New Zealand’s TPPA Amendment Bill: impact on the Trade Marks Act 2002

The Trans-Pacific Partnership Agreement (“TPPA”) Amendment Bill was read for the first time in Parliament on 12 May 2016. This week, AJ Park will be publishing a summary of the changes proposed to New Zealand’s intellectual property laws to comply with the TPPA Amendment Bill, and consider the practical implications of these changes for New Zealand businesses.

The final text of the TPPA was signed on 4 February 2016.[1] However, in order for the TPPA to come into force, it must be ratified by at least six of the signatory countries representing at least 85% of their combined GNP[2].  Ratifying states must also align their domestic laws with the terms of the agreement. That is the purpose of the New Zealand TPPA Amendment Bill (the “Bill”) which will only come into effect if and when the TPPA comes into force. The changes proposed in the Bill will affect New Zealand intellectual property laws by amending existing copyright, patents, trade marks, and border control laws. In this article, we examine a number of changes to the current Trade Marks Act 2002.

ADDITIONAL DAMAGES

Section 106 of the Trade Marks Act 2002 currently stipulates that compensatory damages are available as relief for infringement of a registered trade mark. Such damages are calculated on the basis of how much the trade mark owner will have lost as a result of the infringer’s conduct.

The Bill augments this relief by providing authority to the courts to award additional damages as a remedy.[3] This increase in potential damages is a further commercial disincentive to using another person’s registered trade marks. The courts will look not only to how much the trade mark owner has lost, but also to the flagrancy of the infringer’s conduct and the benefit the infringer has gained as a result of the infringement. This proposed amendment will also align damages for infringement of trade marks with those for copyright infringement in New Zealand.

The possibility of additional damages will hopefully encourage businesses to err on the side of caution, and steer them from the lure of piggy-backing on trade marks they do not own.

INCREASED BORDER SECURITY PROTECTION

The Bill also introduces new precautionary powers to border protection and the operation of New Zealand Customs – as reported in our earlier copyright article here. In addition to clarifying that border protection applies to both imports and exports, the bill also extends measures to allow Customs to detain goods if they have reasonable cause to suspect the goods bear an infringing sign.[4] This marks an increased effort to halt circulation of counterfeit goods by creating a comparatively wider safety net.

Similarly, the Bill also amends several sections to provide that the remedy in relation to counterfeit goods, bar exceptional circumstances, should be an order that the goods be destroyed or delivered to a person who will destroy them.[5] This changes previous wording which had suggested erasing or obliterating offending signs should be tried first before proceeding to destruction.[6] The logistics of this change will remain to be seen. 

IMPLICATIONS OF THESE CHANGES FOR NEW ZEALAND BUSINESSES

In summary, the proposed changes aim to tighten border security measures and bolster incentives to use rightfully owned trade marks. Owners of trade marks should rest assured that these changes will not affect the trade mark registration or renewal process. As is the case with copyright, the TPPA Amendment Bill is designed to reinforce rights; it is not intended to make sweeping changes to affect the nature of the right itself.

The Trans-Pacific Partnership Agreement (‘TPPA’) Amendment Bill

The TPPA is a free trade agreement reached between 12 countries in the Pacific: New Zealand, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, the United States and Vietnam.

It is one of the most ambitious free trade agreements, aiming to harmonise and liberalise trade and investment, thereby bringing future economic growth for the countries involved. Trade Minister Todd McLay has said that the TPPA will, “support New Zealand’s global connectedness, maximise opportunities for exporters, and in turn grow the prosperity of the economy for the benefit of New Zealanders”.[7]

Following the first reading in Parliament, the TPPA Amendment Bill has now been referred to the Foreign Affairs, Defence and Trade Committee for its review. The Committee will hear submissions from the public and report back to Parliament in November 2016.

From here, the bill goes into a second reading, a further committee, and then a third reading before it goes to the Governor-General for Royal Assent. Omnibus bills such as this one, where various bills are consolidated into one piece of legislation, are often split up during the committee stages into several bills which would each require a separate parliamentary vote. A general timeline of the legislative process can be found here.

Further afield, support for ratification of the TPPA has stalled in the US, threatening the viability of the agreement as a whole. The TPPA provisions cannot enter into force unless at least the US and Japan ratify the agreement. It is thought that a ratification vote may be sought in the US in the “lame duck” period after the US election in November and before the new President is appointed to office.

We will keep you updated with developments in this area.

This article was written by Rachel McDonald and Helen Chen.

[1] https://www.tpp.mfat.govt.nz/text