Trade Mark Ownership and Arrangements with Graphics Designers

It is a common scenario.  You have had a logo prepared for your company, and having been through several rounds of changes with your designer, you are finally happy with the design.  You are now looking to have a trade mark application filed in respect of the logo.

But wait… some key considerations when looking to file a trade mark (and particularly a logo trade mark), will be as follows:

1. Whom (or which entity) is to be the owner of the trade mark?
2. Is that person/entity eligible to be the applicant for the trade mark (and therefore the owner of the trade mark once registered)?
3. In terms of the provided logo, was this prepared:
4. in-house by your company, e.g. by an employee/contractor, whereby that employee/contractor has assigned intellectual property they create to your company under their employment/contractor agreement; or
5. by an external consultant/designer?
6. If an external consultant/designer was engaged to prepare the logo, did they provide an Assignment of Copyright in the prepared logo to your company?  This is sometimes contained within a designer’s terms and conditions/service agreement (or similar), or otherwise by way of a separate Deed or Agreement.

Applicant/Owner of Trade Mark

Let’s firstly look as to whom/which entity is eligible to be the applicant for a trade mark.

There are two main eligibility requirements for being an applicant for a trade mark application (and therefore the owner of the trade mark once registered) under the Trade Marks Act 1995 (Cth), and these are as follows:

1. The applicant must be the person (i.e. an individual, a company, an incorporated or unincorporated body of persons, or a political body) who claims to be the owner of the trade mark; AND
2. That person must, in relation to the goods and/or services in respect of which trade mark registration is sought, also either:
   
3. be the user or intended user of the trade mark (this is the most straightforward arrangement); OR
4. (i.e. where the trade mark is held by one party (e.g. an individual, or a holding company), and, e.g. an operating company or a third party); OR
5. have an intention to assign the trade mark to another company that is about to be formed, and that company will use the trade mark (e.g. in a start-up arrangement where the trade mark application is initially filed in an individual’s (e.g. founder’s) name, in circumstances where a company is to be established that will use the trade mark, and to which the trade mark is to be transferred).

Accordingly, unless you have established (or were seeking to establish) another entity, e.g. a holding company etc., in which you were looking to separately hold certain assets such as intellectual property, and then to enter into a licensing arrangement whereby that holding company licensed the operating company to use the trade mark, then the most straightforward arrangement will likely be where your operating company is the applicant/owner of the trade mark.

Copyright in a logo

But what about the logo itself.  Do you own it? 

By way of a brief background to copyright law in Australia:

• Generally speaking, if you are the original creator of a work, then you will own the copyright in that work;
• Works created by employees within the scope of employment are generally considered to be the intellectual property of the employer, whereas independent contractors are considered to own copyright unless they agree to assign copyright to the company that hired them; and
• In the context of a photo, for example, the photographer themselves will usually own the copyright in the work, and then have the exclusive right to use, sell, and licence the work, as well as to enforce their copyright as against an infringer.

Accordingly, in the case of a designer having created the logo, that designer will usually (absent any Terms & Conditions/Assignment etc. that state otherwise) own the copyright in the logo.

If there was no assignment of copyright or similar agreement, then you will need to procure an assignment of copyright in the logo from your designer to the trade mark applicant.

This will be important to obtain prior to filing a trade mark application, as when making a trade mark application (as mentioned above), the applicant is claiming to be the owner of the trade mark (which would not be the case unless the applicant had obtained ownership of the copyright).

Why is this important?

As above, the Trade Marks Act 1995 (Cth) essentially sets out that the trade mark applicant must be the person/entity who “claims to be the owner” of the trade mark. 

Therefore, while the Trade Marks Registrar is not obliged to make any enquiries as to ownership of the trade mark prior to accepting an application to register that trade mark, it is important that you do in fact own the trade mark (i.e. including the underlying copyright in the logo) prior to making an application for registration.  This will be in an effort to prevent your trade mark from being successfully challenged (i.e. opposed/revoked) on this basis at a later time.

The above is important, as one of the first things to occur in a lot of trade mark infringement/opposition matters, is that the other side will likely query the validity of the trade mark in question and request evidence of ownership, and/or this will otherwise be teased out through the “discovery” process if the matter proceeds to Court.

As your company grows and gains prominence, including through the use of its trade mark, it would not be ideal to have to deal with issues surrounding validity, ownership and/or queries about the continued use of the trade mark, as this can be difficult and costly.

As above, while the Registrar may indeed accept the trade mark application on its face if it is capable of being accepted, they would be doing so without determining whether the applicant is the legal owner of the trade mark (including the underlying copyright in the logo).  This may leave the trade mark at risk of being revoked/opposed if challenged, due to the applicant not owning the copyright in the logo.  Also, importantly, registration of the trade mark does not cure any defects as to the underlying ownership of the trade mark, as was held in the Australian Federal Court case of Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83.

Accordingly, such matters should be addressed appropriately at the outset, prior to any such validity or ownership issues arising at a later time.

Ok, understood – what do I need to do?

It is important that you have appropriate legal documentation in place to effect the ownership of your intellectual property, and so if you have any questions about trade mark and copyright ownership, or intellectual property arrangements with your staff or external designers – please do not hesitate to contact NFP Lawyers on (07) 3160 0010.

Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not and is not intended to be, legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.