Appendix B: National Interest Analysis: Accession to the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks
Date of Proposed Binding Treaty Action
1. The Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks ("the Nice Agreement") was adopted on 15 June 1957. It entered into force for states parties on 8 April 1961.
2. It is proposed that New Zealand accede to the Nice Agreement by December 2008.
Reasons for New Zealand to Become Party to the Treaty
3. The Nice Agreement provides that its members adopt a common classification of goods and services for the registration of trade marks referred to as the "Nice Classification". A country does not need, however, to be party to the Nice Agreement to be able to use the Nice Classification for the registration of trade marks. In addition to the 79 countries party to the Nice Agreement, many others use the Nice Classification. According to World Intellectual Property Organisation ("WIPO") well over 100 countries currently use the Nice Classification.
4. Accession to the Nice Agreement would allow New Zealand to participate in and influence the future development of the Nice Classification so that it best meets the needs of the Intellectual Property Office of New Zealand ("IPONZ") and New Zealand trade mark owners and to enable New Zealand businesses to have a voice in such matters that may be of particular importance from their perspective. The classification of goods and services for which a trade mark is registered is an essential part of the trade marks register and the integrity of the trade marks register depends on the effective classification of goods and services.
5. Accession to the Nice Agreement would also formalise the requirement that the Commissioner of Trade Marks (the "Commissioner") use the Nice Classification as prescribed under the Trade Marks Regulations 2003. Its use was originally stipulated under the Trade Marks Act 1953 and this requirement for use by the Commissioner was carried over into the Trade Marks Act 2002.
Advantages and Disadvantages for New Zealand of the Treaty Entering into Force
6. As noted above, acceding to the Nice Agreement would allow New Zealand businesses to have a voice in the review and development Nice Classification. This may be of particular importance to New Zealand businesses, as there may be issues arising from New Zealand vernacular not used elsewhere, or unique New Zealand products or services, not currently covered by the Nice Classification, which would be addressed through New Zealand's direct participation in the development of the Nice Classification as a state party to the Nice Agreement.
7. Furthermore, accession would also allow New Zealand to collaborate with countries in review and development of the Nice Classification to address issues of inconsistency in the translation and interpretation of the Nice Classification and, therefore, its use.
8. In order to accede to the Nice Agreement, approximately 1,600 old trade marks that were registered before use of the Nice Classification became a requirement under the Trade Marks Act 1953 would need to be converted to the Nice Classification. The benefit of converting these old trade mark registrations is that it would simplify searching of the trade marks register and reduce costs to IPONZ from having to maintain two separate classification systems for registered trade marks. The disadvantage is that some owners of these old trade mark registrations could face additional renewal costs if the conversion process results in their registration being divided into two or more classes under the Nice Classification.
9. Updated versions of the Nice Classification are published every five years. Acceding to the Nice Agreement would require New Zealand to adopt and use each new updated version as it is published. This would result in New Zealand losing its current flexibility to choose not to use any updated versions of the Nice Classification. In practice, however, New Zealand has adopted each new version published to date.
Obligations
10. New Zealand would be required to use the Nice Classification either as the principal system or as a subsidiary system. New Zealand would continue to use the Nice Classification as its principal system.
11. New Zealand would also be required to include, in official documents and publications concerning the registration of trade marks, the number of classes of the Nice Classification to which goods or services of trade marks are registered.
12. The Nice Agreement provides for an Assembly of the Special Union made up of countries that have ratified or acceded to the Agreement. New Zealand, as a party to the Nice Agreement, would be signalling its intention to contribute to the maintenance and development of the Nice Classification, including reporting and information sharing requirements and participation in meetings of the Assembly of the Special Union and Committee of Experts.
13. The Committee of Experts has the principal function of deciding on changes to the Nice Classification. Changes decided upon by the Committee of Experts are notified to the competent offices of the countries party to Nice Agreement by WIPO's International Bureau. In New Zealand this office would be IPONZ. Amendments to the Nice Classification enter into force six months after the date of dispatch of the notification. Any other change enters into force on a date to be specified by the Committee of Experts at the time the change is adopted. New Zealand would, therefore, be required to adopt each amended version of the Nice Classification. As noted above, the Nice Classification is usually reviewed and amended on a five-yearly cycle.
Economic, Social, Cultural and Environmental Effects
14. There are unlikely to be any economic effects from accession to the Nice Agreement, as New Zealand has used the Nice Classification system for trade marks registrations for many years.
15. As the Nice Agreement only provides that its members adopt a common classification of goods and services for the registration of trade marks (i.e. the Nice Classification), and because the Nice Classification has been used for 53 years, there are unlikely to be any social, cultural or environmental effects arising from accession, and in particular the continued use of the Nice Classification.
16. Since the Nice Agreement does not attempt to harmonise substantive trade mark law, accession would not limit the government's ability to achieve specific policy objectives in the area of trade marks, such as responding to any Treaty of Waitangi claims. Furthermore, accession would not have any adverse effects on Māori interests or be inconsistent with our human rights obligations.
Costs
Government
17. No costs to government would result from New Zealand acceding to the Nice Agreement. Member States of WIPO have a Unitary Contribution System under which each Member State pays one fee irrespective of the number of WIPO treaties to which it is party.
18. Over the longer term there would be some minor resource implications for the government, and in particular the Ministry of Economic Development ("MED"), from accession. The Assembly of the Special Union meets every two years in conjunction with WIPO's annual General Assembly meeting, which takes place in Geneva, Switzerland each September. As WIPO pays for a New Zealand delegate to attend the annual General Assembly meeting, no additional costs are likely to arise from attending Assembly meetings relating to the Nice Agreement.
19. If New Zealand was to participate in meetings of the Committee of Experts associated with the five-yearly cycle for reviewing and amending the Nice Classification, the necessary costs would be met from within MED's existing baselines.
20. There will also be a minor cost to IPONZ associated with initiating the conversion of some 1,600 old trade mark registrations currently not classified under the Nice Classification. This cost would be met from within existing MED baselines.
21. No other costs or savings would flow from continued compliance with the Nice Classification or accession to the Nice Agreement.
Businesses
22. For the large majority of New Zealand businesses who have registered trade marks or who use registered trade marks, there will be no costs or savings arising from acceding to the Nice Agreement.
23. For the owners of the 1,600 registered trade marks not classified under the Nice Classification, the act of converting these registrations will result in minor (as yet unquantified) costs associated with identifying the most suitable classes of the Nice Classification into which the registration should be converted. In a small number of cases, conversion may result in a single registration being converted into several classes under the Nice Classification. In these cases, the owner would need to pay additional fees to renew the registration related to the number of additional classes under the Nice Classification. The current fee for renewing a trade mark registration is $250 (excl GST) per class.
Consumers/Economy
24. No costs to the economy or consumers would result from accession to the Nice Agreement.
Future Protocols
25. The Nice Agreement may be revised by a conference of the Special Union of Parties.
26. In addition, provision is made under Article 8 of the Nice Agreement for Article 5 (Assembly of the Special Union), Article 6 (International Bureau), Article 7 (Finances) and Article 8 (Amendment to Articles 5 to 8) to be amended by the Assembly following receipt of an amendment proposal by an Assembly member. Under Article 8, four-fifths of the Assembly members must to agree to any amendment proposal. Should Cabinet approve accession to the Nice Agreement, New Zealand would be represented in the Assembly.
Implementation
27. As noted above, approximately 1,600 old trade mark registrations predating the Trade Marks Act 1953 need to be converted to the Nice Classification. This will require amendments to the Trade Marks Regulations to give the Commissioner the power to initiate the conversion process.
28. Currently, the Trade Marks Regulations require that the Commissioner use the eighth (and most recent) edition of the Nice Classification published by the International Bureau of WIPO. The Trade Marks Regulations would require amendment every five years (coinciding with the scheduled cycle of review and amendment of the Nice Classification) to ensure that the Commissioner used the most recent edition of the Nice Classification.
Consultation
29. A discussion paper entitled International Trade Mark Treaties was published on 8 March 2006. Submissions were sought from businesses, trade mark agents, patent attorneys, law practitioners and interested parties on whether New Zealand should accede to the Nice Agreement.
30. Six submissions commented on accession to the Nice Agreement. While submissions broadly supported accession, several supported accession on the incorrect presumption that New Zealand's accession to the Madrid Protocol Relating to the Madrid Agreement ("the Madrid Protocol") required accession to the Nice Agreement. Submitters also noted that it was important for New Zealand to be able to participate in the review and development of the Nice Classification to enable New Zealand businesses to have a voice in such matters that may be of particular importance from their perspective.
31. The following departments and ministries have been consulted on this paper: the Ministry of Consumer Affairs, the Ministry for Culture and Heritage, the New Zealand Customs Service, the Ministry of Foreign Affairs and Trade, the Ministry of Justice, Te Puni Kōkiri, and the Treasury. In addition, the Department of the Prime Minister and Cabinet has been informed.
Withdrawal or Denunciation
32. Parties to the Nice Agreement may denounce the Nice Agreement by notification addressed to the Director General of WIPO. This takes effect one year after the day notification is received. This one year period for denunciation is the standard period provided in WIPO administered treaties.
33. The right of denunciation cannot, however, be exercised before the expiration of five years from the date upon which the Agreement entered into force with respect to that party.
Lead Agency: Ministry of Economic Development
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