Trade mark ownership is an important consideration for any business.  Ensuring that a business holds all rights to enable it to make full use of its trade mark should be front of mind in any branding consideration.  Unfortunately however, while seemingly obvious, the concept of ownership is sometimes overlooked and can be more complex than originally imagined.  More times than not, issues of ownership come to a head when it is time to apply for a trade mark registration, engage in due diligence to raise funding or sell, or when a business needs to enforce its trade mark rights.  At this point, it may be too late!

Being alive to the complexities of ownership from the moment a trade mark is conceptualised will help to avoid issues down the line.  In this article, we explore some issues which can arise in the context of trade mark ownership and what steps can be taken to avoid future ownership flaws.

Let’s start with the legislation – a very good place to start

The Trade Marks Act 1995 (Cth) (the Act) makes it clear under section 27(1) that an application for registration of a trade mark may be made if the person claims to be the owner of the trade mark.  This raises our first question – how does one claim to be the owner of a trade mark?

The answer has recently been summarised in Viceroy Cayman Limited v Anthony Otto Syrowatka [2021] ATMO 159 (Viceroy v Syrowatka), stating “[i]t is well established that ownership of a trade mark is established either by authorship and prior use, or by the combination of authorship, the filing of the application and an intention to use or authorise use”.  Leaving aside the act of filing the application (because of its self-explanatory nature), we will focus on the concepts of (1) authorship and (2) use.  For the latter, Viceroy v Syrowatka will be used as an illustrative example.

Me, a name I call myself…but can I also call myself the author?

Exploring the terrain of authorship first, it is essential, as part of any brand development exercise, that the author (or authors) of a trade mark are able to be pin-pointed.  In some cases this will be an internal employee, in other cases a founder of the business, in other cases a contracted graphic designer and so on.

What is key for any business is ensuring that the person (or persons) who created the trade mark are identifiable and that the business obtains a written assignment of underlying intellectual property rights from that person (or persons).  Without such documentation, in the majority of cases and in the absence of an employer/employee relationship, the individual author will retain ownership rights in the trade mark.  This is particularly important if the trade mark contains graphic elements or is part of the business’ get up.  Even font designs can attract specific intellectual property rights.  Failure to secure an assignment means the business will not be entitled to claim that it is the owner of the trade mark.

The terrain becomes rockier still when authorship extends beyond a person (or persons) and third party software comes into the fold.  Online content creation platforms are easily accessible for consumers, simple to use and in some instances, free.  A professional and modern logo, for example, can be created on platforms in a matter of minutes in most cases.

Despite this ease of creation, businesses must not overlook the fine print associated with using these platforms and importantly, what implication using the platform has on ownership of the content created.  In many instances, where stock-content (including graphics, photographs, images) are used, prohibitions will exist on a business’ ability to claim ownership over the finalised content created and therefore, on that business’ ability to apply to register a trade mark.

Let’s illustrate the concept of authorship with an example.  The founder of a business uses an online content creation platform to develop a new logo.  The logo includes the words “ABC Company” in a stylised font, a blue background and a cartoon image of the world globe which the founder inserted from the platform’s internal graphics library.  If the founder is not an employee of the business and in the absence of a written contract to the contrary, the founder would personally own certain rights in the logo design.  An active assignment from the founder would be necessary to transfer ownership to the business.

To further complicate the situation however, while arguably the founder holds some rights in the logo as a result of their own creativity in the design, the cartoon image is the property of the online platform and the platform would hold intellectual property rights (notably copyright) in the cartoon image.  Unless the platform was willing to assign such copyright to the founder or business, the founder/business will never be entitled to claim authorship over the logo.

These issues notably impact the founder/business’ ability to claim title over the trade mark asset, but importantly also has serious implications on the ability to take infringement action where the same, or similar logo is being used by a third party in the marketplace.

That will bring us back to… “Use”

We now move on to explore the requirement of use.  The key considerations being whether the business which applies for a trade mark registration was the first to use in Australia and if so, whether that use was made directly by the business, or under the authority of the business.  The recent decision in Viceroy v Syrowatka helps to explain the concept.

In this case, the trade mark applicant (Mr Syrowatka) filed an Australian trade mark application for the word “Viceroy” (Application).  Mr Syrowatka was a Director and the General Manager, as well as a 22% shareholder in PT Lembah Maharaja (PLM).  PLM operated a hotel and resort in Bali under the trade name Viceroy, which was promoted in Australia from 2004.

The opponent, Viceroy Cayman Limited (Opponent) took issue with the Application.  The Opponent, together with Viceroy Hotels, LLC, held intellectual property for the Viceroy Hotel Group (VHG) which operated hotels and reports in North America, South America, the Caribbean, and the Middle East under the name Viceroy from 2002.  The Opponent claimed VHG promoted its Viceroy hotels in Australia since commencing operations.  The successful opposition ground which the Opponent relied on was section 58 of the Act, which states that “The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

The Opponent asserted that Mr Syrowatka was not the owner of the Application at the date of filing because

  1. He never used the Application – PLM was the entity behind the Application’s use; or
  2. The Opponent (or its predecessors in title) were the first to use the Application in Australia in relation to hotel services.

In considering the evidence, the Delegate of the Registrar of Trade Marks (Delegate) held that it was unclear as to which of the Opponent or Mr Syrowatka/PLM used the trade mark first in Australia.  The decision therefore focused on whether use by PLM was sufficient to be considered use by Mr Syrowatka.  Mr Syrowatka submitted that PLM was under his control and that there was a unity of purpose between him and PLM.  Mr Syrowatka also submitted that the application was filed in his name as trustee for PLM because he did not want the Australian trade mark to be owned by the Indonesian company, and rather, it was intended to be assigned to an “as yet unincorporated Australian company, that would own and manage the Australian boutique hotel.”.

The Delegate ultimately determined that Mr Syrowatka’s argument of unity of purpose was not persuasive and more so, nothing filed with the trade mark indicated that the Application was held by Mr Syrowatka as trustee.  The Delegate therefore determined that Mr Syrowatka was not the owner of the Application and rather, the owner (based on the evidence before the Delegate) was PLM or a member of VHG, whichever could establish it was first to use the Viceroy trade mark in Australia.

Far, a long, long way to run … but these issues are not to be ignored for far in the future  

If you’ve made it this far down the article, you may be thinking that some of these concepts seem complicated and the complexities of ownership are something you’ll worry about if an issue arises in the future.  Unfortunately this fast-and-loose attitude won’t do you any favours in the land of trade mark registrations.  This is because it is well established that the requirements of ownership must be satisfied at the time the trade mark application is filed, and importantly, a deficiency in any of the ownership considerations cannot be cured at a later date.

What does this mean practically – you have to have your house in order, your ducks in a row, your T’s crossed and your I’s dotted before a trade mark application is lodged.  If there are ownership flaws in the application, the registration will be deemed void, despite any post-application action a business seeks to implement.

Practical takeaways

Ensure that ownership of underlying intellectual property rights in trade marks created for your business (including underlying copyrights, where relevant) are assigned from the person/persons who created, or assisted in the creation of the trade mark.

  • Beware of using content creation platforms and if used, read the terms and conditions to ensure that underlying intellectual property rights in trade marks created are assigned.
  • Carefully consider which entity name a trade mark application should be filed in, including by reference to any use already made of the trade mark and any future intended use.
  • Be aware that there are only limited circumstances where a trade mark application should be made in the name of an individual person as owner if a company or business already exists.
  • If a trade mark application is made in the name of an entity in its capacity as a trustee, make this clear in the application.
  • If your business’ trade marks are used by entities other than the trade mark applicant, ensure that the applicant has sufficient control over such use and document those control measures through appropriate licensing documentation.