October 2014

1. Patents

Australia

High Court Affirms 10+ Year Extension of Time
In Alphapharm Pty Ltd v H Lundbeck AS the High Court held in a majority decision that section 223(2) confers power on the Commissioner of Patents to extend the time within which Lundbeck could apply for an extension of term for its patent.
The day before the original term of its escitalopram patent would have expired Lundbeck filed an extension of term application under section 70 along with an extension of time application under section 223 within which to file the extension of term application. Alphapharm opposed the application for an extension of time, which was unprecedented in being for 10+ years.
While Lundbeck made the application during the term of the patent, it was made more than six months after the latest of the three dates specified in section 71(2). In 2013 the Commissioner’s delegate granted Lundbeck the extension of time sought. Appeals against that decision were unsuccessful in the Administrative Appeals Tribunal and the Full Court of the Federal Court of Australia. The High Court granted Alphapharm special leave to appeal.
However, the High Court dismissed the appeal. The Court held, by majority, that section 71(2) of the Act imposed two cumulative time requirements. The first was that an application under section 70(1) for an extension of the term of a patent be made during the term of the patent.  The second was that such an application be made within six months after the latest of the three dates specified in section 71(2). Properly understood, the extension of time provisions in section 223(2) permitted the Commissioner to enable an application under section 70(1) to be made during the term of the patent but more than six months after the latest of the three dates specified in section 71(2). In particular, while regulation 22.11(4)(b) precludes section 223 from applying in circumstances where the patent term had expired, it did not preclude an extension of time in respect of an application made more than six months after the latest of the three dates specified in section 71(2).

2. Trade Marks

New Zealand

Court of Appeal Clarifies Relevant Market Test for Determining Reputation
In Sexwax Incorporated v Zoggs International Limited the Court of Appeal quashed the prior High Court judgment and ordered that the application for ZOGGS in class 25 for “clothing, footwear, headwear, swimwear, t-shirts …” not proceed to registration. The earlier High Court judgment had overturned an Assistant Commissioner’s decision that upheld the opposition by Sexwax to Zoggs application to register ZOGGS.
Sexwax began in California in the early 1970’s and quickly specialized in surfboard wax marketed with a circular logo prominently containing the text “MR. ZOGS SEX WAX”. It also sold t-shirts with the logo or parts thereof on. While the mark is well known in the New Zealand surfing community, there has been no attempt to register the mark in New Zealand. Zoggs International was founded in Australia in 1992 and initially primarily made swimwear goggles branded ZOGGS, which have been sold in New Zealand since 1994. The company expanded into swimwear, which, following a rebranding in 2000, were also branded ZOGGS.
The High Court Judge found that there was only sufficient reputation in New Zealand for the complex logo and not for its constituent elements. While there was evidence of the constituent elements having reputation overseas, this did not justify a finding of spill-over reputation. Regarding the degree of awareness in the relevant market the Judge found the swimwear buying public to be a very large market. While the complex logo had sufficient awareness amongst the surfing community, there was insufficient evidence to conclude that that was a significant portion of the relevant market. When comparing ZOGGS with the complex logo the Judge held it was not likely to cause confusion.
In quashing the High Court decision the Court of Appeal held that the trial Judge had misapplied the test for determining the relevant market in which reputation is assessed. The trial Judge had construed the relevant market widely based upon the market targeted by the applicant. However, the Court of Appeal held that the relevant market should be determined by the market targeted by the opponent. On this basis the Court of Appeal found the evidence established that the opponent’s mark was well-known within that smaller market.
Regarding the similarity of the marks the Court of Appeal affirmed that the complex MR ZOGS SEX WAX logo needs to be compared with ZOGGS. However, the Court of Appeal also noted the prominence of MR ZOGS within that logo and the evidence of purchasers of the products referring to them as MR ZOGS. Given the similarity and that relevant purchasers could be caused to wonder if there is a connection the Court of Appeal held that ZOGGS is confusingly and deceptively similar to the MR ZOGS SEX WAX logo.
However, the Court of Appeal also noted that Zoggs may want to re-file the ZOGGS mark with a reduced specification of goods which are less likely to cause confusion with the specialist market in which the MR ZOGS SEX WAX logo has an established reputation.

Evidence of Single Use can Establish Genuine Use
In Metalman New Zealand Ltd v Scrapman BOP Ltd the High Court overturned a decision of the Assistant Commissioner of Trade Marks which had found that Metalman’s registration should be revoked for non-use.
In December 2012 a small business based in Oamaru assigned to Metalman a registered complex logo which contained the phrase SCRAP MAN as a prominent feature. About two weeks later Scrapman filed for revocation of the mark based on non-use. Consequently, the relevant non-use period of 3 years and one month prior to the application for revocation being filed covered a period when the mark was owned by the small Oamaru business. The only evidence of use during that period was a single advertisement placed in a newspaper circulating in the Oamaru area.
The Assistant Commissioner accepted there is no de minimus rule regarding the amount of use required of a trade mark, it only needs to be genuine use. However, the Assistant Commissioner considered the information given about the single advertisement made putting it in context difficult. Further, there was no explanation for why only a single advertisement was filed and why no other evidence of use was available. On this basis the Assistant Commissioner concluded that the owner had not discharged their onus of establishing genuine use and so ordered that the mark be revoked.
On appeal the High Court Judge considered that the Assistant Commissioner had set the bar too high. The Judge noted that neither the applicant not the Assistant Commissioner could suggest an ulterior motive for the single advertisement, the absence thereof pointed towards it being genuine use. The Judge also held that in the absence of evidence to the contrary the context of the publication was not relevant. Regarding the lack of evidence of other use of the mark, the Judge agreed with the owners submission that the logo mark is in the form of an advertisement and is suited to such uses rather than to appearing on office stationary or staff uniforms. The Judge concluded that the use of the mark, although minimal, was nonetheless genuine.

Suspension of Active Use not same as Abandonment
In Chettleburgh v Seduce Australia Pty Ltd the High Court held that Chettleburgh’s registration for SEDUCE in class 25 is invalid and should be treated as if it had not been registered on account of prior use by Seduce.
In 2006 Chettleburgh applied for and obtained registration for SEDUCE in relation to various women’s fashion clothing items. Seduce sought to invalidate that application in 2008 after it blocked their application lodged in 2007. A sequence of earlier decisions culminated in an Assistant Commissioner of Trade Marks decision in March 2014 which found that Seduce is the true owner in New Zealand of the SEDUCE mark on account of prior use on relevant goods. Between 2001 and 2003 Seduce sold such goods into New Zealand via a wholesaler. It resumed sales into New Zealand directly to retailers in 2006. Between these times notable quantities of Seduce’s Australian stock was sold in New Zealand by resellers.
On appeal Chettleburgh argued that Seduce had effectively abandoned the mark in New Zealand between 2003 and 2006. However, the Judge considered that proposition counter-intuitive. The indirectly made sales in New Zealand added to Seduce’s profitability, and the evidence showed that during that period listings and sales on Trade Me demonstrated continuing appeal in New Zealand of the SEDUCE brand. Consequently the Judge upheld the Assistant Commissioner’s conclusion that Seduce is the true owner of SEDUCE in New Zealand.
The Judge declined to exercise discretion in Chettleburgh’s favour by not invalidating his mark. To do so would not achieve the purpose of the legislation as it would allow Chettleburgh to benefit from the goodwill created by Seduce.