Trademark protection is lost if registered branding is not used continuously for a period of three years. Selling via an off-shore website with products couriered to New Zealand does not count as ‘genuine use in the course of trade’ in New Zealand.
When Target Australia challenged advertised use of the word Target coupled with the image of a bullseye target by unrelated company Target New Zealand, its legal threat re-bounded. Target New Zealand immediately challenged Target Australia’s New Zealand trademark registrations on grounds of lack of use. The Trade Marks Act gives protection to registered trademarks only if in genuine use.
Target Australia is part of Wesfarmers group. It has over three hundred department stores in Australia selling clothing and household items. Customers in New Zealand can purchase Target Australia products on-line. Target New Zealand sells furniture.
In 1995, Target Australia registered, in New Zealand, trademarks for its name and bullseye logo in relation to bedding, clothing and footwear, amongst other goods. Nine years later, Target New Zealand registered a similar trademark for furniture and accessories. Heads butted in May 2015 when Target Australia took exception to Target New Zealand selling bed linen using the Target name and logo. Target New Zealand was threatened with legal action. It retaliated.
Justice van Bohemen ruled Target Australia had lost trademark protection through lack of use in New Zealand. Selling into New Zealand out of an Australian website did not count. Claims by Target Australia that it also had a New Zealand website presence were dismissed. The court was told Target Australia had negotiated with TradeMe for sale of Target Australia products online in this country. Sales of Target-branded clothing through TradeMe’s website did not start until early 2016, outside the earlier three-year period Target New Zealand relied on as evidence of no ‘genuine use’.
The High Court was told Target New Zealand moved quickly in July 2015 to pique Target Australia by registering in its name the disputed trademark for categories of goods previously reserved to Target Australia. It now holds the trademark rights, given that Target Australia’s rights lapsed through lack of use. Target Australia did claim a minor victory. It retains New Zealand trademark protection in respect of bed linen, having provided proof of ‘genuine use in the course of trade’ with retail sales of bed linen made through Kmart stores in New Zealand.
Target Australia Pty Ltd v. Target New Zealand Ltd – High Court (30.04.19)
19.083