New Zealand: The scope of the potential EU–New Zealand Fair Trade Agreement
Negotiations are underway for a European Union (EU)–New Zealand Fair Trade Agreement (FTA). The EU proposal on intellectual property includes a chapter on geographical indication (GI) names for protection. The Ministry of Foreign Affairs and Trade recently concluded a consultation period on the proposed list of EU GIs, but what remains to be seen is the scope of protection that will be afforded to the agreed terms. A review of the EU's proposed FTA provides us with some insight into what the EU expects to achieve.
The correct use of GIs
GIs shall operate as a collective right (akin to collective marks already recognised by the Trade Marks Act 2002) and will be available for use by any operator marketing a product that conforms to the corresponding specification. The applications will be open to opposition prior to registration.
The protection of GIs
The EU proposes to set a high level of protection for GIs. This includes prohibiting direct and indirect use of a protected name for comparable products not compliant with the product specification, or any other products if that use exploits the reputation of a GI, including where it is used as an ingredient.
It is unclear what use would amount to an exploitation of the reputation of a GI, in particular where the product is being used as an ingredient only. A conservative interpretation may restrict use of the GI to the ingredients list only.
Any misuse, imitation, or evocation, even if the true origin of the product is indicated, will be prohibited. This includes use of expressions such as "style", "type", "method", or similar, including when those products are used as an ingredient. This is a practice readily utilised by New Zealand producers and, if included in the final agreement, those producers will need to update their marketing strategies.
The relationship to trademarks
New trademark applications with a priority date later than the priority date of a protected GI shall be refused registration. This could cause an issue for unregistered rights that may otherwise have been afforded protection through those provisions, allowing for registration of trademarks that have acquired distinctiveness through use. The proposal suggests that these will not be granted protection as a registered trademark if they include a GI.
Parties must agree to protect GIs even where a prior trademark exists. It is unclear what will be considered a 'prior trademark' with the proposal stating that this includes trademarks which have been applied for, registered, or established by use before the date on which the application for protection of the GI is submitted. This suggests that existing unregistered rights may be recognised even in the absence of a registration (and thus softening the impact of the proposal for new applications).
Prior trademark registrations may continue to be used and renewed for that product, notwithstanding the protection of the GI, provided that no grounds for invalidity or revocation exist. Owners of prior trademarks will need to take care to ensure that their marks do not become generic, and therefore subject to removal. While there is a provision preventing registered GIs becoming generic, this is not the position for prior trademarks, and once removed the trademark would be unlikely to be afforded registered protection if a new application was filed.
While New Zealand stands to gain from the protection of GIs in the EU, the final terms of the FTA will need to strike a balance between the high level of protection proposed by the EU and the rights of existing traders in New Zealand.