Who holds the TRIDENT controls the Australian seas - Lessons in trade mark use by parent companies

What you need to know 

• Trident Foods has successfully defended challenges to its TRIDENT trade marks by Trident Seafoods in the Full Federal Court of Australia.
• The case is significant in finding that where a parent company uses a trade mark owned by a subsidiary, "control" may be inferred if the companies operate with a "unity of purpose". In these limited circumstances, no illustration of actual control is necessary.

What you need to do

• In general, steps should be taken to ensure third party trade mark use is always authorised with clear evidence of control.
• Despite the decision, written trade mark licences are advisable, even between related companies. The lack of evidence of sufficient control may result in a trade mark becoming vulnerable to removal for non-use.

Background

Trident Foods is an Australian company which has sold TRIDENT branded food products in Australia since the 1970s. Importantly, since 2000, all sales under the TRIDENT marks have been through Manassen Foods, Trident Foods' parent company.

Trident Seafoods is a US company which intended to commence selling TRIDENT SEAFOODS branded products in Australia. It filed an application for

which was blocked by Trident Foods' registrations. Attempts to obtain consent from Trident Foods were refused.

Trident Seafoods applied for removal of Trident Foods' TRIDENT registrations. The removal applications were unsuccessful before the Australian Trade Marks Office and in the Federal Court on appeal.

Although the primary judge, Justice Gleeson, found that Trident Foods had not used the TRIDENT marks in Australia during the relevant period, and that Manassen's use was not under the control of Trident Foods, her Honour nonetheless exercised her discretion under s 101 (3) to allow the marks to remain on the Register.

Trident Seafoods did, however, succeed at the first instance in its opposition to registration of another TRIDENT mark filed by Trident Foods, on section 44 (prior application or registration of a substantially identical or deceptively similar mark) and 59 (no intention to use) grounds.

Both parties appealed the aspects of the decision on which they did not succeed.

Was Manassen's use "under the control of" of Trident Foods?

The primary judge was not satisfied that Manassen's use of the TRIDENT trade mark was "under the control of" Trident Foods within the meaning of section 8 of the Trade Marks Act 1995 (Act) based on the lack of evidence of actual control and because the nature of the corporate relationship did not place Trident Foods in a position of control (the reverse is the case).

However, the Full Court observed that the question was not whether one company controlled the other, but rather whether Trident Foods (even though a wholly owned subsidiary of Manassen), had control over Manassen's use of the trade marks.

In reaching the view that Manassen's use of TRIDENT was as an "authorised user", the Full Court observed that:

• it must be inferred from the evidence that the companies operated with a "unity of purpose", whereby Trident Foods held the trade mark and Manassen sold the TRIDENT branded products, thereby using the trade marks;
• Trident Foods controlled Manassen's use of the marks by the mere fact it owned the marks, and its directors (also Manassen's director) must have a common purpose of maximising sales and enhancing the value of the brand;
• given the corporate relationship, commonality of directors and shared processes between trade mark owner and user, it is not surprising that there was no particular illustration of actual control;
• the fact that the directors considered it unnecessary to give directions surrounding use of the marks supports the "unity of purpose" which is indicative of control;
• the fact that every packet sold by Manassen stated that TRIDENT was a registered trade mark of Trident Foods supports an inference of control by Trident Foods; and
• given the corporate relationship, it was inconceivable that Manassen was using the marks without the knowledge, consent and authority of Trident Foods.

Trident Foods' active consent and authority must therefore constitute an unwritten licence for use of the marks.

The Full Court found, therefore, that Manassen's use of the TRIDENT marks was authorised use (s 8) of a trade mark (s 7) under the control of Trident Foods and, accordingly, the TRIDENT registrations should not be removed from the Register on the grounds of non-use.

"Other circumstances" justifying registration of TRIDENT mark

Trident Foods' TRIDENT trade mark application had a later priority date than the TRIDENT SEAFOODS Logo application. This mark was opposed by Trident Seafoods.
Trident Foods appealed the primary judge's decision to refuse registration of its TRIDENT application on section 59 and 44 grounds.

However, as the Full Court found that Manassen was an authorised user of the TRIDENT marks, there could be no basis to argue that Trident Foods did not have an intention to use the mark. Therefore, the section 59 ground was unsuccessful.

In relation to the section 44 ground, the Full Court found compelling "other circumstances" which supported the mark proceeding to registration. Such circumstances included:

• the TRIDENT application should not be prevented from registration by a mark that will never itself reach registration, and which has not been used in Australia;
• pre and post-priority date use of the TRIDENT marks on certain goods;
• Trident Seafoods' application post-dated the priority date of three other TRIDENT registrations owned by Trident Foods; and
• Trident Foods had not abandoned its prior TRIDENT marks, and still enjoyed a significant reputation in Australia and elsewhere.

Accordingly, the section 59 and 44 grounds of opposition failed, and the Full Court found that the TRIDENT application should proceed to registration.

Authors: Ashley Johnson, Senior Associate; and Joanna Lawrence, Counsel.