This article first appeared in the INTA Bulletin dated September 15, 2017 Vol. 72 No. 16

The Full Federal Court of Australia has held that a trademark application which was defective as a result of the applicant not being the owner of the mark, or lacking an intention to use the mark, cannot be “cured” by means of an assignment to the true owner. Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [May 26, 2017] FCAFC 83.

The facts of this case were set out in an earlier report in the INTA Bulletin.

The parties’ marks are:

The Full Court overturned the first instance finding that an assignment could resolve situations where the applicant was not the owner of the mark and/or did not have the requisite intention to use at the time the application was filed. Its reasoning was as follows:

  • Section 27 of the Trade Mark Act 1995 (the Act) requires an applicant to claim to be the owner of the mark and have either used or intend to use the mark;
  • A trademark application is an “inchoate” right until registered. The Act permits assignment of “a trade mark whose registration is being sought,” not an assignment of the application (emphasis added);
  • Accordingly, the application itself does not serve as a basis to claim ownership of the mark. It is the combination of claiming to be the owner and use or intended use which crystalizes ownership at common law; and
  • The introduction by the Act of the assignment of a mark which is the subject of a trademark application, without goodwill, was not intended to undermine the ownership and intention to use requirements or their assessment by reference to the filing date.

The question was whether Mr. Pham could establish ownership in his own name, and an intention to use the IR mark at the filing date. The evidence was that his company met these requirements, rather than he personally, and the later assignment of the mark which is the subject of Mr. Pham’s application to the company was ineffective, as one cannot assign a trademark that it does not own.

The Full Court held that Insight Clinical Imaging (ICI) was the true owner of the IR mark on the basis that the marks were substantially identical and ICI had prior use of the ICI mark for the same services. The finding on substantial identity is particularly important as the Full Court concluded:

  • The test for substantial identity requires a side-by-side comparison of the marks “cognisant of the essential elements.”
  • Essential elements are referred to as “dominant cognitive cues” in the marks and are unlikely to be descriptive elements.
  • The dominant cognitive cues in both the IR mark and the ICI mark were the word “Insight” and “a device which is circular in shape evoking an eye to the left of the word ‘Insight’.”

The Full Court concluded that there was a “total impression of resemblance between the marks” and that the marks were substantially identical. Therefore, ICI, and not Pham Global or Mr. Pham, was the owner of the IR mark.

The Full Court has made clear that defects in ownership or intention to use at the filing date of an application cannot be resolved by an assignment to the “correct” entity.

Further, the decision changes the substantial identity test, focusing on “essential elements” or “dominant cognitive cues” rather than a side-by-side comparison looking for obvious differences. This test is important in many provisions in the Act, and the decision will have an impact not only on ownership issues, but potentially allowable amendments to registered marks, the scope of the defense to infringement afforded by a trade-mark registration, non-use proceedings, assessing acquired distinctiveness, and the tests for honest concurrent use and prior continuous use.