Invalidity of registration of trade mark

Introduction

Any person who can show they are aggrieved by either:

• A registered national trade mark; or
• an International Registration protected in New Zealand (hereafter referred to as an IRPNZ) 

may apply to have it declared invalid on the basis that it was not eligible for registration under Part 2 of the Trade Marks Act 2002 at its deemed date of registration. If successful, the registered national trade mark or IRPNZ is treated like it had never been registered/protected (to the extent applicable) and the Commissioner will alter the register accordingly.

For the purpose of this guidance, hereafter the term ‘trade mark registration’ is used to refer to either a national trade mark registration or IRPNZ.

Application for declaration of invalidity process overview

• Applicant files an application for declaration of invalidity.
• Within 2 months, the owner may oppose the application by filing a counterstatement. If not filed, the IPONZ Hearings Office will invite the applicant to file evidence to make out a prima facie case for invalidity before passing the case to an Assistant Commissioner for determination on the documents filed by the applicant only.
• Within 2 months, the applicant files evidence in support of their position.
• Within 2 months, the owner files evidence in support of their position.
• Within 1 month, the applicant may file evidence strictly in reply to the opponent’s evidence.
• Once the evidential stages are complete the Commissioner asks the parties how they wish to be heard, and confirms the hearing date and venue.
• Following the hearing, or any other way the parties elected the matter to be decided, the Commissioner issues a formal written decision.
• The Commissioner’s decision may be appealed to the High Court.

About this information

The following information is intended to guide and inform parties involved in Intellectual Property Office of New Zealand (IPONZ) hearings. It reflects the current accepted practice of IPONZ and is to be read in conjunction with the:

• Trade Marks Act 2002; and
• Trade Marks Regulations 2003; and
• Trade Marks (International Registration) Regulations 2012

Links to which are provided throughout.

Please note the process for an application for declaration against a (1) national trade mark registration or (2) IRPNZ is largely identical. There are, however, some differences which the parties need to be aware of.

See international trade mark proceedings for more information.

Before filing an application

IPONZ recommends that a party considering filing an application for declaration of invalidity contacts the trade mark owner directly about their concerns before filing their application to see if the matter can be resolved amicably without the need for formal invalidity proceedings. Failure to try and resolve the matter amicably may have a bearing on any subsequent costs that the Commissioner awards to the successful party in the proceedings.

See costs for more information.

Invalidity proceedings must be against a registered trade mark

IPONZ will only admit an application for declaration of invalidity against a trade mark that is in ‘Registered’ or ‘Registered - past expiry date’ status.

Some trade marks may have lapsed into ‘Expired but restorable’ status prior to the commencement of amendments to the Trade Marks Act 2002 on 13 January 2020. IPONZ will not admit an application for declaration of invalidity against a trade mark that has fallen into the ’Expired but restorable’ status for non-payment of the renewal fee, notwithstanding that it remains possible to restore the mark under regulation 134 to ‘registered’ status – at which time a third party could apply to have it declared invalid.

1. Application for declaration of invalidity

Sections 17, 18, 25, 73, 74 and 75, 158(a), 162, Regulations 106 and 107, International Regulation 21

Purpose

The purpose of the application for declaration of invalidity (also referred to as the applicant’s pleadings) is to outline the grounds on which the applicant alleges the trade mark registration should be declared invalid.

Partial or full declaration of invalidity

An applicant can apply for the whole of the registration to be declared invalid, or for the partial declaration of invalidity of the registration, by specifying the relevant goods and/or services that are disputed. For example, this may be relevant if there are only some classes, goods, and/or services that are causing confusion in the market place between the parties’ trade marks.

The Commissioner upon determining the outcome of a proceeding will also determine whether the grounds for invalidity have been made out in respect of the whole trade mark registration or only part of the trade mark registration.

Requirements for application for declaration of invalidity

The application for declaration of invalidity must:

• be in writing;
• be accompanied by the prescribed fee; and
• be signed by the applicant.

The application must also contain the following information specified in regulation 107:

• the name and address for service of the applicant;
• if the applicant has an agent, the agent’s name;
• the number of the trade mark registration to which the application relates;
• the class/es, or the goods or services, to which the application relates;
• the grounds for a declaration of invalidity and the provisions of the Act to which those grounds relate [it is therefore important that the opponent cite the relevant sections of the Act to which their grounds relate e.g s17(1)(a)]; and
• a statement of the basis on which the applicant claims to be a person aggrieved.

When filing the application through the IPONZ case management facility, please take care to ensure the ‘Applicant’ and ‘Owner’ fields are correctly entered. The Applicant is the party filing the application for declaration of invalidity. The Owner is the party that owns the trade mark registration.

IPONZ will normally process the application for declaration of invalidity within two working days.

Where can an application for declaration of invalidity be filed?

An aggrieved person can apply to either the Commissioner, via IPONZ, or the High Court for a declaration of invalidity of a registered trade mark. In most cases applications are filed with IPONZ in the first instance because it is seen as the more accessible forum.

However, where there is already another pending court action against the registered trade mark, the aggrieved person must apply to the Court. For example, if there are infringement proceedings in the High Court, it is common for the other party to file an application for declaration of invalidity as a defence or counterclaim.

Aggrieved person

An application for a declaration of invalidity can only be made by an 'aggrieved person'. The onus is on the person applying for the declaration of invalidity to establish they are aggrieved, as at the date they filed their application. ¹

It is now settled law that the term 'aggrieved person' is to be given a liberal or wide interpretation. Such an interpretation is consistent with the public interest in maintaining the integrity of the register and section 5(1) of the Interpretation Act 1999. ² To be aggrieved, the applicant will need show it is appreciably disadvantaged in a legal or practical sense by the owner’s trade mark remaining on the register. ³

Common scenarios in which applicant’s claim to be a 'person aggrieved’ include:

• The registration of the trade mark is preventing the acceptance of the applicant’s own trade mark application. ⁴
• The applicant is in the same trade as the owner of the registered trade mark, and its business is affected by the continued registration of the relevant trade mark.
• The owner is alleging that the applicant is infringing its trade mark registration.
• The applicant is a person with a real or substantive interest in the removal of the trade mark registration.
• The applicant is culturally aggrieved by the registration.

The party who is applying for the declaration of invalidity must be able to show that at the relevant date they would have been appreciably disadvantaged in a legal or practical sense by the existence of the trade mark registration. ⁵ The Applicant should include proof of the reasons as to why they are an aggrieved person when filing their evidence during the proceeding.

Grounds for invalidity

The application for declaration of invalidity needs to clearly set out each of the grounds relied upon by the applicant and must also include a clear reference to the section of the Act to which those grounds relate. ⁶ If the grounds aren't pleaded clearly, the application may not be accepted by IPONZ.

The onus is on the applicant to prove that the trade mark registration was not registrable under Part 2 of the Trade Marks Act 2002, at the deemed date of its registration. ⁷ Part 2 of the Act covers eligibility of a trade mark for registration and, in particular, the absolute and relative grounds of refusal.

Grounds include:

1. The registered proprietor is not entitled to claim to be the owner of the mark. ⁸
2. The use of the mark would be likely to deceive or cause confusion. ⁹
3. The use of the mark is contrary to New Zealand law, or would otherwise be disentitled to protection in any court. ¹⁰
4. The use of the registration would be likely to offend a significant section of the community, including Maori. ¹¹
5. The trade mark application was made in bad faith. ¹²
6. The trade mark is not a 'sign' or a 'trade mark'. ¹³
7. The trade mark is non-distinctive. ¹⁴
8. The trade mark consists only of signs or indications that designate the nature or characteristics of the goods or services. ¹⁵
9. The trade mark consists only of signs or indications that have become customary in trade for the goods or services. ¹⁶
10. The trade mark is identical or similar to another registered trade mark for the same or similar goods and/or services, and its use is likely to deceive or confuse. ¹⁷
11. The trade mark, or an essential element of it, is identical or similar to a well-known mark in New Zealand, and the use of which would be taken as indicating a connection in the course of trade with the owner of the well-known mark, and would be likely to prejudice the interests of the owner. ¹⁸

Presumption of Validity of Registration

The fact that a trade mark is registered is prima facie evidence as to the validity of a trade mark. The status of a registered trade mark therefore affects the evidence required in the proceedings and the burden of proof on the parties to show whether the registration of the trade mark should be declared invalid.

A registered trade mark cannot be declared invalid after seven years from the deemed date of registration, unless it can be established that:

(a) the registration was obtained by fraud; or

(b) the trade mark should not have been registered on any of the grounds in section 17(1) or (2).

Therefore, the date of registration is also relevant as to whether proceedings for invalidity can be invoked.

2. Counterstatement

Regulations 108 and 109

Once an application for declaration of invalidity has been filed, the Commissioner will notify the trade mark owner and provide them with a copy of the application for declaration of invalidity. The trade mark owner then has two months to file a counter-statement if it wishes to defend its trade mark registration.

The purpose of the owner’s counterstatement (also referred to as the owner’s pleadings) is to clarify which assertions in the application for declaration of invalidity the owner either accepts or denies. This process is used to determine which matters are actually in contention so that the parties can focus their efforts on these contentious matters when preparing and filing their evidence, as opposed to wasting time and effort filing evidence for matters that are not in dispute.

Requirements for counterstatement

The counterstatement must be in writing and contain the following information specified in regulation 109:

• The name and address for service of the owner of the trade mark registration.
• If the owner has an agent, the agent’s name.
• A response to the applicant’s grounds for a declaration of invalidity, by admitting, denying, or claiming lack of knowledge of, each assertion made in the grounds for a declaration of invalidity.
• A brief statement of the facts on which the owner relies in support of continued registration.
• Be signed by the owner.

IPONZ recommend addressing each assertion made by the applicant by reference to the corresponding paragraph number in the application for declaration of invalidity. For example, “the owner accepts that the applicant is the owner of trade mark No. 123456 TRADE MARK cited at paragraph 6 of the application but denies that it is confusingly similar to its trade mark” or “the owner has no knowledge of the information contained in paragraph 7”. This approach will ensure the owner has responded to all assertions in the application.

The brief statement of facts should (briefly) outline the general facts and reasons why the owner’s trade mark should remain on the register.

Please note the owner should not file any evidence with its counterstatement. The owner will be given an opportunity to file its evidence later in the proceedings.

IPONZ will send a copy of the counterstatement to the opponent within 15 working days of it being filed.

Consequences of not filing a Counterstatement

If the owner does not file a counterstatement on or before the deadline as notified by IPONZ, the application for declaration of invalidity will be determined on the documents filed by the applicant. The owner plays no further part in the proceedings.

In this situation, IPONZ will provide the applicant with an opportunity to file evidence, and to be heard before the Assistant Commissioner, so it can try make out a case that the trade mark registration is prima facie invalid. This is necessary to overcome the statutory position that registration of the trade mark is prima facie evidence of its validity under s 162 of the Act. ¹⁹

3. Applicant’s evidence

Regulations 33 and 110

From the date the Commissioner sends the applicant the owner’s counterstatement, the applicant has two months to either:

(a) file evidence in support of the application; or
(b) notify the Commissioner they do not intend to file evidence; or
(c) notify the Commissioner they wish to withdraw their application.

The applicant’s evidence must be in the form of a statutory declaration or affidavit. If evidence is not in the proper form, it will not be admitted into the proceeding.

See the evidence guidelines for further information on evidence requirements.

The applicant must, in addition to filing its evidence with IPONZ by the applicable deadline, serve a copy on the owner as soon as practicable pursuant to regulation 33. Please note that filing evidence with IPONZ through its case management facility does not constitute service on the other side.

The application for declaration of invalidity proceeding will be discontinued under regulation 110(3) if the applicant fails to do (a), (b) or (c) above by the applicable deadline.

This will result in the trade mark remaining on the register.

4. Owner’s evidence

Regulations 33 and 111

The owner may file evidence in support of its trade mark registration within two months of either:

(a) being served a copy of the applicant’s evidence; or
(b) being notified of the applicant’s intention not to file evidence.

The owner’s evidence must be in the form of a statutory declaration or affidavit. If evidence isn't in the proper form, it won’t be admitted into the proceeding.

See the evidence guidelines for further information on evidence requirements.

The owner must, in addition to filing its evidence with IPONZ by the applicable deadline, serve a copy on the applicant as soon as practicable pursuant to regulation 33. Please note that filing evidence with IPONZ through its case management facility does not constitute service on the other side.

If the owner decides not to file evidence, this will conclude the evidential stages of the proceeding. The case will then be ready for a hearing.

5. Applicant’s evidence strictly in reply

Regulations 33 and 112

If the owner files evidence, the applicant may file evidence strictly in reply within one month of being served with a copy. It follows that the applicant cannot file evidence strictly in reply where the owner has chosen not to file any evidence – there being nothing to reply to.

Again, the evidence must be in the form of a statutory declaration or affidavit. In addition to filing it through IPONZ case management facility, the applicant must also serve a copy on the owner.

Once the applicant has filed its evidence in reply, or the deadline for this has passed, the case will be ready for a hearing.

6. Extensions of time and halts

Regulations 28 and 32

At any stage in an invalidity proceeding after the application for declaration of invalidity has been filed, a party may request an extension of time to complete their task or request that the proceeding be halted while another matter is resolved or concluded, for example where the parties have entered into settlement negotiations or where there is another co-pending proceeding between the parties that needs to be determined first.

See extensions and halts for more information.

7. Withdrawal

Parties may withdraw from an invalidity proceeding at any time. However, they should consider reaching an agreement with the other side as to costs before withdrawing from the proceeding (or withdrawing the trade mark registration) otherwise costs may be still be awarded against them.

See costs for more information.

8. Hearing

Regulations 122, 125, 126 and 127

Once the evidential stages of the invalidity proceeding are complete, we'll ask the parties how they wish to be heard. The parties may elect one of the following options:

(a) On the papers already filed (no hearing fee)

• Parties choosing this option are not required to do anything further and will be notified through the case management system when the Assistant Commissioner has decided the case.

(b) By filing written submissions to be considered by the Assistant Commissioner hearing the case (hearing fee required).

• Parties choosing this option will be set a task through the case management system to file their written submissions.
• Payment of the hearing fee is due at the time of filing the written submissions.

(c) By attendance at a hearing in person before the Assistant Commissioner (hearing fee required)

• Parties choosing this option will be notified of a hearing date no less than one month in advance.
• A task will be set to file hearing submissions by three working days prior to the hearing date.
• Payment of the hearing fee is due 10 working days before the hearing date.

See fees for more information.

Wellington is the primary venue for hearings by appearance. However, the IPONZ Hearings Office will consider requests to hold hearings in either Christchurch or Auckland if this better suits the parties. The IPONZ Hearings Office will also consider requests for a party to appear at the hearing via a video link from another MBIE site. While the Hearings Office will attempt to accommodate such requests, it is entirely at the discretion of the IPONZ Hearings Office.

Once the parties have advised how they wish to be heard, a hearing date and venue will be set and the case file including both parties pleadings, evidence, and hearing submissions (if any) will be passed over to the Assistant Commissioner hearing the case.

9. Assistant Commissioner’s written decision

Regulation 162

Following the hearing (either by appearance, written submissions, or on the papers filed) the Assistant Commissioner will issue a written decision, including any award of costs. The decision will normally be issued within 30 working days from the hearing.

The decision of the Assistant Commissioner will be sent to both parties via the IPONZ case management facility.

See costs for more information.

All IPONZ hearings decisions are published on the New Zealand Legal Information Institute website.

10. Appeal

Sections 170, 171 and 174  — New Zealand Legislation

Parties may appeal the Assistant Commissioner’s decision within 20 working days by:

(a) filing a notice of appeal and application for stay of proceedings in the High Court; and
(b) notifying the Commissioner.

If no appeal is filed, the decision of the Commissioner is final, and the Commissioner will alter any entry on the register accordingly to give effect to the decision.

Please see our guidelines on appeals and stays of proceeding for more information.

Trade Mark hearing decisions: Appeals and Stay of Proceedings

11. Invalidations of international registrations protecting New Zealand

Regulation 22(1) of the Trade Marks (International Registration) Regulations 2012)  — New Zealand Legislation

With regard to an international registration protecting New Zealand, if the registration is declared fully or partially invalid, IPONZ will notify the International Bureau of the extent that the registration has been declared invalid, as required by legislation.

Footnotes

• 1 Manhaas Industries (2000) Limited v Fresha International (Import/Export) Co Limited [2012] NZHC 1815 at [21] and Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 12 IPR 417 (NSWSC) at 455.
• 2 Metalman New Zealand Limited v Scrapman BOP Limited [2014] NZIPOTM 17 (3 April 2014) at para 51; Fareed Khalaf Sons Company trading as Khalaf Stores v Phoenix Dairy Caribe NV HC Wellington CIV 2002-485-000207, 3 September 2003 at [23].
• 3 Ritz Hotel v Charles of the Ritz 12 IPR 417 at 455
• 4 See for example, Miller Chemical & Fertilizer LLC v Ravensdown Limited [2015] NZIPOTM 25 (24 December 2015), at para 27; The Ritz Hotel Ltd v Charles of the Ritz & Anor [1989] 12 RPC 333, cited with approval in Chettleburgh v Seduce Group Austrlia Pty Ltd [2012] NZHC 2563 and Crocodile International Pte Ltd v Lacoste [2013] NZHC 2265. 269 at 273, as followed in Tui AG v DB Breweries Limited [2010] NZIPOTM 31 at [27]
• 5 Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 12 IPR 417 at 454-455
• 6 In Rainbow Technologies Inc v Logical Networks Ltd [2003] 3 NZLR 533 (HC), it was confirmed that grounds should be pleaded accurately and fully. Hammond J stated that “…proper attention needs to be paid to Notices of Opposition and Counter Statements because these form the “pleadings” in a trade mark cause.” Hammond J then went on to state at para 66 “A party is responsible for the advancement of his or her own case, and for the making it plain what is being put in issue.”
• 7 Being the deemed date of registration – section 73(1) and section 5(1) deemed date of registration means,— (a) in the case of a trade mark to which section 36 applies, the date of the application in the convention country (subject to any enactment relating to international arrangements): (b) in any other case, the date of the application.
• 8 Chettleburgh v Seduce Group Australia Pty Ltd [2012] NZHC 2563
• 9 Section 17(1)(a)
• 10 Section 17(1)b)
• 11 Section 17(1)(c)
• 12 Section 17(2)
• 13 Section 18(1)(a)
• 14 Section 18(1), see also trade mark examination practice guidelines re section 18
• 15 Section 18(1)(c)
• 16 Section 18(1)(d)
• 17 Sections 25(1)(a) and 25(1)(b) see also trade mark examination practice guidelines
• 18 Section 25(c), see also trade mark examination practice guidelines
• 19 Sportsgear New Zealand Limited and White Holdings Limited v Rocawear Licensing, LLC and Mitchell & Ness Nostalgia Company [2005] NZIPOTM 13 (May 2005). Also see O.T.S. S.p.A. v Guardant, Inc [2009] NZIPOTM 5 (9 February 2009), at para 87