While discussing the “superhero” trade mark (here), I had promised to discuss joint TM ownership. In that case, DC and Marvel jointly owned the trade marked word “superhero“.
By “Joint Trade Mark Ownership”, I am referring to two separate entities (not a joint-venture) owning one single mark in the same geographical region over the same kind of products or services.
Actually, I was required to discuss a specific case involving a split in a family and the IP complexities arising out of the subsequent division of the family run restaurant. Instead of dealing with how they would split the kitchen, ingredients and recipes, I felt discussing joint ownership would be a more productive endeavour for both readers and myself.
In this piece, we will solely be attempting to identify the key values at play.
At a later date, we could go into the Indian case laws.
Purpose of Jointly Owning Marks
Imagine a scenario wherein two and only two entities have been using a particular mark for selling their products. Consequently, neither would be able to individually register the mark as the other would be able to successfully oppose registration, given that both parties would have equally legitimate rights over the mark.
Hence, it makes sense for the two entities to jointly register the mark, instead of making it impossible for both parties to enjoy the goodwill associated with the mark.
Some examples of jointly owned marks are:
“Superhero” Owned by DC and Marvel.
“Swiss Army” Owned by Wenger and Victorinox.
Definition of “Trade Mark” and The Single Source Argument
Let us have look at the definition of a “trade mark” in the Trade Mark Act, 1999:
“(zb) ―trade mark‖ means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours;”
The definition gives you a sense that the law only envisages a single source per mark.
The “single source” argument, apart from being merely technical in nature, also argues that having two entities behind one mark could lead to confusion among customers. More on that later.
This “single source” problem arose in the “Swiss Army” case.
Note that the US statute also envisaged a single source per mark.
The US Trade Mark Trial and Appeal Board judgment went around this problem by holding that:
“However, as argued by applicants, where two entities have a longstanding relationship and rely on each other for quality control, it may be found, in appropriate circumstances, that the parties, as joint owners, do represent a single source.”
For holding the above, the relevant considerations were the following:
- For 100 years, neither challenged the other over the rights of the mark.
- For 50 years, they were the only source of pocket knives.
- Both used the same suppliers of materials.
- Same specifications and quality control mechanisms were adhered to.
I find this decision to be slightly dicey because the Board reduced the distinction between entities to merely the quality of the products they produced.
A manufacturing entity is a lot more than just that. For instance, consumers makes purchases not only based on the quality of products produced by an entity, but also a plethora of other factors, such as brand ambassadors, customer service, charity work, stance on social issues, et cetera.
Therefore, it is almost impossible to ascertain if two entities are absolutely identical.
In the case of Marvel and DC owning “superhero”, it was difficult to ascertain the similarity on the narrow point of quality itself, which was used to justify a single source in the “Swiss army” case. But, somehow, it was allowed anyway
Please note that the values attached with allowing for joint ownership are equally valid. I am not claiming that the above problem of impossibility of identicalness is fatal to the cause. Rather, we just need to make a note of the complexities involved.
Dilution as a Result of Joint Ownership; Other Options
If two separate entities own a trade mark, they both can individually license the mark to whomsoever they wish. By doing so, the mark could get diluted, finally ending in demolition of the mark’s trade mark status.
Additionally, readers would like to note that there is a less complicated way of reaching the same ends as joint ownership. This can be done if the two entities form a joint-venture (one entity) and then apply for registration as a joint-venture. This achieves all the ends of joint ownership, without the attached complexities.
At last, let us wrap this up with a quick look at the relevant Indian provision.
Indian Provision on Joint TM Ownership:
“24. Jointly owned trade marks.—
(1) Save as provided in sub-section (2), nothing in this Act shall authorise the registration of two or more persons who use a trade mark independently, or propose so as to use it, as joint proprietors thereof.
(2) Where the relations between two or more persons interested in a trade mark are such that no one of them is entitled as between himself and the other or others of them to use it except—
(a) on behalf of both or all of them; or\
(b) in relation to an article or service with which both or all of them are connected in the course of trade,
those persons may be registered as joint proprietors of the trade mark, and this Act shall have effect in relation to any rights to the use of the trade mark vested in those persons as if those rights had been vested in a single person.”
As stated earlier, I will discuss the Indian case law at a later point.
Image from here.