Trade Mark Ownership

Trade Mark Ownership

An application to register a trademark under the 1995 Act may only be made by a person who claims to be the owner of the mark. (s27).  The applicant, under s6 of the Act, for the purposes of an application, means the person in whose name the application is proceeding.  One ground of opposition to registration is that the trade mark applicant is not the owner of the mark (S58).

At common law, one of the ways you can obtain property in a trademark is by using it and acquiring a reputation in the mark.  In Australia, establishing ownership of an unused mark derives from a combination of authorship of the mark, an intention to use it upon or in connection with goods or services and the act of applying for the trademark.

Authorship in this context doesn’t mean that the applicant invented it, or that it is particularly novel.  The Applicant need only show that they were the first to adopt it as a trademark for the goods or services.  A person may take another person’s idea or design and apply to have it registered as a trade mark.  The  person who came up with the idea can’t use, as a ground of opposition, the fact it was their idea. On the other hand, if they can establish copyright in the mark, then this is a means by which they can challenge the registration. (see Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd) In this case the Respondent successfully argued that the Applicant’s use of the relevant trade mark in contention would breach the copyright in their original artistic work.   The Respondent had applied to register a composite trade mark which included the words ‘Advantage Car Rentals’, the other features of the trade mark application including a portion of a six pointed star within a polygon-shaped border.  Neither the advertising agency which created the applicant’s trade mark, nor its President authorised or licensed the first respondent or any other company or person other than the applicant to use or reproduce the applicant’s trade mark.  Under s42(b) of the Act an application for a trade mark  must also be rejected if it’s use would be contrary to law, and in this instance the Applicant asserted that the application which breach the provisions of the Copyright Act 1968 (Cth) in that it lead to infringement of copyright in an artistic work under s10(1)(a) over which the Applicant holds copyright.  Section 36 of the Copyright Act provides that the copyright in an artistic work is infringed if a person, who is not the owner of the copyright, does any act comprised in the copyright without the licence of the owner. Section 14 deems acts done in relation to a substantial part of the work to be done in relation to the whole of the work. Section 31(1)(b) provides that copyright in an artistic work vests in the owner the exclusive right, amongst other things, to reproduce the work in a material form and to publish the work. The Court found that the Respondent’s mark was a reproduction of a substantial part of the applicant’s trade mark, and also that use by the respondent of its trade mark would involve publishing it, which is also the exclusive right of the copyright owner.

Where a person copies a mark from a trade mark which is already in use overseas, the first applicant or user of the trade mark within Australia will become the recognised proprietor of the mark for the purpose of registration in Australia.

Often during negotiations with foreign companies, who havn’t used their trade mark in Australia, Courts have held that Australian applicants have an  entitlement to seek registration of the foreign mark in their own name.   It is a case of ‘first in, first served’ and whilst it is considered sharp practise to appropriate a trade mark from a foreign owner of the mark under these circumstances, such a practise is tolerated,  as demonstrated in the ‘Tastee Freez’ case (Aston v Harlee Manufacturing Co. [1960] HCA 47) where the Australian applicant, having registered a mark registered in a foreign country, being the words ‘Tastee Freez’ in respect of iced milk, which had not at the date of application been used in Australia, was held to be entitled to but not the US Trademark was held to be entitled to the Proprietor. Although the Respondent coined the phrase ‘Tastee Freez’ and had many franchises using the mark in various countries, and intended to operate in Australia, it had neither used the trade mark in any way in Australia nor exported goods bearing the trade mark to Australia.  Before the date of his application for registration neither Harlee nor anybody else, including the Respondent, had used the mark in Australia,  so as far as Australia is concerned, the Applicant was regarded as the author or originator of it.

This practice however is not looked upon favourably by Courts who have been sympathetic to foreign owners of trade marks not used in Australia,  and have indicated they are prepared to accept a  minimal amount of use of a foreign trademark ‘as a trade mark‘ by it’s foreign owner in Australia in order to confer ownership upon the foreign trade mark owner.  (see Seven Up Co v OT Ltd).  Such use doesn’t have to be enough so as to create a reputation.   In the Seven Up case, the US company were not however able to successfully obtain rectification of the register under S71 & S72 of the former Trademarks Act 1905-1936.

The High Court of Australia has held that, in the absence of fraud,  an applicant can become the registered proprietor of a trade mark which has been used extensively by a foreign trader for similar goods in another country.   However, this is provided that the mark hasn’t been used at all  in Australia as at the date of the application for registration.   At common law,  the first person to use the trade mark in a country will become the proprietor of a mark there.

For example in Re:  Registered Trade Mark “Yanx”, Thunderbird Products Corp v Thunderbird Marine Products Pty Ltd, the sale of one boat with the relevant trade mark was regarded as sufficient.  Distributing advertising brochures with the trade mark on it, or  even using the trade mark in a price list will also be regarded as sufficient. (Alexander v Tait-Jamieson (1993) IPR 103). Despatching trade marked goods to Australia in response to an order from a potential distributor from Australia will also qualify as use as a trade mark. (Re: Yanx Registrered Trademark; Ex parte Amalgamated Tobacco Corp Ltd (1952) 82 CLR 199).  This latter case arose in a situation where the overseas manufacturer received a request from an Australian consumer and wasn’t deliberately trying to put their product into the Australian marketplace.

In an internet world, the question arises as to when goods are sold over the internet through a website, where does the relevant trade use actually occur?  In Ward Group Pty Ltd v Brodie Stone Plc (2005) 143 FCR 479, the Court held that the relevant trade mark use occurred at the point at which the overseas website operator accepted an offer made by the relevant website.

As stated, due to Courts generally frowning upon this practice,  they are prepared to accept either a very small amount of  use of the mark in Australia by the foreign owner,   or alternatively, take into account whether or not the mark has become associated in the minds of Australians with the foreign owner’s goods because of the effect of extensive advertising in publications circulated in Australia or in some other manner.

There needn’t be an actual dealing with goods bearing the trade mark before there can be local use, namely ‘use of a trade mark’.  Use of a mark in an advertisement of goods in the course of trade will suffice (see  Shell Co. of Australia v Esso Standard Oil (Australia) Ltd(1963) 109 CLR 407)

It is sufficient for ‘use as a trade mark’ if  imported goods that havn’t actually reached Australia have been offered for sale in Australia under the mark.  Preliminary discussions and negotiations without any more about whether or not the mark will be used in Australia however will not be enough.

In the Seven Up case the foreign owners were unable to have the trade mark registration expunged from the register.  The situation would be different if there is some fraud, breach of confidence, or breach of contract arising out of the dealings between the competing claimants.   This underscores the importance of using ‘non-disclosure agreements’ or ‘confidentiality agreements’ in the negotiating phase.

A minimal amount of actual use will suffice to establish ownership, ‘use’ preparatory to actual trading will not suffice. For example in Moorgate Tobacco Co Ltd v Philip Morris Ltd (No. 2) (1984) 156 CLR 414,  the parties were in negotiations over the use of the US foreign mark ‘Golden Lights’ for cigarettes,  however prior to the negotiations being concluded,  an application was made to register the trade mark in Australia.   The US company filed an action in the High Court of Australia,  contending that the mark had been used in Australia.  The owner relied upon the sending of samples and advertising materials of the trade mark to Australia as constituting ‘use’ for this purpose . However the High Court rejected this activity as constituting ‘use as a trademark’.   The use must consist of use in the course of trade or commerce, in accordance with the definition of a trade mark,  and would be fulfilled by something such as an order for goods or an evidence of an intention to use the goods in the course of trade.  One single order or sale would have sufficed to prove  the requisite use.

In Thunderbird Products Corp v Thunderbird Marine Products (1974) 131 CLR 592, mentioned above,  the sending of brochures and forwarding of a loosely assembled boat for mould making by the maker of the boat by a US company to an Australian company amounted to use of the trade mark, even though the prototype was not actually available for sale, but was to be used by the Licensee to make boats from the mould which would be sold in Australia.

Similarly in Settef S.p.A v Rivoland Marble Company, a foreign company’s consignments of their products which beared the trade mark RIVO-LAND prominently, accompanied by brochures and explanatory literature to their Australian distributors, who in turn used the products and samples to promote their sale,  was deemed to be sufficient use to establish their rights of ownership over the trade mark.  Use must be demonstrated in the context of the definition of a trade mark S6(2) & S17.

Proprietorship is conferred on the first user of the mark in Australia, but that proprietorship must be in respect of the “same kind of thing”.   The act relied upon to constitute ‘use’ must be such that it creates an impression that goods of a particular trader are intended to be for offered for sale in Australia.   Invoices and other evidence of sale of goods must be use of the trade mark on the same goods or same kind of goods. Goods of the same kind is a narrower concept than goods of the same description and the goods in question must be of the same nature.

The issue of use of a trade mark in Australia was also dealt with in E & J Gallo Winery  v Lion Nathan Australia Pty Ltd [2010] HCA 15, where the registered trade mark owner had no knowledge that it’s trade marked goods had been sold in Australia, the owner having marked and sold it’s wine overseas. Some of the wine was bought by another party, imported into Australia and sold here.  The defendant argued that this use didn’t constitute ‘use as a trade mark’ in Australia. However the High Court held that use as a trade mark can occur even where a trade mark owner doesn’t make a deliberate decision to put it’s goods into the Australian market or is even aware that sales of it’s marked goods has occurred.  Therefore, whenever an importer sell marked goods in Australia, the owner of the trade mark will be using it in Australia, even where they have no knowledge of this.

The requirement for ownership to be based upon either an identical or substantially identical trade mark in respect of the same goods or services or goods or services of the same kind is demonstrated in the case of Colorado Limited v Strandbags Group Pty Ltd [2007] FCAFC 184. The Court examined the issue of the identity of the trade marks and in the course of doing so, found that the word Colorado, by itself, wasn’t sufficiently identical to the use of the word Colorado in conjunction with a mountain motif which resembled a triangle.  The Colorado case demonstrates to registered trade mark owners that their first use of a registered mark in respect of some goods will not necessarily prevent others from successfully claiming first use, and hence ownership, of the mark in respect of other goods covered by the registration. ‘Goods of the same kind’ may be interpreted narrowly in terms of ownership, so that their first use of a mark for some goods   may not confer ownership of the mark for other similar goods.  The Judge in this case did not consider bags and handbags to be ‘goods of the same kind’ as wallets and purses, so it was necessary to determine who The case also shows that where a word is  used in tandem with a logo, that use may not equate to use of the word mark alone as a trade mark.  Therefore if the trade mark owner’s registration is for the word mark alone by itself, they should be careful to use that work mark alone, otherwise that registration may be open to dispute.

A foreign owner wanting to upset a registered trade mark would therefore need to present evidence of a prior transaction/s which would fall within the definition of ‘use as a trade mark’.

Even without prior use in Australia, even the act of seeking registration of an application of a trade mark may sometimes be evidence of ownership. One type of authorship is where a person creates the mark by inventing a logo, sign or word.  A person can also legitimately adopt the use of a trade mark which is already in use overseas as a means of acquiring ownership of the trade mark in Australia (see Tastee Freeze case above).  The Applicant in that case had found the soft service ice cream in Australia and had endeavoured to enter into licensing agreements with the owner but the negotiations had failed. As it hadn’t yet been used in Australia, he was at liberty to register it.  A United States Company registered and used the term ‘ugg boots’ in America despite the widespread use of the term in Australia.

Once you own a registered trade mark you need to monitor the market to ensure it isn’t being used in an infringing manner, take action if necessary and decide upon the optimal commercialisation strategy.

Disclaimer:  This site is intended to operate purely as an informational  resource, a general overview of intellectual property and other related legal issues arising online.   It isn’t a substitute for professional legal advice from a lawyer certified to provide legal advice in your jurisdiction.  Neither is it intended to create an attorney-client  relationship.   The law varies in each jurisdiction and we do not warrant the accuracy, completeness or usefulness of any material you read here.

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