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How powerful are registered trademarks? Just ask the New Zealand Rugby Union

Trademarks can be powerful. If you don't agree, just think of brands like Nike, McDonald's and Mercedes-Benz that rely on their trademarks to define their reputations in the marketplace and to drive consumers to buy their products. Where would they be without their trademarks?

Or, for an even more down-to-earth example, take a look at the New Zealand Rugby Union and their unexpected battle with the New Zealand government over rights to their depiction of a silver fern as a trademark for the All Blacks rugby team.

In 2011, New Zealand Prime Minister John Key decided that it was time to update the design of the New Zealand national flag. In his view, the current flag is too similar to the Australian flag and, being based on the British Union Jack, denotes a time of British rule that is long past. As a replacement, Key's suggested a silver fern on a black background. Of course, it should come as no surprise that Key is a rugby fan and his suggestion was sparked during the 2011 Rugby World Cup.

The All Blacks have used the silver fern as a trademark for the team since 1986 and registered the trademark with the New Zealand Trademark Office 1991 with the words "All Blacks.' Since then, the team has used an easily-recognized depiction of a silver fern branch with the team name in white on a background of black and has vigorously defended it trademark rights.

When Key put together what became known as the Flag Consideration Project and New Zealand began a national discussion about identity, the future, and the possibility of a new flag, government officials met with officials from the Rugby Union to discuss the possibility of using the All Blacks trademark as all or even a part of a new flag design. The problem was that any design that was submitted for consideration and became one of the "final four" to be added to a national referendum would become the property of the "the Crown" and all trademark and other IP rights would have to eb surrendered without remuneration.

Setting aside national pride and other considerations, the All Blacks are a successful rugby club and their use of the silver fern trademark has been very profitable for them. Consequently, the prospect of having to give up their mark and receiving nothing in return made for an easy decision: the Rugby Union informed the New Zealand government that if it chose to use the design they would sue for trademark infringement.

Ultimately, after spending more than $17.6 million on the design and voting process, New Zealand put the issue to a vote earlier this year and the New Zealanders decided to keep their current flag by a margin of 56.6% to 43.2%. Trademark crisis averted.

Why It Matters. Used properly and enforced in a timely manner, trademarks can be a very powerful tool in a business's arsenal. Proper trademark and service mark usage is extremely important. A business may unknowingly be using its mark improperly, which then may undercut the mark's value and jeopardize its registration; as well as jeopardize the ability to prevent other businesses from using a similar mark. Drafting and implementation of trademark usage guidelines is an important first step, but the skillful use of trademark watch services and close worth with an experienced trademark attorney are equally valuable.

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