When the costs of starting your business begin adding up, it can be tempting to bypass professional input and take seemingly simple tasks on yourself. The infamous DIY approach to business!
In recent years, the number of do-it-yourself trade mark registrations has increased. While on the surface a DIY trade mark may seem cost effective, without the right legal advice a low cost option can quickly become a costly mistake. A common pitfall of the DIY trade mark application is applying for registration on behalf of the wrong person or entity.
A recent decision by the Full Federal Court of Australia highlights the major consequences that can occur from applying for registration of a trade mark in the name of the incorrect person or entity. The outcome of this case not only acts as a warning for new applications, it is a prompt for owners to consider the validity of their existing trade marks.
Pham’s failed filing
The case of Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd  FCAFC 83 saw radiology business Pham Global Pty Ltd fail in its application to register the image mark below for Insight Radiology:
The application was successfully opposed by Insight Clinical Imaging. One of the grounds for Insight Clinical Imaging’s opposition to Pham Global’s mark was that, at the time of filing, the trade mark applicant was not the owner of the trade mark.
Unfortunately for Pham Global, the Insight Radiology trade mark was applied for in the personal name of Mr Pham, as opposed to in the company name Insight Radiology Pty Ltd, which was the rightful owner of the mark. The law is clear regarding how a trade mark application may be made and how the owner of a trade mark is determined. Mr Pham did not meet the criterion and was not the owner of the mark.
Although Mr Pham attempted to rectify the ownership issue by assigning the mark to the company – a common fix for many cases of incorrect ownership – the assignment and trade mark application were deemed to be invalid. The Court determined that the ownership requirement must be satisfied at the time an application is filed and a subsequent assignment will not remedy a defective application.
The legal stuff
Trade marks are governed by the Trade Marks Act 1995 (Cth), under which section 27 outlines how a trade mark application may be made:
(1) A person may apply for the registration of a trade mark in respect of goods and/or services if:
(a) the person claims to be the owner of the trade mark; and
(b) one of the following applies:
(i) the person is using or intends to use the trade mark in relation to the goods and/or services;
(ii) the person has authorised or intends to authorise another person to use the trade mark in relation to the goods and/or services;
(iii) the person intends to assign the trade mark to a body corporate that is about to be constituted with a view to the use by the body corporate of the trade mark in relation to the goods and/or services.
The Court concluded that Mr Pham did not meet these requirements. Mr Pham was not the owner of the mark, he did not intend to use the mark himself, and he did not intend to authorise the company to use the mark. It was intended that the company, Insight Radiology, use the mark in its own right, thereby making the company the owner.
As Mr Pham could not assign something he did not own, the assignment was deemed invalid, and his trade mark application was nullified.
If Mr Pham had correctly applied for the trade mark at the outset he would have faced a better chance of fighting the objection to his mark. As it was, he not only incurred the legal costs of defending his brand but also faced the expense – and loss of goodwill – of changing his brand from Insight Radiology to Pham Global.
The outcome of this matter has broader implications than simply warning new businesses about the importance of correct ownership in trade mark applications. It opens the lid on existing registered trade marks with assigned ownership. If you have assigned a trade mark to another entity to rectify an ownership issue, this may not be valid – leaving your brand vulnerable. In such cases you should consider filing a new application.
What you should do
The Australian trade mark process is becoming more streamlined and publicly accessible, but there are nuances to the process that are easy to get wrong. Start off on the right foot and engage a qualified trade mark attorney to oversee your application. The cost is minimal, particularly when compared to the hefty costs involved with infringement and the risks associated with losing protection for your brand.
Contact us to ensure your brand is protected now and into the future.