Trademark action will shape NZ law
Trademark lawyers are gearing up for one of New Zealand's most significant trademark stoushes - over humble insulation material.
Fletcher Building subsidiary Tasman Insulation and German-backed Knauf will square off in the High Court in Auckland over whether Tasman's "Batts" insulation should lose its trademark status.
Knauf - which is facing trademark infringement action from Tasman, is arguing the term has become generic in describing insulation materials.
That is rejected by Tasman, which has held the registered trademark since 1975, and says it will continue to fight to protect the brand value and awareness it has built.
The case, scheduled for September next year, raises the muddy question of exactly when a brand name becomes generic and will set a precedent for future battles over commonly used trademarks.
Ben Cain, solicitor at Knauf's law firm James & Wells, said trademarks were used as a "badge of origin" to signal to consumers that goods were from a particular source.
If a term came to describe the product, rather than its source, "then it can no longer be a trademark". Similar cases had been heard overseas but there was little case law in New Zealand, Cain said.
The Radler case last year, in which the Society of Beer Advocates failed to have DB Breweries' "Radler" mark revoked was of little help, as he believed it had not addressed the meaning of the 2002 Trade Marks Act.
The act changed the threshold for whether a trademark could be revoked, allowing it to be scrapped if it became a common name in public use - rather than in the trade - through the owner's acts or inactivity. Cain said the Radler case did not answer "how is it that a trademark becomes generic? What does common in public use mean? What do we mean by action or inaction?"
The Batts case was "probably the most significant piece of trademark law, certainly in relation to genericism, for a long time, possibly ever".
"This will set the benchmark for years to come," Cain said.
Tasman's lawyers, A J Park, declined to comment.
Penny Catley, partner at Baldwins Intellectual Property, said the case would be "a tricky one".
Proving whether a trademark was generic was complex and subjective. If a business had done all it could to protect its trademark but it had still fallen into generic use, it could argue it should still stand.
In some cases the public might know it was a trademark but still used the term generically and descriptively, Catley said.
The hearing would be a big one, as trademark battles rarely made it to court, she said.
"There's not a hell of a lot of case law here . . . It will provide some guidance for us and for other parties who may be in a position of having a well-known and well-used trademark," Catley said.
James & Wells associate Sarah Tallon advised businesses to avoid using their trademarks as descriptive terms, as that would encourage people to use the term when describing similar products.
"If you can't think of any other logical way that people would refer to it, then your trademark is in danger," Tallon said.
Businesses should also be careful to use the "TM" and "R" signs to denote the word or term was a registered trademark, she said, and to strictly police any infringement.
"When it's become a common term it's much harder to claw it back," she said.
Geography mattered, Tallon said, as a term might be generic in one country but distinctive in another.
For example, in the Radler case the term was deemed to be common overseas but not in New Zealand.
"Businesses should also choose unique, non-descriptive terms or brands to trademark, such as the made-up brand Fonterra, as then competitors would have no reason to use it in marketing their products," Tallon said.
However, in some instances descriptive words and terms could become distinctive trademarks, through a business brand building.
The Warehouse - on the face of it a generic, descriptive brand name - was an example, Tallon said.
"The reputation they have generated means that now if anyone says: ‘I'm popping to The Warehouse', everyone knows exactly what they mean."
BATTS BATTLE THE PLAYERS
Tasman Insulation New Zealand, Pink Batts supplier and a Fletcher Building subsidiary, is defending its registered trademark, "Batts".
Knauf Insulation, a subsidiary of German building materials giant Knauf, is seeking to revoke Tasman's "Batts" trademark.
Section 66 of the 2002 Trade Marks Act states a trademark can be revoked if, in consequence of acts or inactivity of the owner, it has become a common name in general public use for a product or service in respect of which it is registered.
TRADEMARKS OR NOT?
Uggboots – a generic term in New Zealand and Australia but a registered trademark elsewhere. Sellotape – a registered trademark in New Zealand.
Sellotape's owners launched a campaign in 2002 to educate the public that not all sticky tape was Sellotape.
Escalator – originally trademarked overseas by the Otis Elevator Company but now a generic term.
Glad Wrap – registered trademark in New Zealand and Australia.
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