Impending legislation that will enable organisations to register a trademark in multiple countries with a single application is a double edged sword for New Zealand companies, according to one patent law expert.
Parliament has passed two bills that make up the Trade Marks (International Treaties and Enforcement) Amendment Bill, giving new powers to the Ministry of Economic Development and Customs to investigate and prosecute people involved in the manufacture, importation, and sale of illegal goods, and paving the way for New Zealand to join three international treaties.
Joining the Madrid Protocol means businesses can apply to have their trademarks protected in up to 84 countries by filing one application and paying one fee, while signing up to the Nice Agreement and the Singapore Treaty better aligns New Zealand with international practices.
Commerce minister Simon Power said this would clear the way for businesses to "put their innovative ideas on the world stage".
Patent attorney Philip Thoreau, a partner at Baldwins Intellectual Property, said the Madrid Protocol represented good news for large companies like Fonterra, but there was a downside for SMEs.
Once the new legislation comes into play – expected to be around the middle of next year – trademark applications filed in New Zealand can be extended to a number of other countries "essentially by ticking boxes on a form".
"It will be much cheaper for New Zealand patent attorneys to protect trademarks overseas. The potentially worrying part is that while New Zealand companies are able to do that, so are our trading partners, as it's reciprocal," he said.
"We are expecting there will be a significant increase in the number of trademark applications filed in by offshore competitors who are already members of the Madrid Protocol. At the touch of a button, large international corporates could severely inhibit future economic growth, from local startup companies to established exporters, blocking access to key markets."
Other countries who are part of the Madrid Protocol include major trading partners such as China, the, US, UK and members of the European Union.
There will be no need to physically file an application in those countries and no local agents would be involved.
Thoreau said businesses should ensure they had protected protected their trademarks by registration before the legislation comes into force.
"Selection and protection [of trademarks] will be more complicated because we will actually be on the world stage," he said.
"F&P, Douglas Pharmaceuticals, many of those sorts of companies that are currently the darlings of New Zealand's export market really got their start through New Zealand being a relatively benign IP market. There wasn't a lot of competition from overseas."
He said it was likely there were a lot more unregistered trademarks in New Zealand than registered ones.
"There's a bit of a laissez faire mentality among businesses that registering trademarks is an expense you can do without. I think some of them are going to get a bit of a nasty lesson –IP complications tend to be expensive."