Do you have intent to use your New Zealand trademark?

In New Zealand, it is a legal requirement that the applicant of a trademark has an ‘intent to use’ the trademark.

Sometimes, an application will be filed in the name of a director or related company, often for convenience or because of the timing of setting up a new company. There is usually no question that the applicant is related to who will ultimately use the trademark. But does the director have an intent to use, and what does that mean for the validity of the trademark application?

This question was recently dealt with by the Intellectual Property Office of New Zealand in the decisions Gardner NZ Intellectual Property v Corporate IP Holdings [2022] NZIPOTM 24 and Gardner NZ Intellectual Property v Deacon Holdings [2022] NZIPOTM 25.

In 2017, Ian Jacobi applied to register a 'Gardner' logo trademark in New Zealand in relation to building products.

At the time, Jacobi was the sole director of Gardner NZ Intellectual Property. The trademark applications were opposed by GJ Gardner companies that operate a building company franchise under the GJ Gardner brand. Jacobi later transferred the ownership of the 'Gardner' logo trademark applications to his company.

The opposition was successful because the director did not intend to use his company’s trademark.

In New Zealand, a trademark can only be filed if the mark is “used or proposed to be used”. The ‘Gardner’ logo trademarks were not in use in New Zealand, so the Assistant Commissioner considered the following:

• Did the original applicant intend to use the ‘Gardner’ logo trademark?

• If he did not, is it enough that he is the director of the company that intended to use the mark?

• If not, can the legal requirement of intent to use be corrected with an assignment?

Based on the evidence, including that submitted by the applicant, it was decided that Jacobi as an individual did not intend to use the trademarks. The intention was always to have one of his companies own and use the trademarks.

The second question was also decided in favour of the opponents. The sanctity of the separation of an incorporated company as an independent legal person should be preserved. Therefore, even as the sole director, the company’s intent to use did not transfer over to the original applicant, who is a separate legal individual.

The original applicant did not intend to use the ‘Gardner’ trademarks. He was deemed to have had no right at any time to file the applications, and therefore did not own the trademark applications. It is not possible to assign property you do not own; therefore, all subsequent owners of the trademarks were also deemed invalid.

This approach follows the obiter comments from the previous hearing NZME Publishing v Trade Me [2017] NZIPOTM 22. In this decision, the trademark application was filed in the name of the solicitor’s nominee company, to mask the true owner. However, a substantive decision on this matter was not required due to other determinations in the case.

The Gardner and NZME decisions reference the Australian case Pham Global v Insight Clinical Imaging (2017) 141 IPR 1, which came to the same conclusion that an assignment was not an option to correct the ownership of a trademark.

These decisions strengthen the ability for opponents to attack the ownership of a trademark all the way back to the original applicant.

Care should be taken when deciding the applicant of a trademark. It will not be enough that there is some business connection between the applicant and who will use the trademark.

Often, directors of a business will not intend to use the trademark in their own name, so the application in their name might not be appropriate. But the same might also be true where another company is used as the ownership vehicle as an interim measure while the company that will be the true trademark owner is still being established.

It is important to get this right from the outset because it might not be possible to fix it later.