Do you own your trade marks?

The Full Federal Court has recently confirmed that trade marks applied for in the name of the wrong entity or individual will be invalid and open to cancellation.

Ownership issues often arise when:

1. A licensee files an application for a licensor’s mark;
2. The wrong entity within a corporate group is named as the applicant; or
3. An application for a company’s trade mark is made in the name of a director or shareholder.

Owners of trade marks attempting to enforce their rights in a trade mark application that has one of these ownership defects may find that their registration is, in fact, invalid.

What does the Trade Marks Act say?

Under the Trade Marks Act (TMA) the applicant for a trade mark must:

• Be entitled to claim ownership of the trade mark; and
• Currently use or intend to use the mark; or
• Intend to authorise another person to use the mark; or
• Intend to assign the mark to a body corporate that is about to be constituted.

Relevantly, a trade mark may be opposed under section 58, or revoked under section 88, on the ground that ‘the applicant is not the owner of the trade mark’.

Can you fix it if the wrong entity owns the mark?

The short answer is no, you can’t fix an application made by the wrong applicant.  In 2017 the Full Federal Court clarified its position on trade mark ownership in Pham Global.¹ The case involved a trade mark for ‘Insight Radiology’ applied for in the name of an individual, Mr Pham, in 2011. The trade mark was first used in 2012 by Mr Pham’s company, Pham Global. In 2013, Mr Pham assigned all rights in the trade mark to his company.

Relevantly, Mr Pham never intended to use the trade mark himself or licence it to anyone else and the true owner of the trade mark was found to be the company all along. As a result, the key question for the Full Court was whether assigning the trade mark to the company was enough to fix the initial ownership defect. The Court determined that it wasn’t and confirmed the following principles:

• The TMA provides for registration of ownership, not ownership by registration;
• The alternative sources of ownership of a trade mark are: authorship and use before filing an application for registration; or the combination of authorship, filing of an application for registration and an intention to use or authorise use;
• Only a person claiming to be an owner may apply for registration. If the claim is not justified at the time the application is made, the ownership-based grounds of opposition will be available; and
• If the applicant is not the owner of the mark at the time of filing the application, the assignment provisions in the TMA do not assist because they pre-suppose that the applicant owns the mark.

The Court held that, as Mr Pham was not the author of the mark and did not intend to use or authorise anyone else to use the mark, the ground of opposition under section 58 was established. Further, as a necessary consequence, the purported assignment of the trade mark from Mr Pham to the company after the filing date was immaterial.

What does this mean for you? 

The decision in Pham Global means that trade mark applications made in the name of an entity that was not entitled to claim ownership at the date the application was filed will be invalid and unenforceable.

For a valid trade mark, the applicant must be entitled to claim ownership:

• Based on authorship and prior use of the mark; or
• By reason of authorship, filing the application and an intention to use the mark.

Identifying the correct applicant can be difficult, particularly in the context of an evolving business or where trade marks are used across multiple subsidiaries in a corporate group.

We recommend you:

1. Carefully review your trade marks and consider whether the applicant was entitled to claim ownership of the trade mark at the time the application was made; and
2. If ownership issues are identified, immediately refile the application in the correct applicant’s name.

This article was written by Bill Singleton, Partner and Alexandra Trezise, Solicitor.

¹Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 251 FCR 379