Avoiding a “seafood-mix” of problems when you invest in your brand


No votes yet.
Please wait...

A recent Federal Court of Australia* decision highlights the need for all brand owners – and particularly companies with subsidiaries – to constantly review their trademark portfolios and ensure appropriate class descriptions, ownership and use of their trade marks to avoid a “seafood-mix” of problems jeopardising the investment in their brands.

“Seafood” Take-Away Messages for Brand Owners:

• Ensure that your trade mark applications have been filed in the name of the correct company and for the correct goods or services.
• Use of a trade mark by a holding company may not constitute use of the trade mark where the trade mark is owned by a subsidiary company.
• File trade mark applications in your jurisdiction of interest as soon as possible, particularly where you own a brand having an international reach.
• Regularly review your trade mark portfolio for ownership and use aspects.
• Promptly enter into written licensing agreements confirming authorised use of your trade mark.
• Ensure that the actual trade mark owner has ongoing control over the use of the trade mark.

Please contact us should you need assistance with the above.

Background

Trident Seafoods Corporation (“TS-US”) was founded in 1972 in the United States and has grown to be the largest seafood distributor in the United States, with sales throughout the world. TS-US wished to commence selling its “TRIDENT SEAFOOD”-branded seafood products in Australia and was prevented from doing so by the registered trademarks for “TRIDENT” in classes 29 (including for fish) in the name of Trident Foods Pty Ltd.
TS-US was forced to sell its products in Australia using the “BOUNTIFUL” trade mark. This resulted in TS-US incurring substantial costs from the use of different packaging, marketing materials and sales materials. The use of a different brand in Australia also caused confusion for international customers of TS-US who had difficulty grasping why TS-US did not use its brand consistently throughout the world on its products.

Trident Foods Pty Ltd (“TF-AU”) has operated in the Australian market since the 1970’s. Historically, TF-AU used the “TRIDENT” brand in connections with Asian flavours and ingredients. Its best-selling product is a sweet chilli sauce. TF-AU is the owner of a number of trade mark registrations for “TRIDENT” in classes 29 (including for fish).
TF-AU became a wholly-owned subsidiary of Manassen Foods (“MF-AU”) in about 2000. Both TF-AU and MF-AU form part of a corporate group with the ultimate holding company being Bright Food Global Distribution Company Limited based in the Cayman Islands.
Since 2000, the sales of “TRIDENT” branded products have been undertaken by MF-AU and not TF-AU. The product labels typically include the notation “Registered trade mark of Trident Foods Pty Ltd” (see below).

TS-US filed a trade mark application for its “TRIDENT SEAFOODS” (logo) in Australia in class 29 for seafood and oils. IP Australia cited the trade marks of TF-AU as preventing registration of the TS-US logo.

TS-US filed non-use applications in relation to the registered trademarks of TF-AU. In “non-use” proceedings, a registered trade mark may be removed from the Register if, during the relevant period, the trade mark has not been used on the goods or services to which the application relates.
The matter was heard before the delegate of the Registrar of IP Australia and TS-US was partially successful. TS-US appealed the outcome to the Federal Court of Australia.

Key issues before the Federal Court

  1. Goods v Ingredients: The application of a trade mark to goods containing an ingredient is not use of the trade mark in relation to the ingredient itself. The example given by the Court is that a trade mark registered in respect of flour would not generally cover bread, and vice versa. Gleeson J indicated that the proper approach is to examine the description of the goods for the relevant trade mark, and determine whether the particular product falls within that description. For TF-AU, the mere presence of fish sauce and dried shrimp in the oil sachet of the Tom Yum Goong Flavour Thai Noodle Soup did not mean there was use of the “TRIDENT” trademark for “fish product” in class 29. We recommend that you regularly review your trade mark portfolio to ensure your trademarks are filed for the correct class of goods or services, and are being used in relation to the goods or services. 
  2. Ownership and Use: The registered “TRIDENT” trade marks were in the name of TF-AU. However, since around 2000, the trade marks had actually been used by MF-AU (the holding company). Gleeson J found that there was no actual control by TF-AU over the use of the trade marks, despite TF-AU being a wholly-owned subsidiary of MF-AU and having common directors, a common registered address and a common place of principal business. That is, the use by MF-AU was not ‘authorised use’ for the purposes of the Trade Marks Act 1995 (Cth) and, therefore, there was no use of the trade marks during the relevant period. As a result, the registered trademarks were vulnerable to removal for non-use. However, Gleeson J exercised her discretion to allow the registered TF-AU trade marks to remain on the Register (see below).
    We recommend that you review your trade mark portfolio to ensure that your trade marks are registered in the correct name, and that the trade marks are being used under the control of the registered owner. Use by a holding company may not be use of the trade mark by a wholly-owned subsidiary when assessed for non-use purposes. 
  3. License Agreements: TF-AU and MF-AU attempted to retrospectively confirm an unwritten licence agreement between them for the relevant trade marks to support the contention of authorised use of the trade marks by MF-AU including during the non-use period. Gleeson J was not satisfied on the evidence presented that such an unwritten licence agreement was actually in place between the parties, and therefore the use of the “TRIDENT” trade marks by MF-AU was not authorised use. We recommend that you promptly enter into written Trade Mark Licence Agreements for use of your trade marks and regularly document examples of use of your trade marks – particularly where the relationship between the parties is holding company v subsidiary company.
  4. Discretion: Even though the Court conceded that grounds for removal of the registered “TRIDENT” trade marks were established, Gleeson J exercised her discretion for the trade marks to remain on the Register. Her Honour cited a number of reasons, including (surprisingly given the authorised use issue above) the long-standing and significant use of the “TRIDENT” trade marks on a wide range of food products by MF-AU with the knowledge and acquiescence of TF-AU. Her Honour considered that there was no public interest that had been adversely affected by TF-AU’s non-use of the trade marks during the relevant period. We recommend that you take steps such as those outlined above to avoid having to rely upon the delegate’s discretion for your trade marks to remain on the Register.

Outcome

The decision highlights the imperative for all brand owners – and particularly organisations with complex company structures where subsidiary companies own key trade marks, or a member-company separately owns the intellectual property of the corporate group – to continually manage and review their trademark portfolios and ensure appropriate class descriptions, ownership, use and control to avoid a “seafood-mix” of problems jeopardising the investment in their brands.
We can assist you to review and manage your brand portfolio in Australia and overseas. Please do not hesitate to contact us should you have any questions.
Update: On 18th October 2018, TF-US sought leave to appeal the decision to the Full Federal Court of Australia. However, whilst the outcome may change, we consider the “Seafood” Take-Away messages highlighted above remain important for businesses.

* Trident Seafoods Corporation v Trident Foods Pty Limited [2018] FCA 1490 appeal from Trident Seafoods Corporation v Trident Foods Pty Ltd [2016] ATMO 45 and Trident Seafoods Corporation v Trident Foods Pty Ltd [2017] ATMO 39 (not discussed).

No votes yet.
Please wait...
Share this:

Leave a comment