When preparing a trademark application, a significant amount of attention is often given to the drafting of the specification of goods and services. Whilst the goods and service classification is important, care should also be taken to ensure all other details contained within the trademark application are correct, including confirming the true identity of the applicant and that it is the actual owner of the mark.
Whilst it might seem innocuous, incorrectly identifying the applicant in a trademark application could have some damaging consequences, including that a registered trademark owner may be unable to enforce its rights in the mark on the basis that it is not the true owner.
The Australian Trade Marks Act 1995 (Cth) (Act) provides that a person can apply to register a trademark if it claims to be the owner of the trademark and it:
- is using or intends to use the trademark;
- has authorised or intends to authorise another person or entity to use the trademark; or
- intends to assign the trademark to a corporation to be incorporated.
The Act sets out grounds on which a trademark can be opposed or revoked, one of which is that the applicant is not the owner of the trademark.
The decision of the Federal Court in PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd  FCA 1078 (PDP v Grasshopper), which was handed down last year, demonstrated that the principles of trademark ownership set out in the 2017 case Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd  FCAFC 83 (Pham v Insight) still apply, namely that ownership of a trademark is determined either by reason of:
- authorship and prior use; or
- authorship, the filing of the application and an intention to use or to authorise use.
Pham v Insight
In Pham v Insight, Mr. Pham applied to register the trademark INSIGHT RADIOLOGY in his own name. The trademark was applied for by Mr. Pham in his own name, despite having been designed for and used by his company, Pham Global Pty Ltd (Pham Global). Although Mr. Pham asserted that his intention was always to license the trademark to his company, in practice this was never done.
Mr. Pham subsequently assigned the trademark application to Pham Global, and the application was opposed by the owner of a similar trademark.
The Federal Court held that Mr. Pham did not use or intend to use the trademark himself and, in contrast, it was always intended that Pham Global would use the mark. The Court held that Pham Global was the rightful owner of the INSIGHT RADIOLOGY mark and that only the owner of the mark may actually apply for its registration. On that basis, given that Mr. Pham never owned the mark, he could not validly assign that trademark to Pham Global.
Quite simply, you cannot assign something that you do not own.
Under Australian law, if a trademark applicant was not the owner of the mark at the time the application was filed, then the incorrect ownership cannot be cured by an assignment of the mark to the correct owner, and, unfortunately, the application or registration will be vulnerable, including to opposition or cancellation proceedings.
In light of the decision in Pham v Insight, it is particularly important to consider who the actual owner of a trademark is when applying for trademark registration. This may require lawyers to seek more detailed instructions from the client in relation to their corporate structure, their intended use of a trademark, who designed the mark, and who paid for the design.
Those who consider that an Australian application for a trademark has been filed in the name of the wrong owner should seek to file a new application for the trademark in the name of the correct owner.