December 2017

1. General

Europe

Brexit Date and Ramifications Set, But Subject to Ongoing Negotiations
The European Commission has issued a preparedness notice concerning the effective date and ramifications of Brexit in respect of EU trade marks (and registered and unregistered designs) – subject to any subsequent agreement reached in the ongoing discussions between the EU and the United Kingdom.

Unless another date is agreed, all EU primary and secondary legislation will cease to have effect on 30th March 2019. Consequently, applications and registrations for EU trade marks, Community designs as well as unregistered Community designs existing before that date will no longer have effect in the United Kingdom from that date, and subsequent applications will not designate the United Kingdom. This includes rights obtained from designating the European Union via the Madrid Protocol and Hague Agreement. All existing seniority claims in EU trade marks based on national trade mark rights in the United Kingdom will also cease to have an effect in the EU. UK practitioners will also lose their ability to be a representative before the EUIPO.

2. Patents

New Zealand

Ability to Amend Pleadings Confirmed
In Bayer New Zealand Ltd v Merial Ltd the Judge upheld an Assistant Commissioner’s decision allowing Merial to admit certain evidence in reply and amend its pleadings.

The case is part of drawn-out and on-going proceedings relating to Merial’s novelty based opposition to Bayer’s patent application for an anti-infective formulation when used inside teat seals to prevent or ameliorate mammary gland infections, including mastitis. The opposition was initiated in August 2010 and following two abeyance periods Merial filed its evidence in reply in May 2016. While this should have been the last procedural step before the Hearing, Merial also sought leave to file a second supplementary notice of opposition and third supplementary statement of case. Bayer opposed admission of the amended pleadings, but IPONZ allowed them resulting in Bayer requesting a hearing on their admissibility. The Assistant Commissioner decided in Merial’s favour, and also rejected Bayer’s contention that Merial’s evidence in reply was not strictly in reply.

Subsequently, an Australian Patent Office decision issued in relation to the equivalent Australian patent application, finding it to both lack novelty and inventive step, although Bayer has been given the opportunity to amend.
Regarding the disputed evidence in reply Bayer contend that the Assistant Commissioner should have considered whether the evidence could have been filed in the first instance and whether it genuinely was in reply to a matter raised in Bayer’s evidence. The Judge agreed that the disputed evidence should have been filed as part of Merial’s evidence in chief. The compound in question was not mentioned in the patent application and it was Merial who proposed its relevance in its original pleadings and in other documents filed before completing its evidence in chief. Hence, the onus was on Merial to establish that the compound was effective as an antiseptic at the disputed concentration. Nonetheless, in light of the disputed evidence’s role in the outcome of the Australian decision, the Judge allowed the evidence to be admitted even though it was not strictly in reply, citing the wide discretion that the Commissioner has under regulation 145.

Regarding the admissibility of the amended pleadings Bayer contend that the discretion available to the Assistant Commissioner should not have been exercised due to Merial’s lack of diligence in preparing its case, given that the new prior art in contention was freely available on the internet in February 2007. In particular, given its claimed high relevance Merial had an onus of explaining why it only discovered it in 2016, and that the Assistant Commissioner’s assessment downplayed that consideration.

The Judge noted that the Australian decision concluded that that prior art would not have been reasonably ascertained by the skilled person as it would have required searches to include patent opposition files, which limited time and financial resources would suggest against. Nonetheless, while agreeing that Merial should have done more to explain the late location of that prior art, the Judge held that the Assistant Commissioner’s overall assessment of Merial’s diligence was not wrong.

Bayer argued that the prior art in question is irrelevant to the question of novelty as the Australian decision excluded it from consideration in that respect on account of not meeting the threshold of reasonably being ascertained, understood and regarded as relevant by a skilled addressee. However, the Judge noted that criteria is not part of New Zealand law and that excluding the prior art from consideration would create a real risk of the patent being wrongly granted. The Judge allowed the amended pleadings on the basis that the public interest in having the opposition determined on the best evidence outweighs the issue of delay.

Meaning of Exceptional Circumstances Clarified
In Merial Inc v Intervet International BV the Judge upheld the Assistant Commissioner’s finding that a request for an extension of time in which to file a counterstatement satisfied the relevant exceptional circumstances provisions in the Patents Regulations 2014.

On the final day for filing the counterstatement the Intervet’s attorney applied for an extension of time and the following day filed a minimal counterstatement, with a view to amending it to a fuller document. Regulation 103(3) allows the Commissioner to extend the time in which to file a counterstatement by up to 2-months upon being satisfied that there are exceptional circumstances that justify the extension. In line with Supreme Court precedent the Assistant Commissioner interpreted the phrase “exceptional circumstances” as “unusual, outside the common run”, and concluded that this was satisfied and so granted Intervet an extension of time.

In its appeal Merial argued for a more stringent meaning for “exceptional circumstances”. Firstly, the adoption of the phrase marks a departure from the previous Patents legislation and is inline with the overall purpose of improving the efficiency of the patents system. Secondly, it argued for adopting “quite out of the ordinary”, which is being applied to the equivalent phrase in the Trade Marks legislation, and that the higher standard is justified by the strong public interest in the appropriate conferment of monopolies.

The Judge, however, did not find these arguments compelling. While noting that exceptional circumstances is the higher of two standards for extensions in the Regulations, the Judge found that the purpose of the patents legislation was met by the meaning of “unusual, outside the common run” as a decision maker is still aware that extensions are not to be routine. The Judge also considered the High Court trade mark case which applied a higher standard to have little precedential value or legislative influence, finding that it was context dependant and seemingly made without consideration of the Supreme Court’s earlier construction of the phrase.

Regarding the Assistant Commissioner’s finding that exceptional circumstances were present, the Judge held that the Assistant Commissioner was right not to sharply distinguish between qualifying grounds and subsequent discretion. To do so can unduly limit consideration of factors relevant to the underlying policy of promoting speedy and efficient resolution of challenges to patents.

3. Trade Marks

New Zealand

Maori Advisory Committee's Role Strenthened
From January 2018 IPONZ will forward all trade mark applications containing Maori geographical names to the Maori Advisory Committee for the purpose of advising the Commissioner whether they are likely to be offensive to Maori. This replaces the practise since May 2005 under which the Commissioner would not send marks incorporating geographical locations to the Committee, unless the mark contains:

• Any matter the Commissioner considers might be offensive or ambiguous in relation to particular goods and services;
• An Atua or Tupuna name/image;
• An association with wahi tapu - a place sacred to Māori in the traditional, spiritual, religious, ritual, or mythological sense;
• A word that that may be regarded by whānau/hapū/iwi as having mana; or
• Other Māori text and/or imagery.

Assistant Commissioner's Absolute Ground Analysis Criticised
In Man Truck & Bus AG v Shaanxi Heavy-Duty Automobile Co Ltd the Judge quashed the Assistant Commissioner’s finding that Shaanxi’s stylised application for SHACMAN in classes 12, 35, 37 was not deceptively similar to Man’s stylised registration for MAN in classes 12, 37.

Man has a long established worldwide reputation, including in New Zealand, in heavy vehicle related goods and services. Shaanxi is a long established Chinese manufacturer and distributor of heavy vehicles that has traded in Asia, Africa, the Middle East, Central America and South America, but has yet to trade in New Zealand.

Man’s primary ground of appeal is in relation to the Assistant Commissioner’s finding under section 17(1)(a), which prohibits the registration of marks whose use would be likely to deceive or cause confusion. The Assistant Commissioner had found: that the marks were not sufficiently visually, phonetically or conceptually similar; the goods and services were generally the same, but those in the trade would be informed and observant; and consequently held that use of SHACMAN would be unlikely to cause deception or confusion amongst a substantial number of persons.

The Judge disagreed with the Assistant Commissioner’s analysis in two main respects. Firstly, the weighting given to the finding that the marks are substantially dissimilar was considered more appropriate for section 25 than under section 17. While both involve the comparison of marks, the comparison is essential to the section 25 determination, but it is not so determinative under section 17. Further, on the Judge’s evaluation, the marks possess similarity relevant to the ultimate question of deception or confusion. In particular, Shaanxi’s mark wholly contains Man’s registered mark as its end syllable with the same capitalisation and font style, which may constitute sufficient similarity given imperfect recollection.

Secondly, the Judge was critical of the Assistant Commissioner’s finding that Shaanxi had discharged its onus of establishing that its mark would not on the balance of probabilities deceive or cause confusion. In particular, the finding was made without regard to precedential rulings that where goods and services are in a specialist market evidence from persons accustomed to dealing in the market as to the likelihood of deception or confusion is essential. The Judge held that in the absence of such evidence and in light of the re-evaluation of section 17 the opposition should have been upheld, as Shaanxi did not otherwise discharge its onus.