Joint ownership of Trademark: Understanding and Advantages
In everyday life, there are many products every household, company, or service industries use; those products are known by their brand name and unique identity. Their brand names or pattern of the logo leaves an impression in the consumer’s mind, here the importance of brand protection comes in as the identity of the product starts adding value to the business- THE GOODWILL. Manufacturers, makers, or traders have to withstand vigorous competition to sustain in the market by creating and maintaining the same brand value in the eye and minds of their consumers. Huge competition results in misuse, infringement, or fraud. To protect such acts, businesses are now pro-actively protecting their brands by taking Trademark Registration under Trademark Act, 1999.
In this competitive era, every company providing any goods or services aims at providing the best to maintain its brand name and goodwill in the market. Many companies are good at manufacturing the product and some are good at marketing and trading the same. In such situations, companies or businesses come together and establish a joint entity to capture the market. A combination of two synergies is always good for both the parties- the business as well as the consumers. To get local acceptance, the businesses come together with local names in a specific jurisdiction and hence apply for Joint Ownership of the Trademark.
Also Read: Common Myths about Trademark Registration
According to the Trademark Act 1999, when joint owners file an application, the trademark will be considered to be owned by the joint owners jointly and no measurement of the rights is possible as per the Act. However, the financial benefits or outcomes from the usage of the brand can be calculated by the joint owners based on the terms and conditions signed between the parties.
Meaning of Jointly Owned Trademark
Coming together of 2 entities or businesses to act as the owner of a brand name either under a Joint Agreement signed between the parties or to share and act based on the services provided by them in respect of the goods traded under the brand. They can be called Joint Owners of the Brand name and can file the application as Joint Applicant with Trademark Registry for the Brand name. Section 24 of the Trademarks Act, 1999 says – Joint ownership of a trademark is a mutual agreement between both the entities/parties to hold the mark together, but neither of them shall be said to be the absolute owner of the mark and the then registered trademark shall be registered in favour of both the parties, held together.
During the filing of a Joint application for Trademark Registration, either of the applicants should have a business registered in India, which is called a Principal place of business in India as per the Act. In case there is no principal place of business in India with either of the applicants, it would be compulsory for them to have their service address in India.
The process to follow for filing the application under Joint Applicant
According to the Act, while applying for a Jointly owned trademark, the details should be given in such manner:
- Full name of each of the Joint Owner (Individual or a Company)
- Address of one of the business
- Country; State and District
- Email ID & contact number
- Legal Status
For adding the name, please have a look at the example given below:
“M/s XXX PVT LTD AND M/s YYY PVT LTD”
The registered mark therefore shall be used by both the entities as mentioned in the application.
Advantages: Joint Ownership Trademark
1. Collateral Use
The owners of the jointly owned Trademark shall be responsible for using the brand name on the goods and services they are trading in. In such cases, no single party can claim an independent usage of the Trademark over others and cannot exercise control over the mark or goods or services.
2. Protection of Rights even in case of Dissolution
In case either of the parties gets dissolved, no single owner can allege the complete right of ownership over the Trademark.
Examples of Jointly Owned Trademarks
Hero Honda Motors Limited dispersed into a joint involvement between Hero and Honda motors in 2014, and a new Indian entity Hero MotoCorp Limited has been established, to operate under the defined trade name.
VOLVO sold its Car Production Business to FORD MOTOR COMPANY in 1999 but still kept the right to all other automotive businesses, including its truck industry. This required the sharing of trademark rights and the VOLVO, therefore, gave FORD ownership of its automotive division.
In 2001, the two parties merged their respective brands in a joint venture between Sony and Ericsson to establish cellular communication devices and retain their distinct identities.
Also Read: Transfer of trademark rights through trademark assignment
The protection of intellectual property was regarded as just a collection of rights to protect the owners’ vested interests. Due to the changing course of time and the developments throughout the period, we now see various concepts that require a higher threshold for interdependence and trust. The joint ownership of marks is a consequence of such growth, which has proved a multi-faceted bounty for the IP industry. Despite its share of negativity, joint trademark ownership should always be the preferred way of creating a new mark face based on the geographical boundaries of a single company. The sum of profit given is the recipient and the owner of the mark’s prerogative.
Labdhi, associated with LegalWiz.in since 2016, is a Company Secretary, Business Manager and Consultant for the company. She helps startups by giving them consultations and insights on their business development and growth. Labdhi is a BCom-LLB and has 4 years of Industry experience.