How sweet can turn sour: Trade mark joint ownership in Black Star Pastry v Richards (No 2)

The dispute arose when the registered owner of the BLACKSTAR trade mark (Mr Richards) commenced proceedings for infringement against Black Star Pastry (BSP). Things turned sour when BSP sought to cancel the trade mark on the basis that Mr Richards was not the true owner of the trade mark – the mark was jointly owned by two people and incorrectly registered only in the name of one. Judgment in the Federal Circuit Court in favour of Mr Richards was reversed on appeal in the Federal Court.

Key Takeaways

• Both joint owners of a trade mark must be included in an application for trade mark registration.
• Failure to register all joint owners may result in the trade mark application being refused, or the mark being cancelled if it is already registered.
• Businesses should exercise caution when making a trade mark application to ensure that the application includes complete and accurate particulars (including all owners).

Background

BSP is a pastry and bakery business operating in New South Wales. Part of BSP’s business involves the sale/supply of coffee. In connection with its business, BSP owns various trade marks, including “BLACK STAR PASTRY” and various logos incorporating its name (“BLACK STAR PASTRY”, “BLK STR”).

Mr Richards operates a business called “Blackstar Coffee Roasters”, consisting of the roasting and sale of coffee beans. In connection with his business, Mr Richards owns two registered trade marks. One of the trade marks, “BLACKSTAR”, was registered only in his name despite his being a joint owner of the mark with his wife, Ms Andrews.

Mr Richards commenced proceedings against BSP claiming that BSP infringed his trade marks by using BSP’s marks in connection with the supply of coffee. In response, BSP made a cross claim that Mr Richards’ “BLACKSTAR” mark be cancelled on the basis that he is not the owner of the trade mark. BSP claimed that Mr Richards was not entitled to register the trade mark in his name only – Ms Andrews had to be included in the application and subsequent registration.

Justice Downes in the Federal Court noted that this question raised “a novel legal issue for which there is no authority”, namely, the proper construction of section 28 of the Trade Marks Act 1995 (Cth) (TM Act) where only one of two joint owners applies for registration, and the consequences on the validity of its registration.

This case note will specifically detail Downes J’s consideration of this construction question.

Findings

Section 28 of the TM Act provides that:

If the relations between 2 or more persons interested in a trade mark are such that none of them is entitled to use the trade mark except:

• on behalf of all of them; or

• in relation to goods and/or services with which all of them are connected in the course of trade;

the persons may together apply for its registration under subsection 27(1).

BSP claimed that Mr Richards was not entitled to apply for registration of the trade marks on his own, but had to apply together with the joint owner, Ms Andrews.

On this question, the primary judge pointed to the fact that the persons “may together apply” to support the conclusion that joint owners are not both required to apply for registration. It was held that the scheme set out in the TM Act only requires the applicant to claim that they are the owner – any dispute to that claim must then be raised through the mechanisms set out in section 55 or section 88 of the TM Act after the trade mark has been registered. On that basis, since Mr Richards did own the trade marks (in this case, jointly with Ms Andrews), he was entitled to apply for registration on his own.

Downes J disagreed with the trial judge’s approach, holding that the use of the word ‘may’ refers to the fact that registration on the Trade Mark Register is optional – a trade mark owner may apply for registration, but is not required to. On this point, her Honour referred to the decision of Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd,[1] which relevantly held that ownership under the TM Act provides for “registration of ownership not ownership by registration”.

Moreover, Downes J held that the scheme of the TM Act “becomes unworkable” if only one of two joint owners make an application for registration. Her Honour’s reasoning was largely based on the fact that the registered owner of a trade mark is granted statutory rights in connection with the trade mark – the exclusive rights to use the mark and authorise other persons to use the mark, and to obtain relief for infringement of the trade mark. As such, if only one joint owner is registered but the other is not, then the unregistered owner would not enjoy any statutory rights.

This arrangement would suggest that the registered owner would be able to enforce their statutory rights against the unregistered owner. On the contrary, if both joint owners were registered, then the statutory rights granted by the TM Act may be exercised by the joint owners as if they were the rights of a single person. This, to Downes J, is the preferable approach, particularly in circumstances where the TM Act does not make provision for a situation in which only one joint owner is registered.

Her Honour also points out that registration by only one joint owner would be undesirable from the perspective of third parties, since the Register would not reflect the true position of the trade mark (ie, that it is jointly owned). Such a position would be contrary to the purpose of the Register, which is to provide accurate particulars of all registered trade marks.

For the above reasons, Downes J held that Mr Richards was not entitled to apply for registration on his own and that he had to apply with Ms Andrews. On that basis, her Honour ordered that the Register be rectified by cancelling Mr Richards’ trade marks (or otherwise removing them from the Register) as being “at all material times invalid”.

Implications

As mentioned in the judgment, this case was the first time that the question of registration by one of two joint authors has been considered by an Australian court. As such, this decision provides authority for the proposition that all joint owners of a trade mark must be included in an application for registration. Failure to include all joint owners risks the application being refused or the mark being cancelled once it has been registered. More broadly, the decision demonstrates the importance of ensuring that trade mark applications accurately set out the owner (or owners) of the trade mark.

In light of this decision, businesses should exercise caution when making a trade mark application to ensure that the application includes the names of all joint owners and otherwise includes complete and accurate particulars. Failure to do so may result in serious commercial and financial consequences.

You can read the Federal Court’s full decision here.

For more information about trade marks and how you can protect your valuable intellectual property assets, reach out to a member of Addisons’ Intellectual Property team.