Illicit use or fair trading?

It was April 1st but Illicit Clothing wasn’t laughing when they spoke to TV3 earlier this month about Demon Drinks’ launch of a new cola drink called ILLICIT.

Illicit Clothing started using the brand ILLICIT twelve years ago, and subsequently registered the word as a trade mark with IPONZ in relation to clothing, retail and wholesale, and tattooing and piercing services.

Earlier this year they received a shock when they received an offer for samples of a cola called ILLICIT. Demon Drinks in fact owned a trade mark registration for the word ILLICIT in relation to alcohol since 2005, but only recently filed for registration in relation to soft drinks.

A comparison of the marks in use is shown below:

Illicit Clothing: Illicit Cola:

Illicit Clothing told TV3 that they have received calls from a number of confused customers and would take Demon Drinks to court if they had the money. It's true, enforcing your rights can cost a lot - so what are the lessons to be learned?

1. Registering your trade mark with IPONZ means that you can rely on your registration certificate to enforce your rights, rather than having to go through the greater expense of protecting your brand under the Fair Trading Act or common law (both requiring proof of your reputation and establishing that use by others is likely to deceive or confuse consumers).

2. "Future proofing" your brand by applying for registration in relation to all goods and/or services of interest :
* Can costs as little as $100 + GST for ten years; and
* Could save you the cost of bringing a legal action, as IPONZ will refuse later applications by others for yourmark in relation to confusingly similar goods or services.

If you don't have a registration in the relevant class, you may still be successful in enforcing your rights but you would need to have huge brand exposure and a reputation in relation to a wide range of goods .

3. Regularly monitor the IPONZ trade marks register and the Internet to ensure that no other trader is creeping into your market. Acting early to prevent another trader getting traction in a confusingly similar brand can mean that you are more likely to maintain your rights.

4. When marks are compared to determine likelihood of confusion, consideration is given to the look, sound and idea of the marks. Therefore, as well as registering your trade mark in an unstylised font (e.g. ILLICIT) make sure you apply to register your mark as it normally appears so that you have protection for the look of your brand as well the sound. In Illicit Clothing's case, it is the combination of identical word and similar font being used by Demon Drinks that is adding to consumer confusion.

5. In addition to your trade mark rights you may have copyright in the images used to promote your brand. As there is no official system of copyright registration it can be easier (and therefore cheaper) to enforce your images as a registered mark. Registration also clearly establishes the date from which your rights commence, and can be renewed indefinitely (unlike copyright which generally expires 50 years after the death of the author).

Article first published by Rachel Dawson in the Fashion Industry New Zealand's April 2009 newsletter

See http://www.jaws.co.nz/publication/guide-to-protection-of-innovation-goodwill for a full list
See for example IPONZ decision T35/2008, where surfwear label BILLABONG successfully opposed use and registration of the mark BILLABONG by another trader in relation to mineral water and beer. For the problems Illicit Clothing had with Pink's use of its images see http://www.illicit.co.nz/news.htm