Should I Own My Trademark Or Should My Company?

When it comes to choosing between applying for your trademark under your name or your  company name, there is no set answer that will apply to everyone.  You may need a trademark lawyer to assess your individual situation to help you come to the right decision for your situation. In addition, there have been recent legal decisions around the rightful ownership of a trademark which should be considered.

If you are considering registering a trademark, please contact Mark My Words for advice pertaining to your individual situation and needs.

What Are the Risks of Registering a Trademark Under My Own Name?

Before deciding that the best option is to register a trademark under your own name; by considering the mark as your own personal property, there are many factors you need to be aware of.

If a trademark is not used by the named owner within a specific period of time, it runs the risk of being removed.  If you own the trademark but it is used by your company, it is good business sense to have a licensing agreement drawn up with you as the owner and your company as the user.  This document must be designed correctly and adhered to to ensure your company is seen as an actual authorised user in accordance with the provisions of the Trade Marks Act 1995 (the Act.).  It is not necessarily enough to just have the paperwork in place.

For your company to be viewed an ‘authorised user’ of your trademark you must be exercising quality control around the services/goods being provided under the trademark and/or financial control where the use of the trademark for those services/goods are concerned. It’s important these provisions are reflected in a licensing agreement.  All concerned parties will need to show they’re complying with the provisions outlined in the agreement in order to place them in the best position to avoid being removed due to non-use by a third party.

There also the question of establishing the rightful owner of the trademark to consider – a situation recently put under the microscope by case law.  Often a director of the company (especially when they are the only director), would simply register the mark in their own name and the company would use it; making the assumption the director was entitled to take ownership of the trademark.

However, due to the fact that once a trademark application has been approved, any other party could seek to block the registration on a number of grounds stipulated in the Act during the opposition period (or, after registered another party might seek cancellation on the same grounds) – including a claim the applicant wasn’t the owner of the trademark at the time they filed their application.  This usually occurs when the other party is claiming ownership of the same or similar mark such that they wish the other to be refused or cancelled.

In the recent case of Insight Radiology Pty Ltd v Insight Clinical Imaging Pty Ltd ( [2017] (FCAFC 83), which involved several grounds, the issue of ownership was examined and particularly whether the applicant (Mr. Pham, an individual) was the rightful owner, or whether the trademark was owned by his company at the time the trademark application was first filed.

Mr. Pham lodged a trademark in his own name and then assigned it to his company at a later date. The application was opposed and ultimately the matter was decided by the Trademarks Office; with that decision then appealed.  The Federal Court of Australia issued their decision in 2017 (which considered several factors) and on the subject of ownership ultimately found the application should never have been filed in Mr. Pham’s personal name; that he did not have claim to ownership, rather his company did.

Effectively, Mr Pham made the claim he was the owner of the trademark by filing in his own name.  Ownership is determined by reason of authorship and prior use of the trademark or by reason of authorship, filing the application and an intention to use. In the original opposition the opponent did not succeed on this claim, but it was ultimately reversed by the Full Federal Court Decision.  The court found that although Mr Pham was the trademark applicant, there was no evidence that he authored it or that he intended to use (or authorise any other party to use) the mark.

Even though he did transfer ownership to the company at a later date, it’s now been cemented this doesn’t fix the original filing in his personal name – the ownership regarded by this section of the Act is accepted at the filing date of the application.  Based on the application date, the court found the Mr Pham’s company was the rightful owner of the trademark. Therefore, any subsequent assignment, even if in proper form was not useful because it wasn’t possible for Mr. Pham to transfer ownership of something he did not, at the relevant date, own.

It is therefore important to consider the designer of a trademark.  For instance, if you want to create a logo for a business name:

• Who is paying for the logo? You or your company?
• Which party is overseeing the creation process?
• Are you going to be using the trademark for specific products or services or will your company be using it instead?

In view of the recent legal decisions already stated above, it is now vital applicants consider the true and rightful owner. Just being the sole director of a company does not necessarily equate to you being the trademark owner.

Are There Any Benefits to Registering a Trademark Under a Business Entity or Name?

It is not possible for a business name to own a trademark so if you operate as a sole trader the application would normally be filed in your name.  In a partnership situation, it’s usual practice for the names of all partners to be listed as joint owners of a mark. Later should you decide to incorporate a company, you should then consider transferring ownership to your company or licensing use to it.

The main benefits, may be:

• It removes any doubt around the possibility of opposition based on rightful ownership stemming from your own use and structure (people may still file on the basis they believe you are not the rightful owner as they feel they ). If your company already exists at the time of filing the application, it may be the best option to file the trademark owned by your company. This could be easier to later prove rightful ownership than if filing in your individual name.
• Being able to avoid the expense and requirements involved in setting up a licensing agreement between you and your company, including dealing with the extra paperwork that’s associated with a licensing arrangement and in compliance with the agreement.
• Overall easier to manage.

There are of course reasons you might prefer that your operating company does not ultimately hold the trademark registrations. However, it is critical to ensure the correct person/entity is named at the time of actual filing, even if this is transferred later on.

Is the Cost the Same if I Register Under My Name or My Company Name?

The cost of trademark registration remains the same whether you register a trademark under your name or that of your company, or whether there is a single owner or multiple owners.

issues TO CONSIDER BEFORE DECIDING THE PERSON OR COMPANY TO REGISTER A TRADEMARK UNDER

Besides the issues already discussed, if, for whatever reason, you do not wish for your trading company to own the trademark, think about obtaining advice on holding company structures, which are designed to hold assets. If a more suitable structure was found for your purposes, the holding company would need to license use to the trading company still and should be able to demonstrate it authored the trademark with the purpose of (via license) using it.

Contact Us for Professional Advice

Clearly there are many issues to consider when deciding the ownership of your trademark/s.

Bear in mind it’s not likely that every individual filing a trademark application will have it opposed as was the case of Mr Pham. The core principle of their opposition on the grounds of ownership surrounded the similar trademark they owned versus the one Mr Pham wanted to register. The ownership issue was perhaps not the main focus in the initial opposition (rather the similarity of the marks was the core concern), and, perhaps at the time of opposing it was not thought that Mr Pham versus his company owning the mark would become such a critical factor. The case has certainly brought into light the need to ensure correct claim of ownership as at the filing date; that this cannot be fixed by transferring to the ‘correct’ owner at a later time.

Following the case in question it is being widely advised that clients revise their portfolio to be on the safe side.  Should it be found that any trademarks held were not originally filed by the rightful owner, it would be advisable they file new applications for those trademarks to ensure that the correct owner is named at the relevant filing date.