Joint Ownership of Trademark: Process and Benefits

An average consumer relates to a product based upon the satisfaction, ease, and compatibility, which is derived from the same, and these qualities evolve over a period of time and are known as the “Goodwill” of the product. The dealers and manufacturers have to bear fierce competition in providing their goods and services to the consumers, making it difficult to stand in the market. 

Given the tough competition, any company providing goods and services shall always intend to be the best to maintain the established goodwill and reputation. Further, to represent a consumer-centric approach, companies combine together to form a new joint entity to provide goods and services in relationship with each other, which they are separately well-known in the market. To get a local face that is easily acceptable by the local consumer base, most companies or businesses come up with a local name used as a company or business name in a specific jurisdiction and apply with a Joint Ownership of Trademark. With the beginning of this new joint entity, the companies try to provide goods or service which shall together garner status and goodwill based on the recognized market standards. According to the Trademark Law, all the Joint Owners of the Trademark will be treated as the owner of the Trademark equally, and no qualification of rights is possible in accordance with the provision of Trade Marks Act, 1999. In this blog, we discuss the process and benefits of Joint Ownership of Trademark.

What is Joint Ownership of Trademark?

When two or more companies legally combined to act as the owner of a trademark, either for a joint company created by both or to share and act according to the goods and services provided by them, they are said to be joint owners of a trademark. According to Section 24 of the Trade Marks Act, 1999, joint ownership of Trademark is a mutual agreement between both the companies and parties to hold the mark together, but neither of them shall be said to be the complete owner to the Trademark, and the Trademark Registration will be done in favour of both the entities/parties jointly.

According to Section 18 of the Trade Marks Act 1999, while entering into joint ownership of trademarks, it has been laid down that either the applicant essentially needs to have a principal business place in India and if not then, it would be compulsory for them having their address for service in India. The joint ownership also observers the joining of the economic value of the Trademark. The mutual economic value is vital for each joint owner. The earning produced from the business of joint ownership should be equally divided between both combined owners following the terms mentioned in the agreement. The interest balancing should be there between the joint owners, which will help in defining the sharing of duties and responsibilities of each entity.

Also, Read: What are the Reasons for Trademark Application Rejection?

Essential Guidelines Should be Followed While Registration

According to the Indian Trademark Law, at the time of registration of a jointly owned trademark, a description of mention should be given in the following:

• In the case of joint owners, the full name of the joint owners, whether companies or individuals, is essentially required;
• The name of a business or a trading style is not adequate as the name of the joint owner;
• Business name or trading style is given with the joint owner’s name will be recorded separately.

For instance, the name of joint owners should be filed in the following way:

• M/s ABC is a company registered under the Companies Act, 2013 in India;
• M/s XYZ is a company registered under the Companies Act, 2013 in India are claiming to be joint owners of the Trademark.

In case the name of the applicants applying for joint ownership of Trademark is not mentioned correctly, the Trademark Examiner can object, and the examiner can ask the applicants to file the name correctly by submitting a request Form TM-16 for the same.

What are the Benefits of Joint Ownership of Trademark?

There are some benefits of joint ownership over a trademark. Every company aims to provide the best goods and services to maintain its brand value and goodwill in the market. Thus, the companies or entities combine for jointly manufacturing, marketing, and trading the goods or services. They got joint ownership of the goods or services manufactured and marketed by them. Some of the benefits are:

• Complete Dissolution: If one of the parties or entities of the jointly owned Trademark endures dissolution, the jointly owned Trademark is safeguarded as no individual owner can claim complete ownership. All the joint owner’s rights in the Trademark are dissolved promptly and shall not be available for single use by one of the joint owners. Thus, the goodwill and trust in the Trademark used over a timer are well-preserved.
• Combined Usage of the Trademark: As per the Act, the joint owners of the Trademark cannot use the mark completely as their own, and they hold the Trademark together; there is a surety of usage of the Trademark. The Trademark’s joint owners are liable for using trademarks in the goods or services offered by them. However, a single owner cannot claim trademark ownership against the other. No individual user can claim right over the jointly owned Trademark and exercise complete control over the Trademark or goodwill produced by them.

Process for Filing the Application for a Joint Owned Trademark

As per the Act, while applying for a Joint Owned Trademark, the details must be provided in such a way:

• Full name of each Joint Owner (Company or an Individual).
• Legal Status.
• State, District, and Country.
• One of the business address.
• Contact Number and Email ID.

For adding the name, the following is the example: “M/s ABC Pvt. Ltd. and M/s XYZ Pvt. Ltd.”

The registered mark shall be used by both the companies, as mentioned in the application.

Conclusion

The introduction of IPR (Intellectual Property Rights) was seen as a set of rights to safeguard the owners’ vested interest. The advances and evolution which have taken place all through the era in the meantime, we now have observed different views that require a higher threshold of interdependence and belief. The Joint Ownership of Trademark is an outcome of such evolution and development, which has proved to be a multilayered advantage for the IP industry. Regardless of having some share of negativity, Joint Ownership of Trademark is always chosen as the best way of forming a new face of Trademark of a single company based on the geographical boundaries. Thus, people now favour the registration of jointly owned Trademark.

Also, Read: A Complete Guide on Procedure for Brand Registration in India