Hon SIMON POWER (Minister of Commerce) : I move, That the Trade Marks (International Treaties and Enforcement) Amendment Bill be now read a first time. At the appropriate time I intend to move that the bill be referred to the Foreign Affairs, Defence and Trade Committee for consideration. Trademarks are an important intellectual property right and a key business asset. A trademark is a unique identifier, such as a word, brand, or logo, that distinguishes the goods or services of one trader from those supplied by other traders. Trademarks enable consumers to instantly recognise and associate the quality of a particular good or service with a business that uses the trademark. One of the aims of giving legal protection to trademarks is to prevent low-quality firms or counterfeiters from passing off their products as being those produced by well-known, high-quality producers. Trademarks are registered by the Commissioner of Trade Marks under the Trade Marks Act 2002 after an examination process.

This bill has three main purposes. The first is to ensure that New Zealand is able to join three international trademark treaties. In 2006 the then Government agreed to pursue accession to three treaties administered by the World Intellectual Property Organization. These are the Singapore Treaty on the Law of Trademarks—

Hon Lianne Dalziel: Is India covered by that?

Hon SIMON POWER: —that is a good question—the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, and the Madrid protocol relating to the Madrid agreement. The bill makes a number of changes to the Trade Marks Act to enable New Zealand to implement the requirements of each of those treaties, and therefore to be able to join the treaties.

Although each treaty has its own particular objectives, their collective aim is to reduce business compliance costs associated with protecting trademarks. This is achieved through the simplification and international harmonisation of the procedures for registering trademarks. Joining these treaties will also assist in moving New Zealand’s trademark registration procedures into closer alignment with Australia’s. It therefore represents a further step towards the Government’s objective of creating a single economic market with Australia—an important objective, which I know my predecessor shared the same level of enthusiasm for advancing.

The second purpose of the bill is to deter trafficking in counterfeit goods and pirated copyright works by strengthening the enforcement of criminal offences under the Copyright Act and the Trade Marks Act. The trade in goods bearing counterfeit trademarks and pirated copyright works is a growing global problem to which New Zealand is not immune. The manufacture and sale of counterfeit goods is a crime that is depriving our manufacturers, exporters, and retailers of their legitimate earnings. Their productivity and financial viability are being threatened by cheap—and sometimes unsafe—fake products, and that also means that jobs are at risk at a time when the economy can least afford it.

Counterfeit goods can be shoddy products that unsuspecting consumers are deceived into buying; thereby, in some instances, unwittingly exposing them to significant health and safety risks. Among the people benefiting from the sale of counterfeit goods are organised crime groups—potentially, terrorists—that have been implicated in their manufacture and global distribution. Compared with the distribution of drugs, counterfeit goods are increasingly being seen as an easy and safe source of income by criminals.

The bill provides the Ministry of Economic Development and the police with standard investigative powers—but also limited non-warranted powers—to search for and seize counterfeit goods being displayed for sale in public areas. This power has been developed to specifically address the sale of counterfeit goods in markets and fairs, as well as their sale by street vendors, where the transient and itinerant nature of traders make the obtaining of a search warrant impractical for enforcement purposes. Furthermore, the bill extends the powers available to the New Zealand Customs Service, to enable it to play a more active part in enforcing criminal offence provisions against the importers of counterfeit goods. This measure builds upon the Customs Service’s existing trademark and copyright enforcement role, and recognizes that its officers often have specialist knowledge relating to offending importers, and may be in possession of counterfeit or pirated goods those offenders have tried to import. These moves to enhance enforcement of the criminal offences for trading in counterfeit goods and pirated copyright-protected works have been welcomed by trademark and copyright owners.

Thirdly, the bill contains a number of minor amendments to the Copyright Act and Trade Marks Act. One of those amendments is intended to improve the efficiency and effectiveness of the Customs Service’s administration of the border protection measures against the importation of counterfeit goods into New Zealand. It will also assist small businesses to take advantage of those measures. The border protection measures are a notice regime administered by the Customs Service, and are designed to facilitate copyright and trademark owners taking civil action against the importers of counterfeit goods. Under the regime notice, the Customs Service can detain shipments of suspected infringing goods described in the notice pending civil action by rights-holders against the importers of those goods. The bill includes an amendment to provide the Customs Service with the discretion to suspend enforcement of a border protection notice, when a rights-holder fails to reimburse the Customs Service’s costs related to the enforcement of a notice. This measure will help to phase out the $5,000 bond that guards against the possibility of a rights-holder defaulting on a Customs Service invoice. This bond has been a significant barrier for small businesses taking advantage of the border protection measures.

The introduction of the bill also provides an opportunity to address a number of technical issues that have arisen since the Trade Marks Act came into force in August 2003, in order to clarify the intent, or improve the effectiveness, of those provisions. Finally, the bill will amend sections 87 and 188 of the Copyright Act to restore an exception to copyright infringement that was inadvertently removed by the Copyright (New Technologies) Amendment Act 2008. Without the exception, an establishment like a hotel, bar, or restaurant showing its patrons a broadcast of, for example, a Sky Network Television channel, for which it had paid a subscription fee to do so, could be required to pay an additional licensing fee to copyright owners for any copyright material used in the broadcast. I commend this bill to the House.

Hon LIANNE DALZIEL (Labour—Christchurch East) : I congratulate the Minister in charge of the Trade Marks (International Treaties and Enforcement) Amendment Bill, Simon Power, on changing some of the words in the first reading speech that had been prepared for him, and congratulate him on getting around to having the bill’s first reading. I am actually very pleased that the bill is having its first reading and that it will be referred to the select committee for consideration. But I missed the beginning of the speech, so I am not a hundred percent sure which committee—

Hon Simon Power: Foreign Affairs—

Hon LIANNE DALZIEL: That is actually a perfectly sensible committee for the bill to go to, given that we are very busy at the Commerce Committee, and it also makes sense, given that the Foreign Affairs, Defence and Trade Committee has assessed the national interest analyses on each of the international treaties mentioned by the Minister in relation to the legislation that is being amended by the bill in accordance with those treaties.

We have had a lot of debates over recent months in respect of copyright, and perhaps what has occurred there demands that we all pay careful attention to detail when we are discussing those important issues. The copyright amendment bill to which I refer was deliberately couched in non-prescriptive terms so that industry would produce guidelines that protect copyright in this modern Internet age, where everything that is viewed is technically reproduced, albeit for a moment in time. This bill, obviously, is not as complex as that one was, but it does raise for the House’s consideration just how complex some of those issues are. The existence of legislation that was designed in an earlier age before we had the modern technologies that we have today really means that we have to keep thinking in the present and the future rather than, perhaps, reflecting entirely on the past. This bill, as we have heard from the Minister, gives effect to the Government’s decisions to accede to the Madrid protocol relating to the Madrid agreement—

Hon Clayton Cosgrove: What about the Indian one?

Hon LIANNE DALZIEL: —to accede to the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, and to ratify the Singapore Treaty on the Law of Trademarks. My colleague the Hon Clayton Cosgrove interjected from the front bench to ask whether there is any Indian component to this, and I can understand why he would ask that question. Of course, there are certain source countries in respect of counterfeit material that we have to be very aware of, and, tragically, India is one of them. India is one of the countries that has been rather—

Hon Clayton Cosgrove: Visited often?

Hon LIANNE DALZIEL: Yes, it has been visited recently. Unfortunately, it is one of those places that thrive on counterfeit products, and, unfortunately, other countries in the world do as well. That is why I am pleased that this bill also empowers the Ministry of Economic Development and the Customs Service to enforce the criminal offence provisions under the Trade Marks Act and the Copyright Act.

The Minister, in his comments, traversed the implications of the various instruments, and, of course, the treaties themselves. Their accompanying national interest analyses have been examined, as I said before, by the Foreign Affairs, Defence and Trade Committee, which is why it makes sense to send the bill there for its consideration. If I were looking for themes to ascribe to the instruments themselves, though, I would use words like “user-friendly”, “compliance cost reduction”, “flexibility”, simplification”, and “international harmonisation”. I guess that is a win-win win. I think it is good when the House can look at legislation that is able to produce such significant benefit.

During the time that I was Minister of Commerce I came to appreciate how important it was for New Zealand not only to sign up to international standards but also to play a part in both developing and, indeed, leading in many of those areas of standards development as well. There are so many areas where New Zealand punches above its weight, and standardisation is one of them. The fact that the previous chief executive officer of Standards New Zealand now heads the International Organization for Standardization is something that is worthy of mention in this context.

Harmonising our laws with international standards simply makes good sense. The benefits are obvious when one considers, in respect of the Madrid protocol, that a single application for registration will obviously reduce the cost of protecting a trademark across multiple jurisdictions in a single hit. There will be a fee set according to the number of countries that are expected to be covered by the application for registration. Then, of course, there are the enhanced enforcement provisions, and it is worthy of making the point that there really is no protection of trademarks or of copyright unless that protection is claimed and enforced.

There is an enormous problem worldwide with counterfeit goods, and, as I mentioned before, there are the “Rolex” watches, the “Dolce and Gabbana” handbags, and the “Armani” suits that one buys in the markets. Of course, none of the members on the other side would have ever heard of any of those labels! Any designer label one would care to mention has been subject to counterfeit. There is a considerable amount of money to be made from counterfeiting designer labels, although I do think—

Hon Darren Hughes: Big problem in India.

Hon LIANNE DALZIEL: I mentioned before that it is a large problem in India.

Hon Clayton Cosgrove: Did Richard bring it back for his colleagues?

Hon LIANNE DALZIEL: I do not know how much a certain member brought back to New Zealand that is probably counterfeit. I would say that he probably has more on his mind at the moment, because I am sure that the “bollocking” did not cover any of his designer label purchases that he might have made en route. I think acting as a Minister on a private trip might have caused him a little bit more concern than counterfeit designer labels.

I think it is an important issue, and the Minister made a very good point and perhaps one that I had not appreciated myself. That is that when an organisation is trying to find illicit ways of gathering sufficient funds to undertake its various terrorist and criminal activities, counterfeit trade is, obviously, one that fits in very well with the general criminal intent of the organisation, but one that perhaps slips in under the radar. Everyone is, obviously, concerned about the illicit trade in drugs, the illicit trade in arms, the illicit trade in human beings—

Hon Clayton Cosgrove: Aircraft?

Hon LIANNE DALZIEL: —the illicit trade in aircraft—

Hon Clayton Cosgrove: Aviation?

Hon LIANNE DALZIEL: Oh, yes, that is right! I thought there was a link there somewhere.

The point I am making is that there are obvious forms of illicit activities that the world is very much aware of—and aware of the consequences of—but this illicit counterfeit trade is one form that can produce a significant amount of money, and, as I say, basically operate under the radar. So New Zealand, by signing up to those stricter controls and higher penalties, becomes part of this worldwide commitment to protect what are, in essence, property rights.

I am sure there will be submissions, though, about the enforcement provisions, and I again mention the New Zealand Manufacturers and Exporters Association, formerly the Canterbury Manufacturers Association, which has expressed views in this area quite firmly. I note that copyright and trademark owners need to be able to request assistance from the Customs Service to identify shipments of infringing goods coming into, or transiting through, New Zealand. But the Manufacturers and Exporters Association continues to raise an issue about the responsibility for policing at the border. There are countries where, essentially, the responsibility for that policing activity is undertaken by the border control authorities, and, essentially, the importer is obliged to prove that the goods are not breaching copyright, trademark, or any of the other provisions, or undermining any of the standards that apply in those countries. [Interruption] I know that my colleague Clayton Cosgrove is going to take a call on the bill very shortly, because he just cannot stop interjecting. But there we go!

I just want to make the point that the phase-out of the $5,000 bond may assist in that regard, but I know there will be businesses that would expect a much more proactive stance at the border. As a former Minister of Commerce, I delegated responsibility for all intellectual property matters to my colleague the Hon Judith Tizard, in whose name this bill was originally introduced. I am pleased to be able to acknowledge her work in this vital area, and, indeed, to commend this bill to the House.

Mr DEPUTY SPEAKER: I call John Hayes.

Hon Clayton Cosgrove: This will be good!

JOHN HAYES (National—Wairarapa) : Yes, it will be good. The Trade Marks (International Treaties and Enforcement) Amendment Bill is arcane and will be rather over the top of the short head of my colleague from somewhere down in the South Island. The bill is an omnibus measure and will amend the Trade Marks Act 2002 and the Copyright Act 1994. It is intended that the bill be divided into two separate bills when we get to the Committee stage: a Trade Marks (International Treaties and Enforcement) Amendment Bill and a Copyright Amendment Bill. The issues addressed in this legislation were considered by our Foreign Affairs, Defence and Trade Committee last year.

The first thing I would like to explain to the Minister from central Christchurch—

Hon Clayton Cosgrove: Not a Minister any more.

JOHN HAYES: —the previous Minister from central Christchurch—is that a trademark is a unique identifier, such as a word. It could be “Punch ‘n Grow”, for example, if one were growing small seeds. It could be a brand, a logo, a colour, a slogan, a three-dimensional shape, or even a sound that enables a business to easily distinguish its goods and services from those supplied by other traders. It is the difference between, for example, the “N” for National and the “L” on the desk over there for Labour. It is the blue against the red—yes, blue won; red lost. Trademarks are registered by the Commissioner of Trade Marks under the Trade Marks Act 2002.

The bill that we have before us gives effect to the Government’s decision, firstly, to accede to the Madrid protocol. For the edification of the House, that protocol, I recall, was adopted originally on 14 April 1891. It has been revised six times since then, most recently in 1967. Not very many countries belong to that protocol. Then we have to accede to the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks. And then we will ratify the Singapore Treaty on the Law of Trademarks. The bill will empower the Ministry of Economic Development and the New Zealand Customs Service to enforce the criminal offence provisions under the Copyright Act 1994 that relate, as the member who has just resumed her seat was saying, to counterfeit goods and pirated works. The bill will also address one or two miscellaneous issues with the Trade Marks Act.

I would like to explain to my colleagues that the Madrid protocol provides a system that simplifies the procedures required for a trademark owner to protect his or her trademarks overseas. Joining the Madrid protocol will allow New Zealand owners of trademarks to have their trademarks protected abroad by filing an application for registration of a trademark with the Intellectual Property Office of New Zealand, and designating one or more overseas countries that are also members of the Madrid protocol, where protection is sought. There is a bit of a gap here, in the sense that the counterpart country in which one may want one’s wheelchair, for example, to be patented needs to be part of the Madrid protocol, or that will not be possible. Overseas trademark owners would also be able to use the Madrid protocol to protect their trademarks here in New Zealand. So joining the Madrid protocol will simplify the management of overseas-registered trademarks. It will be possible to renew or record subsequent changes to the trademark registration in each country by using the Madrid protocol through a single procedural step, rather than making a request directly to each member country of the protocol. The bill will introduce amendments to the Trade Marks Act to facilitate that happening.

The Nice agreement provides a classification system for goods and services for the purpose of registering trademarks. Those countries that are parties to the Nice agreement must apply the Nice classification to a registered trademark, although those countries that are not a party to it may still apply the Nice classification if they want to. So one does not actually have to be a member in order to use the Nice classification system. New Zealand has applied the Nice classification to registered trademarks for many years. The Nice classification is updated every 5 years, and the parties to the agreement meet on a semi-regular basis to consider amendments to it. The advantage for New Zealand of becoming a party to this agreement is that we will be able to participate in those meetings and potentially influence the future development of the Nice classification so that it best meets the needs of businesses in this country. The bill will clarify that the latest edition of the Nice classification must be used with all new applications for the registration of a trademark under the Trade Marks Act.

I had some doubts about the Singapore treaty during the select committee process. I found that a number of intellectual property lawyers thought there would be no benefit from our joining it. But the point of signing it is that we can use the Singapore treaty to make national trademark registration systems more user-friendly and to reduce business compliance costs for trademark owners. It will do that through the simplification and international harmonisation of national registration procedures. The Singapore treaty does not, however, seek to harmonise substantive trademark law. The majority of the standards and rules of the Singapore treaty relate directly to the procedures of trademarks, and in particular are constructed to make it clear what a trademarks office can and cannot require from applicants. By ratifying the Singapore treaty, New Zealand will be able to contribute to the realisation of the treaty’s aim to make national and regional trademark registration systems more user-friendly. It will provide an opportunity for New Zealand to send a clear signal to the international community of its commitment to provide efficient and effective trademark registration arrangements that are consistent with international practice. The bill will allow regulations to be made for the purpose of giving effect to New Zealand’s obligation under the Singapore treaty.

As one or two speakers have already said, there is a growing problem around the world relating to the manufacture, distribution, and sale of counterfeit goods. I have seen it in Iran, where Russian-produced wool has been passed off as New Zealand wool by Russian traders, and I have seen locally produced butter in Iran with New Zealand’s Fonterra labels on it, even though it was not a New Zealand product. We have experienced in New Zealand a steady growth in the sale of counterfeit products sourced from overseas and in our products being counterfeited in overseas countries. The illegitimate sale of counterfeit products deprives trademark and copyright owners and their licensees of legitimate income, and therefore ultimately undermines the profit of businesses. If people step out of line, the rules here will be consistent with our obligations under article 61 of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights, as well as the Trade Marks Act and the Copyright Act. The penalty for people who do step out of line is a maximum of $150,000.

CLARE CURRAN (Labour—Dunedin South) : I rise to support the Trade Marks (International Treaties and Enforcement) Amendment Bill at its first reading. Labour supports this bill. It is another Labour initiative. The bill is underpinned by some important principles—namely, to deter counterfeiting of registered trademarks and to prevent piracy of copyright-protected works, both of which are essential to protect legitimate business in this country.

The bill has three main purposes: firstly, to allow New Zealand to join three international trademark treaties; secondly, to enhance the existing enforcement provisions in the Trade Marks Act and the Copyright Act in order to further deter counterfeiting of registered trademarks and piracy of copyright-protected works; and, thirdly, to address several minor and technical issues within the Copyright Act, the Trade Marks Act, and the Trans-Tasman Mutual Recognition Act 1997. This bill is an omnibus bill that will amend the Trade Marks Act 2002 and the Copyright Act 1994. I understand that it is intended to be divided into two separate bills at the Committee of the whole House stage.

In 2006 the Government agreed to pursue accession to the Singapore Treaty on the Law of Trademarks, known as the Singapore treaty; the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, known as the Nice agreement; and the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, or the Madrid protocol. The treaties and their accompanying national interest analyses were examined by the Foreign Affairs, Defence and Trade Committee. The committee reported back in November 2006, and did not identify any matters to bring to the attention of the House. I will talk just a bit about those three treaties.

The Singapore treaty aims to make the national trademark registration systems more user-friendly, and to reduce business compliance costs for trademark owners through the simplification and international harmonisation of national registration procedures. Accordingly, the bill provides more flexible arrangements for recording changes in registration of trademark ownership. It repeals provisions that concern registration of a person as a licensee of a registered trademark, and it allows for the division of registration of a trademark.

The Nice agreement provides a classification system for goods and services for the purposes of registering trademarks, known as the Nice classification. The bill clarifies that the latest addition of the Nice classification must be used with all new applications for the registration of a trademark under the Trade Marks Act, thereby facilitating accession to the Nice agreement.

The Madrid protocol provides a system that allows a trademark owner to have a trademark protected in up to 76 member countries by filing one application for the registration of a trademark through the local trademarks office, and designating one or more member countries where protection is sought. The Madrid system also allows an owner to effect subsequent changes to the trademark in each registered country through a single procedural step. The bill introduces amendments to the Trade Marks Act to allow the Madrid system to be implemented in New Zealand through regulations.

Currently there is a growing problem around the world relating to the manufacture, distribution, and sale of counterfeits. Rigorous enforcement of the criminal offences under the Trade Marks Act and the Copyright Act is essential to protect the interests of New Zealand rights-holders—something that Labour holds very dear. The second purpose of the bill is to empower the Ministry of Economic Development and the Customs Service to play an active role in enforcing these criminal provisions, alongside and in cooperation with other enforcement agencies and rights-holders. The bill provides the Ministry of Economic Development with enforcement powers, which include the ability to apply for and execute search warrants, and also to share information with the police and the Customs Service to assist in identifying persons who are involved in committing criminal offences. It also provides non-warranted powers to search and seize counterfeit goods and pirated works for evidential purposes for a prosecution, but only where works are being offered for sale in public places and where entry is made when they are open to the public; in places of business and entry is made when they are open for carrying on business, and only those parts that are open to the public; and also places where the occupier of the place consents to the entry and examination.

The bill proposes to give the Customs Service the ability to seize without a warrant counterfeit goods and pirated works that are subject to the control of customs. That is in accordance with section 20 of the Customs and Excise Act 1996, and includes, for example, goods in a customs-controlled area. It also gives the power to require an importer or agent to provide information about those goods, to require an importer or agent to appear to answer questions, to apply for a judicial order that authorises the production of documents and other recorded information by any person, and also to apply for and execute search warrants.

The bill also includes protection for the Ministry of Economic Development, the Customs Service, and police staff, and persons who assist them, from liability for reasonable actions that are taken in good faith during a criminal investigation into the manufacture, distribution, and sale of counterfeit goods and pirated works. These moves to enhance the enforcement of the criminal offence provisions have been welcomed by trademark and copyright owners and their representatives.

It also should be noted that the provisions in the bill reflect Government decisions in 2006 and 2007 to amend our domestic legislation to enhance the enforcement of criminal provisions in the Copyright Act and the Trade Marks Act. The bill should not be confused with the Government’s recent decision to participate in the development of the Anti-Counterfeiting Trade Agreement, otherwise known as ACTA. The aim of that agreement is to provide an international framework to deal with large-scale counterfeiting and piracy activities.

I will speak just a little bit about the Anti-Counterfeiting Trade Agreement, because it is quite important. It is a cooperative effort by Governments to respond to the increase in global trade of counterfeit goods and pirated copyright-protected works. Its goal is to establish a common standard for intellectual property rights, and enforcement to combat global infringements of those rights, particularly counterfeiting and piracy on a commercial scale. Why develop it? Well, counterfeiting and piracy are a global problem, and that is why a global solution is needed. There has been a lack of progress in various international multilateral areas, such as the World Trade Organization, in tackling the problem. The aim is, essentially, to develop new international standards, and to develop enforcement that is combined with global cooperation. Multilateral agreement is desired, but it is not always achievable. It is about combining action by a small number of like-minded countries to develop an enforcement agreement that most buy into.

The Anti-Counterfeiting Trade Agreement is about international cooperation, establishing best practices for enforcement, and strengthening the legal framework to combat breaches of intellectual copyright, especially copyright and trademarks infringement. A lot of countries are involved, and they include Australia, Canada, the European Union, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland, and the United States. New Zealand is participating because we recognised that strong intellectual property rights make an important contribution to our economic development, and that our geographic isolation does not protect us from the effects and consequences of counterfeiting and piracy. New Zealand businesses are targeted by counterfeiters and pirates, and New Zealand cannot afford not to participate.

I come back to the Trade Marks (International Treaties and Enforcement) Amendment Bill. It contains a number of minor technical amendments to the Copyright Act, the Trade Marks Act, and the Trans-Tasman Mutual Recognition Act 1997. It is a Labour bill, and, therefore, we support it.

RAHUI KATENE (Māori Party—Te Tai Tonga) : The Declaration on the Rights of Indigenous Peoples has a very clear statement in article 31 about the interest that we hold as indigenous peoples in the concept of a trademark. It says: “Indigenous peoples have the right to maintain, control, protect and develop their intellectual property over such cultural heritage, traditional knowledge, and traditional cultural expressions” and that “in conjunction with indigenous peoples, States shall take effective measures to recognize and protect the exercise of these rights”. An overwhelming majority of nations—143 countries—adopted this declaration on 13 September 2007. Just last Friday, Australia added its endorsement—a move that the Māori Party is greatly heartened by. The only countries to sit outside on the issue of indigenous rights are Canada, America, and Aotearoa, but we are hopeful that this Government will address that appalling lack of confidence demonstrated by the previous administration. Why would we not want to keep up with the advances across the world, as, indeed, is expressed in this Trade Marks (International Treaties and Enforcement) Amendment Bill?

The amendments before the House tonight are specifically to update our legislative framework within the Trade Marks Act and Copyright Act to be in line with the agreements and protocols already mentioned by other speakers: the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, and the Singapore Treaty on the Law of Trademarks.

These protocol documents establish an international registration regime and a classification system for trademarks, and it is extremely positive that this Parliament will be giving effect to commitments that are consistent with international practice. There are some pressing reasons for us doing so. This bill responds to the growing problem around the globe that represents a burgeoning market for the manufacture, distribution, and sale of counterfeits. The bill will require the Ministry of Economic Development and the Customs Service to enforce the criminal offence provisions related to counterfeit goods and pirated works.

Why is this so important? Clearly, the existence of counterfeits undermines the viability and profitability of legitimate businesses. But for many businesses the compliance cost to register trademarks often prevent them from taking action to protect their unique brands—their logos, their slogans, their marketing edge. The amendments in this legislation will help to make it easier for consumers to recognise the given quality of a particular business, while also enabling that trader to protect its unique goods and services.

I want to focus on this issue of “the unique quality” as it pertains to indigenous peoples. Just as the Madrid, Nice, and Singapore treaties have advanced international trademark protection, the World Intellectual Property Organization, or WIPO, has been progressing great innovations in indigenous models to protect indigenous knowledge and intellectual property. Specific protections for Māori traditional knowledge and intellectual property have emerged within indigenous declarations on cultural and intellectual property, such as the Mātaatua declaration, so it is extremely surprising that this body of work appears to have been overlooked in the evolution of this bill.

This is particularly concerning in that what has consistently happened to date is that non-indigenous local and overseas businesses have trademarked and exploited Māori images, words, names, etc., and those of other indigenous peoples, to brand themselves internationally, with impunity, because there are no actual laws preventing them from doing so. We have seen a French security firm take on the name “Maori” because it represented a famous rugby team, a Māori tattooed face kit sold on an American Halloween website, and the New Zealand Rugby Union take on the branding campaign of the fearless Māori warrior, complete with the death-defying haka, to promote the All Black team, yet, in the same breath, discard the New Zealand Māori rugby team from the 2009 draw. We have seen Philip Morris use Māori designs on its cigarette packaging, and, as recently as a couple of weeks ago, a Lion Red billboard was spotted in Te Karaka with the slogan “Rangatira liquor”. These are but just a few of the deplorable examples where Māori traditional knowledge and intellectual property have been vulnerable to exploitation. And yet still there is no movement in New Zealand law or policy development, despite the Ministry of Economic Development being very aware of the work, and funding draft model indigenous intellectual property laws for various Pacific nations.

There is a very impressive foundation readily accessible to Parliament through the form of the Māori Made Mark, Toi Iho, which is a registered trademark. We are all looking forward to the insights of the Waitangi Tribunal, which is expected to report back on the Wai 262 claim by the end of the year.

But the message that the Māori Party brings to this debate is to really honour the unique place of tangata whenua within this land by addressing Māori-specific issues of cultural and intellectual protection. The previous Government lacked the political courage to progress protections for Māori traditional knowledge and intellectual property in domestic legislation. This was unsurprising for a Government that had introduced the Foreshore and Seabed Act, rejected the Declaration on the Rights of Indigenous Peoples, and stood by while terror attacks took place in the tribal nation of Tūhoe. But we are in new times, with a new Government and, we hope, a new will to recognise the importance of mana, maintenance, and enhancement.

This is a Government that has been prepared to state in print that it will act in accordance with Te Tiriti o Waitangi—the Treaty of Waitangi. Te Tiriti o Waitangi held up the promise of a strong, unified nation. It is a promise that is best expressed in relationships of mutual respect and of good faith. In essence, this is what is meant by mana-enhancing behaviour—when we give expression to values that are uplifting and enriching. And so this is what we want to see in further iterations of this important legislation—the implementation of sui generis systems, of new systems to protect Māori knowledge. We see this as a solid step towards supporting the Māori partner to the Treaty to once again be distinguished by our vibrant, growing, and prosperous economy, as indeed we were in 1840.

The bill may provide benefits to Māori business owners wanting to apply for trademarks, particularly if they are wanting to trade internationally. It is currently quite expensive and cumbersome to register trademarks, given that it needs to be done separately in each country that a business wants to trade in, so we welcome the relief the legislation offers in that regard.

We want to see Māori-specific indigenous knowledge and intellectual property protection legislation that gives due regard to the unique value of the indigenous brand. We have seen many bills such as this and other amendments to intellectual property laws that express a willingness to sign up to international agreements that protect Western business and the cultural mainstream. What we are now calling for is a proactive approach in supporting Māori intellectual property protections. Where there is a will there is a way, and it seems that the will is just not there yet, but we remain optimistic that the opportunity provided by the select committee process is an excellent way to find the right way to protect Māori traditional knowledge and intellectual property rights.

In order to enable that opportunity to happen, the Māori Party will support this bill at its first reading. Kia ora.

JACQUI DEAN (National—Waitaki) : In speaking to the first reading of the Trade Marks (International Treaties and Enforcement) Amendment Bill, which was introduced by the Minister of Commerce, Simon Power, earlier this evening, I say that the purpose of this bill is to amend the Trade Marks Act 2002 and the Copyright Act 1994. I note that a trademark is a pretty unique identifier, and often a pretty hard-fought-for identifier. A trademark can be anything. It can be a word. In the case of Nike, it looks like a tick but is known as a Swoosh, apparently. It can be a colour, as with Cadbury’s in New Zealand, which fought for the right to use the colour purple. It can be a shape or it can even be a sound, and quite frequently it is.

A trademark allows a business, manufacturer, or a person who has developed an idea, a product, or a service to easily distinguish its products, goods, services, or food from those products or services supplied by other traders. That is, of course, incredibly important to the people who have gone through the development of a product or service, and it is closely defended.

I think about a young designer in New Zealand in recent times, Tamsin Cooper, who was working out of Arrowtown in the South Island and developed some clothing items. She was challenged by another, more established designer—Trelise Cooper—who is also a designer of some wonderful women’s garments. There was a very hard fight for the right to distinguish one product from another. We get a sense that it goes perhaps beyond the trade in those products and right to the heart of who a designer, in particular, is and how that designer feels about his or her product. It is incredibly important not just to New Zealand, and not just to trade, but also to the individual in some instances.

A trademark is used, most importantly, for marketing purposes, to provide consumer recognition that goods, services, or whatever, of a given quality—and that is so very important in the scope of this bill—originate from one particular trader. If we think about products such as cosmetic brands, we see that, for example,a trademarked pot of cold cream can be many hundreds of dollars right down to a knock-off brand, which can go for $4.50 or $5. We are not to know whether it is the same product inside, but traders who have the trademark of the good-quality product will very jealously guard the right to have the exclusive use of that trademark, and so they should.

Trademarks are registered by the Commissioner of Trade Marks, and that is done under the Trade Marks Act. This bill gives effect to the Government’s decisions to accede to treaties administered by the World Intellectual Property Organization. The treaties that the Government is to accede to are the Madrid protocol relating to the Madrid agreement. The Madrid agreement will provide New Zealand trademark owners with the possibility of having their trademarks protected overseas by filing an application for registration of a trademark with the Intellectual Property Office of New Zealand, and designating one or more overseas countries that are also members of the Madrid protocol where protection is sought. Overseas trademark owners will also be able to use the Madrid protocol to protect their trademarks within New Zealand.

This bill also gives effect to the Government’s decision to accede to the Nice agreement, which concerns the international classification of goods and services for the purposes of the registration of trademarks. The Nice agreement provides a classification system for goods and services for the purpose of registering trademarks, which is known as the Nice classification. The countries that are party to the Nice agreement must apply the Nice classification to registered trademarks, although those countries not party may still apply the Nice classification. New Zealand has applied the Nice classification to registered trademarks for a number of years.

This bill will also ratify the Singapore Treaty on the Law of Trademarks. The Singapore treaty aims to make national trademark registration systems more user-friendly and to reduce business compliance costs for trademark owners. That surely has to be good news for those who work so hard in the development of their products. The treaty does those things through the simplification and international harmonisation of national registration procedures. This bill empowers the Ministry of Economic Development and the Customs Service to enforce the criminal offence provisions under the Trade Marks Act 2002 and the Copyright Act 1994 related to counterfeit goods and pirated works.

One of the aims of giving legal protection to trademarks is to prevent producers of low-quality items—counterfeiters—from passing off their products as those produced by well-known, high-quality producers. We only have to think of items of clothing that are very familiar in our own lives, such as the T-shirts that are coveted by our children, or shoes, where there can be a great divergence in quality between branded shoes and knock-off shoes. Clothing is another item. I have already mentioned designers within New Zealand, but there is a vast difference between a quality brand that is made from quality cotton and uses quality cotton in its manufacturing, and a knock-off brand that sometimes uses less than ideal products to make it and will tend to fall apart very quickly. Consumers need protection from that, as do the manufacturers of those trademarked brands.

The productivity and financial viability of our manufacturers, our exporters, and our retailers is being threatened right now by cheap and sometimes unsafe fake products. Of course, that also means that jobs are unfortunately at risk at a time when our New Zealand economy, our workers, and our manufacturers can least afford it. Joining the treaties will help to move New Zealand’s trademarks registration procedures into closer alignment with Australia, and therefore represents a further step towards the Government’s objective of creating a single economic market with Australia. That will also, most importantly, reduce compliance costs for business.

I have spent most of my time talking about the first purpose of the bill. In the remaining time I will mention that the second purpose of the bill is to deter trafficking in counterfeit goods and pirated copyright works by strengthening enforcement provisions. I know that one of my colleagues will fully expand on that provision of the bill. I have pleasure in commending the first reading of the Trade Marks (International Treaties and Enforcement) Amendment Bill, as introduced by Simon Power, to the House.

RAYMOND HUO (Labour) : I rise to support the Trade Marks (International Treaties and Enforcement) Amendment Bill at its first reading. First of all, I thank the Hon Lianne Dalziel and the Hon Judith Tizard for the great work they did to introduce the bill in September 2008. The bill was introduced to address certain deficiencies in New Zealand’s current intellectual property regime and to allow New Zealand to join three international trademark treaties. This bill amends the Trade Marks Act 2002 and the Copyright Act 1994.

This bill has three main purposes: firstly, to enable New Zealand to join three international treaties administered by the World Intellectual Property Organization, including the much-awaited accession to the Madrid protocol; secondly, to enhance the existing enforcement provisions in the Trade Marks Act and the Copyright Act to further deter counterfeiting of registered trademarks and piracy of copyright-protected works; and, thirdly, to address several minor and technical issues within the Copyright Act, the Trade Marks Act, and the Trans-Tasman Mutual Recognition Act 1997.

Under the bill amendments to the Trade Marks Act will allow New Zealand to accede to three important international trademarks treaties: the Singapore Treaty on the Law of Trademarks, or the Singapore treaty; the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, or the Nice agreement; and the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, or the Madrid protocol.

The Madrid protocol is much awaited because it provides a system that simplifies the procedure and reduces the cost for trademark owners seeking trademark protection internationally. It provides a system that allows a trademark owner to have a trademark protected in up to 76 member countries by filing one application for the registration of a trademark through the local trademarks office, designating one or more member countries where protection is sought. The bill introduces amendments to the Trade Marks Act to allow the Madrid system to be implemented in New Zealand through regulations. Among the 76 countries that are currently party to the protocol, most of them are our leading trading partners, including the European community, the United States of America, Singapore, and China.

A 2007 figure released by the World Intellectual Property Organization showed that a record number of international trademark applications were filed—up by 9.5 percent from the same time in 2006. Currently, a New Zealand trademark owner who wishes to protect a trademark overseas must file separate trademark applications in each country and comply with each country’s specific requirements.

Joining the Madrid protocol will mean that New Zealand trademark owners will be able to file international trademark applications by filing a single application for the registration of a trademark with the Intellectual Property Office of New Zealand. The application will be able to select the overseas countries for trademark protection in that single application. Of course, that overseas country must be a party to the Madrid protocol. The advantage is obviously the cost saving. The process of protection under the protocol is also likely to be much faster, as there are strict time limits for intellectual property offices to examine trademark applications under the protocol.

However, there are perceived disadvantages. Simpson Grierson published a very informative paper that stated two such disadvantages. The first one is that accession to the protocol would result in more trademarks being filed in New Zealand, leading to a clogging of the register with trademarks that are not actually in use, in turn making it more difficult for New Zealand businesses to clear a trademark for use. Another concern, or a procedural disadvantage, is in relation to a concept of a central attack, whereby an international application is dependent on the home application or registration for a period of 5 years. If the home application does not succeed or is removed, an applicant’s international application will also fall over.

The protocol currently only partly addresses this issue by allowing an applicant to re-file national applications. It will be interesting to see what more we can debate on this issue at the bill’s second reading and its Committee stage. The Singapore treaty aims to make national trademark registration systems more user-friendly and to reduce compliance cost for trademark owners through the simplification and international harmonisation of national registration procedures.

The Nice agreement governs the international classification of goods and services for the registration of trademarks. A single international classification system will obviously provide efficiencies in respect of monitoring conflicting trademarks and processing pre-filing clearance searches. It is odd to see, however, that although New Zealand has been using the Nice classification system for decades, it is not a party to the Nice agreement.

The second purpose of the bill is to empower the Ministry of Economic Development and the New Zealand Customs Service to play an active role in enforcing the criminal offence provisions for trafficking in counterfeit goods alongside and in cooperation with the New Zealand Police. The importation and sale of counterfeit goods is a growing problem in New Zealand, with the majority of counterfeit goods being sourced from overseas. Since July 2000, the number of counterfeit goods that have been detained by the New Zealand Customs Service has increased by over 400 percent.

The bill amends both the Trade Marks Act and the Copyright Act in order to provide the Ministry of Economic Development’s national enforcement unit, the Customs Service, and the police with standard investigative tools, including the ability to apply for and execute search warrants. Currently, trademark and copyright owners may make a request to the Customs Service for it to detain imported goods at the border if it suspects that those goods infringe the owner’s trademark and/or copyright rights. The poor trademark or copyright owner will then have 10 working days from notification of the detention either to persuade the importer to forfeit the goods on a voluntary basis or to issue court proceedings for infringement. The importer would normally get a letter from the lawyer acting for the trademark or copyright owners.

Hon Simon Power: Come on, Raymond! Throw away the notes! Speak from the heart!

RAYMOND HUO: Of course. Normally, those letters would be worded in legally strong language. Despite that, and especially when the size of the shipment was relatively small, it might not be worth issuing court proceedings. The importer would likely not voluntarily forfeit the goods. Is that right?

Hon Simon Power: That’s right.

RAYMOND HUO: I am very happy to see that members opposite concur. These moves to enhanced enforcement of the criminal offence provisions have been welcomed by trademark and copyright owners and their licensees. Therefore, I commend the Trade Marks (International Treaties and Enforcement) Amendment Bill to the House.

TODD McCLAY (National—Rotorua) : It gives me pleasure to rise this evening to speak on the Trade Marks (International Treaties and Enforcement) Amendment Bill.

Hon Darren Hughes: Briefly.

TODD McCLAY: No, this will not be a brief speech; this is an exciting issue to talk about. It was a bill like this that drove me each morning last year during my campaign in Rotorua to get out of bed, knock on doors, and talk to people of Rotorua so that I could come here and support such an important measure.

Hon Member: And in Miramar.

TODD McCLAY: And in Miramar, most certainly. This is another bill that brings us closer to other countries of the world, and, importantly, to meeting international standards. Indeed, I congratulate the honourable Minister Simon Power on giving this bill priority, and for bringing this measure before the House in such a timely fashion. When I was talking to local people in Rotorua last week, people said that they were not yet sick of hearing about that Minister, Simon Power, and all the good work he is doing for New Zealanders—these important bills he is bringing to us, and the priority he is giving them so that he can deliver them on behalf of New Zealand, thus making New Zealand businesses, manufacturers, and consumers safer in the process. I believe we will hear much more about the Minister in the coming months, as he delivers more for New Zealanders.

Are trademarks, protection of rights, and intellectual property important? Well, there are a large number of counterfeit goods in the world and, indeed, in New Zealand. They have the potential to do great harm to New Zealanders, and, importantly, to local businesses in this country, when they are imported. I am talking here about some of the medicines that we receive advertisements for through email and that we can see on the Internet. People might think such medicines are cheaper and better. In many, many instances, of course, they are not and can do great harm to New Zealanders. Let us also look at bad-quality pirated DVDs that are easily available via the Internet. An unsuspecting New Zealander might think he or she were buying a product that had been produced by the manufacturer and the rights-holder, and would be quite disappointed when that product turned up in the mail.

Hon Clayton Cosgrove: How long did it take you to perfect that accent?

TODD McCLAY: What is a trademark? Very importantly, a trademark is any sign or combination of signs capable of being represented graphically, or distinguishing the good or service of one person from those of another. Examples of this can be found in my electorate, where the people of the wider Rotorua area not only understood my accent last year but also enjoyed it, and voted for it in great, great numbers.

An example of a trademark can be found in Te Puke. Of course, we know Te Puke is the kiwifruit capital of New Zealand. The kiwifruit are big and strong, and they are good. People all over the world want to buy them. The brand, the trademark that is used there, is Zespri. It will come as a shock to members opposite that others in the world grow kiwifruit of inferior quality that do not taste as good, and that they try to pass off as kiwifruit from my electorate under the Zespri name. This does great harm to kiwifruit farmers, who invest large amounts of money, time, and energy. They employ people and create many jobs. These kiwifruit of inferior quality are passed off as Zespri’s fruit, doing harm to Zespri’s business and therefore to the New Zealand economy as a whole.

We also have Fonterra and Anchor butter. We have many fantastic dairy farmers in my electorate, in areas like Reporoa, Rerewhakaaitu, Galatea, Paengaroa, Pongakawa, and many other areas of the electorate where people get up early in the morning and work hard. They are great farmers, they are proud to be farmers, and they produce fantastic products for Fonterra under the brand name of Anchor. Anchor butter, Anchor milk-powder, and many other Anchor products are known all over the world. They are known to be of high quality, to have been produced by hard-working New Zealanders, and to be enjoyed very well in different parts of the world. It will not surprise members opposite, if they have been paying attention, that indeed others in the world produce milk products and try to pass them off under the Anchor brand. They do this so they can get greater funds and piggyback on the back of our farmers’ great names. This bill will help to protect our farmers and to protect Fonterra, and therefore the Anchor brand.

I will tell members opposite about another great product that comes from my electorate, from the town of Rotorua. It will surprise many of them to know that we have a lot of mud in Rotorua, and it is therapeutic. People come from far and wide to enjoy it, buy it, and take it home with them. We have a new hotel that the Prime Minister opened when he was Leader of the Opposition—of course he is no longer Leader of the Opposition but the Prime Minister—and it is the Wai Ora Lakeside Spa Resort. It is a fantastic new hotel in Rotorua, and it is great for tourism. It produces a product that people around the world are already buying and taking home with them. The word is spreading about this product, which does wonders for people’s complexions. We also have the Polynesian Spa in Rotorua, which is another place where people can spend a few enjoyable hours—or days—and buy wonderful mud products to take home. We all know, but of course I have to say, that Rotorua is the geothermal capital of New Zealand. Others would like to say that their mud comes from Rotorua so that they, too, can make money from our great name. This bill will help protect employers and producers in Rotorua.

Trademarks are important because they protect creative rights. I have already mentioned that this intrinsically relates to the registration of trademarks, when they denote intellectual property and personal property rights. This bill allows New Zealand to accede to and ratify three conventions. The first is the Madrid protocol, to enable New Zealand trademark owners to protect their trademarks overseas by filling in an application for registration of that trademark. Then we have the Nice agreement, which provides a classification system for goods and services for the purposes of registering trademarks. Finally, there is the Singapore treaty, named for a wonderful place. I say to the chairman of the select committee that when this bill comes before us we had better go and look at some of these places and see why such wonderful countries get to sign such importantly named bills! The Singapore treaty makes the system more user-friendly. It reduces business compliance costs and, therefore, I suppose, bureaucracy—something that our Government knows much about the reduction of, and something that members opposite care little about.

Once a trademark is registered, the owner has exclusive rights to use that trademark. This means that another person is not permitted to use that trademark, the trademark identification with it, or the trademark as it is clearly identified. Trademarks, of course, can be protected for up to 10 years, and this bill will mean that the protection of trademarks within New Zealand will be recognised in other countries. The treaties before us have previously been consulted on by the Ministry of Economic Development in its international trademark treaties discussion paper. Nine submissions were made and they were all largely supportive. The International Trademark Association, when talking about the Madrid protocol, went into some detail to stress the financial benefits that would be available for New Zealand businesses exporting to at least two or more overseas markets if they were able to use the Madrid system, and, of course, this bill will allow that.

The Madrid protocol, signed by 80 countries, was ratified by only 78. It is a great shame that New Zealand is not on that list. I notice the other two countries that have signed but not ratified are Egypt and Senegal. We are not in the same league as them, but as we look at the other countries on the list, we see that it is right and proper, and fitting, that New Zealand features with them. Eighty-three countries have signed the Nice agreement, and 83 countries have ratified it, and it has entered into force. Of course, New Zealand’s name is not on that list. The first signatures came in 1972. Finally, of contracting parties to the Singapore treaty, 55 countries have signed, including New Zealand, and 11 have ratified, and it has entered into force. Australia is signing in March of this year, and New Zealand, because of the good work of the Minister, Simon Power, and the work that the committee will do, will be one of the next on the list.

I have a moment left to summarise, and I want to tell a very short story for the members opposite. I know they will pay attention as I know they enjoy listening to me.

AARON GILMORE (National) : I rise to talk about the Trade Marks (International Treaties and Enforcement) Amendment Bill. I will take just a few minutes to tell members a little bit about an experience of mine with trademarks. Unlike the members on the other side of the House, I have had some experience with trademarks when importing and exporting products with and without trademarks—

Hon Darren Hughes: What kinds of products?

AARON GILMORE: All sorts of products—cables. I used to operate a business with about 400 staff and $100 million in exports. We used to export cables around the Pacific region. When we recently had the ability to expand into China, about 18 months ago, we ran into some problems. We set up a factory in China, because that was the best way to get our product into China with our own trademarks. We found we had the ability to set up production in China using our own trademarks. It is a global business and a global trademark. General Cable was a multinational firm with a major company logo and trademark that was known all around the world for industrial products. It was all going fine there, and when we came to importing the product from China back into New Zealand we did not have any problems; we imported the product back from China and that worked out quite well. We were importing about $5 million to $10 million a year of product. But we ran into a company that we had never heard of. After about 6 or 7 months that company started importing products, and it was selling about $1 million worth a year, via TradeMe, using a product and a definition that was very, very similar to our company’s trademark. Instead of using the initials GCC, the company used the initials GCE. That is just an example of one of the things that this bill is designed to fix, in many ways.

If we can have a bill like this put in place to solve these sorts of problems, then I think that would be wonderful for New Zealand. I commend this bill to the House, in many ways. If it can save a number of jobs in importing in New Zealand, I think it will be a good thing. Thank you.

• Bill read a first time.

• Bill referred to the Foreign Affairs, Defence and Trade Committee.