Filing across the Tasman

by Hannah Norton01 Aug 2015
At one stage of the 2012 London Olympics, Australia had just one gold medal to its name, compared to New Zealand’s three.

So, in compiling medals tables, the Daily Telegraph had a solution to better Australia’s ranking – combine the two countries and call it ‘Aus Zealand’.

While the invention of the rogue nation was a gimmick, its essence could be said to be true, particularly in the intellectual property space.

“The fact is that people travel a great deal between New Zealand and Australia, and so the knowledge of brands can be very similar, not least due to the existence of many successful trans-Tasman brands,” says Hudson Gavin Martin IP partner Jason Rudkin-Binks.

“Australia and New Zealand are now almost seen as a single market – this has even been discussed in case law – hence whenever someone is looking to launch in New Zealand, inevitably the Australian market is sat there, just waiting to be exploited.”

The blurring of the lines between Australia and New Zealand in the business world has also translated to the legal space, with Kiwi firms now competing head-to-head with their Aussie counterparts when it comes to IP filing across the ditch, and vice versa.

The history of trans-Tasman filing

The passing of the Trans-Tasman Mutual Recognition Act in 1997 marked a new age for New Zealand and Australian IP firms, according to AJ Park managing partner Damian Broadley.

All of a sudden, firms in both New Zealand and Australia could file across the ditch.

“IP firms in Australia and New Zealand overnight went from being each other’s clients to being competitors,” he says.

“Many firms set up addresses for service in the other country and starting acting directly with the Intellectual Property Office in the other country.”

There is a distinct division within the business of IP firms between local client work and the work that firms do for multinational companies who want to protect their IP in New Zealand or Australia, he says.

“Local client work is not really the subject of trans-Tasman competition. New Zealand firms tend to act for local New Zealand companies, and Australian firms for Australian-based companies.

“The trans-Tasman competition is for the international client work coming into New Zealand and Australia.”

And while there are benefits to having a firm on the ground in each country, many clients also see the benefits of having a one-stop shop of sorts, or dealing with fewer law firms in general, Broadley explains.

But it’s not as simple as cross or dual filing.

“The manner in which  IP Australia and IPONZ [the Intellectual Property Office of New Zealand] treat trademarks can be quite different, both from a registration and prosecution perspective; so, for instance, infringement and the pure mechanics of processing a trademark registration have inevitable differences,” Rudkin-Binks says.

“Ultimately, the Acts are different. Our New Zealand Act is similar to that used in the UK, and so to me doesn’t seem too different to how the UK Trade Marks Act looked like back in 1994.

Australian legislation, when you boil it right down to its core, is trying to achieve the same thing, he says.

“However, it is drafted in a different way; it’s constructed in a different way; therefore inevitably the case law is different and the various registrability or infringement tests are different. In many areas the differences are small, but in some cases they are noticeable.

“Trans-Tasman branding can therefore require you to look at a brand with two separate sets of glasses – one for New Zealand and one for Australia.”

The impact of the Madrid Protocol

In 2013, New Zealand implemented new legislation to join the Madrid Protocol, a treaty administered by the International Bureau of the World Intellectual Property Organization (WIPO) to facilitate the filing of applications overseas in one step.

“The overlay you’ve got over the top of all that is really the Madrid Protocol coming in, which has really changed the landscape, I think, in New Zealand,” Rudkin-Binks says.

“In Australia, they’ve had it for a number of years, so they’ve really been through that change in ethos at the examination table, and they are coming out the side of it a little bit.

“So despite the fact that IPONZ and IP Australia seemingly want to work together to make it easier for people to have a trans-Tasman brand, it’s quite hard for them to align their processes.”

For trademark registration, the Madrid Protocol has changed the landscape both ways, according to Simpson Grierson IP partner Earl Gray.

“Many overseas law firms and trademark attorneys, not just Australian, are now filing International Registrations designating New Zealand – amongst other countries – under the Madrid Protocol.”

New Zealand law firms then only get involved in an International Registration that designates New Zealand if the New Zealand designation meets an objection from the IPONZ or opposition from a third party, he says.

“From Simpson Grierson's perspective, as we do not rely on commodity filing and are regarded as high end in the New Zealand intellectual property market, this has been a boon because we are often selected by overseas firms to deal with ‘tricky’ issues.”

More New Zealand businesses are also taking advantage of the Madrid Protocol's simplified processes and – generally – better cost structure to use their New Zealand adviser to file International Registrations designating, among other countries, Australia, Gray says.

“In that sense, New Zealand firms are doing more work at IP Australia. Where objections or oppositions are encountered, we currently continue to rely on the specialist expertise of leading Australian IP practitioners.”

International work goes to fewer firms

New Zealand's accession to the Madrid Protocol, combined with the upcoming ‘single desk’ for filing patent applications, and the potential for an ‘e-PCT’, are all driving consolidation of the international work into a smaller number of firms, Broadley says.

“Many New Zealand firms appear to have suffered as a consequence. AJ Park is in the top five or six firms for filing trademark applications in Australia, but no other New Zealand firms are in the top 15. There were two Australian-based firms in the top 10 firms for filing trademark applications in New Zealand.”

Meanwhile, on the patent side, AJ Park is just outside the top 10 firms for filing patents in Australia, followed by Baldwins – but in New Zealand, nine of the top 14 patent-filing firms are Australia based.

With the recent regulatory changes, that situation will only worsen, Broadley says, which means more market share to Australia-based firms.

“It is not all pessimism though,” he says.

“Those firms with a good base of local clients are somewhat insulated from these international changes, and in fact can benefit from them in some respects.

“AJ Park is still, for example, the biggest filer of trademark applications in Australia and New Zealand combined, followed by three Australian firms.”

Baldwins has work from New Zealand companies protecting their IP in Australia and – to a lesser extent – Australian companies protecting their IP in New Zealand, as well as multinationals looking for a one-stop shop, partner Angela Searle says.

“Australia is still New Zealand’s second-largest export market, so it is always going to be important to our clients,” she says.

“Most of our patent attorneys are registered in New Zealand and Australia so we can deal directly with IP Australia. 

Buddle Findlay is another firm that files directly with IP Australia.

“We also know our limits and so will call on assistance from Australian-based practitioners when needed,” says IP partner John Glengarry.

“The same goes for disputes and transactional matters that involve Australia.”

Work emanating from Australia will often come to the firm by direct referral from Australian firms, who they often collaborate with in terms of dealing with matters here for their Australia-based clients, he says.

“In our case, we go across the ditch without leaving our desk. That is, we haven't chosen to affiliate with one firm or open our own office.”

Challenges and opportunities

“IP Australia’s registry is vastly bigger,” Rudkin-Binks says. “So you’re more likely to come across people with similar rights over there. In terms of clearance, size alone means that Australia can be a more difficult country to clear, because of those earlier rights.”

But it’s an important commercial step, he says.

“One of the aspects of branding that I love is the need to look to the future and understand how the brand could evolve.

“Hence at Hudson Gavin Martin we always discuss the Australian angle to ensure that the client’s brand is ‘locally’ future-proof – something they can use in both Australia and New Zealand.

“The advantage of a dual approach is that if a client encounters a blocking right, we’ll often have the same issue in both New Zealand and Australia, so we can tackle both issues at the same time and save the client time and, ultimately, money.”

Searle echoes his sentiments.

“Australia is obviously a much larger market to New Zealand, and consequently it gives our clients the opportunities to grow.
“However, the Australian trademarks and patents registers are much more crowded.”

This means it is critical to conduct freedom-to-operate searches prior to entering the Australian marketplace, she says.

“There is more than one New Zealand company which has been prevented from using a key aspect of its IP in Australia due to a prior Australian right.”

Also, because of the increasing market ties between the two countries, as well as increasing travel between them and use of the internet, there are some circumstances in which a reputation gained in Australia can ‘spill over’ to the New Zealand market, thereby preventing a local company from using a brand in New Zealand, and vice versa, she says.

“It is often assumed that Australia and New Zealand are just the same when it comes to business culture. However, we have found that Australian companies tend to take a much stricter approach when it comes to enforcing their IP, and are much more vigilant.

“On the whole, they don’t have the ‘she’ll be right’ attitude which is more prevalent in the Kiwi culture.”

The opportunity for Buddle Findlay is to provide an expanded and relatively seamless service to the firm’s clients, Glengarry says.

“The challenge, as it is for all practitioners who choose to provide assistance outside their home jurisdictions, is to know our limits in terms of our legal and other obligations to clients, and to maintain and grow our competencies.

“This is something we are always mindful of and which I think we are achieving; our approach is that we don't dabble.”

Billion-dollar business

However, it can only be a matter of time before New Zealand firms struggle to get their share of the Australian pie.

A notable trend in the Australasian IP market is the consolidation of firms and investment in peripheral companies brought about by the ability of Australian firms to raise capital through listing, Broadley says.

“One major Australian firm has listed on the ASX and currently has a market capitalisation of just under NZ$1bn. They have already bought another reasonable-sized Australian firm.”

Because of the regulation of lawyers and patent attorneys in New Zealand, raising capital is much more challenging here, so it is not really a level playing field when it comes to investment in legal businesses, he says.

“AJ Park is an 18-partner firm, and our biggest competition is now almost a billion-dollar company.”