Registration of ownership. Not ownership by Registration

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The assignment of an international trade mark portfolio requires some project management skills to say the least.

Original documents.  Permissible before registration? Assignor and Assignee (or just the Assignor) signature?  Signatures witnessed?  Authenticated (and what does that mean exactly?)  Apostille.  Consideration. Goodwill.  Power of Attorney.

Certified.  Notarised.  Legalised. …. stupefied?

Fortunately, the requirements for recording the assignment at the Australian Trade Marks Office are relatively straightforward.

Australian Trade Marks Office assignment recordal requirements

The assignment document must include the following information:

  • The name and address of the assignee (new owner).
  • The name/signature and position of the assignor (current owner).  If more than one owner, signatures for all co-owners are required.  An agreement or consent from co-owners must be provided if they are not part of the assignment.
  • The trade mark number(s) to be assigned.
  • Clearly state that it is a full or partial assignment.
  • If a partial assignment, clearly show what is staying and what is to be assigned.
  • An effective date of assignment.

The assignment must be evidenced by a document (no original is required and a mere copy is sufficient) that establishes title.

The documentary evidence will typically be an assignment deed or agreement. However, (provided it includes the information above) the document evidence can also comprise the following:

  • merger document;
  • sale document;
  • simple letter of assignment;
  • probate document in the case of a deceased owner, or death certificate and copy of last will and testament;
  • legislative instrument of transmission; or
  • declaration.

The document does not need to specify consideration.  In fact, commercially sensitive information can be redacted from the document or the matter can be handled via a confirmatory assignment (which deals with the trademark assignment only and includes nothing of the underlying commercial transaction).

With or without goodwill?

NO – is the quick answer to the oft-asked question of whether the Australian Trade Marks Office requires a trade mark assignment to specify goodwill.

However, goodwill warrants special consideration, especially in relation to unregistered rights.  It may not be an issue in recording rights at the Trade Marks Office but the implications of not including goodwill are scrutinised when trade marks are in conflict.

Successive Australian trade mark legislative reform has reflected the trend of the liberalising of the assignment of trade marks.  This changed approach treats trade marks in their own right, that is, independent of any goodwill in a related business.

There are no longer any express limitations on the assignment of trade marks in the Trade Marks Act (1995) (Cth) (the TM Act):

  • Assignment of a pending application is permitted.[1]
  • Assignment may be partial in that it might apply to only some of the goods and services.[2]
  • An assignment may be with or without the goodwill of the business concerned in the relevant goods and/or services.[3]

This superficially makes life easier for commercial lawyers and tax advisors, who naturally make focus more on commercial and fiscal drivers than the esoteric considerations regarding the fragile nature of trade marks as a badge of origin.

The common law position in Australia is that ‘rights to a trade mark are established by use’.[4]  As the Full Court of the Federal Court stated in Accor, the TM Act does not set up '“a Torrens-title” system. It provides for registration of ownership not ownership by registration’.[5]

At common law, no trade mark can be assigned without the goodwill of the business from which it came.

In 2020, the High Court of Australia [6] dismissed Kraft’s application for special leave to appeal against the judgment of the Full Court of the Federal Court[7] which unanimously dismissed Kraft’s appeal against Bega’s successful claim over the rights to use the distinctive yellow lid and a yellow label with a blue or red peanut device in the packaging for its peanut butter products.  Bega was confirmed to be the owner of those rights.

According to the Federal Court, (unlike registered trade marks) unregistered trade marks are not recognised under Australian common law as “a species of property”. What is recognised, and therefore protected under Australian law, is the goodwill or reputation in an unregistered trade mark that has been generated by the use of that unregistered trade mark.

The goodwill in an unregistered trade mark“is inseparable from the business to which it adds value”; consequently, the goodwill in an unregistered trade mark “cannot be dealt with except in conjunction with the sale of that business”.

In a recent decision, Danterr Pty Ltd v Concrete Jointing Systems (Malaysia) Sdn Bhd [2023] ATMO 27 a Delegate of The Registrar of Trade Marks, considered the “outer bounds” of the present law with respect to an assignment of an unregistered trade mark without the associated goodwill.

The case involved an opposition challenging the Applicant’s ownership on the basis of a pre-application assignment that purported to assign a common law trademark without its goodwill.  The assignment also purported to assign copyright in the trade mark, which was not disputed.

The entire dispute thus boils down to a single question (which the Delegate noted appears not to have been directly asked nor answered in the courts or the Australian Trade Marks Office):

Is the purported assignment of a common law trade mark without goodwill perfected at the time an application for registration of that trade mark is filed with this office?

The Delegate dismissed the opposition and said that it is commonplace for an assignment of property to have effect from some date in the future which might be set out in the agreement or by the satisfaction of a condition precedent. One of the conditions was the application for registration of the trade mark. No other mechanism for its transfer without goodwill would have been available under the law.

The Delegate found that at the application date, the Applicant was the owner of the trade mark by the terms of the agreement.  The Delegate added that it would be an odd position for the Applicant to own the copyright in the trademark and yet somehow not be entitled to apply for its registration.

The decisions regarding goodwill illustrate that although the assignment recordal requirements are straightforward in Australia, goodwill requires special consideration particularly as unregistered rights will typically form part of a trade mark portfolio.

For further information, please contact Lance Scott

[1] Section 106(1) of the Act.

[2] Section 106(2) of the Act

[3] Section 106(3) of the Act

[4] FoodChannel Network Pty Ltd v Television Food Network GP (2010) 185 FCR 9, 24 [49](Keane CJ, Stone and Jagot JJ).

[5] Accor (2017) 345 ALR 205, 240 [170] (Greenwood, Besanko and Katzmann JJ), citing PBFoods (1999) 47 IPR 47, 60–1 [78]–[80] (Carr J) (Federal Court)).

[6] KraftFoods Group Brands LLC v Bega Cheese Limited [2020] M41 of 2020

[7] KraftFoods Group Brands LLC v Bega Cheese Limited [2020] FCAFC 65

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