ZIPLOC and two claiming owners

The New Zealand Court of Appeal has ruled that a trade mark application with an application date before the effective removal date of a trade mark revoked for non-use, will not be invalid on the basis of the presence of the earlier trade mark at the time of application. The key consideration is the condition of the register at the time of entry onto the register.

In addition, opposition to an application on the basis of ownership based on prior use of a mark which has been revoked for non-use can only invalidate the application where the use relied on occurred after the period of non-use. Historic use does not allow a claim to ownership in perpetuity where a trade mark has not been used.

Background

In International Consolidated Business Pty Ltd v S C Johnson & Son Inc [2019] NZCA 61, the parties ICB and Johnson continued a prolonged battle for the "ZIPLOC" trade mark in New Zealand.

ICB's registered trade mark No. 648953 for ZIPLOC was revoked for non-use with effect from the date of Johnson's application for removal of 22 April 2013. ICB filed a subsequent new application for ZIPLOC dated 26 September 2014.

Johnson had meanwhile filed an application for ZIPLOC on 19 April 2013, three days prior to its application to remove the original ICB ZIPLOC trade mark. The Johnson application had priority over the second ICB application, and ICB therefore opposed the Johnson application.

Before the Commissioner of the Trade Marks, ICB's opposition was upheld on the basis that ICB was the owner of the trade mark at the date of Johnson's application, as the ICB registration was not revoked until 22 April 2013, three days after the Johnson application was filed. Additionally, Johnson failed to establish that there was no use by ICB of the ZIPLOC trade mark either prior to any use by Johnson or prior to Johnson's application for registration on 19 April 2013.

On appeal to the High Court, Cull J ruled that the effective revocation date of ICB's application was 19 April 2013, and referred the matter back to the Commissioner to determine whether ICB or Johnson was the true owner of the trade mark.

Unhappy with this result, ICB appealed the High Court's decision to the Court of Appeal on 16 points of fact or law.

The Court of Appeal considered the key issues for resolution on appeal were as follows:

(a) Did the High Court err in treating 19 April 2013 as the effective revocation date of Trade Mark 648953?

Yes, as this was not plead by Johnson before the Assistant Commissioner, or raised on appeal before the High Court.

(b) Notwithstanding its subsequent revocation for non-use, was the presence on the register of ICB's Trade Mark 648953 on 19 April 2013 a bar to Johnson filing an application for registration on that date?

In coming to a practical conclusion on this question, the Court of Appeal considered that while issues concerning the fact and extent of use of a trade mark and the intention to use a trade mark are determined as at the date of filing an application, the critical date for consideration of the state of the register is the actual date of entry on the register.

The fact that Johnson's application for registration was filed three days prior to the effective date of removal of ICB's trade mark had no bearing on the validity of Johnson's application, because at the date of its entry onto the register the ICB trade mark would be revoked.

This conclusion was supported with reference to established trade mark practice in New Zealand, guidance from New Zealand and UK case law, and legislative history of the provisions relating to non-use.

While ICB cited decisions from the UK and Singapore in support of their position that the existence of the ICB registration on the register at the date of the Johnson application rendered the Johnson application invalid, this was not deemed persuasive by the Court of Appeal, who favoured the practical approach outlined above.

(c) Does first use of a trade mark determine ownership in perpetuity or can an initial entitlement to ownership be lost through cessation of use?

The Court of Appeal considered that it would be inconsistent with the provisions regarding non-use in the Trade Marks Act 2002, if a proprietor whose trade mark had been revoked for non-use, could subsequently rely on its historic use prior to the non-use period in order to defeat a subsequent trade mark application on the basis of prior use/ownership.

Therefore, the ability to contest an application on the basis of ownership and use before the non-use period is lost where the trade mark has not been used in the intervening period between the revocation and the new application.

A question that may arise is whether any challenge to registration on the basis of ownership/prior use requires use within the period three years before the new trade mark's application date? Does this principle apply generally, or only where the trade mark has been revoked from the New Zealand register for non-use.

The Court of Appeal did point out that earlier use which pre-dates the non-use period may remain relevant in the context of the consideration of issues of deception or confusion under s 17(1)(a).

(d) Did the High Court err in referring back to the Commissioner for hearing the issue of ownership of the ZIPLOC trade mark?

In view of the conclusions above, there was no reason to refer the matter back to the Assistant Commissioner. Johnson had a legitimate claim to ownership which was not defeated by any qualifying use of the trade mark by ICB.

Conclusion

Following the Supreme Court's decision in Crocodile v Lacoste [2017] NZSC 14, this decision provides further guidance on trade mark revocation in New Zealand, and related considerations regarding the date of removal, an intervening or subsequent application by a third party, and ownership. These threads are progressively being drawn together by the case law to provide greater certainty to trade mark owners and applicants regarding trade mark practice, use and rights in New Zealand.

Jesse Strafford - March 2019

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