The Full Federal Court has clarified the law in relation to trade mark ownership, and in particular whether defects in ownership can be cured by assignment. The outcome has significant implications for trade mark owners, particularly for large corporate groups but also for companies which are effectively the alter ego of the main shareholder.

In the recent Pham Global case, the Full Federal Court held that when a trade mark application is filed in the name of the wrong owner, any subsequent registration has a deficiency that cannot be "cured" (Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83). This underlines the need for careful consideration of which entity or individual should file a trade mark application.

Who can file a trade mark application?

To file an Australian trade mark application, the applicant must claim to be the owner of the trade mark and meet one of the following requirements in section 27(1) of the Trade Marks Act 1995 (Cth):

  • the applicant is using (or intends to use) the trade mark in relation to the relevant goods and/or services;
  • the applicant has authorised (or intends to authorise) another person to use the trade mark in relation to the relevant goods and/or services; or
  • the applicant intends to assign the trade mark to a body corporate that is about to be constituted with a view to the body corporate using trade mark in relation to the relevant goods and/or services.

Care should be taken to ensure that the applicant meets the requirements above before any application is filed.

How is a claim to ownership assessed?

The Pham Global case turned on the question of whether the trade mark applicant was the owner of the trade mark it had applied to register. How is ownership in this context determined?

Where a trade mark is already in use by the applicant before an application is filed, the claim to ownership will be based on first use. However, where the trade mark to be applied for is not already in use, the claim must be based on a combination of the applicant:

  • being the author of the trade mark (not in the sense that it is their original design but rather that they decide to adopt it and file an application);
  • having an intention to use the trade mark or authorise (license) another to use it; and
  • filing the application.

Consider the following example:

  • a company director files a new trade mark application in his own name. A previous trade mark application for the company had been filed in the company's name;
  • the trade mark had been designed on behalf of the company, not the director (although the director was consulted and made decisions about changes to the design);
  • domain names and previous trade marks were owned in the company's own name;
  • no licence from the director to the company can be produced;
  • the company is in fact the first to use the trade mark;
  • after the trade mark application is opposed, the director assigns the application to the company.

This was the factual scenario considered in the Pham Global case. Mr Pham, a company director, filed a trade mark application in his personal name and gave evidence that he intended to license the trade mark to his company. After becoming aware that the trade mark application was to be opposed on the basis that Mr Pham was not the true owner of the trade mark, Mr Pham assigned the trade mark application to the company.

Although Mr Pham gave evidence that this assignment was not related to the opposition, this evidence was not accepted by the trial judge. Rather, the trial judge found that, at the time the application was filed, Mr Pham intended that the company would use the trade mark and the company did in fact use the trade mark. The trial judge also noted that Mr Pham did not pay much regard to the corporate structures under which the business activities were carried out.

Can't I just assign my application or registration to the true owner if it was filed in the wrong owner's name?

No. In the Pham Global case, the Full Federal Court held that, although trade mark applications can be assigned, a deficiency in ownership cannot be overcome by assignment even if the application or registration is assigned to its true owner. This is because:

  • a trade mark applicant's claim to ownership is considered at the time the trade mark application is filed; and
  • only the true owner of a trade mark is capable of assigning the trade mark application.

Unless the Parliament intervenes to change the law (and don't hold your breath expecting any legislative change in the immediate future), the trade mark applicant is in a pickle.

So, what should I do if I think my trade mark was filed in the name of the wrong entity?

As nothing can cure the defect in an application or registration where it is not filed in the name of the true owner, the application or registration will be vulnerable in any opposition or cancellation proceedings.

As a result, it would be prudent to file a new application in the name of the true owner. Ideally, the existing application or registration would also be assigned to the true owner, to avoid the trade mark becoming less distinctive (due to multiple trade mark registrations for similar marks being owned by different entities, which may enable other unrelated entities to also register similar trade marks).

However, expert advice should be sought before doing anything. For example, the timing of any assignment will need to be carefully considered and trade mark searches carried out to determine whether there are any pending applications for relevant marks that will have priority over the new application. An assignment to the true owner during opposition proceedings, or even while an application is pending, could put a potential opponent on notice of an ownership issue.