Who is eligible to file a trade mark application? And the consequences of getting it wrong!

To obtain registered trade mark rights under the Trade Marks Act 1995 of Australia (the Act), the applicant must meet the ownership requirements set out under the Act at the time of filing:

• Section 27(1)(a) provides that the applicant must be the owner of the trade mark (except in the circumstance that the mark is to be used by a company yet to be incorporated, in which case the application can be filed by an individual and subsequently assigned).
• Section 27(1)(b) provides that the owner must use or intend to use the trade mark, or authorise or intend to authorise use by another person for the goods and/or services covered by the application (unless it is an application for a defensive or certification mark, in which case the use requirements do not apply).

Who is the owner?

The applicant for registration of a trade mark must be the trade mark owner. This requires the applicant to be the ‘author’ of the trade mark (there is not a high bar to establish authorship), and that no other person has prior rights to the same or similar mark for the same or similar goods and/or services.

As Australia is not a ‘first to file’ country, an owner of prior common law rights resulting from use of the same or similar mark may defeat a claim of ownership by an applicant for registration. The issue of prior rights may arise during examination or opposition of an application, or in revocation or rectification proceedings.

Who is entitled to be the applicant?

In addition to being the owner of the trade mark, the Act also provides that the applicant must be a “person” and this definition includes:

• an individual
• a company
• an incorporated or unincorporated body of persons
• a political body such as government department, or authorities and statutory bodies which are conferred legal personality by statute.

The requirement of this provision is that the applicant must have “legal personality” and for this reason a business name or trading name (whether or not it is registered) cannot be an applicant. Rather, the applicant is the individual or company who owns the business or trading name. Similarly, a trust cannot be an applicant, rather the application is filed in the name of the trustees or trustee company on behalf of the trust. For a company, the applicant is not one or more of the directors but is the company. For partnerships, the trade mark should be filed in the name of each of the partners as joint owners, or the partnership can nominate one partner to hold the trade mark registration on behalf of the partnership as a whole. Some clubs, unincorporated associations, charities and societies do not have legal personality and for such groups filing a collective trade mark may be appropriate.

Other common applicant scenarios

It is not uncommon for trade marks to be registered in the name of IP holding companies. Such companies typically control IP assets for a related group of companies. This may be to limit liability, for tax reasons, to centralise administration of the IP, or to structure asset holdings in a way that facilitates fundraising or investment.

The underlying arrangement is that the IP holding company is the owner of the IP and the applicant for registration of any trade marks. It authorises or licenses use of the trade marks to companies within the group or to third parties, maintaining the necessary degree of control over how the trade marks are used. This is a common structure for multinational companies and also popular for smaller companies with large IP portfolios and global expansion plans.

Another request from business owners is to register the trade marks of the business in his/her own name. This often results from a view that the trade marks are personal property rather than property of the business or for risk minimisation. The first step is to confirm that the business owner is the ‘owner’ of the trade mark, in the sense of being the ‘author’ or first user of the mark, to support filing of the application in the business owner’s name.

It is also important for the business owner to enter into an appropriate license agreement with the company to authorise/license use of the trade mark and maintain the necessary quality control. The aim of the license agreement is to protect the mark from non-use proceedings, as all use of the mark will be by the company and not the business owner. It also protects against the company (as the user of the mark) establishing separate common law rights in the trade mark which may be registrable contrary to the rights of the business owner. This scenario can be problematic if the business activities of the business owner and the company are entwined and demarcation of owner and the authorised user are blurred - the question of ownership of the trade mark can become muddy.

What can go wrong?

IP Australia does not investigate an applicant's claim to ownership unless it obviously appears to be defective, for example if it is a business name or a trust name, in which case the examiner will call for correction. Registration of the trade mark in the name of the applicant is not prima facie proof of ownership and ownership is always open to challenge during the life of the trade mark registration.

Therefore the question of who is the rightful owner of a trade mark and entitled to file an application for registration is a key one. It is important to get this correct as filing with an incorrect applicant can result in an invalid registration, which is unable to be enforced, and its invalidity not able to be rectified. If a trade mark application or registration has been filed in the incorrect owner name, it is important to refile in the correct name, even if this means the loss of an earlier priority date and additional costs. This is the message from the Pham decision below. A 2017 case of the Full Federal Court of Australia, drilled down into this question and illustrates that filing in the wrong name can be irrevocable.

The matter of Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83 (26 May 2017) arose because Mr Pham sought to rely on his registration to object to a competitor using a similar mark. He had filed an application for registration of the trade mark Insight Clinical logo in his own name. Ownership of a trade mark is established by authorship and prior use of the trade mark, or by authorship and filing the application on the basis of use or intention to use. Mr Pham was unable to establish that, at the time of filing, he had authored the mark, that he intended to use it, or intended to authorise any other party to use it.

Mr Pham assigned the trade mark registration to his company in an effort to remedy the situation. However, the court held that the incorrect filing of the application in his own name could not be rectified and so the assignment was also held to be invalid. The reasoning was that at the time of filing the application Mr Pham was not the owner so the application was not correctly filed. Therefore Mr Pham had no valid trade mark rights to assign and the trade mark registration could not be enforced against an infringer.

Take away message

The issue of ownership of a trade mark registration most frequently comes to light during contentious proceedings, such as oppositions, non-use actions or when seeking to enforce the registration against infringers - when the stakes are high. Being aware of these issues, reviewing your trade mark portfolio and discussing any concerns with your trade mark attorney could avoid costly problems.