Preparations to use sufficient to grant rights in a mark

New Zealand

In International Resource (1999) Limited v Aqua-Life 1983 Limited, a hearing officer at the Intellectual Property Office of New Zealand has allowed an opposition to the registration of ECH2O. The opponent successfully argued that although it had not actually made any commercial use of an identical mark, it could still claim rights in the mark in light of its preparations to use.

The applicant owned a registration for the mark ECH2O (Registration 274289) under its previous name of International Resource Limited (IRL). The opponent, Aqua-Life 1983 Limited (ALL), apparently unaware of the existence of the mark instructed its attorneys to file a trademark application for ECH2O for goods in Class 32 of the Nice Classification. On discovering the existence of the prior registration, ALL wrote to IRL on August 2 2002 enquiring whether the registration had been assigned to a third party, given IRL had been struck off the Companies Register on November 7 1997. On August 22 2002, ALL's attorneys filed an application to remove Registration 274289 and the registration was removed from the Trademarks Register in October 2002.

In the interim, IRL changed its company name to International Resource (1999) Ltd and filed an application to register the trademark ECH2O for goods in Class 32 on August 15 2002. ALL filed an application to register ECH2O on August 19 2002, four days after IRL's application.

ALL opposed IRL's application arguing that at the time of its application, IRL did not have a sufficiently definite intention to use the mark and that IRL's application was made in bad faith. ALL also contended that it was the owner of, and the first to use, the ECH2O mark.

On the first point, the hearing officer took the view that "there is an inherent difficulty in establishing [that IRL] did not have the requisite intention to use, given the facts are, to a large extent, uniquely within its knowledge". The hearing officer concluded, based on the evidence filed, that no inference could be drawn from the facts that IRL's application was made in bad faith. Therefore, the opposition failed on this ground.

In support of its claim to ownership and first use of the ECH2O mark, ALL filed evidence regarding the action it took to adopt the mark before August 15 2002. It stated that it briefed a graphic design company in June 2002 to create a brand for ALL to use in relation to a new bottled water product. At a presentation to ALL on July 22 2002, the design company presented three brands to ALL as initial recommendations, one of these being ECH2O. ALL decided in July 2002 to use this as the mark for its new bottled water product. ALL also alleged that, at that time, it had worked on and settled distribution channels for the new product, including how and to whom it would be marketed. However, ALL did not start promoting and selling its new product under the ECH2O mark until December 2002.

Under New Zealand common law, the owner of a trademark is the first person to use the mark in New Zealand. The opposition therefore turned on whether ALL could claim ownership of the ECH2O mark even though commercial (public) use of the mark had not been made at the time of IRL's application (August 15 2002).

ALL argued that as it had an existing (genuine) intention at that date to use the ECH2O mark in relation to the relevant goods, this was sufficient for it to claim ownership of the mark. The hearing officer agreed, concluding that as of August 15 2002 ALL "had committed itself to using the mark". All that remained to be done was for ALL to bottle and sell its new product. The hearing officer rejected IRL's argument that at the relevant time ALL was still at the stage of investigating and planning whether to use the mark:

"I find … there was a fixed and existing intention to use the trademark ECH2O and the steps taken by [ALL] including the significant step of choosing a trademark in relation to the proposed goods take this matter beyond the preliminary stage."

As ALL had substantiated a claim to ownership of the ECH2O mark, the hearing officer refused IRL's application.

Carrick Robinson, James & Wells, Auckland

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