Once a trade mark has been registered in Australia, it must be used by its registered owner to prevent it from becoming vulnerable to removal for non-use. Authorised use of the mark by another entity will be taken to be use of the mark by the owner if it is carried out under the control of the owner. If a registered mark is used by anyone other than the registered owner, an exertion of control by the registered owner over the use of the mark is required to ensure the ongoing validity of the mark, generally requiring a licence agreement between the parties and actual control exercised by the trade mark owner.
A 2018 Federal Court decision of Justice Gleeson in Trident Seafoods Corporation v Trident Foods Pty Limited indicated that this amount of control by the registered owner of a mark is required even within corporate groups where one member of the group may have registered the mark and another member of the same group may be using the mark. In this case, the marks of interest had been registered by Trident Foods Pty Ltd, a wholly owned subsidiary of Manassen Foods Australia Pty Ltd but all sales of foods under the marks since about 2000 had been by the parent company, Manassen. A third party, Trident Seafoods Corporation, sought the removal of Trident Foods’ registered marks for non-use, on the basis that they had not been duly used by the registered owner. There had been no formal licence between these related parties during the period in question and Justice Gleeson found that the use of the mark by Manassen had not been under the control of Trident Foods (even though the companies had common directors and the same principal place of business and Trident Foods was identified as the trade mark owner on products supplied by Manassen). Therefore, Justice Gleeson held that the use that Manassen had made of the mark could not be considered to have been use by the registered owner, Trident Foods.
However, the Full Federal Court has overturned this finding on appeal in Trident Seafoods Corporation v Trident Foods Pty Ltd  FCAFC 100. On appeal, the court held that:
- The question was not whether one company controlled the other but whether Trident Foods, even though a wholly owned subsidiary of Manassen, had control over Manassen’s use of the marks.
- The fact that the two companies had the same directors at all relevant times was significant as it meant that the companies operated with a “unity of purpose” (i.e., the directors of both companies had a common purpose to maximise sales and to enhance the value of the brand).
- Evidence provided by one of the directors of the two companies to the effect that she had not needed to give directions to Manassen was found to support this “unity of purpose”. It was held to be unsurprising, given the corporate relationship, the commonality of directors and the shared processes between the owner and the user of the marks, that there was no evidence of actual control by Trident Foods of Manassen in respect of the marks.
- The fact that every packet sold by Manassen had stated that Trident was a registered trade mark of Trident Foods supported the inference of control by Trident Foods of the use of the marks which it owns.
- Given the corporate relationship between the parties, it was clear that Manassen had used the marks with the knowledge, consent and authority of Trident Foods and that Trident Foods’ active consent and authority constituted an unwritten licence for use of the marks.
Taking all of the evidence into consideration, the court held that Manassen’s uses of the marks had been under the control of Trident Foods, and that there had therefore been authorised use of the marks in Australia during the relevant period.
This decision should provide some welcome relief to corporate groups where the registered owner is not always the entity using the mark, in that it confirms that within a corporate group, adequate supervision as opposed to actual control over the use of a mark may be sufficient to maintain validity of a registered mark, if there is “unity of purpose” between the registered owner and the user of the mark with regard to sales and enhancing the value of the brand.
That said, each case will turn upon its own facts and owners of registered trade marks should take steps to ensure that they will always be in a position to demonstrate a reasonable degree of control or supervision over the use of their marks by related companies within their corporate group.
Where a user is not within the same corporate group as the trade mark owner, actual control is still required and trade mark owners are strongly advised to have formal trade mark licences and control mechanisms in place in such situations.
Please contact us if you have any questions.
By Nicky Shanks