Joint ownership of a trademark in India
The joint ownership of a trademark is possible within the Indian Legislative framework. However, it represents an unusual construct in that the very concept of a joint ownership is counter to the fundamental purpose of a trademark. A trademark usually serves as a designation of origin from a single entity or person. The usual policy is to have a jointly owned single entity owning the mark. When there is joint ownership of a trademark, however, joint owners of a trademark likely have to account to one another for profits related to the mark. To exclusively license a trademark requires the consent of all the owners of the trademark.
The Law on the Joint Ownership of a Trademark:
a.) The Indian Trade Marks Act:
Section 24 [Clauses (1) and (2)] deals with trademarks that are owned jointly by multiple parties. This section corresponds with Section 24 of the Trade and Merchandise Marks Act, 1958 which provides that two or more persons may be registered as joint proprietors of a trademark. Sub-section (1) prohibits in express terms that “noting in this Act shall authorize the registration of two or more persons who use a trademark independently, or propose so to use it, as joint proprietors thereof.
- The Sub-clause (a) covers the cases of co-partnership and on reading sub-section (2) (a), we see that it applies in the cases where the persons are entitled to use the marks as partner’s and on behalf of all the partners.
- In contrast sub-clause (b) covers the cases of joint adventure, which is not a partnership. However it is very difficult to assess the situations and facts falling with the preview of sub-section 2(b).
b.) Indian Court Decisions:
There are several case laws that discuss the construction of a joint ownership of a trademark.
The first of these cases would be Power Control Appliances v. Sumeet Machines Pvt. Ltd. Here the Court laid down that it was a settled principle of law on trademark that there can be one mark, one source and one proprietor. It cannot have two origins. Therefore where a defendant proclaims himself as a rival of the plaintiff and as owner, it is not permissible in law. Thus a jointly owned trademark cannot be used in rivalry and in competition with each other.
In Re Palmolive, Joint Ventures were dealt with. The Court said that before a mark can be registered in the joint names of a manufacturer and a merchant or selector on the ground that they are engaged in a joint adventure, it must be shown that all the goods upon which the mark is to be placed are to pass through the hands of both the parties. For examples, if the joint proprietors were sharing the profits, all of them would be connected in the course of trade with the trademark.
Who can jointly own a trademark?
There is no legal provision as such that demarcates who can and cannot jointly own a given trademark. As long as they meet the criteria laid down in Section 24 of the Act, they may jointly own a trademark. Therefore, different entities can jointly own a trademark. Some of them include:
Joint Venture Companies:
Naanmlooze Klene & Co the foreign company made an application to register a mark in respect of foodstuffs and food ingredients. The application was opposed by the company’s sole agent on the ground that he suggested the mark and the company was instructed to manufacture goods under the mark solely for him. It was finally held that the facts indicated a joint venture and further that the mark should be registered in joint names.
In the case of Jones TM the rights of the parties upon the termination of a joint venture was discussed. It was held that by the very nature of the condition imposed under section 24, the termination of the joint venture would imply that none of them would be entitled to use the mark independently or to remain as joint proprietors. It was held that when a manufacturer, shipping agent and importer have adopted a combination indicative of the interest of each, no one of them could claim to be entitled exclusively as against the others to that design, when the adventure is put an end to.
Therefore, on cessation of the joint venture, the parties will have to have independent marks to distinguish their own trade and business, if any. The new trademarks will have to be sufficiently distinct and different from the mark used by them earlier during the existence of the joint venture arrangement to obviate any confusion or deception in the minds of the public. In other words, on the termination of joint venture no one party is entitled to register the mark in his own name but the joint registered proprietor can assign the mark. The parties may bring to the notice of the Registrar the termination of the arrangement, so as to enable him to rectify the register in respect of the registered trademark under section 57 of the Act.
In the case of the Gudakhu Star & Label Trade Mark partners in a firm owning a trademark was discussed Partnership firm is not legal entity and therefore the names of all the partners must appear in the application, making them joint applicants. As per the provisions of the Indian Partnerships Act, 1932 partners use the mark on behalf of one another of an artistic label. But when he allows the label to be used as a trademark of the firm, the trademark becomes the property of the firm. The registration in respect of the jointly owned trademarks is granted by the Registrar on submission of proof of relevant agreements specifying the joint adventure. It is possible for the Registrar to impose suitable conditions while granting the application.
The Procedure for Registration of a Trademark to be owned Jointly:
There is no special procedure for the registration of a trademark that is to be owned jointly by multiple parties. What is stressed upon in both the Act and the Rules is the fact that the particulars of all the owners must be mentioned, i.e. their address (principal place of business), the business they carry on etc. Therefore there is no special form to be filed to file a joint ownership request with the trademark office.
The procedure mentioned under Rules 3, 4 and 5 (they help determine the Place of business and the appropriate trademark office for an entity wishing to register their trademark) apply to even to a trademark to be owned by multiple parties. The only specification is that all the parties’ (owners) details must be mentioned in the form. In addition to this they must meet the criteria laid down in Section 24 (in the manner mentioned earlier).
Examples of Jointly Owned Trademarks:
Here are some examples of Jointly Owned Trademarks.
- In 1999, Volvo spun off and sold its automobile division to Ford Motor Company, while retaining other automotive divisions, such as its truck business. As a result, Volvo then had to divide its VOLVO trademark rights between Ford and itself. Volvo needed to continue controlling the VOLVO mark for trucks while giving Ford the right to control the VOLVO mark for cars.
- In a 2001 joint venture between Sony and Ericsson to make mobile telephones, the parties combined their respective trademarks, while maintaining their separate identities.
- Similarly, SABMiller and Molson Coors Brewing Company are presently planning to use a new combined trademark in their joint venture, MILLERCOORS.