Is your business infringing existing intellectual property rights? Do your homework.

A trade mark can be a valuable asset which can help your business to develop a reputation in the market and distinguish your goods and/or services from others. It’s risky, however, to not consider existing third party intellectual property rights before you start to trade.

There would be nothing worse than finding the perfect location, deciding on a business name and launching into trading, only to receive a letter six months later to say that your business is infringing existing third party intellectual property rights, and that you must stop using it immediately. In most situations the only way forward is to re-brand and potentially lose your existing goodwill and customer recognition.

To avoid the cost, delay and potential market confusion that this situation could cause, we recommend that you complete a ‘freedom to operate’ search before you open for business. This will involve searching for existing registered and unregistered intellectual property rights. Registered intellectual property, such as trade marks, can be searched on the Intellectual Property Office of New Zealand (IPONZ) website registers here. Existing unregistered intellectual property rights can be identified using Google or any other search engine.

If your intended name, logo or slogan is not already a registered mark, or not already used in trade by another business, you can apply for registration under the Trade Marks Act 2002. Registration of the trade mark will protect your ownership right in that mark and give you exclusive rights to use and manage the mark in New Zealand. 


Medical grounds for terminating employment – what is the process?

When your employee becomes ill, or has an injury, with long-term effects, it takes not only a toll on them of course, but also on you as their employer as there is sometimes quite a disruption to your business.

How long must you wait for your employee to return to work? Answering this question is not straightforward. Every situation will have its own unique circumstances that will influence timeframes around your staff member returning to work.

If your staff member is unlikely to return within what you consider to be a reasonable time, or is taking long periods of leave for similar reasons, you may be considering terminating their employment. Before making this decision, it’s essential that you undertake a fair and reasonable enquiry – both from a legal standpoint and also to simply be a fair and reasonable employer.

The first step in this enquiry process is to write to your staff member:

  • Explaining your reasons for the enquiry
  • Explaining the possible outcomes,
    such as reduced duties or termination
  • Asking for relevant medical information
  • Offering an independent assessment by another medical professional, and
  • Providing an opportunity for your employee to respond.

Once you have the above information, you should liaise with your employee to establish whether they can return to work full-time or on reduced, light or alternative duties. If, after hearing their response, you believe there is no suitable alternative to termination, you need to provide appropriate termination notice to them.

Your employment agreements should address the entire process from the first sick day to the notice of termination. If they don’t, or if you are unsure, we recommend you talk with us before making any move to talk with your employee. 


Bright-line test extends tax liability: what this means for your residential rental property if purchased to run your business

You are probably now well aware that the bright-line test has been extended to five years.

If you own a residential rental property or a holiday home, changes to the bright-line test may mean you have to pay more tax. The current law came into effect 1 October 2015 and states that if any residential rental property, or a holiday home, is sold within two years of being purchased, you have to pay tax on any profit from the sale. This timeframe has now been extended to residential rental property sold within five years for property purchased on or after 29 March 2018. There’s more detail on how this will work here.

Former residential property purchased for the purposes of running a business may be exempt from the bright-line test if it’s no longer considered to be residential property. If, however, you buy residential property and then convert it into your business premises within the bright-line test period, it may be deemed a sale from you to your business and subject to this tax on that basis.

The bright-line rules are complex and strictly enforced by Inland Revenue. If you’re in any doubt about what to do, please contact us.


Disclaimer: All the information published in Commercial eSpeaking articles is true and accurate to the best of the author’s knowledge. It should not be substituted for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are the views of the authors individually and do not necessarily reflect the view of this firm. Articles appearing in Commecial eSpeaking may be reproduced with prior approval from the editor and credit being given to the source. 

Content Copyright © NZ LAW Limited, 2018. Editor Adrienne Olsen, e. adrienne@adroite.co.nz  p. 029 286 3650