Joint Ownership Of Trademark; Understanding & Advantages

Joint ownership means where two or more persons have an equal right over a thing or property. Joint ownership of a trademark is where two or more than two entities jointly own a trademark. When two or more entities come together jointly for the goods or services provided by them, they apply for joint ownership of the trademark of the goods or services provided. Where two legal entities jointly act as a proprietor of a trademark, they are said to be the joint owners of the trademark.

Two companies may come together to gain a larger market and consumer base for a product. A company may be good in manufacturing a product while another company may be good at marketing the product. These two companies may come together and establish a joint entity over the product to provide for a better market to the product.

The combination of two companies may prove to be good for both the business and the consumer. These companies may apply for registration of the product by creating a local name to that product which applies in a specific jurisdiction. This local name helps to gain local recognition and local consumer base, thus increasing the demand for the product. When both these companies apply for registration of the trademark of a product together, they get ownership over the trademark as joint owners.

Joint Ownership

The Trademarks Act, 1999 (“Act”) provides for registration of joint ownership of a trademark. Two entities may file an application jointly for registering a trademark. Section 18 of the Act clarifies the jurisdiction of the office of Trade Marks Registry in case of joint applicants. It states that jurisdiction of the office of the Trade Marks Registry for filing the joint application will be the principal place of business of the applicant whose name appears first in the application.

Section 24 of the Act sets out rules relating to jointly owned trademarks. It states that in case of joint ownership, the relation between the joint owners are such that both the persons or entities use the trademark together, but neither of them shall be the absolute owner of the trademark. The trademark shall be registered in favour of both the parties to be held together. Both the entities or parties will have the rights to use the trademark as if those rights are vested in a single person. The joint entities or parties cannot use the jointly registered trademark against each other.

Instances and Cases Of Joint Ownership

• The Hero Honda Motors Limited, which was a joint involvement between Hero and Honda Motors dissolved and a new entity called Hero MotoCorp Limited came into being which carried the business by using the earlier established trademark.
• Volvo sold its car manufacturing division to Ford Motor Company and shared its rights of the trademark when it gave control of its car manufacturing division to Ford Motor Company.
• In the case of ‘Power Control Appliances vs Sumeet Machines Pvt Ltd’, the court held that there could be only one source and proprietor of a trademark. A trademark cannot have two origins. In this case, the plaintiff (the first party to the case) and the defendant (the second party to the case) are joint owners of the trademark. But, the defendant claimed to be the rival of the plaintiff. The court held that this is not permissible in law as the joint owners of the trademark cannot use it in rivalry or competition with each other.
• The ‘Re Palmolive’ case deals with joint ventures. The court held that before the trademark can be registered in joint names of the parties, it must be established that the trademarks pass through the hands of both the parties. It means that the joint owners must be connected in the course of trade of the registered trademark by sharing profits or in any other way.
• In ‘Gudakhu Star & Label Trade Mark’ case, the court held that the trademark is the property of the partnership firm. The trademark was the property of one of the partners and thus became the property of the firm as the partner used the trademark in the label of the firm.

Advantages

Joint ownership over a trademark has certain advantages. Every company aims at providing the best goods and services to maintain its brand value and goodwill in the market. Thus, the companies come together for jointly manufacturing, trading and marketing the goods or products. They acquire joint ownership of the goods or services manufactured and marketed by them. Some of the advantages are-

Joint Usage of the trademark

Since the Act provides that the joint owners cannot use the mark exclusively as their own and they hold the trademark together, there is a surety of usage of the trademark. The joint proprietors of the trademark are responsible for the usage of the trademarks in the goods or services provided by them. But, one owner cannot claim the ownership in the trademark against the other. No single user can claim authority over the jointly owned trademark and exercise total control over the trademark or goodwill generated by them.

Complete Dissolution

In the case where one of the parties of the jointly owned trademark undergoes dissolution, the jointly owned trademark is protected as no single owner can claim complete ownership. All the rights of the joint owners in the trademark are dissolved instantly and shall not be available for the single-use by one of the joint owners. Thus, the goodwill and trust in the trademark used over a period of time are preserved.

Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.