By Ed Hamilton, Baldwin Shelston Waters, Wellington

Advertisers will be able to use rival traders' registered trade marks in comparative advertisements, once proposed new trade mark legislation is passed - TRADE MARKS Government Bill 2001 No 142-1

Existing law prevents traders from using their competitors' registered trade marks in advertisements that compare rival products.

This is based on outdated UK law, which says that only the trade mark owner has the exclusive right to use his trade mark.

The proposed law brings New Zealand substantially into line with other countries such as Australia and the United Kingdom, which allow comparative advertising incorporating registered trade marks, provided the advertisements are not misleading and deceptive.

The Government considers that comparative advertisements arm consumers with useful information about competing products.

The proposed New Zealand legislation falls short of the United Kingdom law in one respect. English law requires comparative advertising to conform with honest commercial practice. In the recent case of Cable and Wireless Plc v British Telecommunications, the test imposed by the court was whether a reasonable person would honestly have made the statement in the advertisement, based on the information available to him.

There is no similar check in the proposed New Zealand law. Instead, New Zealanders will have to rely on provisions in the Fair Trading Act 1986, prohibiting misleading and deceptive conduct, unless the bill is changed before it is enacted.

This is a general summary only and should not be taken as a substitute for specific advice.

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