INTELLECTUAL PROPERTY RIGHTS

Intellectual property rights are potentially extremely valuable to commercial businesses, but also to not-for-profit entities, and the potential to lose that value is great. There are also risks if a business or a not-for-profit entity fails to respect the intellectual property rights of others.

Intellectual property law is complex and poorly understood. While industrial espionage may be uncommon in New Zealand, intellectual property rights should be protected because they:

  • Help establish or maintain a commercial advantage over competitors,
  • Preserve the benefits of investments in new ideas and products and in research and development,
  • Enhance the reputation and goodwill of an entity and its products,
  • Provide a potential basis for revenue through franchising, licences and agencies, and
  • Protect and enhance the interests of others which enjoy the benefits of intellectual property rights “downstream” from the entity holding those rights.

Intellectual property rights are protected by Acts of Parliament, but also through “judge-made” law developed by the Courts. Many of the areas of protection overlap, and Court proceedings to protect intellectual property rights commonly involve several areas of the law. There are three broad and sometimes overlapping types of intellectual property rights:

  1. Reputation – Protection of a business or not-for-profit through its trading name, trade marks and methods requires protection, primarily through the law relating to Passing Off, the Trade Marks Act, and the Fair Trading Act.
  2. Protection of Ideas – Inventive ideas and operational “know-how” are also valuable, and the Patents Act, the Plant Variety Rights Act, and the protection of commercial secrets are particularly relevant.
  3. Protection of Designs – The physical expressions of creative ideas are protected under the Copyright Act and the Designs Act, but also through the Fair Trading Act and the law relating to Passing Off.

A business’ or not-for-profit’s employees, visitors, customers, competitors and others may appropriate intellectual property rights, sometimes deliberately, but often without realising that what they are doing is wrong. Dealings and contracts with all these people should be informed by the need to protect intellectual property rights.

 

Business Reputation

 

Passing Off

 

Basis of protection: The law concerning what is called “Passing Off” has its origins in judicial decisions. The Courts recognise that businesses acquire a reputation in the products they sell, services they provide, the business “get-up” they use, and in the name under which they carry on business. The business reputation or goodwill protected by the law of Passing Off was aptly described by the House of Lords long ago as the “benefit and advantage of a good name, reputation and connection of a business. It is the attractive force which brings in custom.” To be entitled to protection under the law of Passing Off the goodwill must be proved to exist, usually over a period of time and in the area or market where the defendant is alleged to have passed off. Protection is also available for personalities and characters (for instance, Crocodile Dundee), even in the absence of significant confusion or deception, where there has been a misrepresentation of some sort.

What is Passing Off: It is Passing Off where someone else sells products or carries on a business or activity under a name, “get-up,” description or otherwise in such a manner as to mislead the public into believing that the products or business are those of the original entity. The misrepresentation may not be intended, but evidence of deliberate conduct by a defendant may help a Court to conclude that misrepresentation has occurred. Evidence of a degree of confusion going beyond mere irritation and leading to evidence of damage to the complainant is required. The five characteristics which must be established to justify proceedings for Passing Off have been summarised as:

  1. A misrepresentation,
  2. Made by a trader in the course of trade,
  3. To prospective customers of his, or ultimate consumers of goods or services supplied by him,
  4. Which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence), and
  5. Which causes actual damage to the business or goodwill of the trader by whom the action is brought or (in certain circumstances) will probably do so.

Trade Marks Act 2002

 

Basis of protection: A trade mark or trade name in respect of goods or services may be registered under the Trade Marks Act 2002. The Act defines a trade mark as any “sign” capable of being represented graphically and distinguishing the goods or services of one person from those of another person, with “sign” being defined as including “a brand, colour, device, heading, label, letter, name, numeral, shape, signature, smell, sound, taste, ticket, or word and any combination of signs.”

A registered trade mark gives the proprietor of that trade mark the exclusive right to use the registered trade mark in relation to the specified goods or services. The proprietor may also restrain other traders from using a mark or name which is identical to or confusingly similar with the registered mark, if that use relates to goods or services of a similar kind to that in respect of which registration has been obtained.

Apart from the protection offered by the registration of a trade mark, the law relating to Passing Off (see above) and the Fair Trading Act 1986 (see below) also confer certain rights. However, a registered trade mark, merely by the fact of registration, will give the registered proprietor of the trade mark the statutory right to protect the trade mark or name, whereas more in the way of proof is required in cases relying on:

  • The law of Passing Off, where a reputation in a trade mark must be proved, and
  • The Fair Trading Act, where it is necessary to prove actual or likely deception and the extent of the plaintiff’s reputation

A trade mark registration continues for an initial 10 years with rights of renewal for periods of 10 years, but must actually be used in the form in which they are registered otherwise the registration can be set aside (as in Crocodile International Pte Ltd v Lacoste [2017] NZSC 14). Use of trade marks by associated entities (including subsidiaries) and by licensees may be recorded in the Intellectual Property Office as used by registered users.

Trade mark registration (including fees) can be relatively costly, technical problems and objections from the holders of other trade marks are not uncommon, and the process can take several years to be completed. Serious consideration needs to be given to whether the benefit of the trade mark protection justifies the time and cost involved, or whether it would be better to achieve a reputation in the market place and rely on the law as to Passing Off and the Fair Trading Act.

Criteria for protection: Under the Trade Marks Act 2002 any “distinctive” trade mark (consisting of a word, label, signature, logo, design, sign or combination of these elements) can be registered. There must be something distinctive about the trade mark and accordingly it is not normally possible to register words which are surnames, place names, or descriptive words or pictures.

Applications for registration are lodged with Commissioner of Trade Marks (within the Intellectual Property Office), and the application must specify the class or classes of goods or services to which the trade mark is to apply. The Commissioner or an objector to registration can raise a number of objections, including objections that there is some similarity with existing trade marks which have been registered or for which registration has been applied, that the proposed trade mark is deceptive or confusing, or that the trade mark is descriptive or laudatory (including phonetic equivalents of descriptive or laudatory words).

There are a number of detailed (and often complex) rules about trade marks, but the most important are as follows:

  • A trade mark is an adjective not a noun, and the trade mark should not be used as the commercial name for the product, which would be to use the trade mark as a noun. Thus a particular cosmetic manufacturer does not make Max Factor, but Max Factor lipstick/cleanser/powder etc.
  • The trade mark should be clearly distinguished from other words in any particular context, the most common method being by putting the whole of the trade mark in capitals or in a different print style.
  • Wherever a registered trade mark is used the fact of registration should be noted as “registered trade mark” although these three words can be abbreviated to, for instance, RTM. It is an offence to suggest that a registered trade mark is held if in fact this is incorrect. It is acceptable, however, to indicate that the name is a trade mark (e.g. TM) even if it is not (or not yet) registered, or to indicate that a trade mark has been applied for.

Infringement: The registered proprietor of a registered trade mark has the exclusive right to its use and may sue anyone who makes unauthorised use of an identical or confusingly similar trade mark in relation to goods or services of classes where the registered proprietor holds a registered trade mark.

In addition, misuse of a trade mark is specifically prohibited by section 16 of the Fair Trading Act 1986 (see below); “No person shall, in trade, … falsely apply to any goods any trade mark or marks so nearly resembling a trade mark as to be likely to mislead or deceive; or … falsely use in relation to the provision of services any trade mark or mark so nearly resembling a trade mark as to be likely to mislead or deceive,” and for the purposes of the section a trade mark is defined as a registered trade mark. Remedies under the Fair Trading Act are accordingly available for improper use of a registered trade mark.

 

Fair Trading Act 1986

 

Basis of protection: This Act (based on the Australian Trade Practices Act 1974) introduced a statutory regime to control certain trade practices, and in particular misleading and deceptive conduct and false representations.

Misleading or deceptive conduct and false representations: Section 9 of the Fair Trading Act provides that “No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.” Sections 10 and 11 are complementary provisions relating to misleading conduct in relation to, respectively, goods and services.

Section 13 of the Fair Trading Act provides (in part) that:

No person shall, in trade, in connection with the supply or possible supply of goods or services or with the promotion by any means of the supply or use of goods or services, –

Falsely represent that goods are of a particular kind, standard, quality, grade, quantity, composition, style, or model, or have had a particular history or particular previous use; or …

Falsely represent that goods or services have any sponsorship, approval, endorsement, performance characteristics, accessories, uses, or benefits; or

Falsely represent that a person has any sponsorship, approval, endorsement, or affiliation; or …

Make a false or misleading representation concerning the place of origin of goods.

A number of points need to be made about these provisions:

  • The reference to “person” includes not only individuals but also companies, other corporate bodies (such as incorporated societies and charities), and government agencies.
  • The reference to “in trade” includes most businesses, commercial activities, and undertakings relating to the supply or acquisition of goods and services.
  • The phrase “engage in conduct” includes acts and omissions, verbal and written representations, and even, on occasions, silence. The allegedly deceptive conduct must be causally linked with the confusion of the public; and the causal link is not proved if the public misleads itself.
  • To be “misleading or deceptive” involves a false representation, and it is not necessary that the person who engages in the misleading or deceptive conduct intended to mislead or deceive. The relevant question is whether or not people were misled or deceived or were likely to be misled or deceived. These people are treated as being the notional ordinary consumers who are not particularly intelligent or well-informed, and the test is objective.
  • A corporate entity or other employer or principal is responsible for the conduct of directors, employees or agents acting within the scope of their actual or apparent authority.

There are a number of criminal provisions in the Fair Trading Act, but, as the Act is intended to be largely self-policing, provision is also made for civil remedies.

 

Companies Act 1993

 

This Act protects the use of registered company names, and contains provisions to prevent registration of company names where there is a close resemblance with other names.

 

Flags, Emblems, and Names Protection Act 1981

 

This Act protects the way the New Zealand Flag and certain other flags are used, and provides for the protection of certain names and emblems of Royal, national, international, commercial, or other significance.

 

Protection of Ideas

 

Patents Act 2013

 

Basis of protection: Patent law is also a very technical area of law. Under the Patents Act 2013 a registered patent protects ideas and principles embodied in novel technologies, products and processes, and protection is not limited to the physical form of an item. The proprietor of a patent enjoys an exclusive right to make, use, and sell a patented product or manufacturing method within New Zealand. The exclusive right generally dates back to the date of filing of the application even although it may be some months or years before the patent is advertised or even accepted. However, patent law differs from country to country, and in some overseas countries little if any protection is afforded in respect of intellectual ingenuity. In general, the maximum term of a patent is 20 years subject to renewal fees being paid regularly.

A commercial decision needs to be made as to whether a product or process justifies the cost involved in obtaining patent protection, particularly if patent protection overseas may be necessary. The costs of obtaining patent protection are significant, and if patent protection is sought overseas the costs can be enormous. Unless the invention has a clear commercial potential to make significant profits the cost of seeking patent protection may not be commercially justified. The protection of patent offers, of course, is of significant commercial value, and there may be potential profits to be obtained from the patent either in terms of on-sale of patent rights, licensing, or profit from production of the product incorporating the patent. However, once patent protection is obtained its value has to be protected, if necessary by Court action, and further costs may therefore be involved in protecting the value of the patent.

Criteria for protection: The essence of the Patents Act is the protection of inventions which are defined in section 2 of the Act as “any manner of new manufacture … and any new method or process of testing applicable to the improvement or control of manufacture …” A mere discovery cannot be the subject of a patent as there must be some inventive ingenuity.

It is important that the subject matter of a patent should not be given any publicity or applied commercially prior to lodging any patent application. All patent applications are examined by the Intellectual Property Office and may be the subject of opposition proceedings, and even once granted may be challenged in Court proceedings on the basis of a number of grounds including:

  • That the invention, so far as claimed in a claim, is not a patentable invention under section 14 of the Act,
  • That the intended holder of the patent is not entitled to the patent,
  • That the complete specification does not comply with technical requirements
  • That the applicant is attempting, or has attempted, to obtain the grant of a patent by fraud, false suggestion, or a misrepresentation
  • That the claimed invention was secretly used in New Zealand before the priority date of that claim (secret use does not include reasonable trials or experiments), and
  • That granting the patent would be contrary to law.

To obtain the benefits of patent protection manufacturers normally note on products that a patent has been granted or applied for. Such notification is an effective deterrent to potential infringers. Patents may be transferred and be the subject of licensing arrangements.

Infringement: Because a patent holder enjoys a statutory monopoly in the patented invention manufacturers are normally careful to avoid the possibility of infringing against patents. On any action for infringement of patent the defendant can attack the validity of the original patent, which needs to be considered when deciding whether to apply for patent registration.

 

Commercial Secrets

 

Basis of protection: The protection of trade or commercial secrets is based upon the proposition that someone who receives information in confidence should not take unfair advantage of it. Commercial secrets may be made known to people in one or more of the following ways:

  • Through the relationship of employer and employee where the employment agreement expressly or impliedly includes an obligation of confidentiality on the part of the employee,
  • Where the parties have or had a commercial contractual relationship and the obligation of confidentiality has been an express or implied term of the contractual relationship (this commonly occurs in manufacturing, agency, licensing, franchising, and other contractual relationships), and
  • Where information is provided by one party to another in the course of commercial negotiations which may be in anticipation of future contractual relationships (whether they arise or not) or in contemplation of a business takeover (particularly common in the due diligence process of company takeovers).

Criteria for protection: In all these situations the first essential is that the information be of a kind such as to justify confidentiality. Confidential information is likely to be protected by the Courts if the following criteria are present:

  • The information must not be public property or within public knowledge, but it is not necessary for the information to be novel or inventive. Even simple concepts or information which comprise a unique combination of information known publicly will be entitled to protection. However, the information must justify protection (it cannot be merely trivial). The significance of the information may be judged by considering whether the release of the information would be injurious to the owner of the information or of advantage to rivals or competitors, and the usage and practices in the relevant trade or industry will be considered.
  • The confidential information must be conveyed in circumstances where the obligation of confidence is express or implied. There can be little doubt where there is an express contractual obligation, but the obligation will also be implied in circumstances such as the following:
  • Where information of commercial or industrial value is given on a business-like basis and with a common intention in mind such as a joint venture or the manufacture of articles by one party for another,
  • Where the recipient of information knows that the context is such that the giver of the information regards the information as being of special significance, peculiar sensitivity or confidentiality, and
  • The Courts are likely to be more readily persuaded of confidentiality obligations where a regime of secrecy procedures are adopted to restrict access to documents or equipment, where documents are clearly endorsed as being confidential, where restricted access signs are erected giving notice of the obligation of confidentiality, and where secrecy agreements are signed.
  • The confidential information must be used by the recipient in an unauthorised way to the disadvantage of the person who provided the confidential information

Particular difficulties arise with former employees, and a clear and express obligation of confidentiality should be included in an employment agreement if an employee is commonly dealing with confidential information. The employer will need to demonstrate some consideration (benefit granted by the employer to the employee) for obligations of confidentiality, particularly if they are incorporated into existing or replacement employment agreements. However, in appropriate cases the Courts will imply a term as to confidentiality. Problems usually arise where a former employee appears to be taking advantage of information concerning customers of a former employer. Information about previous customers may be used by former employees, but the employee is not entitled to deliberately commit to memory (nor to take copies of) lists of customers nor to make use of memorised (or copied) information concerning the identify of customers where confidential information relating to the business with such customers would give the employee (or someone else) some commercial advantage. This is a particularly difficult (and still developing) area of the law, and one of the greatest difficulties is to prove that a former employee has (or has not) deliberately committed information to memory.

In many cases involving breaches of confidence by employees it is likely that there will also be some infringement of copyright in documents or computer records.

 

Protection of Designs

 

Copyright Act 1994

 

Basis of protection: Copyright is an intellectual property right, but, unlike patents, plant variety rights, trade marks, and designs, copyright requires no registration but comes into existence automatically when an original work that qualifies for protection is created. The law relating to copyright is complex, and the Copyright Act 1994 provides a statutory code, with copyright protection extending to literary and artistic works including industrial articles. Substantially similar works can each enjoy copyright protection as long as there is no causal connection between the works. Only a very general explanation of the law relating to copyright and designs is possible in a Review of this nature. The 1994 Act updated and extended copyright law in a number of significant areas, and was passed to comply with New Zealand’s GATT obligations, and has been and will be amended further.

In 1962, New Zealand extended copyright protection to industrial articles (as “artistic works” irrespective of artistic quality), and New Zealand cases have been reported in respect of a lavatory pan connector, toilet seats and flush units, kiwifruit trays, steel filing cabinets, frisbees, and computer hardware and software.

Copyright protection extends to “works” which include original literary, dramatic, musical or artistic works, original sound recordings, original films, original broadcasts, original cable programmes, and original typographical arrangements of published editions. Works are not original if they are, or to the extent that they are, copies of other works, or if they infringe the copyright in any other work, and a cable programme is not an original if it is simply an immediate retransmission of a broadcast received from elsewhere. Literary works include tables, compilations and computer programmes; dramatic works include dance, mime and scenarios or scripts for films; and artistic works include graphic works, photographs, sculptures, collages and models (irrespective of artistic quality), works of architecture (buildings or models for buildings) and other works of artistic craftsmanship (but exclude layout design or integrated circuits which are the subject of the Layout Designs Act 1994 – and this Review does not cover that statute).

It is fundamental to copyright law that copyright is enjoyed not in respect of an idea but in the actual physical expression of that idea. Thus, it is the form of an article rather than the concept for the article which attracts copyright protection.

While novelty is essential to patent registration, novelty is not required for copyright protection. In respect of original literary, dramatic, musical and artistic works protection is automatic upon creation as a result of independent skill and labour and without any form of registration.   Under section 31, National Library of New Zealand (Te Puna Mātauranga o Aotearoa) Act 2003, a Gazette notice can be issued requiring publishers to send three copies of public document (including magazines, periodicals, maps, art prints and sheet music) to the National Librarian.

Copyright is owned by the author of the copyright work, with the following exceptions:

  • Subject to any agreement to the contrary, where any employee in the course of employment makes a literary, dramatic, musical or artistic work the employer is the first owner of the copyright in the work produced,
  • Subject to any agreement to the contrary, the first owner of copyright in a commissioned work is the person who commissions or pays or agrees to pay for the works, such as photographs, computer programmes, paintings, drawings, diagrams, maps, charts, plans, engravings, models, sculptures, films or sound recordings, and
  • Under section 105 there are rights of privacy in relation to photographs or films commissioned for private and domestic purposes where the commissioning party does not own copyright.

The 1994 Copyright Act expressly recognised “moral rights” in copyright works for the first time. The first right recognised is the “right of attribution” which is the right to be identified as the author or director of a copyright work, and the second is the “right to integrity” which is the right to object to derogatory treatment of a work. In addition, sections of the Act protect the interests of performers from illicit recording and on-sale of illicit recordings of concerts or performances.

The scope of copyright protection is limited in some particular circumstances. A brief summary of the exceptions (which need to be checked carefully in respect of particular factual situations) is as follows:

  • Specific provision is made for criticism and review of and reporting on copyright works in section 42 and for research and private study in section 43. To avoid any suggestion that a copyright work has been released into the public domain (with consequent loss of copyright protection), where a work is the subject of criticism, review or reporting the author of the work should be careful to clarify the copyright situation. A licence to use material in the public domain may be express or implied, and inaction to prevent copying may be sufficient to enable the copyist to argue that there is a licence in the public domain.
  • Particular provisions are made for copying of literary, dramatic, musical and artistic works, films and sound recordings for educational purposes by educational institutions as long as the copying complies with the detailed rules prescribed (sections 44-49).
  • Special exceptions are provided for libraries and archives (sections 50-57).
  • Copying associated with public administration (Parliament, Courts, and government services) is the subject of express exceptions (sections 58-66).
  • A series of exceptions are made relating to anonymous works, reporting current events, provision of Braille copies, public readings and recitations, abstracts of scientific and technical articles, and archival recordings of folk songs (sections 69-72).
  • In relation to buildings and works such as sculptures and works of artistic craftsmanship permanently situated in a public place or in premises open to the public copyright is not infringed by copying the work by making a graphic work, photograph or film representing it, or broadcasting a visual image of the work (section 73).
  • Under section 77 the author of an artistic work who is not the copyright owner does not infringe copyright in that work by copying the work when making another artistic work, if the main design of the earlier work is not repeated or imitated. This will protect architects and other designers from using original detail in more than one work as long as they do not repeat or imitate the “main design of the earlier work”.
  • Further, the reconstruction of a building does not infringe copyright in the building or its drawings or plans (section 78).
  • Rental of a copyright work by an educational establishment (generally under the Education Act) or prescribed library (generally, educational and public libraries) is not a copyright infringement (section 79).
  • Back-ups of computer programs permitted by the owner of the copyright are permissible (section 80).
  • Playing of sound recordings by non-profit charitable organisations where any admission charge is solely used for the organisation is not a copyright infringement (section 81).
  • Particular exceptions are provided for broadcasts and cable programmes (sections 82-91). There is an express exception made for private or domestic use of recordings of broadcasts and cable programmes to enable viewing at more convenient times, as long as the copy is not retained longer than necessary to view or listen to the recording (section 84).

The duration and ownership of copyright are complex issues which need to be considered with knowledge of the facts of each case. Briefly, the following rules generally apply:

  • For literary, dramatic, musical, artistic and photographic works, copyright protection continues until fifty years after the death of the author.
  • For films, protection expires at the end of the fiftieth year from the end of the calendar year the film was made or was made available to the public, whichever is the later.
  • In the case of works of artistic craftsmanship, copyright protection expires twenty-five years after the first industrial reproduction for sale or hire of fifty or more copies of the product, but generally speaking in respect of other artistic works (for example, utilitarian objects) the Act limits protection to sixteen years (section 75). This is likely to be an area where there will be dispute as to whether an article is a “work of artistic craftsmanship” or merely an “other artistic work” – for instance, Bonz Group Pty Limited v Cooke [1994] 3 NZLR 216 where handknitted garments with a combination of designs and colour were held to be works of artistic craftsmanship.

Criteria for protection: Before copyright infringement can be established the following elements justifying the claim to copyright need to be proved:

  • The item concerned must qualify for protection under the Act. The categories of protected works have already been outlined.
  • If the article to be protected is a literary, dramatic, musical, or artistic work it is necessary to prove originality (but not novelty). It is sufficient to show that the work originates from the author (without copying) and that there has been sufficient independent skill and labour involved in its creation to enable it to be said to be “original”. Even compilations and other derivative works (short of slavish imitation) may be considered original, and the 1994 Act expressly deals with such works.
  • Ownership of the copyright must be proved. As already indicated, an employer is normally the proprietor of the copyright in work produced by employees or by other people under a commission.

Copyright may be assigned in writing either in whole or in part, and the right to reproduce copyright works may be the subject of licensing arrangements. As many people are not aware of the significance of copyright protection the proprietor of copyright should ensure that the copyright claim (and the date from which copyright protection runs) is noted on copyright works, including reproductions (for instance, articles produced industrially).

Infringement: The most common infringement of copyright involves copying the copyright work (or a substantial part of it) in a material form, issuing copies of the work to or performing the work in public and making adaptations of the work (known as “primary infringement”), or dealing in or providing the means for making infringing copies, and permitting premises to be used for infringing performances (known as “secondary infringement”).

Copyright may be infringed in a number of ways, for instance by publishing or performing copyright works and also by copying literary, dramatic, musical or artistic works (either in whole or in part) by reproducing the copyright work in any material form (including placement on a website). The Act describes infringement as the carrying out of certain specified restricted acts relating to a copyright work by someone who is not the owner or licensee of the owner of the copyright work.

In respect of infringement there are usually three issues which need to be considered:

  1. Where copying of only part of a copyright work is alleged, the proprietor of the copyright will need to establish that the part which has allegedly been copied is “substantial”. Section 29 of the Act makes it clear that an infringement can occur “in relation to the work as a whole or any substantial part of it.” In determining what is a “substantial part” the issue is one of quality rather than quantity (and if a small part of the work is taken then the importance or originality of the small part to the owner becomes relevant), and is a question of fact and degree to be decided by the Court.
  2. To constitute an infringement there must be “objective similarity” between the original product and the alleged copy. Differences of only a relatively minor nature in dimensions and detail are insufficient to avoid the suggestion of copying, either under the Designs Act 1953 or the Copyright Act 1994. In terms of section 11 of the Designs Act slight differences do not make an apparent copy “substantially different from the registered design,” and the position is similar under the Copyright Act 1994. The decision in Wham-O Manufacturing Co v Lincoln Industries Limited [1984] 1 NZLR 641 (Court of Appeal) established that “a difference in dimensions alone is not sufficient to avoid infringement.” In the same case the words of an English Judge were quoted with approval “a copy is that which comes so near to the original as to give to every person seeing it the idea created by the original”. Again, “in comparing the works and keeping in view the idea and general effect created by the original, there was ‘such a degree of similarity as would lead one to say that the alleged infringement is a copy or reproduction of the original or the design – having adopted its essential features and substance.’” The same conclusion was reached in the 1984 Auckland High Court decision in Plix Products Limited v Frank M. Winstone (Merchants) Limited (subsequently confirmed by the Court of Appeal – [1985] 1 NZLR 376) where Bannister & von Dadelszen acted for the successful plaintiff. A Court is also likely to hold that if there is a “multiplication of coincidences” between the original work and the alleged copy the degree of resemblance may be such as to indicate objective similarity and copying.
  3. To establish a breach of copyright under the Copyright Act 1994, one must also establish a causal relationship between the copyright work and the apparently infringing copy. Under section 29(2)(b) the infringement may be direct (copying from the copyright work itself) or indirect (copying by means of a description from a third party or from instructions derived from the copyright work – as in the Plix case). It is not common to be able to prove that direct copying has occurred. However, if the proprietor of the copyright can establish the existence of substantial similarities between the copyright work and the alleged copy and that the alleged copyist had access to the copyright work or a reproduction of it, the alleged copyist must then effectively explain how the similarities came about. If the design is registered under the Designs Act 1953 it is not necessary to establish a causal relationship between the copyright work or design and the apparently infringing copy, and this is the main benefit of design registration.

 

Designs Act 1953

 

Basis of protection: In the context of the discussion of the law relating to copyright reference was made to the Designs Act 1953. The main advantages of registration under the Designs Act are that the registered proprietor of a design does not need to prove copyright (ownership or entitlement to protection) and enjoys a monopoly in New Zealand (and elsewhere if the design is registered there) for up to fifteen years but copyright protection continues under the Copyright Act after protection under the Designs Act lapses or expires.

The designs capable of registration under the Designs Act are those designs which consist of the features of shape, configuration, pattern or ornament which are applied industrially to an article.

As already noted, this Review does not discuss the Layout Designs Act 1994, a “layout design” being defined in that Act as “the three-dimensional disposition, however expressed, of the elements, at least 1 of which is an active element, and of some or all of the interconnections, of an integrated circuit; and includes such a three-dimensional disposition prepared for an integrated circuit intended for manufacture.”

Criteria for protection: The Designs Act 1953 has certain limitations when compared with copyright protection. First, purely functional designs cannot be registered under the Designs Act and, second, registration is required under the Designs Act 1953 with consequential costs. These costs need to be weighed against the benefits of registration. As indicated below in respect of infringements, the important point is that the holder of a registered design enjoys a statutory monopoly in the design which does offer greater protection than simple copyright.

To be registered a design must be new or original and relate to a manufactured article, have “eye appeal,” and not be solely functional.

The existence of any registered design rights should be endorsed on any products to warn potential infringers of the benefits enjoyed by the holder of registered design rights.

Infringement: In contrast with the alleged infringement of copyright where the proprietor of the copyright must prove copying, the proprietor of a registered design merely needs to prove registration and prove production of a replica which is substantially of the same appearance as the registered design, and need not prove that the registered design has been actually copied or pirated.

 

Civil Remedies

 

Where intellectual property rights are infringed a number of weapons in the legal armoury may be employed, including:

  • The Court has a discretion to grant an interim injunction restraining the infringement if a strong legal and factual case can be established, if the balance of convenience favours an interim injunction, if damages would be an inadequate remedy (especially if the apparent infringer could not pay damages), and if irreparable damage could result if the interim injunction was not granted. The plaintiff must not delay seeking such relief, and must give an undertaking as to any damages the alleged infringer may incur as a result of any interim injunction being granted.
  • An order equivalent to a civil search warrant, called an Anton Piller order, may be obtained if there is a serious risk that the infringer will destroy or remove incriminating evidence. This is commonly sought before the infringer is aware that proceedings have even been commenced.
  • An interim injunction to restrain a defendant from dissipating assets, called a Mareva injunction, is usually obtained without the defendant having prior notice of the application. The plaintiff must show a good arguable case, prove that the defendant has appropriate assets, and establish that there is a very real risk of dissipation of assets.
  • A permanent injunction is normally sought to prevent continuing infringement after judgment.
  • A successful plaintiff may seek an account of profits or damages.
  • An order for delivery up and destruction of infringing copies is normally sought.

 

Conclusion

 

Obtaining statutory protection for intellectual property by registering patents, plant varieties or designs is expensive. Taking action if intellectual property rights (whether or not based on a statute) are infringed is even more expensive. An entity can, however, minimise the risk of having to meet those expenses by following good practices to protect its intellectual property rights. If those rights are infringed an entity needs to assess the costs and risks of litigation realistically (it is seldom likely to be economic).

While this Review should be useful as a broad summary of intellectual property law, this Review is of limited value when considering specific intellectual property issues because of the sheer complexity of the law involved and the fact that the law is developing all the time. What is clear is that many entities realise neither the value to their activities of their intellectual property rights nor the need to avoid infringing against the intellectual property rights of others. Particularly when new products are being considered it is important that staff are aware of the potential conflict between a business and its competitors in respect of intellectual rights.