India: Joint Ownership Of Trademarks

INTRODUCTION

An average common consumer always relates to a product based upon the comfort, compatibility and satisfaction which is derived from the use of the same; these traits evolve over a considerable period of time, and are known as the "goodwill" of the product. The manufacturers and merchants have to endure fierce competition in providing their goods and services to the consumers, which makes it difficult to sustain in the market.

Given the fierce competition, any entity providing goods and services shall always aim at being the best in order to maintain the established goodwill and reputation. Going a step ahead in order to portray consumer centric approach, companies come together to establish themselves as a new joint entity to provide goods and services in collaboration with each other which they're individually well known for in the market. In order to get a local face which is closer and easily acceptable by the local customer base, most entities/business houses come up with a local name which is used as a business name in a particular jurisdiction and hence apply with a joint ownership of Trademark. With the emergence of this new joint entity the companies try to provide goods and services which shall together garner reputation and goodwill based on the established market standards.

As per the TM law, all the joint owners of the trademark will be treated as owner of the TM jointly and no quantification of rights is possible as per the provision of Trademark Marks Act, 1999. Whereas, the financial outcome arising out of the use of jointly used TM, can be quantified, as per the terms & conditions agreed upon while entering in to the said joint ownership.

WHAT ARE JOINTLY OWNED TRADEMARKS?

When more than one legal entity come together to act as proprietor of a trademark, either for a joint entity created by both or to share and act in accordance for the good and services provided jointly by them; they're said to be joint owners of trademark. As per Section 24 of The Trade Marks Act, 1999 - Joint ownership of trademark is a mutual agreement between both the entities/parties to hold the mark together, but neither of them shall be said to be the absolute owner of the mark and the then registered trademark shall be registered in favour of both the parties, held together.

While entering into joint ownership/proprietorship of Trademarks as per Section 18 of The Trade Marks Act, 1999 it has been laid down that the either of the Applicant necessarily needs to have principle place of business in India, and if not then, it would be mandatory for them have their address for service in India.

Apart from the intellectual property, the joint ownership also witnesses' joining of the economic value of the trademark is crucial to each individual joint owner. The proceeds generated from any business from the said joint ownership/venture shall have to be divided equally or as per the terms of the contract agreement. The balance of interest thus established shall also be helpful in determining the obligation and share of responsibility of each individual entity.

NECESSARY GUIDELINES TO BE FOLLOWED WHILE REGISTRATION

As per the Indian Trademark Law, while registration of a jointly owned trademark, description of mention should be given in the following format:

In case of joint owners, the full name of each of the joint owners, whether individuals or companies, is essentially required. A trading style or business name is not acceptable as the name of the joint owners and, if given in addition to the joint owners, such names will be recorded separately.

"M/s XXXXXXXXXXXX, A Company registered in India under the Indian Companies Act, 2013

AND

M/s YYYYYYYYYY, A Company registered in India under the Indian Companies Act, 2013... Are claiming to be the joint ownership of trademarks."

The registered mark shall thereby be used jointly only by all the applicants mentioned in the application.

CONDITION AS TO JOINT USE OF TRADEMARKS:

In a case of jointly owned trade mark, the condition should be "The mark shall be used jointly by all the applicants mentioned in the application"; or

"The mark shall be used only in relation to goods or services with which all the applicants mentioned in Section 24 of the applications are connected in the course of trade with all the joint applicants and it shall not be used against each other.

ADVANTAGES OF JOINTLY OWNED TRADEMARKS

1. SURETY OF USE

The joint proprietors of the jointly owned trademark shall be responsible for the use and for the goods and services provided under the trademark. However, no single user of the jointly owned trademark can exercise total control over the mark or the good will generated from the same.

2. COMPLETE DISSOLUTION

In a case of dissolution of the jointly owned trademark no single owner can claim complete ownership over the trademark; the complete bundle of rights shall be dissolved instantly and shall not be available for single use, thus preserving the generated trust and goodwill of the mark over the period of usage.

CHALLENGES UPON DISSOLUTION OF A JOINTLY OWNED TRADEMARK

1. CLOUD OVER JOINT OWNERS TO EACH CONTINUE TO USE THE MARK AFTER TERMINATION

Upon dissolution of the trademark each joint owner of the mark, shall not be eligible to use the mark any further on an individual basis. As per the conditions mentioned during the time of registration, the rights of use are vested in the owners strictly with the condition precedent that the use of the trademark would be on a joint basis, and thus this nullifies the aspect of single owner using the mark.

2. ONE OWNER PURCHASES THE MARK AND LICENSES IT THE OTHER OWNER

Irrespective of the grounds of dissolution, if both the joint owners of the trademark mutually agree, to transfer the rights vested in them as per the provisions of the Trade Marks Act, 1999 (through assignment), to either of them, to carry forward the business individually under the same joint trade-name, the same can be carried out by the conditions mutually agreed upon by them at the time of dissolution.

As per the general practice, full-fledged licensing is carried out to avoid complexities further. However, an option of mutual settlement in private is also open to the joint owners. The parties involved in the joint ownership of the mark can transfer the mark to each other on basis of "buy me/buy you" clauses. Further, the parties together can sell/license/assign the mark to a new party which may be interested to carry out business under the trade-name. These kinds of settlements are seen when the parties have no interest left to completely use the mark upon dissolution. The proceeds from these kinds of transactions are generally shared equally between the parties involved in the joint ownership.

3. DISSOLUTION OF INDIVIDUAL IMAGE / CREDITS

In case of dissolution of a jointly owned trademark, the individual image generated by the prolonged use of the mark shall be dissolved accordingly which would in turn dissolve the goodwill of the mark. No individual owner of the mark shall be allowed to use the mark or any related mark either individually or in association unless clear permission has been given by all the joint owners of the earlier mark. Also, neither of the party shall be individually allowed to take any credit for the mark or the goodwill or revenue generated by use of the jointly owned trademark.

EXAMPLES OF JOINTLY OWNED TRADEMARKS:

  • In 2014, Hero Honda Motors Limited, a joint involvement between Hero and Honda motors was dissolved and a new Indian entity Hero MotoCorp Limited was established which got to carry out business using the earlier established tradename.
  • In 1999, VOLVO sold its Car manufacturing automotive division to FORD MOTOR COMPANY, yet still had rights over all other automotive divisions such as its truck business. This cause called for a sharing of rights of trademark and the hence VOLVO gave control of its car manufacturing automotive division to FORD.
  • In a 2001 joint venture between Sony and Ericsson to make cellular communication devices, the parties combined their respective trademarks, while maintaining their separate identities.

CASELAWS ON JOINT OWNERSHIP

1. ELLIOT OPTICAL COMPANY LTD.'S [APPLICATION (1952) 69 RPC 169]

In the scenario where the goods manufactured, have been sold under a specific mark by the applicant directly to certain customers and partly by the opponent to certain customers, joint ownership of trademark in such scenario shall then be refused.

2. POWER CONTROL APPLIANCES V. SUMEET MACHINES PVT. LTD. 1994 AIR SCW 2760; (1994) 2 SCJ 644: 1994 (2) SSC 448

As per law relating to trademark, there can only be one source and proprietor of one trademark and the trademark cannot have two origins. Hence, when the defendant proclaimed himself as a rival of the plaintiff, the joint owner, it was not permissible under the law. Joint ownership cannot be used in rivalry or in competition with each other.

3. GUDAKHU STAR & LABEL TRADE MARK [1990 PTC 216];

The Trademark was the property of one of the partners, and thus became the property of the firm. In other words all the partners became the owners of the trade mark and the copyright. Earlier dissolution of the earlier partnership had completely dissolved the rights of the partners over the trademark. Though having formed a different partnership and using the trademark similar to the earlier, the partners and the firm are not eligible for using the mark due to lack of rights.

4. RAMAPPA V. MONAPA [AIR 1957 MAD: ILR (1957) MAD 206]

The Madras High Court has held that where the application for rectification of the Registrar was made on the basis that the registration of the mark was obtained by fraud, and it is found that the allegations are correct, the court must direct the entry to be expunged from the register and the order of joint registration should be annulled.

5. IN RE PALMOLIVE [(1932) 49 RPC 269, 278]

It has been laid down that before a mark could be registered in the joint names of the parties to the joint ownership, as engaged in a joint adventure, it must be established that all the goods which would be traded under the name of the mark are to be placed and should pass through the hands of both the parties, i.e. joint owners. For examples, if the joint proprietors were sharing the profits, all of them would be connected in the course of trade with the trade mark.

JOINT OWNERSHIP AND FINANCES

Observing from a global perspective, instances have iterated the where clear demarcation has been laid down between ownership and sharing of finances. All the joint owners of the trademark shall have no quantification of their rights over the ownership of the mark. However, the financial outcome from the use of the trademark can be quantified and be controlled by the conditions laid down and mentioned either in the contract or the agreement for joint ownership. Joint Ownership of trademark is mostly confused with Co-Ownership and hence it has been seen on various occasions that licensing of the rights of the parties to each other acts as an escrow guarantee to safeguard the interest involved in the ownership.

CONCLUSION

The inception of Intellectual Property was seen only to be as a set of rights to safeguard the vested interests of the owners. Given the evolution in the changing course of time and in light of the developments which have taken place all through the era, we now witness various concepts which require higher threshold of interdependence and trust. The joint ownership of trademark is a result of one such evolution which has proved to be a multi faceted boon for the IP industry. Despite having its share of negativity, joint ownership of trademark shall always be the preferred way of creating a new face of the mark of a single company based on the geographical boundaries. The amount of benefit vested shall be a prerogative of the user and the owner of the 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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.