Use of a trade mark by a parent company: Battle on the high seas
Assisted by Kristina Tato and Natasha Mustac
In 2018, the Federal Court of Australia issued a decision which caused some uncertainty within the Australian trade mark community as to whether a registered trade mark owner could rely on use of its trade mark by a parent company to defend an application for removal filed against its trade mark on the grounds of non-use. The recent Full Federal Court decision in Trident Seafoods Corporation v Trident Foods Pty Ltd (2019) 143 IPR 1 has provided clarity and resolved any uncertainty on this issue.
Trident Foods Pty Ltd (Trident Foods) is an Australian company and the registered owner of the TRIDENT trade mark in Australia. Since the early 1970s, the TRIDENT trade mark has been used on a variety of products. Historically, these products were closely connected with Asian flavours and ingredients including savoury sauces, dried fruits, canned soups, coconut cream, milk and noodles.
In 2000, Trident Foods was acquired by Manassen Foods Australia Pty Ltd (Manassen) and since the acquisition, sales of the goods sold under the TRIDENT trade mark have been undertaken by Manassen, and not Trident Foods. However, up until 3 November 2017, there was no formal licence agreement between Manassen and Trident Foods regarding use of the TRIDENT trade mark by Manassen.
On 7 May 2013, Trident Seafoods (Trident Seafoods) who claims to be ‘the largest vertically integrated seafood distributor in North America’, filed an application with the Australian Trade Marks Office to register the Trident Seafoods following trade mark in Australia.
The trade mark application was filed by Trident Seafoods in respect of the following goods: Class 29: Seafood; processed seafood; edible oils; edible fish oils; nutritional oils for food purposes; edible oils and edible fish oils for use as ingredients in foods and beverages.
During examination, the registration of the Trident Seafoods application was blocked by three prior registrations owned by Trident Foods for the TRIDENT trade mark.
Initially, Trident Seafoods sought consent from Trident Foods to the registration of the Trident Seafoods application, however Trident Foods refused. What could be seen as an act of retaliation, Trident Seafoods filed applications for the removal of the three prior TRIDENT registrations on the grounds of non-use. Trident Foods opposed the non-use applications and the matter was heard by a delegate of the Registrar.
The First Instance Decision
In the first instance, the delegate found that Trident Seafoods had established grounds for removal of the TRIDENT trade marks. The delegate removed one of Trident Foods’ prior marks but exercised her discretion to not remove the remaining two marks from the Register. Trident Seafoods appealed the decision to the Federal Court of Australia in relation to those marks that remained on the Register.
To add another layer to the dispute, in July 2014 Trident Foods had filed a new application for the trade mark TRIDENT, which was opposed by Trident Seafoods
At the appeal, the primary Federal Court judge, Justice Gleeson, sided with the delegate and agreed that the TRIDENT trade mark had not been used within the relevant non-use period in respect of the applied for goods. While the trade marks were ultimately not removed from the Register using discretionary powers, it was nonetheless found that Manassen’s use of the TRIDENT trade mark had not been authorised by Trident Foods due to the lack of a written licence agreement and that it’s use of the TRIDENT trade mark was not “under the control of” Trident Foods.
Justice Gleeson’s decision caused some concern amongst members of the trade mark community as it is common practice for related entities to use one another’s trade marks without a formal written licence agreement being in place.
However, on appeal to the Full Federal Court the question was not whether one company controlled the other, but whether Trident Foods (even though Trident Foods was a wholly owned subsidiary of Manassen), had control over Manassen's use of the TRIDENT trade mark.
In concluding that Manassen was an “authorised user" of the TRIDENT trade mark, the Full Court observed that:
- from the evidence, it must be inferred that Trident Foods and Manassen operated with a "unity of purpose", whereby Trident Foods held the trade mark and Manassen sold the TRIDENT branded products, thereby Manassen was using the trade mark;
- Trident Foods had control over Manassen's use of the TRIDENT trade mark on the basis that it owned the trade mark, and its directors (also Manassen's director) must have a common purpose of maximising sales and enhancing the value of the brand;
- on the basis that Trident Foods and Manassen were related entities, had shared common directors and shared processes between the trade mark owner and the user, it should not come as a surprise that there was no formal licence agreement;
- the fact that every product bearing the TRIDENT trade mark sold by Manassen stated that TRIDENT was the registered owner of the trade mark supports an inference of control by Trident Foods; and,
- given the corporate relationship between Manassen and Trident Foods it was inconceivable that Manassen was using the TRIDENT trade mark without the knowledge, consent and authority of Trident Foods.
In light of the above, the Full Court held that Manassen was using the TRIDENT trade mark as an “authorised user" under the control of Trident Foods, and on this basis, the TRIDENT registrations should not be removed from the Register, providing reason and clarity to the Australian trade mark community. Trident Foods was also successful in defending the opposition filed by Trident Seafoods against a new application for the trade mark TRIDENT.
Implications for Brand Owners
This dispute highlights the importance of Australian brand owners to ensure that any third party trade mark use is authorised with clear evidence of control by the registered trade mark owner, as opposed to relying on an informal or unwritten licence arrangement. While on this occasion, Trident Foods was successful in retaining its trade mark registrations, having a written trade mark licence is advisable, even between related entities.
If you have any questions relating to any of the information in this article or you would like assistance with your own trade marks or documenting IP licensing agreements, please do not hesitate to get in touch with Coleman Greig’s Intellectual Property lawyers today who would be more than happy to assist.