 29 of the Interpretation Act 1999 and Section 35(2) of the Interpretation Act 1999 for the definition of “a period of time described as being from or after a specified day”.

The Laws of New Zealand explains one calendar month as “a period which begins on any day of a calendar month, and which ends on the day immediately proceeding the numerically corresponding day of the next calendar month” (The Laws of New Zealand, “time” para 5, Butterworths of new Zealand, 1994).

In the past, the immovable time period of one month has not been an issue for domestic or international applicants. In fact, the examination of applications within 5 working days by the Intellectual Property Office of New Zealand had allowed for an issue to be identified, submissions to be made in favour of classification as filed, and in some cases, where IPONZ had maintained the objection the applicant may, still have had time within the one month time limit to apply for the additional class.

From 1 July 2010, IPONZ introduced new time frames for the examination of initial trade mark applications. The time frame was extended from 5 working days to 15 working days. At the time, IPONZ stated that “alignment and certainty of time frames for responses and the opportunity to further improve the quality and timeliness of examination, and as a result reduce ongoing compliance costs as reasons for the extended time frame” and acknowledged that “turn around times had increased in some areas but that IPONZ would seek to maintain the efficient time frames that client’s have learnt to expect and enjoyed from the Intellectual Property Office of New Zealand”.

It is our experience that either a notice of acceptance or compliance report issue close to, if not on the 15th working day following application. This turn around time is extremely efficient, and significantly faster than other Registries around the world. However, the 15 working days time frame has significantly encroached on the one month time frame within which to add a class should a classification be raised by the examiner. This can reduce an applicant’s ability to make a fully considered decision on whether or not it wishes to add the class.

For example, in December IPONZ was closed for 5 days, and in 3 days in January resulting in reports arriving or being issued after the expiry of the “one month” period, removing the applicant’s right to add an additional class.

It is still possible to make submissions on the classification of the goods or services in question. However, it is recommended that the addition of the suggested class or classes along with the required fee is made at the time of submissions in order to preserve the applicant’s right to add an additional class should IPONZ maintain their position.

If IPONZ is persuaded that the goods or services are correctly classified as originally filed, then the applicant would be eligible for a refund of the official fee made for the additional class(es).

It will be critical when the Trade Marks (International Treaties and Enforcement) Amendment Bill comes into force, that Regulation 43 be amended to either extend or remove the one month requirement to add an additional class to an application, to allow the applicant full time to consider its options.

In the meantime, applicants should be aware of the potentially limited time they will have to decide whether to add the class, delete the goods or make submissions in support of their original classification.

A single patent examination for New Zealand and Australia

Thu, 24 Feb 2011 00:00:00 +1300

On Wednesday 16 February 2011, New Zealand Prime Minister John Key and Australian Prime Minister Julia Gillard announced progress on harmonising the intellectual property laws of New Zealand and Australia. This is part of the Trans-Tasman Single Economic Market agenda between the two countries for the next five years.

Baldwins, as a leading specialist intellectual property firm practising in New Zealand and Australia, is perfectly poised to service its clients in this new harmonisation of intellectual property laws.

Intellectual property has been identified as an important Trans-Tasman business ingredient of the agenda. The aim of the agenda is to make it easier for businesses to run in both countries.

A key announcement on Wednesday was that New Zealand and Australia will work towards a single examination process for patents.

Currently each country examines patent applications separately with different time frames, examination costs and outcomes. Grant of a patent in New Zealand does not automatically mean grant of a patent in Australia.

Baldwins understands the proposed single examination process will see an applicant’s patent applications for the same invention filed in both countries examined by the one examiner in either New Zealand or Australia. The one examiner will examine each country’s application under the specific patent laws of that country.

This will happen in two stages over the next three years. The first is both countries relying on each others examination reports. The second stage will be the one examiner from either New Zealand or Australia examining for both countries.

It is not clear yet what the precise benefits for clients will be, but it is likely to reduce the cost of protection and time to grant. Aligning the examination process should also give clients earlier certainty about the strength of their patent application.

Further areas of alignment are a single:

trade mark regime,
application process for patents,
plant variety right regime, and
regulatory framework for patent attorneys.

The patent offices of each country are working on the details of each area.

For more information please see: http://www.iponz.govt.nz/cms/iponz/sem/patents

If you have any questions, please contact the author.

New Zealand - "MY" trademark applications allowed in surprising decision

Mon, 07 Feb 2011 00:00:00 +1300

The assistant commissioner has allowed the registration of several trademarks including the words 'my' and 'insurance' by an insurance firm despite oppositions from competitors (T21/2010, November 8 2010).

AMI Insurance Limited applied to register a range of 'MY' marks, including MY INSURANCE, MY CAR
INSURANCE and MY HOUSE INSURANCE. The applications were opposed by four insurance providers: AA Insurance Limited, IAG New Zealand Limited, Tower Insurance Limited and Vero Insurance New Zealand Limited. Two further applications, MY FARM INSURANCE and MY LIFESTYLE INSURANCE, were opposed by AA Insurance, IAG New Zealand and Vero Insurance. Tower Insurance also sought a declaration of invalidity in relation to the registered series marks MY MULTI QUOTE, MY MULTI-QUOTE and MY MULTIQUOTE.

The parties opposing claimed, among other things, that the applications were not capable of distinguishing AMI’s services, had no distinctive character, were descriptive and were customary in trade.

AMI sought to argue that the onus was on the opponents to prove that the applications should not be
registered because the Trademarks Act 2002 has a presumption of registrability, unlike its predecessor, the Trademarks Act 1953. The assistant commissioner rejected this submission, noting that Section 13 of the Trademarks Act 2002 provides that the commissioner must be satisfied that there are no absolute or relative grounds preventing registration. This does not amount to a presumption of registrability.

The assistant commissioner further found that:

the trademarks were capable of distinguishing because the word 'my' (in combination with the descriptive words) was not a generic description for the types of services, namely insurance services; and
other traders were not likely to wish to use the words in the course of trade to describe their own 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. In particular, she found that the trademarks were not descriptive because they would be taken by the average consumer to mean, for example, in the case of MY INSURANCE, “insurance that belongs to me”, and that is a reference to something that belongs to the consumer, and is not descriptive of AMI’s services.

None of the evidence was said to reveal use by a trader 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, for example, “what do I do if I think my insurance policy has expired?”. The assistant commissioner found that this was not an example of other traders wanting to use the trademark, because the trader is pretending to be in the shoes of the customer and is not making the statement as a trader of the services concerned.

In a rather surprising statement, the assistant commissioner found that an average consumer would not “immediately perceive this meaning in 'MY', plus whatever the type of insurance it is”. It is hard to believe that a consumer would not understand the meaning of the words 'my insurance'.

None of the oppositions, nor the invalidity actions were successful on any of the grounds.

This article was published in World Trademark Review, January 2011.

Chinese Top Level Domain Name in Hong Kong Available for Register

Mon, 10 Jan 2011 00:00:00 +1300

Back in June 2010, the Hong Kong Internet Registration Corporation Limited (HKIRC) was granted approval by ICANN to administer Chinese equivalent of the ".hk" top level domain name, the ".香港" (the Chinese term for Hong Kong) to eliminate language barriers. Subsequently, free and priority registration of the Chinese domain ".香港" has been offered to current English domain users, with any new customers able to register both Chinese and English ".hk" domain names for the price of one.

HKIRC has now announced its plan to launch [Chinese Characters].香港 domain categories in February/March 2011 (exact dates to be confirmed). In preparation for the launch, application for [Chinese Characters].hk domain names will no longer be accepted from 18 January 2011 onwards. From 18 January 2011, you will only be able to register [Chinese Characters].香港, and all existing customers with a registered [Chinese Characters].hk domain name will be automatically allocated a corresponding [Chinese Characters].香港 domain name for free.

With the anticipated increase in popularity for Chinese language domain names, there is a need for trade mark owners to secure their Chinese character brands and domain names, especially when mere registration of roman characters only domain names will not necessarily offer protection for corresponding trade marks in Chinese characters. Brand owners should therefore take this opportunity to obtain priority for Chinese character trade marks in both ".香港" and ".hk" domain names for the price of one registration fee.

First In - First Served: Advantages of filing your provisional patent application in the US

Fri, 17 Dec 2010 00:00:00 +1300

While the choice of where to file a provisional patent application may seem routine (“It’s a New Zealand invention, so we’ll file first in New Zealand”), your patent filing strategy needs to take into account your long term goals. If you want to target and enter the US market, then a New Zealand provisional patent application may not be your best option.

By filing your provisional patent application in the US, you gain several commercial and legal advantages that will help you towards market penetration in the States.

On the commercial side, you will have a better chance of winning over investors with a US patent application as opposed to one from New Zealand. Particularly in the US, investors expect to see US patent protection underway. The earlier you file in the US, the earlier you have the ability to say “US patent pending” to potential financial partners.

On the legal side, you will have a better chance of getting patent protection in the US when you file first in the US. This is because each US patent application is potentially prior art to other patent applications in the US. The key is to file in the US before your competitors file there.

If you file in the US before your competitors, your US application may be used as prior art to knock out your competitors’ applications in the US. Similarly, if you are first to file in the US, your US application is safe from and cannot be knocked out by your competitors’ applications in the States.

This boost based on an earlier US filing date has been confirmed by a recent case from the United States Court of Appeals for the Federal Circuit.(i) Thus, the sooner you file in the US, the better your chances (and the worse for your competition) during patent prosecution.

Only a US patent application can provide these advantages. For that reason, it is best to consider filing first in the US, particularly if the US market is important to your business plans. You will still have the option of filing a subsequent patent application in New Zealand, either as a convention application or as a national stage application, to protect your local market as well.

At Baldwins, we can ensure that you have the benefit of an early US filing date. We can draft your provisional patent application and our associate Caryn DeHoratius can file your application directly into the US Patent & Trademark Office (USPTO).

Caryn uses an online system at Baldwins which allows her to file provisional patent applications and other documents directly into the secure online filing portal of the USPTO. Caryn is qualified as a US lawyer and registered as a US patent attorney; she has been working as a patent specialist since 1999, and at Baldwins since 2006.

As your intellectual property counsel, the team at Baldwins will make sure that you get a head start in the US and a leg up against your business rivals there.

If you would like to discuss further, please contact Caryn DeHoratius directly.

(i) In re Giacomini, No. 09-1400 (Fed. Cir. July 7, 2010).

Internet suspension for file sharing infringers

Thu, 09 Dec 2010 00:00:00 +1300

The Copyright (Infringing File Sharing) Amendment Bill purported to introduce a new civil remedy, allowing a District Court to order an Internet Service Provider to suspend an account for up to six months. This measure brought support and criticism in equal share.

The internet suspension provision would only be activated if an account holder continues to infringe copyright after receiving detection and warning notices. It was seen as a secondary measure of last resort for more serious infringers, with the primary avenue being recourse to the Copyright Tribunal.

Internet suspension is seen by supporters as the only adequate deterrent for serious copyright infringers and without it, the notice system would be without weight. Critics have argued that internet suspension would be ineffective, disproportionate to the harm caused by the infringers and it would unduly affect the contractual rights and obligations of Internet Service Providers and their account holders.

The Commerce Select Committee has recently reported back on the Bill and proffered a compromise. The provisions relating to internet suspension are retained in the Bill, but they will not be brought into force unless activated by an Order in Council. This means that internet suspension will only become a remedy if the notice process and the Copyright Tribunal prove to be ineffective.

This is an appropriate compromise. The notice system and the Copyright Tribunal remedy is targeted at low level copyright infringers, many of whom will be deterred by the fact that their actions have been identified. If this does not deter the more serious infringers, then it is doubtful whether internet suspension would either.

Australian Patents Act - proposed amendments to prevent gene patenting

Mon, 06 Dec 2010 00:00:00 +1300

A private member’s Bill, the Patent Amendment (Human Genes and Biological Materials) Bill 2010 was recently introduced in Australia’s Parliament. The Bill, originating in the Senate, is sponsored by Liberal senator Bill Heffernan, Labor MP Melissa Parke and independent senator Nick Xenophon.

The Explanatory Memorandum for the Bill states that the amendments proposed in the Bill will

“advance medical and scientific research and the diagnosis, treatment and cure of human illness and disease by enabling doctors, clinicians and medical and scientific researchers to gain free and unfettered access to biological materials...that are identical to such materials as they exist in nature.”

The purpose of the Bill as stated by Senator Heffernan during its introduction is “to amend the Patents Act 1990 to prevent the patenting of human genes and biological materials existing in nature.” In particular, the Bill will amend section 18 of the Act to add a further definition of what is not a patentable invention:

“biological materials including their components and derivatives, whether isolated or purified or not and however made, which are identical or substantially identical to such materials as they exist in nature.”

A definition of biological materials as including DNA, RNA, proteins, cells and fluids will also be added.

This Bill appears to have been put forward in reaction to the gene patents debate that is underway in Australia and other countries. In his introductory speech, Senator Heffernan said:

I [question] the legality of a practice which had allowed [a patentee] and its exclusive Australian licensee…to monopolise human genes BRCA 1 and BRCA 2, genes linked to breast and ovarian cancers. No one invented these genes. Yet, relying on four patents granted by IP Australia, on 8 July 2008 [the licensee] attempted to close down all public laboratory genetic breast and ovarian cancer gene testing when it sent a letter threatening to sue each of them for patent infringement. I said then and I say now that this is a disgrace.

AusBiotech, Australia’s biotechnology organisation, has called for an informed debate on the issue. In its press release of 18 November 2010, AusBiotech stated that it

supports access for patients to life-changing medical tests, therapies and devices. It also supports a research exemption to patent infringement, and the certainty derived from the patent system in driving and facilitating medical innovation, which gives us social and economic benefits, including the development of new diagnostic tests based on genes.

These pursuits will be impacted in an unintended manner if the fundamental changes to the Patents Act that are being called for are allowed to proceed.

The outright banning of gene patents, which campaigners are seeking, will undoubtedly reduce, and in some cases eliminate, investment in related research, and ultimately is more likely to profoundly diminish public access to future gene-based developments in healthcare.

The Bill has been referred to the Senate Legal and Constitutional Affairs Committee, which is due to report back to Parliament on 16 June 2011. The Committee is seeking written submissions from interested individuals and organisations. Submissions close 25 February 2011.

Short Domain Names to be released in December

Thu, 02 Dec 2010 00:00:00 +1300

According to Nominet, the registry for domain names which end in “.uk”, application to register a “short” domain name will be available from 12:00pm GMT on 1 December 2010 until 12:00pm GMT on 17 January 2011.

This means 2,831 very short domain names, including those consisting of just each letter of the alphabet or number digit (such as .a.co.uk, .ip.co.uk, .1.co.uk etc) will become available for registration. These domain names were previously held back due to technical and policy reasons, but Nominet has now changed its stance following public consultation and policy reviews. It should be noted, however, that short domain names which correspond to existing .uk second level domain names (e.g. .net.co.uk, .me.net.uk etc) are still prohibited.

The release of these short domain names will be separated into three stages:

The registered rights “Sunrise” stage, where registered rights holders (e.g. owners or licensees of trade marks) will be allowed to register between the above period between December 2010 to January 2011, if their registered right (such as a trade mark).
    a. Is in force in the United Kingdom (including UK national, Community trade mark as well as international registration designating the United Kingdom) and registered on or before 1 January 2008;
    b. Matches the domain name being registered exactly (excluding suffix .co.uk, .org.uk etc), which does not need to be a word mark; and
    c. Has been put to use in the United Kingdom in connection with bona fide offering of goods and services on or before 1 January 2008.
The unregistered rights “Sunrise” stage, where applicants with unregistered rights can apply for short domain names which correspond with its rights, or for those registered rights holders who has simply missed the deadline for stage 1. The criteria for the applicant’s unregistered rights are the same as that for stage 1, with more details to be released in early 2011.
The final “Landrush” general release stage where all unregistered domain names remaining from the last two phases will be available for registration by all interested parties on a first come first served basis.

If two organisations have equal rights to a name both apply concurrently, Nominet will auction the name to the highest bidder.

Many of these domain names will be hotly contested by major brands as well as many individuals and companies. After all, while there are room for variations and flexibility in trade mark registration, there is only one domain name. Given the huge demand expected, trade mark owners should carefully review its branding strategy and identify any .uk short domain names which may be of interest.

For further information and advice on applying, contesting or registering domain names as well as any other related matters, please contact us.

Is the Rugby World Cup 2011 (Empowering) Bill Too Empowering For Some?

Thu, 21 Oct 2010 00:00:00 +1300

The Rugby World Cup 2011 (Empowering) Bill has now received the approval of the government administration select committee and has had a second reading before Parliament. The Bill has been drafted in preparation for the Rugby World Cup 2011 and is essentially being put in place in order to facilitate consents required by those providing activities or facilities for the Rugby World Cup in a shorter timeframe than what would usually be required.

The Bill establishes the Rugby World Cup Authority as a body which will have the power to determine applications for approval relating to Rugby World Cup activities and facilities (or classes of the same), and to make declarations relating to activities or facilities as Rugby World Cup permitted activities.

In addition to this the Bill provides a means for regulations to be made which declare activities or facilities (or classes of the same) as Rugby World Cup permitted activity “in circumstances of urgency that, for good reason, were not foreseen”, if they are recommended to be made by the Authority. The Bill also allows the Rugby World Cup Minister (currently Murray McCully) to grant urgent approvals for activities and facilities in these same circumstances.

The Bill also sets up a process by which the Authority is able to grant Rugby World Cup liquor licences.

Some concerns have been raised by members of the Opposition as to the amount of power which the Rugby World Cup Minister is given under the Bill. Currently the Bill allows for the Minister to approve applications, even where the Authority has not recommended such approval be given.

The Bill is now subject to a committee discussion of the whole House and will then have a third reading in Parliament before it is passed.

Toasting the success of Cognition Education

Thu, 02 Sep 2010 00:00:00 +1200

Baldwins were delighted to be sponsors of the recent Air NZ Cargo Export Awards in Auckland, sponsoring the Consultants and Services Exporter of the Year Award.

Philip Thoreau, Baldwins partner, played an integral role as one of the judging panel and was keen to recognise the achievements of all the finalists, not least Cognition Education who were awarded the Baldwins sponsored award.

"The claibre of entrants to this years awards was impressive. The judging of such high calibre entrants was exhausting but highly rewarding and it's fair to say that the New Zealand export market is sound."

"Cognitive Education illustrated organisation, a clear strategy being implemented and a very high level of success demonstrated by solid returns at surprisingly high levels. "

Baldwins were also delighted to host a post-awards function at which Dr John Langley, CEO of Cognitive Education and Marc Michel, General Manager - International of the BCS Group (Berrill Control Systems Ltd), winners of the Westpac Institutional Bank Exporter of the Year Award, gave an insight into some of their key learnings along the path to their success.

For further information on the 2010 Awards go to the Export NZ website.

Above: Cognition Education team
Below: Philip Thoreau, Stewart Germann, Dr John Langley

ONLINE TRADE MARK DISPUTES: Challenges of an Evolving Front

Mon, 16 Aug 2010 00:00:00 +1200

The Internet is a place of endless possibilities, increasingly the first port of call for consumers of anything from agricultural machinery to designer clothing. The more that the Internet is embraced by consumers and companies alike, the more frequently it is becoming the battleground for Intellectual Property disputes, such as disputes involving trade marks. Such disputes may involve cybersquatting or typosquatting, the use of Adwords, Facebook, Twitter, Google Places listings on Google Maps, or domain name disputes. The proliferation of available domain names is adding to the likelihood of such disputes. Even the most well protected brands are likely to face an increase in online trade mark disputes.

There are many issues facing brand owners who encounter unauthorised use of their trade marks online. Whilst trade mark rights are generally territorial, the Internet is without such geographical boundries, which leads to difficulties when attempts are made to enforce rights such as registered trade marks. Furthermore, often use online does not correspond clearly to a particular good or service and it is not always clear whether use online constitutes use as a trade mark. For example, domain names technically function as the electronic equivalent of a street address, but they are commonly understood to act in practice as an indicator of origin as well. Options to address online trade mark disputes include relying on trade mark infringement, passing off and/or the Fair Trading Act 1986. There are also options specific to online issues, such as the New Zealand Dispute Resolution Service Policy for .nz domain disputes.

In order to establish trade mark infringement, the use online must constitute use of the same or similar sign as the registered trade mark, in relation to the same or similar goods or services, and such use must be likely to deceive or confuse. In addition, the use must be use as a trade mark. Determining whether use online constitutes use as a trade mark requires consideration of whether the online mark is used to distinguish the goods or services of one trader from those of another. For example, if a domain name is used in relation to a website which does not offer goods or services, or does not offer goods or services that are the same or similar as those covered by a registered trade mark, then an action for trade mark infringement is unlikely to be successful. However, there may be some scope for injunctive relief if a third party has registered a domain name incorporating a registered trade mark, but is not yet using the website to trade, on the basis of the threat of infringement. However, this is a grey area of law and will depend on the circumstances of the case.

In the recent case of Sports Warehouse Inc. v Fry Consulting Pty Ltd [2010] FCA 664 (25 June 2010), the Federal Court of Australia considered the issue of when use of a domain name can constitute use of a trade mark. Australian cases have influence in New Zealand, particular in an area of law such as this where there is very little judicial guidance. In this case, the issue arose during the course of considering whether the Applicant had established sufficient use of the mark TENNIS WAREHOUSE to overcome the concerns regarding lack of distinctiveness. The Applicant wanted to rely on their use of the domain name www.tennis-warehouse.com in support of their claim for acquired distinctiveness. The respondent argued that this use was not use as a trade mark. The Court held that use of a domain name may constitute use of a trade mark, and it is not to be considered as only an address on the Internet. Whether or not a domain name is used as a trade mark was said to depend on the context in which the domain is used. In this case the Court found that it did constitute use as a trade mark as the domain would be seen by the public as a sign for the online services identified by the trade mark as available on the webpage to which it carries the user. This view is consistent with previous decisions regarding domain name use including CSR Ltd v Resource Capital Australia Pty Ltd [2003] FCA 279, which was a case dealing with cyber squatters who had no real intention of using the domain name as a trade mark. In that case, although the use was not found to be use as a trade mark, the Court allowed for the possibility that a domain name might be used as a trade mark and could constitute infringing use.

Further options for dealing with online trade mark disputes are available under the Fair Trading Act 1986 and under the common law action of passing off. To establish passing off, a reputation in the words (or similar words) in the mark used online must be established. The defendant’s use must also amount to a misrepresentation and damages must be suffered, or likely to be suffered, as a consequence. A further cause of action may be on the grounds of misleading and deceptive conduct under the Fair Trading Act 1986. The Fair Trading Act provides legislation for the protection of consumers from unfair trade practices, and allows for anyone to take action against conduct in trade that is misleading or deceptive or is likely to mislead or deceive. Establishing passing off can be onerous and costly, due to the requirement to prove damages and reputation. However, if successful, damages and costs may be awarded.

The number of domain name extensions (such as .com) available is increasing, which is adding to the likelihood of Intellectual Property disputes involving these domain names. Recent additions include the launch of the .co top level domain name extension, as well as the availability in New Zealand to register a .nz domain using the macronised vowels ā, ē, ī, ō and ū, allowing correct representation of the Māori language. ICANN, the International body in charge of regulating the domain name space, have indicated they are liberalising their approach to domain name extensions generally. This leaves it open that companies may be able to obtain their own name as a domain name extension, for example, .cocacola.

In New Zealand, in addition to the recourse available by way of trade mark infringement, passing off and/or breach of the Fair Trading Act, those encountering an online trade mark dispute involving a .nz registered domain may wish to take advantage of the dedicated Dispute Resolution Service Policy (“DRSP”). This is administered by the Domain Name Commission, on behalf of InternetNZ, who are responsible for .nz domain names in New Zealand. New Zealand has been well represented on the domain front by Peter Dengate Thrush, a former Baldwins partner, has been involved in both ICANN and the New Zealand’s InternetNZ since their inception. The DRSP differs from ICANN’s Uniform Dispute Resolution Service (UDRS), which deals with top level domains such as .com. All .nz registrants agree to be bound by the DRSP when registering or renewing a .nz domain name. To receive a favourable decision under the DRSP a Complainant must establish on the balance of probabilities both “Rights” in respect of a mark which is identical or similar to the Domain Name, as well as that the domain name, in the hands of the Respondent, is an “Unfair Registration”. “Rights” are defined as including, but not limited to, rights enforceable under New Zealand law. Therefore, this appears to cover both New Zealand registered and unregistered trade marks, and possibly foreign trade marks. “Unfair Registration” is defined as a domain name which was registered or acquired in a manner which took unfair advantage or was unfairly detrimental to the Complainant’s rights, or is used or likely to be used in a manner which takes undue advantage or is unfairly detrimental to the Complainant’s rights.

The procedure under the DRSP begins with both parties having the opportunity to file submissions. A period of Informal Mediation follows, facilitated by an officially appointed mediator. If no acceptable resolution can be achieved by Informal Mediation, the Complainant will have to pay a fee of approximately NZD$1800 plus GST (approximately USD$1320 or EUR€1000) and an Expert will be appointed who issues a written Decision. The written Decision may include a direction that a domain name should be cancelled, transferred, suspended or otherwise amended. There is an option to appeal the Expert’s decision to a panel of three Experts. The DRSP process is a relatively quick and cost effective method of dealing with a domain name dispute and there is a general consensus that the process generally favours Complainants. Furthermore, there is not a strict requirement that the domain be in use as a trade mark, as there is for an action based on trade mark infringement. This is particularly useful in dealing with cybersquatters or typosquatters. However, it is not possible to obtain an award for costs or damages, which may otherwise be available under trade mark infringement and/or passing off.

In today’s ever-evolving world of the Internet, it is clear that the misappropriation of a brand online is a serious cause for concern. In the event that this involves a .nz domain name dispute, the most cost effective and timely option for resolution is by way of the official DRSP process. However, in many other cases brand owners will have to rely on their rights under a trade mark registration, common law rights under passing off and/or breach of the Fair Trading Act 1986.

This article was published in MIP Week, August 2010.

Generics and Pharmac - again

Fri, 06 Aug 2010 00:00:00 +1200

The ongoing battle between pharmaceutical companies and the manufacturers of generics, with Pharmac as a very interested party received another airing in court recently.(i)

Aventis Pharma SA is the patenteee of the cancer treatment drug Taxotere, a derivative form of Docetaxel, which is due to expire on 2012. InterPharma (NZ) Ltd is the manufacturer of a generic copy, called Docetaxel EBEWE. It won a tender to supply the generic product to the government’s pharmaceutical purchasing agency, Pharmac, in place of Aventis.

When it discovered the existence of the Docetaxel EBEWE drug on the Medsafe website, Aventis noitfied Interpharma of its concerns in April 2009. In October 2009 Pharmac awarded the tender to InterPharma, effective from December 2009. On seeing the medicine data sheet Aventis applied to amend its patent to ensure it covered the Interpharma product. Interpharma failed to oppose the amendments before they were made.

Aventis then sent a warning letter to Interpharma demanding that it stop selling its product to Pharmac. Interpharma responded by applying to the court to review the Commissioner of Patent’s decision to grant the amendments.

Aventis applied for an interim injunction against InterPharma to stop InterPharma’s distribution of Docetaxel EBEWE.

Both applications were heard together. Starting with the interim injunction, Harrison J held that the substantive issues of infringement and invalidity of the patent could not be dealt with until trial.

Turning to the balance of convenience, His Honour referred to evidence showing the drop in sales of the Aventis product following its delisting from the Pharmac schedule and the fact that hospitals would not purchase it once present supplies were exhausted. The market for those parties prepared to pay privately for was small.

Aventis’s sales of Taxotere prior to delisting were considerable, at around $4million a year and it claimed it would need to restructure and make staff redundant. Even if Docetaxel EBEWE were to be withdrawn, it claimed that it might not be viable to re-enter the market.

However InterPharma successfully argued that even if Aventis ultimately succeeded on patent infringement, damages could still be quantified in monetary terms using measures of gross sales, difference in supply price and direct market revenue comparison. The lack of substitutes and relatively stable demand in the market further strengthen the case that loss of future market opportunities need not be a consideration. The judge was also influenced by the provision by InterPharma of a $5m bank guarantee.

Other factors also weighed in InterPharma’s favour. The judicial review application on the amendments was finely balanced. If it succeeded, the infringement action might fail. InterPharma had contractual obligations to Pharmac, including penalties for non-supply, and its generic product was saving the taxpayer $1.33m per annum.

Finally, Aventis did nothing between its first lawyers’ letter in April 2009, and the award of the tender by Pharmac to InterPharma in October 2009.

Conclusion

In the end, Harrison J refused the application for the interim injunction, provided InterPharma produced a bank guarantee of balance of convenience favoured InterPharma

This case illustrates the importance of acting promptly when patent rights threatened by a generic product (including if necessary amending the patent) and also the peculiar factors that can come into play when Pharmac is the major purchaser of the particular product.

(i) Aventis Pharma SA & Anor v Pharmaco (NZ) LTD and Interpharma(NZ) Ltd HC AK CIV-2010-404-1670, 4 June 2010 Harrison J

Launch of .co Extension

Wed, 28 Jul 2010 00:00:00 +1200

On 1 March 2010, the Colombian Domain Name Registry launched a new top level domain (TLD) extension – ‘.co’.

Given the saturation of the generic TLD ‘.com’ market, and that ‘co’ is a common abbreviation for company, the new domain name extension may be an attractive alternative. Not only is the ‘.co’ extension useful to businesses with a Colombian market or presence but also to businesses wanting to take advantage of the ‘company’ connection as well as those wanting to profit from web-traffic generated by mistyping the extension .com. The ‘company’ connection is particularly attractive to small and medium size businesses that already have country code TLD’s such as ‘.co.uk’, and ‘.co.nz’ as well as others, and who want to expand their web-presence.

As with most recent other TLD launches, the Colombian registry is running a phased launch process with owners of Colombian domain name registrations (with extensions such as ‘.com.co’ and ‘.net.co’) being given first priority, followed by holders of Colombian trade marks. Next in line are trade mark holders in other states after which the land rush period and general registration periods commence.

The Colombian Registry will be marketing the ‘.co’ extension to the global web community in an effort not to restrict the meaning of ‘.co’ to ‘Colombia’ or ‘company’. To further this aim, numerous rights protection mechanisms (RPMs) have been put into place to protect brand owners’ rights.

RPMs relating to the launch of ‘.co’ include the IP Clearinghouse, a ‘rapid suspension system’ for domain names that infringe trade mark rights and the implementation of the Uniform Domain-Name Dispute-Resolution Policy (UDRP) for the settlement of disputes relating to ‘.co’ domain names. Domain name registrants will also not be allowed to use a proxy service to hide their identity, which will be available through ‘WhoIs’ services.

The general registration period for .co domain names begins on 1 August 2010 subject to availability.

For advice in relation to domain names or any of the issues raised above, please contact Rosemary Wallis or Vineetha Veerakumar

Disputing Ownership of Copyright

Tue, 27 Jul 2010 00:00:00 +1200

Disputes over ownership of copyright often arise in situations where one party “commissions” someone else to create an original work.

The starting position for ownership of copyright is that the author of an original work owns copyright in it. One of the exceptions to this is the “commissioning rule”. Section 21(3) states that where a person commissions, and pays or agrees to pay for a work in which copyright can subsist, that person is the first owner of any copyright in the work. This applies only to certain types of copyright work, including artistic works, drawings and computer programs.

It is not always clear whether the work has been commissioned or whether the person who created it retains copyright in it, and has merely offered the products which are the embodiment of that work for sale to the other person.

In the recent Court of Appeal case of Oraka Technologies Ltd v Schwarz & Geostel Vision Ltd & Napier Tool and Die Co, the crux of the appeal centred around whether in fact the work was done on “commission”.

The Court of Appeal stated that the relevant requirements of a successful commission were set out in Pacific Software Technology Ltd v Perry Group Ltd [2004] 1 NZLR 164:

A request or order must be made.
The commissioning must be antecedent to the work.
Commissioning requires an express or implied agreement to pay (s21).
The payment is quid pro quo for the copyright; that is, the making of the copyright work, not the physical embodiment of the work.

Napier Tool contended that what had been offered was a “free design service” and that the dealings between the two parties did not constitute a commission. The critical issue for the Court was then whether there had been an ‘implied’ commission between Oraka Technologies and Napier Tool to design and build the cup assembly in question (which was part of an asparagus grader), which would give copyright in the design to Oraka Technologies.

The factual progression of this case can be broken down into three significant events. First, Mr Schwarz (one of the appellants) came to Napier Tool and requested them to make an assembly cup. This request was accompanied with some drawings and an original prototype by Mr Schwarz. Secondly, provisional drawings were prepared by Napier Tool free of charge. Thirdly, the drawings were approved by Mr Schwarz and final industrially design drawings were then made and used to produce the assembly cup. The evidence showed that the plaintiffs made a payment of $26,000 for the work done in order to complete the cup assembly.

The Court of Appeal and the High Court differed only in how the second event affected requirements 3 and 4. Allan J in the High Court ruled that the fact that the drawings made by Napier Tools were ‘free of charge’ meant that there was never an implied agreement to pay for the copyright. On top of this, the final payment did not account for the copyright itself. The $26,000 covered the payment of making the assembly cup, and that was all.

The Court of Appeal focussed on the commercial reality of the dealings. The Court of Appeal ruled that creating two transactions between producing the drawings and making the product was an artificial separation that did not reflect the true nature of the relationship. The commercial reality test used by the Court showed that in ordinary practice a party would not make two separate payments for a transaction of this kind. The Court said that it was “everyday commercial sense” that what had transpired was one seamless transaction.

The Court further ruled that the fact scenario could be seen as a ‘conditional’ agreement of an implied obligation to pay. There was an implied obligation that the Oraka would pay the money if satisfactory drawings led to the manufacturing work. That conditional implied obligation arose before the work was undertaken.

The Court of Appeal therefore overturned the decision of the High Court and ruled that all the requirements of a commission were complete.

For many New Zealand SMEs, the issue of protecting their intellectual property is not at the forefront of contractual negotiations. However, what businesses must keep in mind is that not specifically deciding which party owns copyright prior to completion of a transaction can lead to problems, particularly if they do not want their competitors to have access to designs for any products they have specially developed for their own product portfolio.

Setting it out clearly in an agreement between the parties ensures that each party knows their rights and obligations at the time of creation of copyright works.

If you have any queries over ownership of copyright and wish to discuss further please contact Vineetha, or speak to your Baldwins contact.

Case Note: Oraka Technologies Ltd v Schwarz & Geostel Vision Ltd & Napier Tool and Die Co [2010] NZCA 232

FIFA 2010 – What Can We Learn From an Ambush Marketing Perspective?

Tue, 27 Jul 2010 00:00:00 +1200

With the wrap up of the FIFA World Cup 2010 in South Africa, Paul the Octopus can go back to his grotto and contemplate his newfound psychic abilities and those of us with an interest in intellectual property can look at lessons learned in relation to ambush marketing incidents which occurred during the tournament. These lessons are particularly valuable given that New Zealand’s Major Event Management Act 2007 (MEMA) is currently untested in the courts. Any cases which are brought under MEMA will no doubt look to other jurisdictions with similar ambush marketing legislation, such as the South African Trade Practices Act (no. 76 of 1976) and the Merchandise Marks Act (No 17 of 1941), for preliminary guidance.

The Tavern Case – Federation Internationale de Football Association (FIFA) v Eastwood Tavern (GNP) (unreported case no. 52309/07, 12-15-2009)

FIFA’s fight against ambush marketing kicked-off with this case involving a restaurant in Pretoria, located across the road from the Loftus Stadium where FIFA World Cup matches were to be played, which erected signs containing WORLD CUP 2010, the national flags of competing nations in the FIFA tournament, TWENTY TEN SOUTH AFRICA and SOUTH AFRICA 2010 alongside its own branding.

FIFA brought an action against the Eastwood Tavern in relation to both trade mark infringement, passing off under the common law and unlawful competition under section 15A of the Merchandise Marks Act and section 9(d) of the Trade Practices Act.

The parties settled the matter before it proceeded to Court but the High Court of South Africa issued an order which prohibited Eastwood Tavern from, inter alia, obtaining special promotional benefit from, or associating its business with, the 2010 FIA World Cup.

The Lollipop Case - Federation Internationale de Football Association (FIFA) v Metcash Trading Africa (Pty) Limited (unreported case no. 53304/07, 1-10-2009)

The second ball through FIFA’s ambush marketing goal was the Metcash Lollipop case. Metcash, a major distributor in South Africa, was selling “Astor 2010 Pops” – lollipops which were packaged in wrappers depicting the “2010” written with soccer balls depicted as the 0’s, the South African flag and soccer balls.

FIFA brought an action against Metcash which alleged trade mark infringement in relation to the use of the soccer ball 2010 which was a registered FIFA trade mark. In addition, FIFA brought actions in passing off and unlawful competition (once again under section 15A of the Merchandise Marks Act and section 9(d) of the Trade Practices Act) alleging that the use of the 2010, soccer ball and South African flag elements together called to mind the 2010 FIFA World Cup. The High Court of South Africa found in favour of FIFA and restrained Metcash from competing unlawfully with FIFA by deriving special promotional benefit from the tournament without FIFA’s approval. Costs were also awarded against Metcash.

The Keyring Case - Federation Internationale de Football Association (FIFA) v Executive Trading Cc and the Registrar of Designs (Case No 52308/07)

FIFA has also issued proceedings against both Executive Trading and the Registrar of Designs in relation to the use and registration of a design depicting a vuvuzela trumpet, with a football and 2010 written beside it. Executive Trading intend to use the design in relation to a key holder. The Registrar of Designs registered the design.

FIFA is trying to prevent the use of the design by Executive Trading on ambush marketing grounds. In addition, FIFA is applying for an order against the Registrar of Designs to cancel the registration of the design. The case is yet to be heard by the Courts.

Close Calls

Bavaria Brewery
The Bavaria Brewery had perhaps the most successful counter attack against FIFA and South Africa’s ambush marketing laws in terms of gaining international exposure for a very successful ambush marketing event. Bavaria organised for 36 young, blonde females to attend the World Cup match between the Netherlands and Denmark dressed in bright orange mini-dresses (the national colour of the Netherlands and Bavaria beer). The dresses had small Bavaria emblems on them. All of the women were immediately removed from the stadium and FIFA decided to lay charges against two of the women. After several days the charges were dropped after FIFA reached a settlement with Bavaria. However, by this time the damage had been done.

Budweiser Beer was the official beer sponsor of the 2010 FIFA World Cup and, as such Bavaria scored a direct ambush marketing hit against a major sponsor, which essentially went unpunished – in fact quite the opposite – it has been reported in media that the Bavaria website was the fifth most visited beer website in the United Kingdom the week after the stunt, which also caused international headlines for several days as the world watched and waited for the outcome of the case.

Kulula.com
South African budget airline kulula.com tried some creative thinking to get around South Africa’s ambush marketing legislation. They first ran an advertisement with the heading “Unofficial National Carrier of the “You-Know-What”” and which featured soccer balls, the date 2010, vuvuzelas and other items associated with soccer. It did not however contain any direct reference to the tournament. FIFA served a cease and desist letter to kulula.com alleging that the sum of the elements contained in the advertisement brought to mind the 2010 FIFA World Cup. Kulula.com duly complied with the letter but brought out a second advertisement headed “Not Next Year, Not Last Year, But Somewhere In Between.” which replaced the soccer related elements with other items in a tongue-in-cheek way. FIFA did not object to the second advertisement. Once again the attention which Kulula received from this campaign, on a global level, was substantial.

While the cases taken so far by FIFA discussed in the first part of this article have proved to be successful and have no doubt acted as a deterrent to some regarding ambush marketing, the problem remains that those organisations which “take their chances” and run ambush marketing campaigns often reap the collateral publicity rewards associated with their illegal activities. The cases and situations discussed may assist not only event organisers and the Ministry of Economic Development in relation to possible prosecutions under MEMA, but may also help individuals and business owners and operators to begin to delineate some of the limits to ambush marketing activities.

If you have any queries on ambush marketing or MEMA contact us.

Government maintains its hard line on software patents

Fri, 23 Jul 2010 00:00:00 +1200

Recent rumours that there could be a re-wording of the exclusion of computer programs from patentability have been quashed by Commerce Minister Simon Power. Consequently, the blanket ban of computer programs from patentability remains and it is unlikely there will now be any change to this. However, the Minister repeated that inventions involving "embedded" computer programs "should be able to obtain patent protection" and has tasked the Intellectual Property Office of New Zealand (IPONZ) with the somewhat daunting task of drafting guidelines as to the types of inventions that will be allowed. Whether such a hotly debated matter should be left to IPONZ as opposed to those elected to define New Zealand's policies remains to be answered.

Despite concerns having been raised by various parties, it appears that the scope of the exclusion is still not fully appreciated and it is unclear what effect any guidelines will have with the proposed statutory exclusion clause overriding them. The change creates a high level of uncertainty in that any patents granted according to the IPONZ guidelines will be open to challenge based on the wording of the statute (when enacted). This is contradictory to the Commerce Comittee's desire for a clear and simple approach. Surely any limitations of the scope of the exclusion would be best defined in the legislation, with IPONZ providing guidelines around those, particularly in view of the Committee having accepted that there is no agreed definition of "embedded software" or offering much in the way of explanation as to which inventions should or should not be patentable.

The definition provided in the Committee's report is that "embedded software" is "computer software which plays an integral role in the electronics it is supplied with (e.g. cars, pacemakers, telephones and washing machines)". On first reflection, this may seem helpful, essentially distinguishing between software that is used with PCs and that used to provide functionality within a piece of equipment, but it is quickly possible to see problems with it. Consider, for example, an operating system. It would be hard to argue that an operating system does not play an integral role in the computer in which it is installed, it essentially transforms a useless box of electronic components into a useful tool. However, it is unlikely that the Committee would have intended such software to be patentable. The proponents of open source software certainly would not have. This is further complicated by the ever increasing intelligence given to devices along with the ability for users to interact with them, blurring the lines between what is a computer and other electronic-controlled devices. Smart phones, for example, will clearly not fit neatly into either of these categories.

Reasoning given for the exclusion includes the argument that patents in the software field stifle innovation. One assumes that this is not considered to be the case in other fields as no similar exclusions are proposed for other technologies. Why software should be treated different from other technologies is difficult to fathom, particularly in view of the Ministry of Economic Development's more considered review which concluded that there was no reason to treat software differently. Only time will tell whether removal of a barrier to imitation will actually promote innovation and the investment required to bring innovations to market, or whether the temptation of using another's creations will be too hard to resist.

Without any evidence or analysis backing the exclusion, it is difficult to assess what the effects will be. Further, these will not be felt in the short to medium term because any pending applications or granted patents in New Zealand that cover software inventions will remain pending or in force (patents have a 20 year term). Only applications filed after the new law comes into force will be assessed under the new exclusion clause. Even after expiry of the existing patents, the exclusion is only likely to have a significant impact for those Kiwi developers that market their products solely in New Zealand. The potential risk from damages overseas (particularly the US) typically dwarves that in New Zealand to negligible levels and exporters will be required to continue to assess freedom to operate in much the same way as they have always done. With the government pushing for the development of medium to large enterprises with a bias towards exporting, it is difficult to see how this fits into their overall strategy or the wider goal of trans-Tasman harmonisation (Australia allowing patents for software). Further, it is difficult to see how the targeting of these smaller developers will provide any significant benefit for New Zealand as a whole although it is possible that the exclusion will enable more enterprises to stay afloat or even develop beyond the startup phase. Without any indication as to the numbers of enterprises that have been adversely affected by patents, this is difficult to evaluate.

While the focus on the exclusion has been on the freedom of Kiwi developers to fearlessly introduce their developments, this is a very blinkered view. The increasing competence of programmers in developing countries such as India and China should not be forgotten. Copyright provides protection against direct copying but does not provide any bar to others copying the concepts behind a computer program. Without the additional protection provided by patents, Kiwi developers will be more open to overseas-originating competing products, at potentially much reduced prices.

There is also the possibility that the proposed exclusion will impact on trade negotiations with other countries such as the US. While not likely to be the most significant issue in any negotiations, it is possible the exclusion could cause distraction, making it more difficult for the government push through other initiatives.

It is difficult to estimate when the Bill will be enacted because there are no hard timelines for its progress through Parliament. However, it is anticipated it will come into force before the end of 2012. Those on both sides of the debate will be keenly awaiting the release of the IPONZ guidelines.

If you would like to discuss further contact Chris at chris.way@baldwins.com or t 09 373 3137. Alternatively, discuss with your dedicated Baldwins contact.

EU dispute with India and Brazil ups stakes in generics saga

Wed, 21 Jul 2010 00:00:00 +1200

This article was published in the January issue of CiNZ, the professional journal of the New Zealand Institute of Chemistry.

In January 2008, a generic version of Cozaar™ (an antihypertensive drug) en route from India to Brazil was seized under EU customs regulations while in transit in the Netherlands. The seizure, carried out at the behest of the patent owners Merck and DuPont, has reignited the debate over the extent of intellectual property (IP) rights and the availability of patented medicines to developing countries.

Despite the absence of a patent in Brazil or India, Dutch officials deemed the “storage” of the patented drug on Dutch soil to be infringement of the Dutch patent. Although the seizure was later released and flown back to India by the generics producer (in this case Dr Reddy’s Laboratories), the fallout from this and more recent EU seizures has led India and Brazil to beat a path to the door of World Trade Organisation (WTO) to file a complaint. If high-level diplomatic talks between the EU and India/Brazil fail to reach a settlement, it seems likely that the WTO will be left to decide on the extent of protection afforded by IP laws to goods in transit. The international interest (and in some quarters, outrage) in this case highlights the deeper rifts in respective attitudes towards IP between the so-called developed and developing countries.

Protecting your investment
Multinational pharmaceutical companies (collectively “Pharma”) argue that a robust IP enforcement strategy is essential to protect their investment in research and the extraordinary costs and time (on average USD802 million and 7.5 years) to take a drug to market¹ . They might ask why it is that generics companies are able to steal the fruits of their labour and sell them on as cut-price and, in some cases, sub-standard pharmaceuticals. It is argued that the practice exposes patients to potentially harmful counterfeit pharmaceuticals, and that cut-price generics deprive Pharma of revenue to develop new and improved medicines to treat future generations. Enforcing IP laws is therefore said to be an essential part of Pharma’s strategy to ensure survival in a competitive global marketplace.

Protecting the poor
In the other corner of the ring are the generics manufacturers who argue that seizures such as those seen in the EU constitute anti-competitive practice on the part of “Big Pharma”; solely designed to sustain the market status quo and deny opportunities to companies from growing economies. Such practices are also argued to be to the detriment of millions of people in developing countries by denying them access to affordable medicines. The recent EU dispute drew protests from those in the Indian pharmaceutical industry who felt that the seizure was taking the scope of IP laws in Europe too far. Amar Lulla, the joint managing director of Cipla (one of India's largest pharmaceutical manufacturers), expressed his opposition to the seizure saying “The EU has to be resisted at every forum as this is an outrageous step to scuttle Indian exports. This is part of Big Pharma's multi-pronged strategy arising out of their desperate situation of scanty product pipelines”².

The Patent System
Patent protection is designed to stimulate and incentivise innovation by guaranteeing the inventor a limited period of monopoly in exchange for publicly disclosing how to produce or work the invention. However, the scope of the monopoly only extends to the countries in which a patent has been granted. A “global” patent does not exist. Potential patent owners must therefore determine where to invest in a patent; a choice dictated by both economics and whether patent rights can be obtained and effectively enforced. These decisions can restrict access to the product from both a supply and affordability perspective; a situation more likely to occur in less developed countries where healthcare funding is limited or non-existent.

In the countries where the patent has not been granted or has expired (usually after the twenty year term), generics manufacturers may legitimately take up the slack by manufacturing the drug and supplying it domestically and to other countries where a patent is not registered.

At the time the original Cozaar™ patent application was filed (1989), India did not allow patents on pharmaceutical compounds; only the manufacturing process could be protected. Reform came about as a result of a WTO deadline to adhere to the TRIPS agreement. From 2005, patent owners could obtain patents on the active compounds and could gain protection for novel compounds invented after 1995. Despite the reforms and significant improvements to the level of IP protection in India in recent years, India still lies second to bottom of the Global IP Index³ (China sits at the bottom). This index assesses and compares how 24 major IP jurisdictions fare on obtaining, exploiting, enforcing and attacking particular types of IP.

Brazil (which lies one place ahead of India in the Global IP Index) has also had issues with providing robust IP protection to patent holders. While not overtly refusing to grant patents on active compounds, Brazilian patent law (in common with Indian and New Zealand patent law) contains compulsory licensing provisions that can be invoked if favourable terms are not offered by the patent holder. Potential enforcement of these provisions has been used as a bargaining tool by the Brazilian government to force patent owners to reduce prices and indications are that this trend will continue. Despite this, only one compulsory licence has been issued to date (for the antiretroviral drug efavirenz).

The decision by governments on how to legislate and apply their own IP law to benefit their economy has to be finely balanced with honouring commitments to international trade treaties (such as the TRIPS agreement). Other countries and organisations try to influence these decisions by employing incentives and penalties such as trade agreements and import tariffs. The recent reform in India reflects the shifting of this balance as the Indian economy moves from manufacturer towards an R&D led knowledge economy supported by strong IP protection.

The Ideas Pipeline
The practice regarding enforcement of IP rights is in a constant state of flux and depends on interpretation as well as statute. This fact is illustrated by a recent decision in the UK which allowed the transit of counterfeit goods; the court found that trademark infringement does not occur unless the counterfeit goods were likely to be placed on the market in the transit country. The UK decision appears to be at odds with the Dutch practice although EU deliberations may lead to a more unified outlook.

The EU dispute is a minor piece in an immensely complex jigsaw to which this short article cannot do justice. The overwhelming reality is that many millions of people in developing countries lack access to even the most basic medicines and this is a situation that should not be overlooked by the more fortunate in developed countries. Generics manufacturers play an important role in providing competition in the global pharmaceutical economy. However, diluting the power that IP has to incentivise innovation in developed nations is not a sustainable solution. The developing world will only benefit from new medicines if the product pipeline from knowledge-based economies keeps flowing; patents and a return on investment are an essential part of that pipeline. The solution lies in government, Pharma and NGO backed initiatives and partnerships. These initiatives could include promotion of multi-tier pricing strategies by Pharma and the use of development funding to subsidise medicines and develop distribution infrastructure. The goal of providing affordable, high quality healthcare to the masses may then be a step closer.

[1] DiMasi, Hansen, Grabowski (2003) “The price of innovation: new estimates of drug development costs,” Journal of Health Economics; Vol 22, pp. 151-185.
[2] India Opposes Seizure Of Drugs By EU Even As Dr. Reddy’s Labs Brings Its Goods Back PharmAsia News 29 January 2009
[3] Taylor Wessing Global IP Index 2009 http://www.taylorwessing.com/ipindex/ (accessed 1 December 2009)

Patenting software in New Zealand – in or out?

Thu, 08 Jul 2010 00:00:00 +1200

As is the case in Australia, New Zealand's patent law is currently being revised, though the New Zealand reforms are much further through the parliamentary system. New Zealand law has, of course, much further to come to meet modern standards: New Zealand law is currently based on the 1949 United Kingdom Act, which was replaced in that country in 1977, and in the case of New Zealand's closest neighbour, Australia, in 1990.

The New Zealand Patents Bill 2008 has been to the Commerce Select Committee and was reported back in March this year. Under the bill, New Zealand will change from examining only for novelty to examining for novelty, obviousness and utility, and from local novelty to absolute novelty, the objective being to reduce the number of patents of dubious quality being granted. Under the first draft of the bill, oppositions were removed, but following select committee consideration are now back in, following widespread concern from a number of quarters.

However, by far the most controversial topic has been patentability of software. The original bill made no specific mention of it and it was widely assumed that computer programs would continue to be patentable as they are currently, provided they meet the standard tests for patentability.¹

At the select committee stage, a well organised lobby of proponents of open source software managed to get the attention of a number of the select committee members, and to some extent caught many of those larger software developers in favour of patenting software napping. Given previous consultations on the exposure draft of the bill, and the wording of the bill itself, they had not unreasonably assumed that software patents would stay. Few made submissions to the select committee in support of patenting software.

It therefore came as a complete surprise when the select committee reported the bill back with a specific exclusion of computer programs from patentability. ²

The select committee's alarmingly limited understanding of how patents work is illustrated by this statement:

"A number of submitters argued that there is ‘no inventive step’ in software development, as ’new’ software invariably builds on existing software. They felt that computer software should be excluded from patent protection as software patents can stifle innovation and competition, and can be granted for trivial or existing techniques. In general we accept that position."

The select committee considered allowing embedded software only, but concluded that would be too difficult to manage and shut out computer programs altogether, on the basis of their "understanding" that this would be unlikely to prevent the granting of patents for inventions involving computer software.

Apart from the observations that patents cannot in any event be granted for "trivial or existing techniques", that many, indeed most, inventions build on something that already exists, and that the Bill's substantive changes considerably raise the bar for patentability in New Zealand, the select committee's change would put New Zealand out of step with its trading partners around the world. New Zealand companies would still be liable for infringement of software patents in their overseas markets.

At the time of writing the Patents Bill is sitting well down the list of bills on the parliamentary order paper, but is likely to be dealt with before the end of the year. If changes are to be considered, the bill could be referred back to the select committee, or changes made by way of supplementary order paper during the passage of the bill. In the meantime, there is a great deal more lobbying underway, on both sides of the debate.

If you have any legal issues you would like to discuss contact Rosemary Wallis.

¹ Over 1000 software patents have been granted in New Zealand since 1995, and about 20 percent of them are held by New Zealanders.
² Clause 15(3A): “A computer program is not a patentable invention.”

Patents back in business, at least in the US

Wed, 30 Jun 2010 00:00:00 +1200

The US Supreme Court has issued its long awaited decision on the patentability of business methods. The Supreme Court decided that while the particular invention in question was not eligible for patent protection (it covered an abstract idea or scheme), business methods in general were not excluded from patentability. Further, business method inventions were distinguished from computer-implemented or software inventions. The Supreme Court considered computer-implemented inventions were more eligible for patent protection since they inherently include or relate to a computer and are therefore likely to at least have some technical considerations.

There were concerns that this decision would close the door on business method patents in the US, and to a lesser extent, software patents. However, these have been put to rest by the Supreme Court. The Supreme Court indicated that it will not impose limits on what types of invention are eligible for patent protection, other than those set out in the US Patent Act.

This follows a recent decision of the highest decision-making body of the European Patent Office not to change its practice in dealing with computer-related inventions. So, such inventions are eligible for patent protection in Europe as long as they provide a technical solution to a technical problem, rather than providing an advance in an abstract, non-technical field.

These two decisions, with the wide eligibility of patent protection for computer-related and business method inventions in Australia, will put added pressure on the legislators in New Zealand not to impose a blanket exclusion on the patentability of software. Such an exclusion was recently proposed for the draft Patents Bill. This is despite this being inconsistent with the apparent intentions of the Select Committee reviewing the Bill to allow patents for some software inventions ("embedded software"). However, the Government has noticed this inconsistency and the latest indications are that New Zealand will adopt an approach similar to that in Europe.

New Zealand's Major Events Management Act

Tue, 29 Jun 2010 00:00:00 +1200

With the excitement in New Zealand growing as the Rugby World Cup 2011 and World Rowing Championships 2010 draw near, businesses and individuals are finding themselves grappling with the practicalities of the Major Events Management Act 2007 (“the Act”). This legislation was passed to protect major event organisers from illegitimate profiteering by parties not associated with the major event. How does the Act work? What does it protect? And how successful will it be?

WHAT ACTIVITIES DOES THE ACT COVER?

The Act attempts to protect major event organisers against ambush marketing through both association protections and intrusion protections. The Act also covers ticket scalping and pitch invasion.

WHAT IS A MAJOR EVENT?

A major event is any event which has been declared such by an order pursuant to the Act. At this stage the following have been declared major events:

FIFA U17 Women’s World Cup 2008;
FIBA U19 World Championship 2009;
U19 Cricket World Cup 2010;
World Rowing Championships 2010; and
Rugby World Cup 2011.

An order is made by the Governor General, on the recommendation of the Economic Development Minister after consulting with both the Sports Minister and the Commerce Minister.

Once an order is made declaring an event to be a “major event”, all protections under the Act will apply to that event. Often protected emblems and protected words are declared in the same order in which the major event is declared, although the Rugby World Cup 2011 has a separate order governing these issues.

PROTECTIONS AGAINST AMBUSH MARKETING

Recent ambush marketing experiences at the Beijing Olympics, Winter Olympics, and the FIFA World Cup in South Africa have emphasised the growing propensity for organisations to “jump on the pseudo-sponsorship bandwagon” and gain unofficial exposure for their goods and services with worldwide audiences. The Act attempts to prevent this type of behaviour through regulation of both association protections and intrusion protections.

Association Protections

It is prohibited under the Act to imply an association between a major event and goods or services, a brand of goods or services or a person who provides goods and services. The definition of “association” pursuant to the Act is “a relationship or connection, whether direct or implied, such as an approval, authorisation, sponsorship, or commercial arrangement and includes offering, giving away, or selling a ticket to a major event activity in connection with the promotion of goods or services.”

Such a definition is expected to have far-reaching consequences in relation to the field of corporate hospitality, where sporting events have historically been used for client entertainment purposes. Under the Act such hospitality will be forbidden unless carried out by those official corporate hospitality providers appointed by the major event organiser.

A further implication of the “association” definition will be that businesses will not be able to give away tickets to the major events in relation to competitions or promotions.

The question remains as to whether the corporate hospitality and ticket giveaway provisions are in fact overly protective, and as such disadvantageous to the major event organiser. Over regulation may negatively impact business for the major event organiser.

The Act also provides for the declaration of major event emblems and words which are protected for a specified “protection period”. The emblems, words and duration of the protection period are usually declared in the order designating the event as a major event.

Courts are able to presume that a representation has been made which breaches the Act where the representation includes a major event emblem, word or words, or emblems or words which are confusingly similar to the protected emblems or words.

Not only the person who commissions the representation is liable under the association protection provisions, but also the person who has paid for the placement or location of the representation. This is an important consideration for businesses dealing in various forms of media and selling advertising as part of their revenue stream.

Breach of the provisions is not overcome by using the words “unauthorised” or “unofficial”.

Associations are allowed in some situations such as:

where written permission of the event organiser has been given to either the representation or the association;
where the representation is made by a natural person as an opinion and there is to be no commercial gain;
in limited industrial or commercial circumstances such as where such a representation is necessary to show the intended purpose of goods or services;
an existing organisation is carrying out its ordinary activities;
reporting news and information, or
where not used in contravention of the Act in relation to a word or emblem that is all or part of a place in New Zealand, a legal or trade name, or an existing trade mark.

A breach of the association protection provisions of the Act can result in fines of up to NZ$150,000.

Intrusion Protections and “Clean Zones”

In addition to the association protections created under the Act, intrusion protections have also been put in place. These provisions allow the Economic Development Minister to declare “clean zones”, being

the venue of a major event activity;
the area directly proximate to it;
any other area necessary to allow the major event activity to happen, and
“clean transport routes” which are motorways, state highways or train lines (or areas directly proximate to these) which are 5 km or less from the clean zone and likely to be used by a “substantial” number of people to travel to and from the clean zones. (What constitutes a “substantial” amount of people remains to be seen).

Clean zones and clean transport routes are operational during a declared “clean period” only. They do not include “excluded land or buildings” being private land and private buildings in the clean zone (except for billboards, the actual major event activity venue or land which is generally open to the public).

Various restrictions apply to the clean zones and the clean transport routes during the clean period. No street trading or advertising is allowed within the clean zone which does not have the authorisation of the major event organiser. Further, advertising is not allowed which is clearly visible from within the clean zone – including aerial advertising. Advertising is also prohibited within the clean transport route unless authorised by the major event organiser.

Both the person who commissions and pays for the advertisement and the person who is paid for carrying out the advertising will be in breach of the Act.

Exceptions to these restrictions exist including where

certain honest practices are involved;
where the advertising is on shoes, clothes and personal items of members of the public (as long as there is no intention to advertise at the major event) or volunteers and participants in the major event activity;
or advertising on trains, boats or vehicles carrying out ordinary activities in their usual manner.

It is also permitted to have advertising on newspapers or magazines or televisions, radios or electronic devices where these are being used in a personal capacity and not for the purpose of intrusion advertising. An exception also exists in relation to emergency aircraft.

TICKET SCALPING

People planning to make a profit by buying bulk tickets to Rugby World Cup games and selling them at a profit to fans, will be disappointed - under the Act there are now laws in place to stop what is commonly known as “ticket scalping”.

The Act does allow a person to on-sell tickets to major events to other people. However, it is prohibited to knowingly sell or trade tickets to major events for more than the original sale price for which they have been purchased.

While it is not prohibited to make group bookings for family and friends and be reimbursed for the tickets, people will be prevented from selling tickets on eBay or equivalent websites to the highest bidder (unless the highest bid is less than or equal to the price which was paid for the ticket).

The original sale price is defined in the Act and includes “charges necessary to effect the sale or trade of a ticket”. So courier costs could be passed on as part of the original sale price.

Under the Act “sell or trade” means any transaction “regardless of its form” where the sale or trade of the ticket for more than its original purchase price is the substantial purpose of the transaction.

Tickets may be sold or traded for more than the original price of the ticket if the authorisation of the major event organiser has been given.

Anyone who is convicted of the offence of knowingly selling or trading a ticket to a major event for more than the original price of the ticket under the Act is liable to a fine not exceeding NZ$5000.

PITCH INVASION

Provisions prohibiting pitch invasion have also been included in the Act. The prohibition includes both a person entering onto a playing surface at a major sporting event, and a person intentionally propelling any object onto a playing surface at such an event.

People in breach of this section of the Act are liable to up to 3 months in prison and a maximum fine of $5000.

PERMANENTLY PROTECTED WORDS AND SYMBOLS

There are also provisions which allow for the permanent protection of certain marks - namely, Olympic Games and Commonwealth Games emblems and words - on a permanent basis. Certain exceptions are also applicable to the use of these permanently protected words and symbols.

ENFORCEMENT

New Zealand legislators have attempted, to give the Act “teeth” and allow enforcement agencies effective tools to properly police breaches of the Act. Measures which have been allowed, have met with some criticism with many concerned that the level of policing required by government agencies will be untenable.

There has been a noticeable campaign of press releases “warning” the public about the provisions of the Act – in particular the advertising limitation and ticket scalping issues. A manual has also been released by the Ministry of Economic Development to assist businesses and individuals in keeping within the provisions of the Act. Despite this, confusion as to the exact limits of the Act remains high for both the public and practitioners wishing to advise their clients.

While this confusion is part of new and almost entirely untested law, it may well be in the event organisers’ interests to recognise that the costs and inconvenience of policing and dealing with infringement incidents may be avoided by the event organisers and relevant governmental bodies providing advice and clarity to organisations attempting to stay within the limits of the Act from the beginning.

The Ministry of Economic Development laid the first charges under the Act on 22 April 2010. Terry Lung Chang, director of CL NZ Trading Company Limited, is facing criminal charges after a shipment of over 1000 t-shirts bearing one of the International Rugby Board logos was intercepted by New Zealand Customs. The case has been adjourned until 29 June 2010. The Ministry of Economic Development will no doubt be hoping that these charges have a deterrent effect on would-be counterfeiters.

The Act provides for the appointment of enforcement officers, who are able to seize or cover things which are in breach of the Act, and issue formal warnings. Courts are able to grant injunctions, damages and account of profits under the Act, as well as orders for erasure allowing for unauthorised material to be removed, obliterated or covered. Courts are able to make directions for corrective advertising, order delivery up of goods, materials or objects or order the forfeiture, destruction or retention of goods. Criminal charges can be laid under the Act.

CONCLUSION

The practical application of the Major Events Management Act will be a challenge not only to businesses and individuals trying to abide by its provisions, but also to people charged with the enforcement of those provisions. At this stage, due to the relatively new and untested status of the Act there appear to be many grey areas, in particular the association and intrusion protection provisions. Practitioners and the public will watch with interest over the coming months to see how issues are dealt with as they arise.

This article was published in MIP Online, June 2010.

"HEARING CARE" succeeds

Thu, 10 Jun 2010 00:00:00 +1200

The New Zealand High Court recently awarded an interim injunction preventing National Hearing Care (New Zealand) Limited (“National Hearing”) from using a stylised version of “national hearingcare” in certain regions of New Zealand - Hearing Care Manawatu Ltd v National Hearing Care (New Zealand) Ltd (unreported, CIV-2009-404-8506, High Court Auckland, 31 March 2010, Heath J).

The plaintiffs, Hearing Care Manawatu Limited and Hearing Care Wellington Limited (“Hearing Care”), had been using a trade mark incorporating the words HEARING CARE since 2005. National Hearing began to use the name “Hearing Care New Zealand” or “HearingCare New Zealand” in about July 2008.

Hearing Care raised the issue of National Hearing’s use of “Hearing Care” in March 2009 but took no formal steps to prevent it until November 2009. As a result, National Hearing said that the delay was too long and fatal to the interim injunction application.

National Hearing also claimed that Hearing Care, having chosen a descriptive name, could not prevent others from using the same name. The judge chose deliberately not to deal with the merits of the competing claims and so this issue was not explored further.

A decisive factor in granting the interim injunction, despite the delay and alleged descriptiveness, may have been the fact that Hearing Care was able to point to examples of confusion and deception that had taken place. These included invoices that had been directed to the wrong entity, a Government entity who had changed Hearing Care’s vendor numbers to National Hearing, as well as confusion amongst patients.

Despite the stylisation being different, there were said to be distinctive aspects of the trade marks that give rise to a potential for confusion, which appeared to be borne out by the evidence of confusion and deception. The judge said that if National Hearing had focussed on the words NATIONAL HEARING as opposed to HEARING CARE there would have been less room for confusion.

The judge concluded that there is a real risk of confusion in certain areas of New Zealand but not in others where Hearing Care did not have patients. On balance, the judge ruled that an interim injunction was justified but only to ensure the minimum amount of protection was granted.

The judge indicated that the matter should be brought on for substantive hearing as soon as practicable.

This article was published in World Trademark Review, May 2010.

Software to be excluded from Patentability in New Zealand

Fri, 04 Jun 2010 00:00:00 +1200

Progress towards an updated Patents Act in New Zealand took another step forward late last month with the issuing of the Commerce Select Committee's report on the draft Patents Bill (reported recently in MIP). The report signalled a potentially significant change in the patentability of computer-implemented inventions in New Zealand, with the Select Committee making the surprise recommendation that computer programs be excluded from patentability.

Based upon the United Kingdom's Patents Act 1949, New Zealand's Patents Act 1953 incorporates a definition of an 'invention'(i) derived from the United Kingdom's Statute of Monopolies 1623, and states that invention means "any manner of new manufacture". The interpretation of this definition has been successively broadened in a series of decisions by the Courts and the Commissioner of Patents over the years, culminating in a 1994 decision of the Commissioner(ii) which resulted in allowance of claims directed towards computer-controlled methods of air traffic control. Following that decision, computer-implemented inventions have been patentable provided only that the claimed invention produces a commercially useful effect.

As an initial step towards updating New Zealand's patent laws, first mooted in 1990, a three-stage review of the Act was undertaken by the Ministry of Economic Development. The third stage of that review considered the Act's definition of an invention and the issues relating to its application to modern technology. Particular consideration was also given to the patentability of software. A few submissions were received arguing for the exclusion of software, but otherwise submissions were generally in favour of the patentability of software in at least some form(iii). The Associate Minister of Commerce at the time, Judith Tizzard, thus concluded that "There are, then, no strong arguments for specifically excluding business methods and software from patent protection"(iv).

New Draft Patents Bill

A completely new draft Patents Bill to replace the Patents Act 1953 was released for public consultation in late 2004, and was finally introduced to the House of Representatives for its first reading in mid-2008. The Bill retained the existing definition of an invention but introduced several important changes which were generally well-received. Among those changes, the Bill introduced a number of new measures expected to minimise the number of patents for inventions of dubious novelty or inventiveness, a criticism commonly levelled at so-called "software patents". In particular, the Bill introduced a change from a "local" to an "absolute" novelty requirement, and added obviousness as a ground for objection during examination.

The Patents Bill was subsequently sent to a Commerce Select Committee for review, and public submissions on the issue of software patentability were received from 67 interested parties, with 36 submissions being heard. Not all of those parties were necessarily well-informed, however, with the non-profit organisation InternetNZ, for example, incorrectly noting in its submission that "it is not currently possible to obtain a patent in New Zealand for software"(v) and unintentionally arguing that since "the review process which led to the current Bill did not include extensive or thorough consideration of the benefits or costs of allowing for the patentability of software... the status quo... should be reinforced in the absence of any apparent reasons to change it."

Open Source Opposition Gains Ground

Most outspoken among the parties making submissions to the Select Committee were a number of impassioned proponents of the free and open source software models, whose arguments appear to have been given great weight by the Committee to the possible detriment of the developers of novel and inventive software.

The free and open source models of software development and distribution generally include liberal licences allowing users access to source code to modify, copy, and/or redistribute the software as they see fit, without risk of infringing any copyright or patent rights held by contributors to the software provided that the terms of the licence are adhered to. A significant proportion of free and open source software is developed collaboratively by volunteers contributing their time and skills to a project. This collaborative development creates many opportunities for contributors to introduce copyright- or patent-infringing source code or functions to a project, making warranties of non-infringement in licenses problematic and/or inappropriate. The risk of infringing third-party intellectual property rights is therefore seen as a threat to the free and open access upon which these models are based.

While the term "free" in free and open source software refers to the freedom of access and modification rather than the cost of licensing or using such software, it is common for free and open-source software to be provided without cost to the consumer. As a result, few open source software projects are in a position to determine whether their software is likely to infringe any patents, pay royalties to patentees, and/or seek revocation of invalid patents.

Advocates of free and open source software are generally united in their opposition to software patents. The most common argument made in support of this position is that software patents represent a barrier to innovation, whereas the justification for the 20-year monopoly granted by a patent is to encourage and reward innovation and the public disclosure of inventions. It is also often argued that software, being a written expression of an algorithm, is akin to literary or musical works which are not patentable, and that there is no reason why software should be the only field entitled to "dual protection" under copyright and patent laws. However, such arguments conveniently overlook both the fact that software is functional, and that certain inventions in other fields are often entitled to copyright, registered design, and patent protection.

The strong opposition to software patents from the free and open source community is a viewpoint not necessarily shared by commercial developers of the more traditional "closed-source" or proprietary software. Without software patents, developers risk seeing their own inventive products reproduced by other companies and/or open source groups having the resources to create their own implementation of an inventive idea, thereby avoiding infringement of the inadequate protection provided by copyright law. Such companies are therefore faced with being unable to recoup their development costs in the face of competition from companies with much larger or more effective marketing campaigns, and open source software groups having unlimited programming resources with minimal or non-existent overheads. Proponents of software patents therefore often argue that patents do encourage innovation and provide an incentive for the significant investment made in the development of new inventions involving software.

The Select Committee issued its report on 30 March 2010, surprising even the opponents of software patents with their recommendation for exclusion. Even more surprising, however, was the justification provided for this recommendation, with the Committee agreeing with submissions arguing that "'new' software invariably builds on existing software". The suggestion that software is somehow unique in this regard is staggering, and the Committee members are clearly unfamiliar with Sir Isaac Newton's famous comment that "If I have seen a little further it is by standing on the shoulders of giants." The Committee in its report went on to accept that software patents "can be granted for trivial or existing techniques"; this would seem to demonstrate a clear ignorance or misunderstanding of the basic requirements for patentability (namely novelty and inventive step), or at best a lack of faith in the ability of the Patent Office and Courts to consistently apply those requirements.

The Select Committee did recognise that there are likely to be inventions involving the use of software which might be patentable, in particular referring to "embedded software", but avoided the difficult task of attempting to precisely define what may and may not be patented. Instead, the Committee suggested that the Intellectual Property Office of New Zealand be given the unenviable task of developing guidelines on the issue.

Commerce Minister Simon Power has indicated that the Government will back the proposed exclusion of computer programs. Members of opposition parties have also expressed their support for the Committee's recommendation. A press release from the opposition New Zealand Labour party quoted their Commerce spokesperson and Chairman of the Select Committee, Lianne Dalziel, as saying,

“Copyright is the appropriate form of intellectual property protection. We believe that this change to the Bill isn’t a big change from previous law at all. Patents are not used to protect books or music."

The Labour party's Communications and IT spokesperson Clare Curran, also a member of the Select Committee, adopted similar reasoning in her support of the recommendation. “Imagine if a piece of music was patented and you could therefore not use the notes in that piece of music.”

Passage of the Bill

The Patents Bill will receive a second reading to provide Members of Parliament with the opportunity to debate the principles of the Bill and the changes proposed by the Select Committee. It is expected that the Patents Bill will pass the second reading rather than being defeated, since it is widely recognised that the Patents Act 1953 is long overdue for an update. The Bill will then proceed to a Committee of the whole House to allow Members to debate and vote on the Bill clause-by-clause, and then will be given a third and final reading. Bills at that stage are rarely rejected, and once passed will require only Royal assent from the Governor-General before becoming law. It is expected that the Patents Bill will come into force as the Patents Act 2008 some time in 2011.

If computer programs are indeed excluded from patentability as recommended by the Select Committee, there is likely to be significant uncertainty regarding the boundaries of patentability for computer-implemented inventions for some time. In the past, questions of patentability have been raised with the Commissioner and/or Courts relatively infrequently due to the relatively small size of the market in New Zealand. It could be some time before there is a body of case law to provide guidance on the issue. Until then, it is the guidelines to be developed by the Intellectual Property Office of New Zealand which will initially determine the boundaries of patentability if the Bill is enacted in its present form.

File Software Patent Applications Now

To avoid the software exclusion, applicants may wish to consider filing patent applications in New Zealand before commencement of the Patents Act 2008. Transitional provisions in the Patents Bill state that applications made under the Patents Act 1953 "generally continue to be dealt with under that Act"(vi).

In the case of national phase applications entering New Zealand from a Patent Cooperation Treaty (PCT) application, applications will continue to be dealt with under the present Act if the applicant fulfils their obligations under Article 22(1) or 39(1)(a) of the Patent Cooperation Treaty prior to commencement of the new Act(vii).

Any divisional applications filed from applications made under the Patents Act 1953 will also proceed under that Act(viii) regardless of when the divisional application is filed, provided only that they are antedated to the filing date of the parent application (i.e. do not add any new subject matter).

This article was published in MIP Week, May 2010.

(i) Patents Act 1953, Section 2
(ii) Hughes Aircraft Co.’s Application, Commissioner’s Decision No P03/1995, Commr Popplewell, 3 May 1995
(iii) Summary of Submissions on Exposure Draft of Patents Bill, Ministry of Economic Development, 2002
(iv) Review of the Patents Act 1953 Stage 3: Part 1, Hon Judith Tizard, 2003
(v) Submission to the Commerce Committee on the Patents Bill (235-1), Internet New Zealand Inc, 2 July 2009
(vi) Patents Bill 2008, Section 299(1)(b)
(vii) Patents Bill 2008, Section 305
(viii) Patents Bill 2008, Section 304

Registered Designs in New Zealand: Changes allowing restoration and publication

Mon, 31 May 2010 00:00:00 +1200

New Zealand has amended the Designs Act 1953 (the Designs Act) to allow:

restoration of lapsed registered designs;
restoration of lapsed registered design applications; and
publication of registered design application details.

The amendment gives the Commissioner of Designs the discretion to restore; the lapse must have been unintentional by the owner and the application for restoration made without undue delay. Before the amendment, the Designs Act omitted inclusion of restoration of a lapsed design application or a lapsed design registration.

The Design Amendment Act 2010 (the Amendment Act) received its royal assent on 19 April 2010 and comes into force on 19 April 2011 (or an earlier date if appointed by the Governor-General).

So far there is no guidance on how the Commissioner will treat designs that lapse between now and the amendment coming into force, and there are no relevant transitional rules or guidance on this in the Amendment Act.

1. RESTORATION – HOW?

The owner must provide evidence satisfying the Commissioner the lapse was unintentional and, once the owner detected the lapse, the owner applied for restoration without undue delay. The Commissioner will then exercise his or her discretion, and if for the owner, the Commissioner will then publish the application for restoration. Any person may oppose the application for restoration within the set time limit, but only because the lapse was not unintentional and there was undue delay.

2. RESTORATION – A TWOFOLD REASON FOR ITS IMPORTANCE

Lapsing of a registered design in New Zealand has a twofold impact. When the registered design lapses it also effectively destroys the protection given to three-dimensional shapes under New Zealand’s Copyright Act 1994.
The Copyright Act 1994 (“Copyright Act”) protects original drawings and prototypes from which three-dimensional products are made or derived. This is often referred to as “design copyright”. Under New Zealand law, a third-party infringes copyright in the original drawings and prototypes if they copy without permission from either the,

a) original drawings or prototypes; or

b) three-dimensional products made or derived from those original drawings or prototypes.

Therefore, copyright law in New Zealand protects the three-dimensional products themselves. This is a unique feature of New Zealand intellectual property law. In many other jurisdictions (for example, Australia), copyright protection is ‘lost’ once the relevant work is ‘industrially applied’ (which usually means applied to 50 or more articles).

Under New Zealand law the double protection of the Copyright Act and Designs Act effectively crumbles when design registration lapses.

This is because section 74 of the Copyright Act provides a defence to copyright infringement if the copying was from a lapsed patent or registered design. Therefore, third parties can avoid copyright infringement, provided they copied from the lapsed registered design.

Therefore, the ability to restore registered designs and registered design applications in New Zealand is an important one.

3. RESTORATION – THE BEGINNING AND ITS CODIFICATION

A recent hearing by the Commissioner corrected what the position under the Designs Act should have been all along. At the hearing, the Commissioner allowed restoration of a lapsed design registration, where the owner did not pay the renewal fee within required time frame, including the six-month extension of time.

Owners of a registered design in New Zealand have a six-month extension of time available to pay the renewal fees on the registered design. Historically, once this extension expired, the registration irrevocably lapsed. This occurred even if the failure to pay the renewal fee was unintentional.

The amendment to the Designs Act codifies the approach taken at the hearing by the Commissioner. In the Tweco Products Inc.(i) hearing the owner asked the Commissioner to reconsider whether a design registration could be restored on application by the owner for a correction of a mistake in the register. Specifically, the owner filed an earlier application asking for:

“…correction of a mistake under section 29(3) of the Designs Act 1953. We wish to correct the status of the design register of New Zealand design 29157 showing the status as ‘Registration Expired’. The expiry of the design arose from an error or omission on behalf of the proprietor or another person(s) concerned which led to the non-payment of the renewal fee normally ... Hence, the mistake in the register .”(ii)

The Commissioner rejected this application because the register was correct – the registration lapsed through failure to pay the renewal fee by the final deadline. The owner then requested a hearing in which the Commissioner held:

“…in a case such as this, when comprehensive evidence has been adduced to show that the owner of a registered design intended the design to be extended for a further five year period and, because of a mistake in any proceedings in connection with the design, caused by an error or omission on the part of the proprietor or applicant or any other person, the extension was not applied for within the time allowed by section 12(3), the mistake may be corrected under the provisions of section 29(3), and the register amended accordingly. I am satisfied that, in this case, the owners of the design have adequately established that they intended to extend the period of copyright, that an error or omission has occurred, and that, once the mistake was discovered, they acted diligently in pursuing the request for correction .”(iii)

As a result the Commissioner allowed the application for correction of the error, despite the fact the Designs Act did not provide for restoration at the time.

4. RESTORATION - AMENDMENT TO THE COPYRIGHT ACT 1994

The Amendment Act also amends section 74 of the Copyright Act by adding subsection (4). The added subsection bars action against a third-party who works the design during the period it is lapsed.

5. PUBLICATION - REGISTERED DESIGN APPLICATION DETAILS

The amendment to the Designs Act also clears up the confusion over publication of the details of registered design applications. For a period before the amendment, the Commissioner would not publish the details of applications until registered.

Publication is important at least from the prospect of identifying potential infringement.

(i) Tweco Products Inc [2009] NZIPODES 1 (2 February 2009)
(ii) Tweco Products Inc [2009] NZIPODES 1 (2 February 2009) at para 2
(iii) Tweco Products Inc [2009] NZIPODES 1 (2 February 2009) at para 59

This article was published in MIP Online, 27 May 2010.

Beware the “Patent Marking Troll”

Fri, 28 May 2010 00:00:00 +1200

Recent court decisions have identified a previously little used way of making money from the US patent system – suing on behalf of the US government…

You may have heard of a “patent troll”, also known in polite circles as a “non-practising entity”. These are individuals or companies which own one or more patents, but don’t make any products. Instead, the patent troll waits for others to commit to developing products which fall within the scope of their patent portfolio, and then demands a licence fee.

US company NTP Inc are sometimes held up as the quintessential patent troll after they successfully used their patent rights to negotiate a US$ 612 million settlement with Research in Motion Ltd (RIM), makers of the popular Blackberry handsets. NTP did not make a handset, and had no plans to do so.

A recent spate of court decisions have brought to light a new breed of litigant, dubbed the “patent marking troll” by many US commentators, who can ply their trade without even owning a patent.

In the USA, any member of the public can bring an action against a person who falsely represents a product as being covered by a patent, even if they have not suffered any loss as a result. This type of action is called a writ of qui tam. A notable feature is that the person bringing the action gets to keep half of any fine handed down by the court.

The relevant part of the statute states that the person making the false statement shall be fined not more than $500 “for every such offence”. In the recent case Forest Group v The Bon Tool Company the US Court of Appeals held that the statutory fine of up to $500 per “offence” meant that the patentee could be fined up to $500 for each and every item sold which was falsely marked. The court went on to decide that in this case the appropriate penalty was the entire sale price of the item in question, rather than simply the profit on the item, or some smaller amount indicative of the extra profit attributable to having falsely claimed that the product was protected by a patent.

The products at issue in the Forest Group case were industrial stilts, and only 38 sales were found to be in breach, meaning that the total fine was less than $7,000. However, it is not hard to imagine cases involving far greater quantities of goods which could result in a large windfall for the party bringing the action. No doubt the patent marking claims of various prominent companies in industries such as computer hardware, software, telephonics and pharmaceuticals are now being scrutinized by a number of opportunistic individuals (or rival companies), each looking for the high value, high volume, falsely marked product which could be their path to riches.

It is important to note that the false marking provisions only apply where there is an intention to deceive the public, and so not every case of a product being advertised as patented where it actually isn’t will result in a successful prosecution. In the Forest Group case a previous attempt by Forest Group to sue Bon Tools for infringement over their copied product had failed, thereby conclusively demonstrating to Forest Group that its own stilts were not covered by its patent. Only the sales of falsely marked stilts subsequent to this court decision were penalised.

The US patent legislation is currently under review, and there are proposals to remove the ability of third parties to bring false marking suits where they have not suffered any consequential loss. Nevertheless, this case serves as a reminder that care must always be taken to avoid any kind of false or misleading claim in your advertising, and in particular, any false suggestion that a product is covered by a patent.

For futher information on 'patent trolls' please contact Richard Clement.

Personal Property Securities

Fri, 21 May 2010 00:00:00 +1200

In the same way real estate is frequently mortgaged as security to raise loans, it is also common practice for lenders or creditors in commercial transactions to require securities be given over business assets other than land, in order for businesses to acquire funds or goods more quickly at a favourable rate. This is where businesses need to be aware of the common pitfalls and legal issues involved in security over business assets, especially where intellectual property is involved.

All kinds of moveable chattels, goods, assets or negotiable instruments that are not land or fixtures on land (e.g. buildings) are considered “personal property” capable of being used as collateral in commercial transactions under the New Zealand Personal Property Securities Act 1999, and the similar Australian Personal Property Securities Act 2009 (“the PPSA”). Unbeknown to some, this also includes intangible goods such as intellectual property rights in patents and trade marks, or valuable commercial licences that exploit intellectual property rights.

As a result, many businesses have value and leverage intellectual property as security in commercial transactions, not only to raise funds from banks or other lenders, but also to ensure compliance in distribution or supply agreements, as a hedge against failure in licensing/franchising arrangements, and as assets to increase value in sale and purchase of businesses. Such security interests entitle the security holder to claim possession of the secured intellectual property rights, and sell them to realise financial value in order to offset money owed.

However, as intellectual property rights cannot be physically “possessed” or “held” as security by the party requiring payment, the only way to ensure your security interest takes priority over other possible competing claims is to register them on the Personal Property Securities Register (“the PPSR”), which came into being in New Zealand in 2002. The Australian equivalent comes into effect in May 2011.

A first-come-first-served system, the PPSR establishes a single nationwide online system for the registration of security interests in all personal property assets, which provides adequate security to registered creditors by giving them priority over subsequent or unregistered security interests granted by the same debtor over the same asset. While it has no bearing on the actual validity of a security interest, having your security interest registered on the PPSR is vital in protecting your interests by obtaining priority over other interested parties.

The PPSR not only provides a nationwide system to register your rights, but also provides a public platform for ascertaining whether a business you are dealing with in fact has rights to trade/secure the intellectual property rights it claims to own. Searching the PPSR is essential if you wish to extend credit to a supplier or distributor, assign certain rights and license to third parties, or invest in any entity that claims to own significant intellectual property.

The risk of failing to perfect your security interest on the PPSR is evident in the case of Viacom Global (Netherlands) B.V. v Scene One Entertainment Limited (In Receivership) CA 600/09 [2009] NZCA 457. Viacom Global, a subsidiary of Paramount Pictures, licensed Scene One to distribute Paramount Pictures DVDs in New Zealand. While the licence gave Viacom full title and intellectual property rights in the DVDs, Viacom did not register its interests under the PPSR. Meanwhile, Scene One also independently granted ASB Bank a blanket General Security Agreement over all of its assets (including the DVD stock) as is often required by banks. The bank promptly registered its interests on the PPSR and when Scene One went into receivership, the receiver was allowed to sell the DVDs to a retailer chain in order to pay back the bank, despite Viacom’s rights under the contract to the DVDs and its copyright. The registration of ASB Bank’s security interest was crucial in the court’s eventual decision, where ASB Bank’s first-in-line registration and validly executed security to the DVDs gave it unassailable rights and priority to the DVDs over Viacom, despite Viacom’s rights under its contract with Scene One.

This case serves as a reminder to businesses which trade and exploit intellectual property rights, to ensure that not only a comprehensive contract is executed in commercial dealings, but also that key intellectual property rights, such as patents, designs, or trade marks, as well as licences and products that rely on these rights, are protected under the PPSA either by registering your interests or excluding them from other registered creditors’ interests.

With the imminent introduction of the Australian PPSA regime, it is important for businesses to understand how to protect assets and interests under the PPSA in both New Zealand and Australia. Given the potential risks involved in non-compliance you should take legal advice before proceeding.

Case Commentary: Wyeth vs Ancare and ERMA

Fri, 21 May 2010 00:00:00 +1200

The Supreme Court in a recent decision clarified the basis on which ERMA could withhold information from the public in relation to hazardous substances.

Wyeth (NZ) Limited v Ancare New Zealand Limited and The Environmental Risk Management Authority [2010] NZSC 46 (see here)

Under the Hazardous Substances and New Organisms Act 1996, parties wishing to manufacture or import into New Zealand hazardous substances must first obtain the approval of ERMA. Applications to ERMA are publicly notified and interested parties have the opportunity to file submissions with respect to applications, and be heard on these at a public hearing.

This appeal concerned one such application by Ancare New Zealand Limited to manufacture and import a drench. Ancare used the codeword MEP600 for its application, and withheld all technical information regarding its ingredients from the public. Wyeth, wishing to make a submission on Ancare's application, sought information regarding the ingredients of the drench. Ancare contended this information was confidential and would unduly prejudice its commercial position and ERMA refused to disclose the information to Wyeth. The Ombudsman, upon appeal by Wyeth, upheld ERMA's decision. Wyeth appealed to the High Court, which found that ERMA had not complied with the requirements of the Act and directed it to rehear the matter. Ancare successfully appealed to the Court of Appeal, and Wyeth in turn appealed to the Supreme Court . The hearing before the Supreme Court focussed upon what the Act required ERMA to disclose to the public, and specifically whether a codename alone would suffice (as opposed to the active ingredient(s) for example) .

The Supreme Court held that the statutory regime under the Act did not require ERMA to reveal confidential information to the public, and that a codename could suffice. When an application is made ERMA (privvy to the confidential information about the ingredients) is in possession of all the information it requires to make a decision and has the authority to request the applicant for any further information it requires. The Act further incorporates the principles of the Official Information Act in relation to confidential information and stipulates that where there is a request for the release of confidential information, the proprietor of that information has the opportunity to say why it should be withheld. With respect to the register of Hazardous Substances administered by ERMA, the Court found that although the Act stipulates that ERMA maintain such a register, it was not intended to be a comprehensive record of all hazardous substances in New Zealand and the statutory requirements were met where codenames were used by applicants and informaton regarding the identity of the ingredients withheld.

The Court also found that while Wyeth may not have known the active ingredient or composition of the drench, it has sufficient information by way of the classification of those substances provided by Ancare and approved by ERMA to make any submissions.

The Court dismissed the appeal without order for costs.

Recent amendments to the Hazardous Substances and New Organisms Act have now changed the language of provisions dealing with ERMA's public notification duties such that notification of new applications to release hazardous substances is no longer mandatory, but is now a matter for ERMA's discretion.

Baldwins acted for its client Wyeth throughout this litigation.

For litigation and commercial matter please contact Gus Hazel or Vineetha Veerakumar.

Comvita: An international success story

Thu, 20 May 2010 00:00:00 +1200

Starting out in the basement of founder Claude Stratford’s New Zealand home, Comvita has gone on to become a world leader in the natural products industry.

Applying science and innovation to natural health, Comvita has changed the public’s perception of the natural products industry. Utilising acknowledged health giving properties of natural products such as honey combined with leading-edge technology, Comvita products cover the spectrum from beauty, everyday wellness and medical products with brands such as HUNI, COMVITA WOUNDCARE and MEDIHONEY.

At 63 founder Claude Stratford, instead of entering retirement, established Comvita in Paengaroa, Bay of Plenty, New Zealand, his vision “to care for the community, producing natural products that work and acting in a way which preserves the environment for generations to come”.

While Comvita’s head office remains in Paengaroa, Comvita has grown into a substantial brand and a successful international company through its vision, innovation and scientific foundation.

Baldwins Intellectual Property has been pleased to partner with Comvita to provide the company with comprehensive intellectual property services from strategic advice to enforcement by litigation.

www.comvita.com

Case Commentary: Health World vs Shin-Sun Australia

Wed, 19 May 2010 00:00:00 +1200

This recent decision of the High Court of Australia addresses the meaning of "aggrieved" or "person aggrieved" i.e. standing to bring cancellation or removal proceedings against a registered trade mark.

The appellant, Health World Ltd and the respondent, Shin-Sun Australia Pty Ltd, applied to register INNER HEALTH PLUS and HEALTHPLUS respectively as trade marks in class 5 (pharmaceutical products) within months of each other in 2001. In December 2001, Health World failed in opposition proceedings brought against Shin-Sun's trade mark application. In 2003, Shin-Sun filed an opposition against Health World's application but later withdrew the proceedings. Both trade marks were registered within days of each other in February 2005. Health World had been marketing probiotic capsules under the brand INNER HEALTH PLUS since 2000 and in 2001, Shin-Sun began preparing to manufacture and sell natural health supplements under the brand HEALTHPLUS. In August 2004, before either trade mark was registered, a range of products using the HEALTHPLUS brand was launched, however the products did not bear the company name Shin-Sun Australia, but rather an associated company's name, Nature's Hive Pty Ltd.

First proceeding

In February 2006, Health World began proceedings against Shin-Sun as an "aggrieved" person, seeking cancellation of the HEALTHPLUS registration under s88 of the Australian Trade Marks Act 1995 on the basis that Shin-Sun did not intend to use the mark in Australia. The judge found in favour of Health World, holding that Shin-Sun did not intend to use or authorise the use of the mark in Australia and that Shin-Sun had allowed "HEALTHPLUS" to become deceptive or to cause confusion because the mark was used to identify goods of Nature's Hive, not those of Shin-Sun. However, the judge held that Health World was not an "aggrieved" person under s88 of the Act and therefore dismissed the proceeding.

Second proceeding

In July 2006, Health World began a second set of proceedings against Shin-Sun as an "aggrieved" person, seeking removal of the HEALTHPLUS registration from the Register under s92 of the Trade Marks Act 1995 on the basis that when Shin-Sun filed its application for registration, it had no intention in good faith to use the mark in Australia and that the mark had not been used (pursuant to s42(b)) by the registered owner within 3 years of the date of registration. The judge found that Nature's Hive (and not Shin-Sun) had used the trade mark within the prescribed 3 year period however dismissed the proceeding on the basis that Health World was not an "aggrieved" person under s92 of the Act.

Third proceeding

In September 2006, Shin-Sun commenced proceedings against Health World seeking removal of INNER HEALTH PLUS under s92 of the Trade Marks Act 1995 on the basis that it was registered in respect of goods other than those it was in fact used upon. Once again, while the judge found that the ground had been made out, the proceeding was dismissed on the basis that Shin-Sun was not an "aggrieved" person under s92 of the Act.

The above decisions were all upheld by an appeal court following appeals on each.

The current proceeding

The High Court found that the appeal court and trial judge had erred in accepting the test set out in Ritz Hotel Ltd v Charles of the Ritz Ltd as an exhaustive test on the issue of standing. That test required a person claiming to be "aggrieved" to show at least a reasonable possibility of being 'appreciably disadvantaged in a legal or practical sense' by the trade mark remaining on the Register." The primary judge had found that there was no evidence before him to show any intention of Health World to use the "HEALTHPLUS" mark other than as part of its existing "INNER HEALTH PLUS" mark, and therefore Health World was not an "aggrieved" person.

The High Court considered that the correct interpretation of "aggrieved" was that of Lord Pearce in "Daiquiri Rum" Trade Mark [1969] RPC 600, that there was no requirement that the applicant desired or intended or "could use" the mark. It was sufficient that the parties were rivals in relation to the goods to which the mark applied and no consideration needed to be given to whether or not the party claiming to be "aggrieved" intended to use the mark on those goods.

The High Court applied Lord Pearce's test and found that Health World and Shin-Sun were rivals in selling health products and both traded in the class of goods in respect of which the marks were registered. The High Court therefore allowed the appeal and remitted the proceeding to the Full Court of the Federal Court for determination of the remaining issues.

For more information on this case see here. If you wish to discuss litigation and commercial matters, please contact Gus Hazel or Vineetha Veerakumar.