Assignment without business goodwill annuls opposition

New Zealand

In H & J Smith Limited v New Deal Skateboard Products Inc, the trademarks commissioner has dismissed an opposition and allowed an application for the registration of the trademark ELEMENT. During the proceedings, the original opponent, New Deal Skateboard Products, assigned rights in unregistered marks, including two pending trademark applications for the word 'element', to GSM (NZ Operations) Ltd. GSM was substituted as the opponent in the proceedings but H & J Smith, the applicant for the ELEMENT mark, argued that this substitution was unlawful as New Deal had not assigned its business goodwill to GSM.

Under the Trademarks Act 1953, an assignment of a trademark without an assignment of business goodwill will not take effect until an application to record the assignment is lodged by the assignee with the Intellectual Property Office. This must be done within six months of the date on which the deed of assignment was executed, otherwise the assignment will have no effect. The assignment is then advertised in accordance with directions given by the trademarks commissioner.

H & J Smith argued that the assignment of New Deal's unregistered marks was without business goodwill and that GSM missed the deadline for lodging the assignment with the Intellectual Property Office. Thus, GSM could not be substituted for New Deal in the opposition proceedings.

The hearings officer agreed with H & J Smith, finding that GSM had not followed the correct procedure after assignment and, therefore, had not gained rights in the unregistered marks to allow an opposition. As a result, the opposition failed and H & J Smith's ELEMENT mark was registered.

Carrick Robinson, James & Wells, Auckland

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