Unregistered Trade Mark Rights

Protection without the need for registration is afforded in New Zealand in a number of manners.

Common law rights provide protection for use of trade marks. As for copyright, the burden of evidence on a trade mark owner in bringing a passing off action (relying on their common law rights in a mark) is high and includes factors such as establishing the extent and area of reputation in the mark, that confusion has occurred, and that loss has resulted. Some of this evidence may be difficult to gather, or involve sensitive material (such as financial records establishing extent of loss attributable to passing off). In contrast, registration of the mark where possible, bypasses these issues and focusses on the similarity of the marks.

The extent of any common law rights in a trade mark is proportional to the extent of reputation. Common law rights are also territorial, and thus strong reputation (and common law rights) in one part of the country will afford little or no rights in another area where no reputation exists. Consequently trade mark registration is recommended, and sole reliance on common law rights consigned to cases where trade marks are considered unregistrable and the applicant does not wish to abandon their continuing use of the mark.

While unregistered rights are appealing, as they cost no money, and require no formal registration process, the extent of protection they provide can be variable and limited. Some, such as common law rights for unregistered trade marks, provide negligible protection until significant reputation and recognition has been established.

Such limitations affect the role of unregistered rights. Ideally they are relied upon as a secondary form of IP protection, rather than being the mainstay of a well-balanced IP portfolio. In such a case they can be quite effective, representing additional causes of action in infringement cases, or for enforcement when applications for registered IP protection have not yet reached grant or registration. Copyright can be a very effective tool in the NZ market, but is often less effective overseas.

While unregistered rights may be free, there can be a hidden cost if legal action becomes necessary. The onus of proof rests heavily on the owner of the unregistered rights. Invariably they are put to the test by the other side, and can spend a considerable amount of money establishing that the other side has a case to answer. This alone is a good reason for not relying upon unregistered rights as the main weapon in your arsenal.