This article has been written for people who want basic information about trade marks and service marks. If you require any assistance or wish to discuss anything mentioned in it, please feel free to contact us.
What is the difference between a trade mark and a service mark?
The term “trade mark” has traditionally been used to refer to marks or brands which apply to goods such as toothpaste, cosmetics, drinks etc. The term “service mark” is used to refer to a mark or brand which applies to services such as a dry cleaning service, a computer repair service, etc. Legally, the term “trade mark” encompasses both trade marks in the narrow sense, as referring to goods, and it also encompasses service marks. So in what follows we will refer to trade marks in that broad sense.
Creating a new trade mark
It is at this point where you can save yourself a lot of money. Not all marks or brands which people wish to use are easily protected. Some are not able to be protected at all and some, if used, will result in a very stern letter from a party who already has rights to that particular trade mark. The very best trade marks are invented words because these are usually registrable, or protectable, at far less cost than many other types of trade mark. Also, there is far less chance of someone else having invented the same mark. If you need an example of an invented trade mark think of KODAK – this has no easily discernible meaning or derivation. It is not descriptive in any way of any product or service.
However, not every word which you think might be invented will be regarded as being inventive as a matter of law – usually because the derivation is fairly obvious.
Our suggestion if you are creating a new trade mark is to create several, perhaps half a dozen, and then ask for our opinion concerning registrability, before you make any commitment whatsoever to using one of these marks.
If you are having any difficulty in creating a suitable trade mark please call us – we are a creative team and the task of devising new trade marks generally presents us with no difficulties.
Some trade marks we suggest you stay away from are surnames, geographical names, initials, and that great big class of descriptive names which encompasses everything from laudatory trade marks, which extol the virtues of a product, such as the mark “KING PIN”, to ones of obvious descriptive derivation, such as “SMOKE STOPPA”, which regardless of how it is spelt has a very clear meaning. Also, you would be advised to steer clear of foreign words which, when translated, fall into any of the above difficult categories.
Searching your trade mark
Having settled on one or more possibly suitable trade marks, a prudent client will wish to know whether any other party has the same, or a confusingly similar, trade mark registered or pending. Obviously, if such a situation does exist, it would be most unwise to commence use of that mark, as this could amount to infringement or passing off or breach of The Fair Trading Act.
Unfortunately, our trade mark laws in New Zealand will not enable us to give you a complete clearance to use your mark, but it is possible for us to search a number of online databases and official government registries. Within the limits of accuracy of these databases, appropriate searching strategies should locate trade marks already registered or applied for in New Zealand which would conflict with your proposed trade mark. If a potential conflict is found then you may have to resort to the next available trade mark on your list of options.
We have AI searching software that can search worldwide trademarks or brands that could potentially conflict with your chosen trade mark.
As well as a search of this nature, you should also conduct some searching of your own by looking through relevant trade and other directories and the internet, especially in the countries you intend to file in. It would also be prudent to make enquiries of others in the particular trade in which your mark will be used if you are new to it, to see if they are aware of any potentially conflicting trade marks.
We cannot stress too much that it will be well worth your while taking all this trouble rather than to find once you have printed your packaging at a cost of $100,000, for instance, that someone objects to the trade mark which you have used.
The classification system
We now comment on the classification system which applies to goods and services. Originally this classification system was probably devised to assist searching and to distinguish different classes of goods, where it was unlikely there would be confusion if identical marks were registered to different owners in each class.
There are 34 classes of goods, such as class 15 “musical instruments”, class 25 “clothing, footwear, headgear”, and there are 11 classes relating to services such as class 36 “insurance; financial affairs; monetary affairs; real estate affairs”, and class 41 “education; providing of training; entertainment; sporting and cultural activities”. When a trade mark application is filed, the application needs to cater for each category of goods or services the trade mark is used in – this may mean filing in more than one class. Much the same system applies throughout most of the world. New Zealand uses the Nice classification which was developed & is maintained by the world intellectual property organisation (W.I.P.O.)
If your trade mark is already in use do you still need to search?
Generally, if a trade mark has been in widespread use in New Zealand for a reasonable length of time, so that other persons having an interest in the same goods or services would most likely have learnt of it, you will probably not want to spend money on searching that trade mark in New Zealand.
If you have not already got a rude letter demanding you to cease using it, then most likely there is no conflict with anyone else’s trade mark.
However, we do caution that the majority of trade marks – about 60% – are filed by overseas parties and many of these marks will not be used in New Zealand until some time after they have been applied for. If you are thinking of spending a large amount on promoting a relatively new trade mark, for instance television advertising or website design, you might think it well worthwhile having searching conducted rather than taking the risk of having to scrap an expensive promotion.
If you are looking to expand your business overseas then a trademark search can be very important to ensure you avoid costly mistakes. Our search software uses AI to help determine possible risks.
The advantages of registering a trade mark
There are relatively few court cases involving trade mark infringement in New Zealand. However, if you did get involved with a situation where some other party seemed to have misappropriated your trade mark, you would find it much easier and cheaper to have that situation brought under control and stopped if your trade mark was appropriately registered, than if you were simply relying on the fact that you may have used it for quite some time.
The difference in cost may be 20 or even 50 times less in even a simple case.
A trade mark registration, therefore, will provide an immense reduction in the legal costs you will face if you subsequently need to enforce your trade mark rights against some other party.
Probably even more important however, is that once a trade mark is applied for it becomes entered on a public register as a trade mark which has already been appropriated. Parties wishing to select new trade marks can therefore avoid your mark. Every day, numerous searches are made of the trade mark records maintained by the Patent Office, and a large number of potential conflicts are eliminated, simply because prudent trade mark owners take steps to apply to register their trade marks.
Another fairly important reason for registration is that trade marks can achieve very significant values. In some companies, the trade marks are worth more than all of the real estate and other assets of the company. If you are going to be in a position where you might wish to sell your business, you can expect that the buyer will carefully scrutinise whether your trade mark assets are properly protected. Selecting a good trade mark in the first instance, and properly protecting it as its usage expands, could pay you a rich dividend if you come to sell your business.
What are the requirements for filing a trade mark application?
First, we need to know who is using, or who is going to use, the trade mark which you wish to register. Considerable care must be taken to ensure that we are told the exact names involved, and particularly we need to know if the mark is going to be used by any other additional parties or if it will only be used by a licensee.
We also need to know the exact form of the trade mark. The majority of trade marks are applied for in capital letters which is sufficient to cover use in normal typefaces. However, there are other marks where a word is artistically stylised or there may be no word at all – the mark may simply be a logo or picture. Where the mark has some artistic element then we need a high quality jpg or gif representation of the mark showing it just as you intend to use it.
Probably the most difficult task is to settle on the precise goods or services to be protected. Your annual report, if you are a listed company, or your catalogue, or product or service brochures can help us. It is vital that sufficient care be taken over this aspect, otherwise you may not get the protection you need.
What happens once a trade mark application is filed?
When a trade mark application is filed it sits in a queue at the Trade Marks section of the Patent Office, awaiting examination. Examination is likely to occur within the first month after filing. Examiners frequently raise objections to new trade mark applications. Often these objections may be overcome, but not always. Our task is to apply our skill and judgement in trying to overcome objections. Each case is different, and in cases when a poor mark has been chosen in the first place, the prosecution costs will be high, whereas when a good trade mark has been chosen there may be no prosecution costs at all.
Acceptance and registration
Once a Trade Mark Examiner is convinced that the mark ought to be registered, the mark is advertised in the Patent Office Journal. This gives any interested persons the opportunity to apply to oppose registration of your mark. Relatively few marks are opposed and you would be unlikely to become involved in opposition proceedings.
Once the trade mark is registered it will survive for an initial period of ten years providing that you actually use it for the goods or services for which it is registered. The renewal process continues every ten years and NZMarks will send out reminders from our renewal system for trade marks they have filed. It is important that you ensure we always have your current details so we can make contact with you in the future.
Using the trade mark
It is very important to realise that if a trade mark is not used, some interested party may apply to have it removed from the register, either entirely if it has not been used on any of the goods or services for which it was registered, or in part if the mark has only been used on some of the goods or services for which it was registered.
You are only vulnerable to this type of removal or restriction proceeding if the mark has not been used on all of the goods or services for which it is registered during the immediately preceding three years.
From a practical point of view, if a valuable mark of yours is in a situation where it is vulnerable to removal, you may wish to consider reapplying to register it which will start a period of at least three years running once again and may give you the protection you need.
The moral of this is that you should constantly review your trade mark portfolio if you are in a no-use or restricted-use situation. However, if you are using your mark in respect of all of the goods or services for which it is registered, you have nothing to fear. By merely paying the renewal fees every ten years you can keep your protection indefinitely.
Purchasing a trade mark
The usual procedure involved where you wish to purchase a trade mark, owned by somebody else, is for us to search to ascertain just what protection that mark has before you make any firm commitment. Then documentation needs to be prepared and recorded at the Patent Office to secure an effective transfer or assignment.
Almost all of what we have said in relation to trade mark applications in New Zealand, concerning searching and the application procedure, applies to overseas situations. An important point to realise, however, is that while in New Zealand there is some protection for trade marks which are not registered but are nevertheless in use, in some overseas countries there may be no protection for unregistered marks and the first person to file a trade mark application will have the paramount position in the case of a conflict. This particularly applies to Europe & China.
The normal course of events therefore, if you are proposing to export, is that first of all appropriate searching should be done to ensure that your use of the trade mark overseas will not conflict with anyone else’s rights. Then, you may wish to apply to register your trade mark.
Generally speaking, registration is conducted on a country by country basis. However, New Zealand is party to the Madrid Protocol which allows us to simultaneously apply for a single trademark in over 100 countries or regions. Using the Madrid protocol the trade marks will still be examined by each country but it is a more efficient way of progressing your international trade mark application. There are also regional blocs where you can apply for protection in multiple countries under one application. In Europe there is a form of trade mark protection running parallel with national registrations known as the European Union Trade Mark (EUTM). It provides coverage in countries which are members of the European Union and the intention of such an application is to cover all of the European Union in a single application.
Overseas applications are considerably more expensive than New Zealand applications and typically the costs are two to three times as much.While filing overseas can sometimes be expensive NZMarks can assist you to help you get the most protection for your available budget.
If an overseas trade mark application is filed within six months of a corresponding New Zealand application, then priority might be claimable, which has the effect of ante-dating the overseas application. This can be useful on some occasions.