Can a Trademark be Jointly Owned?

Can a Trademark be Jointly Owned?

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According to section 24 of The Trade Marks Act, 1999, when two or more persons or legal entities come together for creating a joint entity in accordance with goods and services provided jointly by them, then they may be regarded as joint owners of a Trademark. Joint ownership of a trademark is considered as a mutual agreement between the parties of the trademark where all the parties holding the same rights but no one of them should be considered as absolute owner and it should be registered in favour of all the parties as same.

JOINT OWNERSHIP OF TRADEMARK

Joint ownership of a Trademark means when a Trademark is owned by more than one person and all the owners shall have the same rights and liabilities over the mark and no one shall be considered as the absolute owner of the same.

CONDITIONS FOR JOINT OWNERSHIP OF A TRADEMARK

According to section 18 of The Trade Marks Act,1999, either of the parties of the joint ownership must have a place for their business within the territory of India and it would be mandatory for them to have their address for service in India. 

Other than the above-mentioned point another major condition for Jointly Owned Trademarks should be that the trademark must be used jointly in relation to goods and services mentioned in Section 24 of The Trade Marks Act,1999, by all the joint proprietors mentioned in the agreement and shall not be used against each other.

ADVANTAGES OF JOINTLY OWNED TRADEMARKS

1. The joint proprietors shall the responsible for all the goods and services of the trademarks and no single owner shall be responsible for any loss or profit of the same.

2.  No single proprietor can exercise total control over the trademarks as it has joint ownership.

3.  If the owners ever want to dissolute the mark then no one could claim the complete ownership over the same and the rights of them can be dissolved instantly.

CHALLENGES UPON DISSOLUTION OF A JOINTLY OWNED TRADEMARK

1. DISCONTINUATION OF THE USE OF THE MARK AFTER TERMINATION OF THE TRADEMARK BY THE JOINT OWNERS

As per the requirements mentioned in section 24 of The Trade Marks Act, 1999, the mark of a jointly owned trademark could be used jointly only and no proprietors of that joint ownership could use the mark individually. When the matter comes after the dissolution of the trademark then also the mark couldn’t be used by a single person for his personal use.

2. ONE OWNER PURCHASES THE MARK AND LICENSES IT to THE OTHER OWNER

After the termination of the joint ownership of a trademark, the owner can use the mark for his own interest only if all the joint owners give prior permission to one of the owners for using the mark in the joint name in the agreement of the dissolution of the trademark.

As per the general practice, full-fledged licensing is carried out to avoid complexities further. The owners by their mutual understanding could give permission to one of the owners to use the name of the mark by “buy me/buy you” clause. The joint owners could sell/license the mark to a third party by their mutual understanding and will distribute the profit comes from it among them equally.

3. DISSOLUTION OF INDIVIDUAL CREDITS

As it has been previously discussed that not a single owner of a joint ownership of a trademark could use the mark individually, even after termination of that trademark no one of the owners could use the mark for his own benefit unless and until all the owners of the trademark gives proper permission to one of the owners for using that mark for his individual interest at the time of termination of that trademark. Just like a single owner could not use the mark of joint ownership individually, a single owner also could not use the credit that comes from the use of the mark.

JOINT OWNERSHIP OF TRADEMARK AND FINANCES

Joint Ownership of a mark is laid down on the sharing of the finances. All the joint owners of the trademark must have all the rights as an owner and must have all the knowledge about the finances of the mark. All the joint owners of the trademark must have the same share of the finances of the trademark or may have that much amount of share in the finances which were written in the contract of the trademark for joint proprietorship. Sometimes, it has been seen that licensing the rights of each other, acts as a safeguard to the interest involved in the ownership.

PROBLEMS WITH JOINT OWNERSHIP OF TRADEMARK

As a rule, a trademark application is filed and registered in the name of one legal person or one individual entrepreneur. In article 1478 of the Civil Code, a chapter is dedicated to trademarks which states that “a trademark may belong to a legal person or to an individual entrepreneur”. In article 1229, there is also a chapter in the Civil Code which concerns intellectual property in general. This article sets forth that “Exclusive right for the result of intellectual activity or a means of individualization except for the company name may belong to one person or jointly to several persons.” As shown, there is some contradiction between these provisions leaving space for interpretation. For any jointly owned trademark by two or more parties there isn’t any specific procedure or special procedure for the registration of the same. There are some grounds that must be mentioned while the registration of the trademark which are- the addresses of the owners, principal place of business, what kind of business they are running, etc. So we can say that there is no need to fill any special kind of form to file a request for the joint ownership trademark office. The details of all the joint proprietors or joint owners must be mentioned in the form. For making this, they must follow all the requirements mentioned in section 24 of The Trade Marks Act, 1999.

EXAMPLES OF JOINTLY OWNED TRADEMARKS

  • The well-known company ‘Hero Honda Motors Limited’ is a joint trademark between ‘Hero Motors’ and ‘Honda Motors’. The above said companies dissolved their previous trade and came to a joint involvement and made a new entity of India ‘Hero Motor Corp Limited’ in 2014. 
  • VOLVO and FORD MOTOR COMPANY made a trademark in 1999 where VOLVO sold its ‘Car Manufacturing Automotive Division’ to FORD MOTOR COMPANY but the other automotive divisions of VOLVO like Truck, Bus, etc. remained with VOLVO in single ownership. By this VOLVO and FORD MOTOR COMPANY made sharing of rights of trademark.
  • Another example of joint ownership of trademark is made in the year 2001 when ‘Sony’ and ‘Ericsson’, two separate companies make a joint proprietorship for making cellular communication devices but they were maintaining their separate identities during the same.

CASE LAWS ON JOINT OWNERSHIP OF TRADEMARK

1. ELLIOT OPTICAL COMPANY LTD.’S [APPLICATION (1952) 69 RPC 169]

In this case, the manufactured goods were sold directly to certain customers who had a contract between them and some other goods were sold to some different customers who didn’t have any previous contract with the mark. So in this case, the joint ownership could not be valid under section 24 of The Trade Marks Act, 1999, and the joint proprietorship will be revoked.

2. POWER CONTROL APPLIANCES V. SUMEET MACHINES PVT. LTD. 1994 AIR SCW 2760; (1994) 2 SCJ 644: 1994 (2) SSC 448

As per law relating to trademark, the trademark cannot have two origins. In the case of joint ownership, though the number of owners can be more than one, the origin of that particular trademark must be only one. In this case, when the defendant proclaimed himself as a rival of the plaintiff, the joint owner, it was not permissible under the law. Joint ownership cannot be used in rivalry or in competition with each other.

3. GUDAKHU STAR & LABEL TRADE MARK [1990 PTC 216];

In this case, the trademark was the property of one of the partners, and thus became the property of the firm. In other words, all the partners became the owners of the trademark and the copyright. Earlier, contract between the partners has been dissolved. Though they have formed a different partnership using a similar trademark as the previous one, the partners and the firm are not eligible for using the mark due to lack of rights.

4. RAMAPPA V. MONAPA [AIR 1957 MAD: ILR (1957) MAD 206]

In this case, the High court of Madras held that the registration of the mark was obtained by fraud, and the allegations were found as correct, so the application for ratification of registrar must be revoked and the court must direct the entry must be removed from the registration and the registration must be annulled.

5. IN RE PALMOLIVE [(1932) 49 RPC 269, 278]

In this case, it has been laid down that before a mark could be registered in the joint names of the parties to the joint ownership, as engaged in a joint adventure, it must be established that all the goods which would be traded under the name of the mark are to be placed and should pass through the hands of both the parties, i.e. joint owners.

CONCLUSION

In the time of developing India, for the benefit of the economy of the state, the number of trades must be increased. For a single owner, it’s not possible to maintain the trade and he thinks of involving in joint ownership which will be beneficial for the trade and the owner both. According to me the joint ownership of a trademark is a better option for running a trademark and increase the profit that comes from it.


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Sinthia Kundu

Author

Sinthia has incredible writing skills and you will never miss a flow in her writings. Her favourite leisure activity is watching movies. She is also a very humble person. In other words, she is as bright as a new penny. For any clarifications, feedback, and advice, you can reach us at editor@lawcirca.com

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