Kiwis 'unsophisticated and naive' attitude toward intellectual property rights

Wednesday, 25 October 2017

Photos of the Willis St, Wellington cafe Innocent Foods products that got them in trouble with Coca-Cola owned company Innocent.

OPINION: New Zealand has an unsophisticated and naive attitude towards intellectual property rights.

In the dispute between a Coca-Cola owned company and a small cafe in Wellington which began trading as INNOCENT FOODS, the public reaction has largely been one of surprise and outrage that Coca-Cola would force the cafe owner to change its name.

Innocent Foods cafe owners Claire Rientjes and Egemen Yeter have a deadline to rebrand and are asking the community to help.

Nothing demonstrates more, New Zealand's quaint attitude to intellectual property (IP) rights compared to the attitudes prevailing in more advanced economies. Kiwi businesses think IP rights don't matter, whereas businesses in most developed countries consider their IP rights to be their most important asset.

Fresh Trading Limited (which Coca Cola now owns), developed the INNOCENT trademark and related business of supplying a wide variety of foodstuffs and beverages.

Image of Innocent Foods products from their Facebook page.

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In anticipation of expanding its business, Fresh Trading cleared the INNOCENT food brand for use and registration internationally and then registered the trademark in countries where it thought the business might have a market – including New Zealand.

Fresh Trading has not yet begun using the INNOCENT brand here, but obviously it wants to protect and control the use of its brand so that when it is ready, it can market INNOCENT food products in New Zealand.

By comparison, the local Innocent Foods cafe appears to have simply decided on INNOCENT FOODS as a name it liked and started using it without first properly investigating whether such use might conflict with the intellectual property rights of someone else.

It seems not even a most basic search of the Register of Trade Marks was conducted – otherwise the rights of Fresh Trading would have been immediately apparent. A patent and trademark attorney could provide a full clearance search very quickly.

It should not come as any surprise that a company coming from a country that values intellectual property will object strongly to the misappropriation of its intellectual property rights. The actions of Innocent Foods cafe were naive and Fresh Trading Limited has been inconvenienced and has incurred cost defending its rights.

That said, the way it has been handled seems to me to have been overly aggressive and heavy handed: it is not as though Innocent Foods deliberately misappropriated the brand.

There is a lesson here. New Zealand businesses need to shake off bucolic attitudes to intellectual property and appreciate that in the global environment in which now live, we have to be a lot more IP savvy.

Sadly, it reflects our country's lack of focus on building a more productive high-wage economy based on innovation and value-added products, as opposed to our current economy which seems to be focussed on collecting and selling anything we can grow, chop down, dig-up or collect from the rear-end of a lactating farm animal in its least processed form.

Kiwis pride themselves on being innovative, and as individuals this pride is well justified. However the New Zealand commercial and political environment does not make it easy for anyone wanting to develop new products and commercialise them.

As a consequence, New Zealand rates very lowly in the Organisation for Economic Co-operation and Development (OECD) in terms of the commercialisation of innovation.

New Zealand's naivety in terms of intellectual property rights is easy to demonstrate. Many New Zealand businesses have no idea how they should be using intellectual property rights to own and control their brands and their innovations, and leveraging those rights to produce business growth.

Since the end of the Global Financial Crisis (GFC), the rate of filing patent applications in New Zealand by New Zealand entities has fallen by 50 per cent.

At the same time, most of the countries we trade with have increased their patent filings each year since the GFC. The total number of patents New Zealanders file in a year is a lot less than what many companies overseas file on their own.

Countries such as Denmark and Finland, which had similar agriculturally-based economies as our own back in the 70s and 80s, have focussed on creating innovation based economies and as a consequence have now left us far behind in terms of gross domestic product (GDP), wages and general standard of living.

Many countries encourage the registration of intellectual property rights through grants and sizeable tax deductions because their governments understand the importance of owning and leveraging knowledge, innovation and brands. It is pretty obvious what we must do.

* Ceri Wells is a partner and lawyer of James and Wells intellectual property firm.