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Border Enforcement of Intellectual Property Rights: A Look at New Zealand

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Abstract

Since 1994, New Zealand Customs has had a broader ability to detain goods/items appearing to infringe trade marks or copyright. In undertaking this function, Customs must act as an interpreter and enforcer of trade mark and copyright laws. This raises a myriad of issues, as intellectual property is a highly technical area of law, where infringement is heavily fact-dependent. This article surveys the extent to which intellectual property rights owners have used Customs’ mechanism and Customs has applied its authority. This is followed by an analysis of how Customs determines infringement, the relationship between the role of Customs and the role of the courts, and the resultant differing standards of infringement. The article concludes by examining Customs’ expanded authority due to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, what this potentially means for New Zealand as a net intellectual property importing country, and how this affects the power dynamics between the rights-holder and the importer.

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Notes

  1. Rasmussen (2012), p. 848.

  2. Wu (2004), p. 105.

  3. Wu (2004), p. 105.

  4. Seuba (2015), pp. 136–137.

  5. Seuba (2015), p. 138.

  6. Rasmussen (2012), p. 848.

  7. TRIPS, Arts. 51–60.

  8. See e.g. Tasman Insulation NZ Ltd v. Knauf Insulation Ltd and Ors [2015] NZCA 602, [125], where the rights-holder identifies lodging Customs notices as part of their strategy to protect their trade mark from infringement and becoming generic.

  9. Gervais (2012), at 2.604–2.605.

  10. Stats NZ, Population, https://www.stats.govt.nz/topics/population. Accessed 9 May 2019.

  11. Frankel and Lai (2016), pp. 75–77; Frankel (2011), pp. 84–113.

  12. Dunne (2007), p. 43.

  13. Signed 1 October 2011, in Tokyo, by Australia, Canada, Japan, Morocco, New Zealand, Singapore, South Korea, and the United States.

  14. ACTA, Art. 16.

  15. European Parliament (2012).

  16. With Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, and Vietnam.

  17. See Trade Marks Act 2002, Sec. 97A; and Copyright Act 1994, Secs. 12(5A) and 35(1). On the parallel importation of trade marks, see Sumpter (2015), pp. 196–198. On the parallel importation of copyright and trade marks, see Frankel (2011), pp. 94–109.

  18. Trade Marks Act 2002, Sec. 89(1)(c).

  19. Copyright Act 1994, Secs. 16 and 29.

  20. See e.g. Furman (2015); Schaumberg (2017); Sidak (2016); and Rasmussen (2012).

  21. Unlike other jurisdictions (see e.g. European Commission (2018); and United States Homeland Security (2018), this data is not publicly available in New Zealand and was obtained via Official Information Act 1982 requests.

  22. Trade Marks Act 2002, Sec. 137; and Copyright Act 1994, Sec. 136(1): “A person who owns the copyright in any 1 or more literary, dramatic, musical, or artistic works, or 1 or more typographical arrangements of a published edition, or 1 or more sound recordings or films may give a notice in writing to the chief executive”.

  23. Trade Marks Act 2002, Sec. 138; and Copyright Act 1994, Sec. 136(2).

  24. Trade Marks Regulations 2003, Secs. 156–160F; and Copyright (Border Protection) Regulations 1994.

  25. Trade Marks Act 2002, Sec. 138(2); and Copyright Act 1994, Sec. 136(2)(b).

  26. Trade Marks Regulations 2003, schedule 2.

  27. Copyright (Border Protection) Regulations 1994, Schedule.

  28. Lin (2018).

  29. Trade Marks Act 2002, Sec. 139; and Copyright Act 1994, Sec. 136(3).

  30. Dickey (2018).

  31. New Zealand Customs Service, Intellectual Property Rights and Notices, https://www.customs.govt.nz/business/import/prohibited-and-restricted-imports/intellectual-property-rights-and-notices/. Accessed 15 March 2019.

  32. New Zealand Customs Service (2019).

  33. ESR Group (NZ) Ltd v. Burden and Ors [2017] NZCA 217, [69], upholding Burden and Ors v. ESR Group (NZ) Ltd and Ors [2016] NZHC 1542, [301]–[302].

  34. Trade Marks Act 2002, Sec. 149; and Copyright Act 1994, Sec. 140.

  35. The Trade Marks Act 2002, Sec. 135 defines “specified goods”, to which Customs’ investigation, detention and infringement relate, as “goods imported, or to be exported, other than for private and domestic use”. Similarly, the Copyright Act 1994, Secs. 35(1)(c), 135 defines “specified item” as “an item imported, or to be exported, other than for private and domestic use”. In Adidas AG and Anor v. Alibaba (NZ) Trading Co and Anor, AUCK HC CIV 2009-4043361, 30 June 2010, a case relating to the “ADIDAS” trade mark, the Court determined that the “sheer quantity of goods imported by the defendants (1800 pairs of socks)”, indicated that the importation “cannot have been intended for personal and private use”.

  36. APEC (2006), p. 20.

  37. Trade Marks Act 2002, Sec. 97A; Copyright Act 1994, Secs 12(5A) and 35.

  38. See e.g. Sumpter (2007); van Melle (1999); and Deloitte (2012).

  39. Frankel and Lai (2016), p. 75.

  40. Office of the United States Trade Representative, Executive Office of the President (1999), pp. 19–20. See also Frankel (2011), p. 99. This led to New Zealand implementing the Copyright (Parallel Importation of Films and Onus of Proof) Amendment Act 2003, Sec. 4, which created a nine-month moratorium on the parallel importation of films from the point of their international release. This section was designed to last for five years and was repealed on 31 October 2016.

  41. Trade Marks Act 2002, Sec. 97A. This section refers to “the owner”. Leisureworld v. Elite Fitness Equipment, HC AUCK CIV-2006-404-003499, 21 July 2006, narrowed this to the “New Zealand trade-mark owner”.

  42. Copyright Act 1994, Sec. 12(5A)(a).

  43. New Zealand’s treatment of artistic works that have been industrially applied is somewhat unique; see Copyright Act 1994, Sec. 75.

  44. Copyright Act 1994, Sec. 12(5A)(b).

  45. Trade Marks Act 2002, Sec. 155A(1); Copyright Act 1994, Sec. 144(1).

  46. Trade Marks Act 2002, Sec. 124(a); Copyright Act 1994, Sec. 131(1)(a).

  47. New Zealand Customs Service (2019).

  48. New Zealand Customs Service (2019).

  49. New Zealand Customs Service (2019).

  50. Dennison (2018).

  51. New Zealand Customs Service (2019).

  52. New Zealand Customs Service (2019).

  53. New Zealand Customs Service (2019).

  54. Trade Marks Act 2002, Sec. 143; and Copyright Act 1994, Sec. 137(1).

  55. Trade Marks Act 2002, Secs. 144–145; and Copyright Act 1994, Secs. 137(2) and 138.

  56. Lin (2018); and Dickey (2018).

  57. Dickey (2018).

  58. Trade Marks Act 2002, Sec. 146; and Copyright Act 1994, Sec. 137(3).

  59. Trade Marks Act 2002, Secs. 147 and 149; and Copyright Act 1994, Secs. 139–140.

  60. Australasian Conference Ass’n Ltd and Ors v. A Little Bit of Britain Ltd and Anor [hereinafter Weet-Bix] [2018] NZHC 2501, [108].

  61. Weet-Bix [2018] NZHC 2501, [111]–[112].

  62. New Zealand Customs Service (2018).

  63. New Zealand Customs Service (2018).

  64. See e.g.Disney Enterprises Inc v. Guan, AUCK HC M 123-SD02, 19 June 2002 (which dealt with pirated copies of the plaintiff’s copyright works and their trade mark “DISNEY”); and Burden and Ors v. Dixie Cummings NZ Ltd and Ors [2016] NZHC 729 (dealing with furniture that had been detained pursuant to Sec. 149 of the Trade Marks Act 2002 and Sec. 140 of the Copyright Act 1994). Of the nine cases found, five pertained to trade marks, two related to copyright, and two related to both.

  65. Trade Marks Act 2002, Sec. 153(2); and Copyright Act 1994, Sec. 141(4).

  66. See e.g.Disney Enterprises Inc v. Guan, AUCK HC M 123-SD02, 19 June 2002. [19].

  67. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [18] and [20].

  68. Trade Marks Act 2002, Sec. 154(3A). “Counterfeit” is defined in Sec. 135.

  69. Trade Marks Act 2002, Sec. 154(2); and Copyright Act 1994, Sec. 142(2).

  70. The Upper Deck Co LLC v. Reach NZ Ltd, AUCK HC CIV 2008-404-004944, 25 September 2008.

  71. Disney Enterprises Inc v. Guan, AUCK HC M 123-SD02, 19 June 2002 at [32]–[34].

  72. Brand Developers Ltd v. Kanji Corp Ltd and Anor, AUCK HC CIV 2007-404-6151, 31 March 2008, [27].

  73. The occurred around 90% of cases in 2006; APEC (2006), p. 20.

  74. Lin (2018).

  75. Adidas AG and Anor v. Alibaba (NZ) Trading Co and Anor, AUCK HC CIV 2009-4043361, 30 June 2010.

  76. Dickey (2018).

  77. Dickey (2018).

  78. Dickey (2018).

  79. New Zealand Customs Service (2019).

  80. A decision from 1901 was located, Trade & Customs, Commissioner of v. R Bell & Co Ltd (1901) 19 NZLR 813, which addressed the forfeiture of goods per Patents, Designs, and Trade Marks Act 1889, Sec. 104; and The Customs Laws Consolidation Act 1882, Sec. 66.

  81. See e.g. Tasman Insulation NZ Ltd v. Knauf Insulation Ltd and Ors [2015] NZCA 602, [14]–[22]. This related to the trade mark “BATTS” for insulation materials, owned by the plaintiff. The defendant started to import insulation materials with the words “Batt” and “Batts” on them in July 2011. On 26 October 2011, the plaintiff advised the defendant of the alleged trade mark infringement. The same month, the rights-holder lodged a notice with Customs for the trade mark. On 6 November 2011, Customs detained 96 bales of insulation imported by the defendant. Whilst denying liability, the defendant decided to forfeit the goods. Formal notice of this was given on 24 November 2011. The defendant continued to import goods with “Batts” and “Batt” until June 2012. The plaintiff issued the proceedings on 19 December 2011.

    In ABB Ltd v. NZ Insulators Ltd (2006) 3 NZCCLR 645, [293], the defendant was found liable for copyright infringement via importation. The defendant argued that the damages should be reduced because the plaintiff failed to lodge a notice with Customs and so failed to mitigate their loss. This was rejected, as “had this been done it would have deprived [the plaintiff] of the profit that is now sought by way of damages.”

  82. New Zealand Customs Service (2019).

  83. Trade Marks Act 2002, Sec. 152(a)–(b) (formerly Trade Marks Act 1953, Sec. 54G(1)–(2)); and Copyright Act 1994, Sec. 141(1)–(2).

  84. Trade Marks Act 2002, Sec. 153(1) (formerly Trade Marks Act 1953, Sec. 54G(3)); and Copyright Act 1994, Sec. 141(3).

  85. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506.

  86. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [16].

  87. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [16].

  88. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [17].

  89. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [17].

  90. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [16], referring to Trade Marks Act 1953, Sec. 54I, now Trade Marks Act 2002, Sec. 154(1).

  91. Formerly Trade Marks Act 1953, Sec. 54F(1)(d)–(e).

  92. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [17].

  93. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [17].

  94. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [19].

  95. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [19].

  96. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [19].

  97. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [19].

  98. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [21].

  99. Burden and Ors v. ESR Group (NZ) Ltd and Ors [2015] NZHC 1649.

  100. Copyright Act 1994, Sec. 141(3).

  101. Copyright Act 1993, Sec. 141(2).

  102. Burden and Ors v. ESR Group (NZ) Ltd and Ors [2015] NZHC 1649, [60].

  103. Burden and Ors v. ESR Group (NZ) Ltd and Ors [2015] NZHC 1649, [24].

  104. Burden and Ors v. ESR Group (NZ) Ltd and Ors [2015] NZHC 1649, [24].

  105. Burden and Ors v. ESR Group (NZ) Ltd and Ors [2015] NZHC 1649, [61].

  106. Burden and Ors v. ESR Group (NZ) Ltd and Ors [2015] NZHC 1649, [62].

  107. Burden and Ors v. ESR Group (NZ) Ltd and Ors [2015] NZHC 1649, [63] and [66].

  108. Burden and Ors v. ESR Group (NZ) Ltd and Ors [2016] NZHC 1542,[301]–[302]; and ESR Group (NZ) Ltd v. Burden and Ors [2017] NZCA 217, [69].

  109. Burden and Ors v. ESR Group (NZ) Ltd and Ors [2015] NZHC 1649, [65].

  110. Trade Marks Act 1953 Act, Sec. 54G(3), now Trade Mark Act 2002, Sec. 153(1).

  111. Now Trade Marks Act 2002, Sec. 89.

  112. Trade Marks Act 1953, Sec. 54I, now Trade Marks Act 2002, Sec. 154(1).

  113. G Sucess Co Ltd v. CEO NZ Customs Services [2001] 1 NZLR 506, [4].

  114. Adidas AG and Anor v. Alibaba (NZ) Trading Co and Anor, AUCK HC CIV 2009-4043361, 30 June 2010.

  115. Adidas AG and Anor v. Alibaba (NZ) Trading Co and Anor, AUCK HC CIV 2009-4043361, 30 June 2010, [11] and [13].

  116. Adidas Ag and Ors v. Hilton, AUCK HC CIV 2011-404-2751, 9 September 2011, [17]. This case related to the trade marks “ADIDAS” and “REEBOK”. The Court found a breach of Sec. 89(1) and, thus made a declaration under Sec. 153(1) that “the goods are good on which an infringing sign is used, other than for private or domestic use.” The Court ordered that the goods be forfeited to the Crown and destroyed.

  117. Weet-Bix [2018] NZHC 2501, [34].

  118. Weet-Bix [2018] NZHC 2501, [36].

  119. Weet-Bix [2018] NZHC 2501, [48].

  120. Weet-Bix [2018] NZHC 2501, [48].

  121. Weet-Bix [2018] NZHC 2501, [36].

  122. Weet-Bix [2018] NZHC 2501, [54].

  123. Weet-Bix [2018] NZHC 2501, [54].

  124. Weet-Bix [2018] NZHC 2501, [54].

  125. Weet-Bix [2018] NZHC 2501, [55].

  126. Weet-Bix [2018] NZHC 2501, [55].

  127. Weet-Bix [2018] NZHC 2501, [56].

  128. Weet-Bix [2018] NZHC 2501, [60].

  129. Weet-Bix [2018] NZHC 2501, [62].

  130. Weet-Bix [2018] NZHC 2501, [72], citing Pioneer Hi-Bred Corn Company Limited v. Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50, 62 (CA).

  131. Weet-Bix [2018] NZHC 2501, [72], citing Mainland Products Ltd v. Bonlac Foods (NZ) Ltd [1998] 3 NZLR 341 (CA).

  132. Weet-Bix [2018] NZHC 2501, [97].

  133. Weet-Bix [2018] NZHC 2501, [89].

  134. Weet-Bix [2018] NZHC 2501, [96] and [98].

  135. Weet-Bix [2018] NZHC 2501, [149].

  136. Weet-Bix [2018] NZHC 2501, [149].

  137. Weet-Bix [2018] NZHC 2501, [149].

  138. Weet-Bix [2018] NZHC 2501, [153].

  139. Weet-Bix [2018] NZHC 2501, [155].

  140. Copyright Act 1994, Sec. 29.

  141. Copyright Act 1994, Sec. 16.

  142. Wham-O MFG Co v. Lincoln Industries [1984] 1 NZLR 641, 666.

  143. Paragraph (c)(ia) was inserted into the definition of “pirated copy” on 19 May 1998, by Sec. 7 of the Copyright (Removal of Prohibition on Parallel Importing) Amendment Act 1998 (1998 No. 20). Subsec. (5A) of Sec. 12 deals with parallel importing and was inserted on 19 May 1998, by Sec. 5(2) of the Copyright (Removal of Prohibition on Parallel Importing) Amendment Act 1998 (1998 No. 20).

  144. Disney Enterprises Inc v. Guan, AUCK HC M 123-SD02, 19 June 2002 [21]–[22]. In this case, the defendant consented to the extension to 20 days. Agreement could not be reached by the expiration of the extension, leading to the plaintiff having no choice but to file an infringement proceedings in order to “preserve its rights in relation to the [detained] goods” ([22]).

  145. Weet-Bix [2018] NZHC 2501, [130].

  146. Weet-Bix [2018] NZHC 2501, [131].

  147. Weet-Bix [2018] NZHC 2501, [131].

  148. Weet-Bix [2018] NZHC 2501, [132].

  149. Weet-Bix [2018] NZHC 2501, [133].

  150. Weet-Bix [2018] NZHC 2501, [131].

  151. Weet-Bix [2018] NZHC 2501, [134].

  152. CPTPP, Art. 18.76.

  153. Trade Marks Act 2002, Sec. 135A(1).

  154. Copyright Act 1994, Sec. 135A(1).

  155. Trade Marks Act 2002, Sec. 135A(2); and Copyright Act 1994, Sec. 135A(2).

  156. Trade Marks Act 2002, Secs. 135A(2) and 135B(a); and Copyright Act 1994, Secs. 135A(2) and 135C(1).

  157. Trade Marks Act 2002, Sec. 135B(1)(b)(i); and Copyright Act 1994, Sec. 135C(1)(b)(i).

  158. Trade Marks Act 2002, Secs. 135B(1)(a) and 135B(1)(b)(ii); and Copyright Act 1994, Secs. 135C(1)(a) and 135C(1)(b)(ii).

  159. TRIPS, Art. 58 stipulates some requirements if members “require competent authorities to act upon their own initiative and to suspend the release of goods in respect of which they have acquired prima facie evidence that an intellectual property rights is being infringed”. However, TRIPS does not require this. See Gervais (2012), at 2.657.

  160. See TRIPS, Art. 51.

  161. This is, of course, presuming that the counterfeit or pirated goods are safe and there is consumer demand for such goods.

  162. The US has argued analogously that New Zealand’s copyright parallel importation provisions might increase piracy in New Zealand and promote black market trade in pirated goods in the region; Office of the United States Trade Representative, Executive Office of the President (2001), pp. 28–29; and (2002), pp. 30–31.

  163. This is a suspended provision of the CPTPP (Art. 18.63), suspended upon the US withdrawal from the preceding Trans-Pacific Partnership (TPP).

  164. New Zealand Government (2018).

  165. Dinwoodie and Dreyfuss (2012), pp. 168–169 state that, because ACTA “deals exclusively with intellectual property …, there is no danger that it was adopted as a result of exogenous trade-offs unavailable to nonsignatories.”

  166. CPTPP, Art. 18.76.7.

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    Jessica C. Lai

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Lai, J.C. Border Enforcement of Intellectual Property Rights: A Look at New Zealand. IIC 50, 792–822 (2019). https://doi.org/10.1007/s40319-019-00842-9

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