Can an Individual Own a Trademark?

Yes.

Perhaps the shortest answer to a question we’ve ever written!

To elaborate though. Any ‘person’ with legal personality can own a trademark, and by legal personality, we mean that could be an individual, it could be a group of individuals under partnership, it could be a company etc. A business name does not have a legal so it cannot own a trademark, but holder of the business name can. So if an individual owns a business name, then you would have the individual filing the trademark application.

What is crucial is that the owner (be that an individual/company or other legal person) of the trademark is the controlling force behind it. Either the owner needs to be demonstrating quality control or financial control around the use of the trademark. Some people make this mistake when filing a trademark application in an individual’s name. For example, where you have sole director businesses. Sometimes the sole director of the business files a trademark in their own personal name, even though they have up a company, and then the company goes off and makes all of the decisions and is effectively the actual controlling force, and potentially the ‘rightful owner’.

For example, the company will pay the bills for the graphic designer or the company will make all of the investments in equipment. So really what’s going on there is the company is the controlling force, and that’s actually a potential mistake for the director to have filed the trademark in his or her own personal name rather than the company’s name. It’s very important, and often difficult to truly appreciate in sole director companies, that the director and the company are two separate legal persons. It’s important to get ownership correct at the filing stage of the trademark application, and if you don’t then that could be fatal, because you can’t remedy this by later transferring the trademark to the ‘correct’ entity; as you can’t assign what you didn’t actually ever own.

There is a reasonably recent case that went to the Full Federal Court that examined this very issue and the fatality of getting it wrong. Basically, the director of a company filed the trademark in his personal name, and it transpired later on that it ought to have been filed in the name of the company. And the trademark was essentially held to be invalid. And because it was found invalid at the time of filing, there was nothing that could be done to remedy that after the fact. The only way to fix this sort of ownership issue is the filing of a new trademark application in the correct ownership.

So, it is clearly important to ensure the right person is named owner in a trademark application. Whilst the above case had various factors and complexities to it, the ultimate judgement cemented the importance of ownership. Even in a situation, unlike the above, where there’s no particular ownership attack or challenge before registration is granted, having an incorrect ownership claim can result in difficulties when you wish to enforce your rights in a trademark against infringers as the alleged infringer might conduct investigation to determine any ownership flaws, in which case may have a counter claim on that basis in the event an infringement action was brought against them.

Another point to be aware of when registering a trade mark in an individual’s name, where the individual may have been a sole trader when filing and therefore certainly the correct owner when filing, is that the trademark should be reviewed if/when the sole trader migrates to a company structure.

If was filed correctly in the first instance in a personal name, if it’s not assigned at the point in which control is transferred from the individual to a corporate entity, then you can have a situation where the trademark registration becomes vulnerable because although it’s being used, it’s not being used by the registered owner being that individual who was originally the owner. The trademark can actually, ironically,  become vulnerable to a non use attack by a third party. So that’s why it’s so important to always be mindful of who is the owner at a given time, because ownership can change even if there’s not a formal assignment. It goes back to the concept of ‘controlling force’ – who is controlling the use of the trademark, the quality of products/services or who has financial control around the trademark etc.

Assuming a trademark application is first filed in the correct entity’s ownership, the owner then has the right to assign that right to another legal person if it wishes to do so. A trademark is a piece of property and can be dealt with accordingly by selling it, licensing it or transferring it etc. A trademark assignment is not a complicated thing in and of itself and it can be a fairly simple document. It can be as simple as a letter of assignment signed only by the assignor, namely the current owner to the assignee. It needs to identify the trademark number, the trademark, the goods and services, and obviously whoever it’s been assigned to. And then it needs to be recorded with the trademarks office, the relevant trademarks office, whether that be Australia or another country or multiple countries.

If the transfer of ownership is part of a larger transaction, for example a business transfer agreement, things can get a bit more complex. Given the complexities in such a case, it is always best to seek advice.

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