Pipers Bulletin 2021-2
- Trade Marks
Stricter Rules for .au Domain Name Licensing Imminent
Australia’s .au Domain Administration (auDA) organisation has given notice that .au domains will be subject to a raft of stricter rules when they are registered or next renewed from 12th April 2021.
Domain names are not owned, but rather are licenced, with the terms of the licence primarily set by the register for the top-level domain – in the case of the .au top-level domain auDA. Consequently, auDA can change the rules according to which a domain name is licensed. Some of the rule changes will apply to all .au domains, while other changes will only apply to specific second-level domains, such as .com.au. Several of the rule changes are noteworthy from an intellectual property perspective.
Currently registrants for all .au domains need to satisfy an Australian presence test. For .com.au and .net.au domains in the name of registrants that are not domiciled or registered in Australia auDA allows the Australian presence requirement to be satisfied if the registrant also has an Australian trade mark registration or pending application that is closely and substantially connected to the domain name.
However, the Australian presence test for .com.au and .net.au domains registered or renewed on or after 12th April 2021 will be satisfied only if the domain name only contains the exact trade mark or specific minor variations thereof. In particular, the domain name must include and only include all the words in the order in which they appear in the Australian trade mark, excluding:
- DNS identifiers such as com.au;
- punctuation marks such as an exclamation point or an apostrophe;
- articles such as ‘a’, ‘the’, ‘and ’or ‘of’; and
Non-Australian business entities that will no longer satisfy the Australian presence test under the stricter test have some options for avoiding losing the right to use a domain name. Most notably, they could:
- apply for a trade mark that will exactly match the domain name in question taking into account the above exclusions; or
- have the domain name transferred and held on behalf of the current registrant by another company in their corporate group (a ‘related body corporate’), as long as that related company meets the Australian presence requirement. i.e. this could involve registering an Australian entity.
This latter option becomes available under the new rules from 12th April 2021, provided that the holding of the domain name on behalf by a related body corporate does not create a conflict of interest. The new rules also expand the types of commercial entities that can qualify for a .com.au or .net.au domain name. In particular, from 12th April 2021 the definition of ‘commercial entity’ will include incorporated limited partnerships under State or Territory legislation, Commonwealth entities, statutory bodies under commonwealth state or territory legislation, trading co-operatives and the government being the crown.
Also from 12th April 2021 registrants will no longer be able to sell, rent or lease sub-domains of a domain name, unless it is to a related body corporate. Sub-domains have the format www.subdomain.example.com.au. auDA is restricting the use of sub-domains as otherwise domain name holders can operate a private registry allowing third parties who would otherwise not be entitled to use an Australian domain name to do so.
Further, domains will only be able to be held by a person or entity that has contractual capacity. As a result of this a domain registered in the name of a company that gets de-registered or a person who dies will be cancelled 30-days from the date that contractual capacity is lost. Once the domain name licence is deemed cancelled it cannot be transferred or renewed.
Brexit Determines Appeal Following Lax Max Opposition
In the recent Board of Appeal decision Max Kiene GmbH v Frito-Lay Trading Co GmbH R 204/2020-4 delays during the opposition period have subsequently resulted in the appeal against the successful opposition being allowed due to intervening changes in the legislative landscape brought about by Brexit.
In July 2010 Max Kiene filed their application for a device mark consisting of the word MAX inside two concentric circles as shown right for various food items in classes 29, 30, 31. The mark was accepted in September 2010, and by December 2010 had been opposed by 4 different parties, although one of the opponents withdrew shortly thereafter.
One of the opponents was Frito-Lay, who have the prior UK registration of MAX for potato crisps in class 29 and crisps of potato flour in class 30 and the prior EU registration for WALKERS MAX for various chip or crisp type products in classes 29 and 30. The opposition was suspended in January 2013 and only resumed in January 2017 – presumably spurred on by the ‘Yes’ vote in the Brexit referendum. However, even after that long suspension it was still subject to numerous extension of time requests.
The EUIPO Opposition Division gave their opinion in late November 2019, in which they upheld Frito-Lay’s opposition. Max Kiene had required Frito-Lay to demonstrate evidence of use of its UK registration. While the evidence showed the word MAX used in conjunction with the word WALKERS, the Opposition Division accepted that it counted as use of MAX alone given that that mark had a much larger font size and that it is common practice for autonomous marks to be shown together with different stylisation. The goods of the contested application were found to be identical in-part, similar to a low degree in-part and dissimilar in-part to the goods for the UK registration. While the word MAX has descriptive connotations it could not be held to have no distinctiveness as its registration was not challenged, and so the Opposition Division held that it has at least a very low level of distinctiveness. However, given the finding that the application is phonetically and conceptually identical and visually similar to an average degree with the UK registration, the Opposition Division held that there would be a likelihood of confusion for the goods that are identical or similar. There was considered to be no likelihood of confusion with the WALKERS MAX mark as the first element is the more distinctive and prominent feature of that mark.
Max Kiene appealed to the Board of Appeal, who in their decision dated 11th January 2021 held that the UK registration is no longer relevant for opposition purposes, given that the transitional provisions to the withdrawal of the UK from the EU ended at the close of 31st December 2020. In order to be taken into account an earlier right has to have protection in the EU on the date of the decision. The Board of Appeal also essentially upheld the finding of no likelihood of confusion with the WALKERS MAX mark.
While arguably against the odds Max Kiene has been successful against Frito-Lay’s opposition, the oppositions by the other two opponents are on-going.
Lack of Distinctiveness Wipes Out Application
In Waterwipes Unlimited Co v Church & Dwight Co Inc 2021 NZIPOTM 2 the Assistant Commissioner held that Waterwipes Unlimited (WU) has not discharged its onus of demonstrating that its stylised application for WaterWipes is either inherently or factually distinctive for wipes consisting mainly of water.
WU created the wipes containing 99.9% water by a proprietary process and were first to market them noting their suitability for people and particularly babies with skin sensitivities. They were launched in Ireland in 2003 and entered the New Zealand market in 2011. They were initially marketed with a stylised WaterWipes being part of a device mark (as shown right), and that mark was applied for and registered in New Zealand in 2010.
However, WU also sought to register an essentially stylised version. On 8th June 2017 WIPO informed IPONZ that WU’s 12th September 2016 Madrid Protocol application for a stylised WaterWipes device (as shown right) designated New Zealand. The application covered various wipes or tissue products in classes 3, 5 and claimed priority back to July 2016 and was readily accepted by IPONZ on 28th June 2017. Church & Dwight (C&D) opposed the application arguing that it is descriptive and that other traders would legitimately want to use the phrase in relation to the same goods (sections 18(1)(b)&(c)) and that the mark had not achieved distinctiveness through use at the application date (section 18(2)).
While both parties agreed the onus is on the applicant to establish the distinctiveness of its mark, the issue of where onus lies was discussed on account of divergence from that position by a recent High Court decision and UK practice diverging. In Beiersdorf AG v Unilever Plc  NZHC 44 at  –  the Judge considered there is no clear law on the point and that during the standard trade mark application process the applicant does not have to put forward evidence of distinctiveness. In the UK the Trade Marks Act 1994 introduced a presumption of validity when an application is examined and case law has extended this to oppositions as well. While noting that arguably there is no onus on the applicant either during examination or opposition, the Judge also noted that in Australia the onus is on the applicant in oppositions and considered that without express legislative direction or consistent higher court direction that the traditional approach of the applicant having the onus should remain.
Another preliminary issue was whether WU’s counterstatement noting that the mark is in widespread use in New Zealand was sufficient to put C&D on notice that WU have pled the section 18(2) acquired distinctiveness provision. The Assistant Commissioner considered that the regulation 80(1)(d) ‘brief statement’ requirement for counterstatements is particularly important for section 18(2), but that compliance can be established provided it is sufficiently clear to the opponent what the applicant’s position is. The Assistant Commissioner considered that WU’s widespread use statement sufficiently put C&D on notice, but that specifically pleading 18(2) would have been preferable.
The Assistant Commissioner also noted that while the Evidence Act 2006 is a useful guide strict compliance with it is not required as Assistant Commissioner hearings are not a Court and that strict compliance would be inconsistent with the purpose of providing just, speedy, and inexpensive determination of proceedings.
Regarding inherent distinctiveness WU argued that its mark it the sort of stylised logo that consumers expect to denote trade origin and that it is not a limping mark used in conjunction with a house mark. However, the Assistant Commissioner rejected that since having the style or feel of a trade mark does not establish distinctiveness if the words are descriptive. WU also argued that water is the primary ingredient of many products, but that using water to describe them such as “water lemonade”, or “water shaving foam” would be unusual. However, the Assistant Commissioner rejected that too on the basis that an uncommon use of a descriptive word does not make it distinctive. Given that the wipes contain 99.9% water it is apt to so describe them using the word “water” and other traders are not taking advantage of WU’s reputation, even though their product was innovative and led to copycat products. The Assistant Commissioner also considered it would be inappropriate to allow the mark to be registered with a disclaimer to the words “water wipes” as the stylisation in the mark is insufficient to establish registrable distinctiveness.
Regarding acquired distinctiveness the Assistant Commissioner found the evidence lacking in various respects, such as not specifying market share, not providing independent supporting evidence, some evidence relating to the device mark or to markets outside New Zealand. The Assistant Commissioner though considered that the mark is capable of acquiring distinctiveness, but had not been shown to have done so at its filing date.
IPONZ Updates Trade Mark Examination Guidelines on Restoration and Revocation
In light of recent legislative changes and judicial decisions IPONZ has updated its Trade Mark Examination Guidelines.
The Regulatory Systems (Economic Development) Amendment Act 2019 received Royal assent on 13th November 2019 and its provisions commenced 2-months later on 13th January 2020. As previously noted the main focus of the amendments in relation to trade marks was to:
- Reduce the grace period for late renewal from 12-months to 6-months; and
- Specify that during the new grace period the marks remain on the register while deeming that they are not considered registered in relation to subparts 1-3 of part 4 of the Act, which concern civil and criminal proceedings and border protection measures – whereas previously marks were removed from the register if not renewed by the renewal due date but could be restored during the grace period.
- Specify that during the grace period such trade marks would have the status “registered-past expiry date” rather than the previous status of “Expired but Restorable”.
The Amendment Act contained a transitional provision to account for trade marks removed from the register for not being renewed by the renewal due date prior to the commencement of the Amendment Act still having a 12-month renewal grace period. Now that the transitional period has ended IPONZ has updated its examination guidelines to reflect the above noted changes.
Other changes to the Trade Marks legislation brought in by the Amendment Act are:
- Broadening the long-standing exclusion from registration of a certification mark in the name of a person who carries on trade in the goods or services concerned to include the owner of a trade mark for the goods or services concerned;
- Specifying a corollary of the above exclusion – namely a trade mark must not be registered in the name of a person who owns a certification mark in relation to the same goods or services;
- Removing any discretion on the part of the Commissioner in issuing a replacement certificate of registration;
- Specifying that revocation is limited to the grounds in section 66;
- Broadening the ability of the Commissioner or the Court to require security of costs or to treat the proceedings as abandoned if security is not provided to include situations in which there is reason to believe that the party will be unable to pay the costs of the other party if unsuccessful in the proceedings.
IPONZ has also updated its examination guidelines regarding the filing of non-use revocation actions in light of a decision in the Supreme Court and an Assistant Commissioner’s decision. In response to the Supreme Court’s decision in International Consolidated Business Proprietary Ltd v SC Johnson & Son Incorporated  NZSC 110, (summary here) which gave prominence to the pleaded date for revocation, the guidelines now provide:
- The applicant should specify in their pleadings the date it wishes to have the trade mark registration revoked from and the alleged period of non-use. If no date is pleaded by the applicant, the date of revocation will usually be taken to be the date of filing the application for revocation.
- Revocation from a date earlier than the filing date will only be granted if the Commissioner or the Court is satisfied that the grounds for revocation existed at that earlier date and the pleadings should specifically reference section 68(2)(b), and the relief sought, to support this earlier date.
- If a party applies to revoke a mark which has been cited against their own pending application, the date of revocation requested should be (at least) one day before the application date (or convention priority claim) of that pending application.
- An earlier revocation date will not be accepted on the grounds of non-use where it falls within three years of the actual registration date of the cited mark (section 66(1)(a) and (1A)).
In response to the Assistant Commissioner’s decision in Nitro AG v Nitro Circus IP Holdings LP  NZIPOTM 23, (summary here) the guidelines provide:
- If necessary where a cited mark is involved, an earlier revocation date can be pleaded as one of two dates for revocation with the alternative date being the date the application for revocation was filed. Other than this situation, alternative dates of revocation should not be necessary. If the applicant pleads alternative dates of revocation other than in this scenario, the date of revocation will usually be the filing date of the revocation application.