Trade mark owners who have been assigned a trade mark to rectify a defect in proprietorship should consider filing a new application.

Earlier this year, the Full Court of the Federal Court of Australia ruled that an error on the Trade Marks Register (with respect to the proprietorship of a trade mark) cannot be subsequently rectified by assignment to the correct proprietor. Consequently, any registration resulting from such a purported assignment is invalid.

The case, Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC83, involved two radiology businesses and their Marks, with the Full Court dismissing Pham Global’s appeal against a decision to revoke its trade mark registrations and finding that it infringed Insight Clinical Imaging’s trade marks, and INSIGHT (ICI Marks).

The Full Court’s decision means that existing registered marks that were assigned in order to correct ownership defects may be vulnerable to attack.

Background

Mr Pham is the sole director of the first applicant, Pham Global Pty Ltd, formerly known as Insight Radiology Pty Ltd and initially known as AKP Radiology Consultants Pty Ltd. The change of name from Insight Radiology Pty Ltd to Pham Global Pty Ltd occurred after orders of the primary judge, which were the subject of the appeal in this case, were made.

Mr Pham filed a trade mark application for

(the Mark). Insight Clinical Imaging (ICI) successfully opposed the registration of the Mark before the Registrar of Trade Marks.

Insight Radiology appealed against the refusal and ICI proceeded against Insight Radiology for trade mark infringement, misleading or deceptive conduct and passing off. A cross-claim was made by Insight Radiology that ICI’s marks should not have been registered at all, or without a limitation restricting their use to outside NSW and Tasmania.

The primary judge dismissed Insight Radiology’s appeal, rejected Insight Radiology’s cross-claim and found in favour of ICI. Insight Radiology was granted leave to appeal but its appeals were dismissed.

The Issue of Ownership

One of ICI’s grounds of opposition concerned ownership, in particular, that Mr Pham was not the owner of the Mark and therefore, under section 58 of the Trade Marks Act 1995 (Cth) (the Act) the registration ought to have been refused.

While the primary judge found Mr Pham was not the owner of the Mark and that there was no intention at the time of application that Mr Pham authorise Insight Radiology to use the Mark in relation to Insight Radiology’s radiological services, the primary judge rejected ICI’s contention on the basis that the requirement that the applicant own the trade mark may be satisfied at any time during the currency of the application and that as Mr Pham had assigned the Mark to Insight Radiology, Insight Radiology became the owner of the Mark during the currency of the application. The Full Court, however, found differently on this point.

Section 27(1) of the Act provides that a person may apply for the registration of a trade mark in respect of goods/ services if the person claims to be the owner of the trade mark and either the person is using or intends to use the trade mark in relation to the goods/services, the person has authorised or intends to authorise another person to use the trade mark in relation to the goods/services, or the person intends to assign the trade mark to a body corporate that is about to be constituted with a view to the use by the body corporate of the trade mark in relation to the goods/services.

Based on the wording of this section, the Full Court determined that only a person claiming to be an owner may apply for registration. Such a claim may be justified at the time the application is made either by reason of authorship and prior use or by reason of authorship, filing the application and an intention to use the trade mark. However, if such a claim cannot be established as at the date of application, section 58 of the Act provides an available ground of opposition.

Further, the Full Court commented that sections 106-111 of the Act, which provide the scheme for the assignment of trade marks, pre-suppose that the applicant is the owner of the trade mark and thus able to assign the relevant trade mark. Therefore, if the applicant is not the owner of the trade mark at the time of the filing of the application, the assignment provisions do not assist. At paragraph [40] the Court stated:

where the rights of the registered owner extend back to the filing date of the application, it is essential that the initial applicant on the filing date be the owner of the mark. Otherwise the applicant cannot transfer ownership of the mark by an assignment in accordance with the legislative provisions on and from the filing date ...

Mr Pham was not the owner of the Mark when he made the application, Insight Radiology was. Mr Pham did not intend to use the Mark himself nor to authorise Insight Radiology to use the Mark. Rather, the intention was that Insight Radiology use the Mark in its own right.

The Full Court therefore concluded that Mr Pham could not assign that which he did not own and that nothing which happened after the filing date could cure the deficiency in ownership at the application date.

Practical Implications

The Full Court’s determination that assignment can no longer cure a defect in ownership means that existing registered marks that were assigned in order to correct ownership defects may be vulnerable to attack.

To address this, trade mark owners which have had assigned to them a registered trade mark as a means of correcting a defect in proprietorship would be well advised to consider filing a new trade mark application in the correct name to ensure the registration is valid.

In addition, where a trade mark holding company is the registered owner, adequate agreements must be in place to ensure such ownership is valid.

Finally, prudence must be exercised in all trade mark applications – care must be taken to ensure the applicant is truly the proprietor of the trade mark and has used or has an intention to use or authorise the use of the mark.