Trade Marks: The registrability of shapes in New Zealand

The recent High Court decision in Fredco Trading Ltd v Robert Peter Miller is the first New Zealand decision under the Trade Marks Act 2002 (the Act) that considers the registrability of shapes as trade marks in New Zealand.

This case involved an application to revoke a trade mark registration for the shape of a plastic vine tie (pictured) under section 73 of the Act.

The applicant (Fredco) was a trade competitor of the respondent (Miller).

Background

In the early 1980s, Miller designed and sold a plastic vine clip for use in kiwifruit orchids under the KLIPON brand. The KLIPON tie dominated the market and Miller sold over one billion clips.

The only other product on the New Zealand market with a similar function was a vine tie manufactured by Illinois Tool Works Incorporated (ITW) which looked different to the KLIPON tie.

In June 2002, Fredco started selling vine ties manufactured in China that were virtually identical to the KLIPON tie.

On 25 July, Miller filed for a shape mark application in New Zealand. The Intellectual Property Office of New Zealand (IPONZ) initially objected to the application on the grounds that the mark was not distinctive.

However, after considering Evidence of Use filed with the application, the application was accepted on 7 August 2003 on the basis of "use claimed".

On 23 August 2002, Miller began High Court proceedings against Fredco for passing off, breach of the Fair Trading Act and trade mark infringement. Fredco, in turn, challenged the validity of Miller's trade mark registration.

Grounds for invalidity application

Fredco sought invalidity on the following grounds:

• The sign is not a trade mark:(18(1)(a);



• The trade mark has no distinctive character: (18(1)(b);



• The trade mark consists only of a sign that serves in trade to designate the intended purpose and characteristic of the goods: (18(1)(c);



• The trade mark consists only of a sign that has been customary in the bona fide and established practices of trade: (18(1)(d).

Fredco accepted that it had to bear the onus of proving that the mark was not a trade mark. It was also accepted that while the registration is prima facie evidence of validity, a presumption of validity is not created.

In support of the application, Fredco submitted expert evidence that the mark was entirely functional and devoid of brand or trade mark significance.

Miller in turn filed evidence from a marketing professor, business consultants and managers and people from within the trade that although the shape of the vine tie was primarily functional, the fact that there were other vine ties on the market (namely the ITW tie), which had different features indicated that the "swan-neck and rectangular end shapes" were elaborate design features which were not central for the functionality of the tie and therefore, distinguished the shape from other ties.

While the tie was used with KLIPON, Miller produced evidence that the shape of the tie and KLIPON were "inextricably linked" as consumers immediately associated the shape with KLIPON.

Overwhelming evidence was also submitted from the orchid trade that established that consumers associated the shape of the tie with Miller's products.

Justice Venning held that the phrases to "have distinctive character" and of "being capable of distinguishing" under section 18(1)(b) meant two different things.

If this were not so, he stated that section 18(1)(b) would be redundant and this was not the draftsperson's intention. Therefore, in his view, section 18(1)(b) was applicable to marks which lack inherent distinctive character. Such marks can only be registrable if they can acquire distinctiveness through use.

While the tie had features not solely functional he held that because the essential shape was determined largely by functional considerations - for example, its length, diameter of clip mechanism, and wire - the shape mark was not registrable inherently.

He then considered whether the registration was saved by section 18(2), which states:

The Commissioner must not refuse to register a trade mark if before the date of application, as a result of either use made of it or of any other circumstances, the mark has acquired a distinctive character.

Justice Venning took into account the following factors in reaching the view that the shape was eligible for registration:

• sales of over a billion units of ties over a 24-year period;



• 24 years of use;



• only Miller's ties used the shape (other than the brief use of the shape by Fredco);



• the marketing and promotion of the shape as an identifying feature of the ties;



• the overwhelming evidence of recognition from consumers which established that the shape was used to identify the ties;



• the clear education of consumers by the respondent that the shape was a trade mark;



• there were other alternative shapes available to other traders and competitors for ties without copying the respondent's tie shape;



• the aesthetic component of the shape mark, namely the "swan neck" feature;



• while the shape mark is used with the KLIPON brand, evidence established that the market and consumers related the tie shape to KLIPON rather than the other way round; the product was recognised by its shape first.

As such, the registration was allowed to remain on the Register.

In summary, the decision indicates that as long as distinctiveness of a shape mark can be established through long use, clear marketing and promotion as having trade mark significance and as long as consumers have been educated into recognising the shape as a trade mark, and if the shape has some aesthetic quality, no matter how functional the shape is, it will be considered to be eligible for trade mark registration.

Enquiries and information

For more information on the registration of shape marks, please email or call Jeanette Singh on 64 9 916 8352.