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Brief Counsel

Tougher counterfeiting regime on the way

24 April 2009

Legislation to beef up New Zealand’s enforcement powers in the war against counterfeit goods and pirated copyright works has just passed its first reading in Parliament.  It has been referred to the Foreign Affairs, Defence and Trade Select Committee for consideration.The Committee has yet to set a deadline for submissions.  We will advise you by e-mail immediately we have that information. 

The legislation

The Trade Marks (International Treaties and Enforcement) Amendment Bill (the Bill) has broad support in Parliament as it was initiated by Labour and has now been adopted by National.  It gives effect to the Government’s decisions to:

  • strengthen New Zealand’s enforcement regime by empowering the Ministry of Economic Development (MED) and the Customs Service (Customs) to enforce the criminal offence provisions under the Trade Marks Act and the Copyright Act, and
  • ratify the Singapore Treaty on the Law of Trade Marks and accede to the Nice Agreement Concerning the International Classification of Goods and Services and the Madrid Protocol.

The Bill does not introduce new offences or increase the penalties available in the event of a breach.  Instead, it increases the chances of offenders being apprehended and prosecuted by providing new enforcement powers.  The Bill will:

  • provide MED and Customs with warranted search and seizure powers
  • allow them to share information with other enforcement agencies, especially the New Zealand Police, to help in identifying those involved in criminal offending
  • provide Customs with the power to seize counterfeits (without the need for any warrant) when the counterfeits come to their notice at point of entry into New Zealand, and
  • give MED some limited powers to carry out search and seizure of counterfeits being offered for sale (for example, at a flea market stall) without a search warrant. 

The three international treaties each have their own particular features but are all aimed at reducing the compliance costs associated with protecting trade marks.  The Madrid Protocol, for example, allows a single application for a trade mark to be filed in New Zealand and in multiple overseas countries.The Bill also contains a number of small amendments to the Trade Marks Act.  Included amongst these are the abolition of the system of recording licensees of trade marks and a clarification to the provision allowing ‘parallel imported’ trade marked goods into New Zealand. 

Commentary

The Bill is to be welcomed.  It strengthens intellectual property rights which will encourage innovation and dynamism in the economy.  That said, in reading the proposed law reform, we see two main risks:

  • As with all legislation, the devil will lie in the detail and this is a very large Bill, running to 126 pages in total, and
  • It will be essential that the enforcement agencies have the resources to exercise their duties effectively.  We refer in particular to the National Enforcement Unit within the MED which will need increased funding to support its increased functions.

Next steps

Chapman Tripp will send out a quick advisory note when the select committee announces the closing date for submissions.  The Government’s budget is under immense pressure as a result of the economic recession so it will be important to use the submissions process to emphasise the need for adequate resourcing of MED and Customs.  The Bill will also need close analysis to ensure that the Government’s policy intentions are accurately reflected in the drafting.

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