Chapter 4 - The Challenges of Trans-Tasman Intellectual Property Coordination

Susy Frankel, Chris Nixon , Megan Richardson and John Yeabsley 

This paper examines three areas of intellectual property law and policy where there is potential for trans-Tasman coordination and harmonisation of regulatory approaches: the proposed single trade mark regime, shared patent examination and parallel importing regulations. Five criteria are used as a guide to determine whether harmonisation or coordination will be beneficial:

(a) How simple are the arrangements?

(b) How much certainty is required?

(c) How much influence on the decision making is required?

(d) How much flexibility is required to accommodate one-offs and unique


(e) How feasible is the option?

For the single trade mark regime, the authors conclude that harmonisation is the preferable option because the process would be simple (as everyone is on a similar playing field) and would provide certainty in the market (as the same rules apply in both countries). These are dominant characteristics that will reduce transaction costs for businesses. The existing rules of localised reputation and related issues of honest concurrent use could continue to apply in the same way in a trans-Tasman context as they currently apply in both New Zealand and Australia. However, the refusal to register culturally offensive trade marks (particularly those relating to Maori) in New Zealand presents an issue for the feasibility of complete harmonisation. The authors’ preferred solution would be that Australia creates a provision equivalent to New Zealand law. Tis could be achieved by an extension of its existing provision dealing with scandalous trade marks to encapsulate cultural offensiveness as a ground to refuse registration. Yet there is no apparent political will in Australia to do this. Therefore the authors suggest that an ‘opt-out’ model could be adopted to enable New Zealand to refuse such registrations even in a trans-Tasman harmonised environment.

With regard to shared patent examination, the authors conclude that cooperation is the preferred option as it can provide the influence and flexibility required to protect New Zealand’s patent related interests. The law that results from such cooperation needs, however, to be properly analysed so that the best result is reached, rather than the default result of cooperation being the larger party’s (Australia) law. Such a process is not easy, but if done properly can reduce the risk that a third party’s standards will be imposed that do not meet the needs of either Australia or New Zealand.

Parallel importing is discussed as an area where New Zealand and Australia ought to have benefited from some co-ordination but have taken disparate paths. One third party interest is that of the United States which, in the Trans- Pacific Partnership negotiation, has indicated a desire to create parallel importing restrictions. Such regulation the authors suggest sis not desirable and will likely be redundant as technology continues to open up new avenues to the consumer to purchase products from distributors other than the authorised copyright holder. Restrictions are therefore no longer as they would involve complicated controls to stop certain trades, market influence would be limited as traders and consumers find ways around the rules to acquire parallel imports, flexibility would be limited, and feasibility would be compromised as enforcement would become increasingly costly and unrealistic. Such restrictions bear a cost on consumers and do not necessarily even benefit the innovators who produce the goods and services. Studies discussed in the paper’s appendix demonstrate that removing the restrictions has been positive for the New Zealand economy. Therefore harmonisation with the objective of removing barriers is the preferred option as it will improve competition and efficiency on both sides of the Tasman.

The appendix further examines the topic of parallel importation of copyright works. It examines the impact of removing parallel import restrictions in New Zealand given a single economic market with Australia, the relevance of parallel import restrictions in a globalised world and the implications for trade agreements with parallel importing restrictions. It concludes that removing restrictions on parallel imports are thought to be welfare enhancing and provides the benefits of price reduction, and also a better quality of service as competition increases.