Julie’s thoughts on trade mark law.
Disclaimer: I’m not a trade mark dispute specialist. My interest is strategy, or why you’d want to do something. Find out more.
There was an uproar on Twitter last Thursday about IPONZ (the Intellectual Property Office of NZ) accepting a trade mark application for the word “Koha” in relation to software.
The back story is basically Koha is an open source computing product for libraries. It was developed in New Zealand, and then around the world for ages. Then, a splinter group decided to make their own offshoot product. And stopped “sharing” with the community. Then started commercialising their product. Then they were sold. So the Koha community doesn’t like them much, as they had a collaborative, open, sharing community and a group “forked” away and did their own thing. Making money. Off the first guy’s effort. No wonder they don’t like them.
Then the company did what any good company would do, they applied for a trade mark on their name. But, they didn’t create a new name, rather ran with the name of the project, Koha.
So, now the name Koha has been trade marked in the US and Australia, and has just been accepted in New Zealand.
And people are up in arms! How can they do this? How can a US company trademark a Maori word? How can they do this to the nice little NZ company? Our trade mark law is obviously terrible and IPONZ is a crock.
Naturally, I would be upset too. But these people have a poor understanding of the trade mark law. Although the company has acted in a way that the community doesn’t like, they’re not doing anything illegal in relation to the trade mark. They do own a company. They do have a product that they sell. They do use that name. No one else has a trademark on it. So, they do have the right to register it themselves. (Also, they say they’re going to give it to the Koha community now.)
Let’s take a look at trade mark law in New Zealand.
First: what can you do with a registered trademark? Why would you want to register your brand?
- You can use your trade mark on your goods
- You can authorise others to use your trade mark on their goods (licensing)
- You can sell your trade mark
- You can use your application in NZ to register overseas
- You can write ® on your product
- You can stop people using your trade mark to represent their goods
So, if I want to start a business, it’s a good idea to register my trademark in the area I do business – to stop someone else passing themselves off as me, to give me an asset to sell in the future, and to make sure any marketing I do is going to be for my brand, not someone pretending to be me.
But can’t you sue someone doing that under the fair trading act? Passing off law?
Yes, yes you can. But, it’s more difficult, as under the Fair Trading Act you have to prove that someone is misleading the public. That is, not just using your name, but using it in a way that is deliberately misleading the public.
Part 1, section 10: Fair Trading Act 1986: Misleading conduct in relation to goods:
No person shall, in trade, engage in conduct that is liable to mislead the public as to the nature, manufacturing process, characteristics, suitability for a purpose, or quantity of goods.
To get relief from someone misleading the public, you need to complain to the Commerce Commission. And, as the Commerce Commission says, they don’t investigate every complaint. They act on the ones with the highest possible harm to the public.
To make a private complaint without a registered trademark, you’re looking at trying to take action against someone under passing off – common law. That’s difficult, long, hard, and expensive.
So, it’s a good idea to register your trade mark. Which the US company (Progressive Technology Federal Systems, Inc. DBA Liblime) did.
Again: How can they do this? How can a US company trademark a Maori word? How can they do this to the nice little NZ company? Our trade mark law is obviously terrible and IPONZ is a crock.
Grounds for registering a trade mark are found here.
But basically, if it is capable of being used as a trade mark (i.e. a badge of origin), is distinctive, non-descriptive and not offensive, then it can be registered as a trade mark. Things that can’t be registered are common words that anyone can use in relation to their product, e.g. Fantastic, Amazing; or things that describe your product, e.g. New Zealand Apples.
Things that can be registered include: Apple (in relation to computers, music etc., is nondescriptive), Zespri (made up word), Southern Cross (in relation to healthcare) and many more.
“Koha” is not descriptive and is distinctive. In fact, there are 10 other current registrations on the trade mark register for the word Koha in relation to other goods and services. Seriously, search the word Koha here.
But it’s a Maori word. How can they do that?
All Maori words go to the Maori trade mark advisory board. They check to see if use of that is offensive to Maori. They typically stop such words as mana and tapu. But the word koha is not considered sacred, nor is it offensive to use it on computers, so they can’t stop this one. Just as I can register a trademark for Apple (an english word), or Xerox (a made up word) or Armani (an Italian name), you can also register one in Maori.
So basically the nice open source people are screwed and now they can’t use their own name?
Well no. Trade mark law isn’t like patent law. You don’t have to be the first person to use a name to register it. You don’t have to be the only person using it. You just have to be the first person to apply to protect it.
Because of the fact that someone else might be using the name, there’s a nice little section that protects prior users. Section 96 of the Trade Marks Act says that if someone has already been using an unregistered trade mark before your date of registration, then they cannot stop you continuing to use it.
As long as the person hasn’t stopped using it for 5 years and then tries to cash in on your marketing, then they are an honest concurrent user and you can’t stop them. Sorry. But, good for the Koha people, right?
So what’s everyone upset about? Have the sued you? No. Can they sue the community already using it? No. Do they want to give it to the community? Yes.
Everything’s going to be okay, Twitter. Let’s move on.