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• Appendix 1

• Intellectual Property Policy

• Parallel Importing

• Creative Industries

• Cabinet Paper
• Parallel Imports Impact
• Discussion Paper
• Questionnaire

• Introduction
• Trade Marks and Parallel Importing
• Patents and Parallel Importing
• Registered Designs Protection and Parallel Importing

Introduction

This appendix outlines the manner in which trade marks, patents and designs can impact on parallel importing, despite the absence of a ban on parallel imports of copyright goods.

Trade Marks and Parallel Importing

Trade mark protection is relevant to the parallel importation of many consumer goods, including creative-industries goods. In some situations, the owner of a trade mark registered under the Trade Marks Act 1953 might be able to prevent the parallel importation of goods where the goods in question have a trade mark registered in New Zealand affixed to or embedded in the goods themselves or associated packaging or material. 56

The Trade Marks Act provides that parallel importation will not amount to trade mark infringement when the New Zealand trade mark holder originally applied the trade mark to the goods, or when they have at any time consented, either expressly or impliedly, to the use of the trade mark on the imported goods. The proprietor will, however, be able to prevent parallel importers and retailers of parallel-imported goods lifting trade marks from the goods in question and using them for advertising purposes.

The question of what constitutes "express or implied consent" has not been fully judicially considered in New Zealand. Case law on the corresponding provision in the United Kingdom has provided conflicting answers to the question of when a local trade mark holder will be deemed to have consented to the use of a trade mark. As a result there is still some uncertainty surrounding the situations in which parallel importation will amount to trade mark infringement in New Zealand. The Ministry is currently considering options to reduce this uncertainty in the new Trade Marks Bill, currently being drafted. 57

Patents and Parallel Importing

Patent protection also has the potential to restrict parallel importing. Under the Patents Act 1953, patent owners are given the exclusive right to exclude all others from making, using, and selling the patented invention or process in New Zealand for a 20-year period. During the patent term, other parties can only exercise these rights with a licence from the patentee.

Persons other than the patent owner or licensee are therefore prohibited from importing items subject to a New Zealand patent, or goods manufactured using a process patented in New Zealand, except in certain limited circumstances. The permitted circumstances are:

• when the goods are placed on the market outside New Zealand by the patentee either directly or through their agent or subsidiary, unless the patentee has placed restrictions on the importation of the goods into New Zealand and has communicated those restrictions to purchasers; and
• where the goods are placed on the market by a patent licensee outside New Zealand, if New Zealand is part of the territory of that licensee.

Patents are granted only in respect of inventions, as defined in the Patents Act  58. With the possible exception of some computer software products, the parallel importation of most creative-industry goods is therefore unlikely to be affected by patent rights.

Registered Designs Protection and Parallel Importing

Registered design protection 59  can also restrain the parallel importation of some goods. The Designs Act 1953 gives the owner of a design registered in New Zealand the exclusive right to import for sale or trade purposes any article in respect of which the design is registered and applied. 60

The Designs Act therefore limits the scope for parallel importing of goods subject to a registered design right.

The number of design registrations in New Zealand each year is, however, comparatively low. The practical effect is a tempering of the restraint that registered design protection provides on the parallel importation of goods.

56Section 8 of the Trade Marks Act 1953 provides that a New Zealand registered proprietor of a trade mark in respect of certain goods and services has an exclusive right to use that trade mark in New Zealand in relation to those goods or services. A limit to this right is contained in section 8(3)(a):

"The right to the use of a trade mark given by registration as aforesaid shall not be deemed to be infringed by the use of any such mark by any person.

In relation to goods connected in the course of trade with the proprietor or a registered user of the trade mark if, as to those goods or a bulk of which they form part, the proprietor or the registered user conforming to the permitted use has applied the trade mark and has not subsequently removed or obliterated it, or has at any time expressly or impliedly consented to the use of the trade mark."

57A Trade Marks Bill is expected to be introduced into Parliament in the first half of 2001.

58Section 2(1) of the Patents Act 1953 defines invention as "any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies and any new method or process of testing

59Registered design protection is granted under the Designs Act 1953 for designs embodied in the external appearance of an article. Designs can only be registered where they are new and appeal to the eye, which means that functional designs cannot be registered under the Act.

60  Designs Act 1953, section 11(1).