Australia: Trident Appeal – Unity of Purpose sufficient for authorised use of trade mark in corporate group

Last Updated: 21 September 2019
Article by Kathy Mytton and Sean McManis

In Trident Seafoods v Trident Foods Pty Ltd, the Full Federal Court examined the issue of whether use of a registered trade mark by the parent company of the registered owner of the trade mark amounted to an authorised use sufficient to protect the registration from cancellation for non-use.

Background

Trident Foods Pty Ltd (Trident Foods) owns two Australian trade mark registrations for TRIDENT in relation to goods in class 29 including fish and fish products. The TRIDENT brand has been used in Australia in relation to a range of food products since the early 1970s, in particular Asian flavourings and ingredients

Trident Foods is a wholly owned subsidiary of Manassen Foods Australia Pty Ltd (Manassen) who uses the TRIDENT trade marks in Australia.

Trident Seafoods Corporation (Trident Seafoods) wanted to sell its TRIDENT SEAFOOD branded products in Australia. The TRIDENT registrations blocked its application and Trident Seafoods filed applications for non-use removal of the marks. In response, Trident Foods secured acceptance for a subsequent application for TRIDENT relying on the "other circumstances" provisions of s44(3)(b).

The Registrar's delegate was not satisfied that Trident Foods had used the TRIDENT trade mark during the relevant three year non-use period, or had authorised Manassen's use of the mark, but exercised discretion to leave the marks on the Register due to Trident Foods' residual reputation in the trade marks and the likelihood of confusion if they were removed.

Federal Court

The primary judge agreed with the delegate in finding that Trident Foods had not used the TRIDENT trade mark for any fish or fish products. Her Honour found that Trident Foods could not rely upon any use by Manassen because Trident Foods did not control the activities of its parent company, Manassen. However, she exercised discretion in favour of leaving the TRIDENT registrations on the Register having regard to Manassen's uses of TRIDENT for fish products up until 2007, during and after the relevant non-use period.

Trident Seafoods prevailed in its opposition to Trident's later application. The primary judge found that Trident Foods could not rely on the "other circumstances" discretion because Manassen was the owner and user of the trade mark not Trident.

The Federal Court decision is reported here.

Appeal

The Full Court disagreed with the primary judge and found that use of the TRIDENT trade mark by Manassen was authorised by Trident Foods. This rendered the primary judge's exercise of discretion unnecessary as it resulted in a finding that the trade mark owner had made use of the trade mark sufficient to defend the non-use action. The question is not whether one company controlled the other but whether Trident Foods had control over Manassen's use. In this regard, it was considered sufficient that the two companies had the same directors and the evidence indicated that they operated with a unity of purpose to maximise sales and to enhance the value of the TRIDENT brand.

The opposition was also dismissed as the Court found that there were sufficient circumstances to justify acceptance under the provisions of s44(3)(b). The Court considered that the discretion to accept the application under that provision should be exercised according to the circumstances as they exist at the time of exercising the discretion rather than as at the priority date of the application. At that time, it was known that the blocking application filed by Trident Seafoods could not succeed because the earlier registrations owned by Trident Foods were not being removed from the Register.

This decision may make it easier for companies in a corporate group to establish the existence of control sufficient to maintain a trade mark registration. It remains to be seen whether the "unity of purpose" test can apply to arm's length arrangements. In those circumstances, trade mark owners should ensure that appropriate licence agreements are in place that clearly define the ownership and control of the trade mark.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Shelston IP ranked one of Australia's leading Intellectual Property firms in 2015.

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