A clause in the Act allows a trade mark to be revoked if "in consequence of acts or inactivity of the owner" it becomes "a common name in general public use for a product or service in respect of which it is registered".

Previously, a trade mark could be revoked if it became generic in the eyes of the particular industry in which the product was sold.

The change means that anyone can apply to the Intellectual Property Office of New Zealand to have a trade mark revoked because of genericization.

Additionally, when faced with a claim of infringement, defendants will also be able to press for a disputed mark to be declared invalid for the same reason.

Trade mark owners may also find it difficult to renew their marks because the Office may decide the name has passed into everyday usage, though, revocation is not automatic.

According to information provided by Judith Tizard, the associate minister of commerce, the reason for the change is that a trade mark is intended to distinguish the goods and services of one person from those of another.

Tizard added that if a trade mark is used as a generic term by consumers it ceases to provide useful information to consumers – it ceases to function as a trade mark – and it was for this reason that it was considered appropriate to change the test for revocation in the new legislation from use in trade to use by the public.

During a parliamentary debate in November, Stephen Franks, an MP for the ACT party, moved an amendment to the offending clause which would have replaced "a common name in general public use" with "a common name in trade".

"That change is needed to protect trade mark owners," said Franks. "They can be expected to take action against trade mis-users of their trade marks. But it is, and should be impossible, to stop the public from using words as they choose."

"Brand owners in New Zealand have been lax in educating the public about brand value," said Bryan Thompson, a partner at AJ Park in Auckland. "The provisions are unfortunate and their effect is uncertain. In the long-term it probably won't be serious, but it could be for those who haven't done enough." Thompson added that companies in the US used the symbols denoting a trade mark far more widely than those in New Zealand.

At the same time, many good things are included in the legislation, according to Thompson, such as the extension of infringement to include dissimilar goods, creating a lot of opportunities for protection, and express criminal remedies for infringement, which Thompson said should boost anti-counterfeiting efforts.

The Intellectual Property Office of New Zealand is hopeful the Act's implementing regulations can be in place by July 2003. The new legislation is the first completely new Trade Mark Act in New Zealand in 50 years, though the old Act from 1953 had been amended seven times between 1972 and 1999.

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