A common consumer relates to a product based upon the ease, satisfaction, and compatibility satisfaction, which is derived from the use of the product. The different traits of products evolve for a considerable amount of time and later on known as the goodwill of the product. The producers and merchants of different products have to enter into a competitive world for providing the best goods and services to the common consumers. The fierce competition in the market makes it difficult for the merchants and producers to sustain longer in the market.
Sometimes two different companies jointly come together to give a consumer-centric approach. The two companies jointly work for the production goods and services, which they are well-known to produce individually. In order to save the value and reputation of products from Infringement, the joint owners come together with Joint Ownership of Trademarks. The Trademark Act, 1999, provides for provisions related to the Joint Ownership of a Trademark in India. In this article, we will discuss the Joint Ownership of Trademark in India.
What is a Trademark?
A Trademark is a word, symbol, sign, phrases, or words registered for the use of representing the products or services of a company. The illicit use of a Trademark, which is registered, gives the opportunity to the authorized Company to take legal action against the person doing the Infringement of Trademark. The Trademark Registration is the most essential feature of the Company. After the establishment of a Company, Registration of Trademark of the Company with the Registrar of Trademark should be done as early as possible. The Registration of Trademark is valid for 10 years only.
The need of Registration of Trademarks to signify goods and services can be considered a three-prong approach by:
- Helping the customers to identify the source
- Helping the customers to determine the quality
- Helping the customers to make the precise purchasing decision.
It is very imperative to protect the ill-use and Infringement of Trademark. The addition of any of the values to the Trademark of products or services will surely reduce the misuse of Trademark.
What is the Joint Ownership of Trademark?
When more than one entity comes together to be acting as Owner of a Trademark, either for an entity jointly created by both or to share the goods and services produced by both jointly is known as Joint Ownership of a Trademark. Section 24 of the Trademark Act, 1999, prescribes the provision for Joint Ownership of Trademark. The Joint Ownership of a Trademark is termed as a mutual agreement between both the parties or entities to own a Trademark together. The Joint Ownership of the Trademark does not allow anyone of the party or entity to be the absolute owner of the Trademark. The Registration of Trademark will be done in the name of both the parties or entities jointly.
As per Section 18 of the Trademarks Act, 1999, provides that either of the parties or entities while entering into Joint Ownership of a Trademark, needs a principle place of business necessarily in India. In case there is no principal place of business in India, it is mandatory to have any address available for service in India.
The Joint Ownership also witnesses the joining of the economic value of Trademark. The joint of economic value is crucial for each joint owner individually. The profits generated from the business of Joint Ownership should be equally divided between both joint owners as per the terms mentioned in the contract agreement. The balancing of interest should be there between the joint owners, which will help in determining the sharing of responsibility and obligation of each party or entity.
What are the conditions related to the Joint Ownership of Trademark?
The conditions related to Joint Ownership of Trademark are as follows:
- The full name of each joint owner, whether companies or individuals;
- A business name or a trading style is not acceptable as the name of joint owners;
- The trading style or business name is given with the name of joint owners will be recorded separately.
For example, the name of two Joint Owners should be filed in the following manner:
M/s ABC a Company registered under Companies Act, 2013, in India and
M/s XYZ, a Company registered under Companies Act, 2013, in India……are claiming to be Joint Owners of the Trademark.
In case the name of any of the applicants applying for Joint Ownership of Trademark is not mentioned appropriately, the Trademark Examiner can raise the objection. The Trademark Examiner can ask the applicants to file the names properly by submitting a request Form TM-16 for the same.
What are the advantages of Joint Ownership of Trademark?
The advantages of Joint Ownership of Trademark are as follows:
Surety of Usage of Trademark
The Joint Owners registered under the Joint Ownership of Trademark will be responsible for the usage and for the products or services which are provided under the jointly registered Trademark. Hence, no single party or entity who are joint owners of the Trademark, can exercise total control or usage over the registered Trademark. The goodwill generated after the Joint use of Trademark by joint owners can also not have the control of a single party or entity.
Complete Dissolution of Trademark
When there is complete Dissolution of Joint Ownership of Trademark, then any of the single party or entity cannot claim for complete ownership of the jointly registered Trademark. The rights associated with the Joint Ownership should be instantly dissolved and should not be available to a single user for usage. The restriction on usage of jointly registered Trademark will preserve the trust and goodwill of the Trademark, which was generated over the period of usage of the Trademark.
What are the challenges upon the Dissolution of Joint Ownership of Trademark?
The challenges faced upon the Dissolution of Joint Ownership of Trademark are as follows:
- Restriction on use of Trademark by Joint Owners
After the Dissolution of the Joint Ownership of a Trademark, each joint owner is not eligible to use the Trademark for any further use on an individual basis. The conditions mentioned during the time of Registration of Trademark, the rights to use the Trademark are vested in the Joint Owners strictly with a precondition that the Trademark will only be used on a joint basis. The precondition hence, nullifies the single-use of Trademark.
- Assignment of Trademark to another Owner
The Joint Owners of the Trademark, after a mutual agreement between them, can transfer the rights vested in them to either of the Joint Owners to carry forward the business related to the Trademark in earlier joint name. The Assignment of Trademark can be done as per the provisions prescribed under the Trademarks Act, 1999.
- Dissolution of Individual Image and Credits
The Dissolution of Joint Ownership of Trademark will dissolve the individual image, which was generated by the prolonged use of the Trademark. The Dissolution of the image will also dissolve the goodwill of the Trademark. The use of the jointly registered Trademark is prohibited by any single owner unless a clear permission is granted by the Joint Owners of the Trademark. Furthermore, no single owner is used to take any credit of the Trademark. The goodwill or revenue generated by the prolonged use of Trademark is also not slowed to be used by any single owner.
What are the examples of Joint Ownership in India?
The various examples of Joint Ownership are as follows:
- In the year, 2014, the Joint Ownership of Honda and Hero motors came to an end. The name of the Joint Ownership was Hero Honda Motors Limited. After the Dissolution in 2014, the new entity, Hero Moto Corp Limited, was established in India. The newly formed entity carried on the business using the earlier registered Tradename.
- In the year 1999, Ford Motor Company, got the car manufacturing automotive division of Volvo. The Volvo Company had the rights over other automotive divisions such as truck manufacturing business. The selling of car manufacturing to Ford Motor Company caused a sharing of rights associated with Trademark. Hence, the control and use of car manufacturing divisions were given to Ford Motors by Volvo.
- In the year 2001, a joint venture happened between Ericson and Sony. The joint venture was done for the manufacturing of cellular devices. Both the companies’ combined the Trademark respective to their Company for the making of cellular devices, while the companies maintained their separate identities.
Read our article:Grounds for the Refusal of the Trademark Registration
What are the different Case laws related to the Joint Ownership of Trademark in India?
The case laws related to Joint Ownership of Trademark are as follows:
- Case of Elliot Optical Company Limited
For several years the goods or services manufactured and sold under the same Trademark by the applicant partly to certain customers and by opponent partly to certain customers. Hence, in this case, it was held that the Joint Ownership of the Trademark would be refused rightly to both the parties.
- Power Control Appliances vs. Sumeet Machines Pvt. Ltd. [1994 AIR SCW 2760; (1994) 2 SCJ 644: 1994 (2) SSC 448]
The Trademark law states that there can be only one owner and source of one trademark. A single Trademark cannot have two origins. However, in this case, the defendant claimed himself to be the rival of the plaintiff and the joint owner of the Trademark, which is not permissible under Indian Trademark Law. The concept of Joint Ownership of Trademark can never be used in competition or rivalry between each other.
- Gudakhu Star & Label Trade Mark [1990 PTC 216]
In a partnership firm, the names of all the partners should be there on the application, which makes all the partners Joint Owners of Trademark. However, it could be said that all the partners of Partnership Firm are now the owners of the Trademark. The Dissolution of the Partnership will completely dissolve all the rights of all the partners. After the Dissolution, if the partners form a new Partnership, the use of an earlier registered Trademark of old Partnership is not allowed. The new partnership and the partners are not allowed to use the earlier registered Trademark with the old Partnership firm due to a lack of rights.
- Ramappa vs. Monapa [AIR 1957 MAD: ILR (1957) MAD 206]
The High Court of Madras in the case held that the application of the Rectification of Trademark is filed on the basis that the Registration of Trademark was obtained by fraud. Then in such a case, the court should direct the Registrar of Trademark to remove the entry of Trademark from the Register of Trademarks. Hence, the order of the Joint Ownership of a Trademark will also be annulled.
- In re Palmolive Case [(1932) 49 RPC 269, 278]
In this case, the court said that before the Registration of Trademark in Joint Ownership, on the ground that the merchant and the manufacturer are in a joint venture, there must be a clear statement by the joint owners that the goods or services on which the Trademark is to be placed are being passed through the hands of both the owners. For example, the profit shared by the joint owners should be related or connected in the course of business with the registered Trademark.
What role does the finances play Joint Ownership of Trademark?
After the Observation of the global scenario, there are instances that have been emphasized, where the differentiation between the sharing of finances and Joint Ownership has been laid down. The joint owners registered with the Trademark Registry have no assessment of the quantity of rights each party or entity is having over the ownership of the Trademark. The contract or agreement for Joint Ownership of a Trademark will prescribe the conditions which will be necessary to control and quantify financial outcome, which came out from the use of the jointly owned Trademark.
Co-ownership and Joint Ownership of a Trademark is mostly confused between each other. Mostly, it has been seen on various occasions that licensing of rights of different parties to each other acts as a security to safeguard the interests of parties involved in the Ownership.
The introduction of Intellectual Property Rights was seen as a set of rights to protect the vested interests of the owners. The evolution and developments which have taken place all through the era in the mean-time, we now have witnessed various perceptions that require higher threshold of interdependence and belief. The Joint Ownership of Trademark is a result of one such evolution, which has proved to be a multi-faceted advantage for the Intellectual Property industry. Despite having some share of negativity, Joint Ownership of a Trademark is always preferred the suitable way of creating a new face of the Trademark of a single company based on the geographical boundaries. Hence, people now prefer the Registration of Jointly owned Trademark.
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Read our article: Basic Definition of Trademark Registration, Objection and Assignment