Can a trade mark be registered in the name of a company’s sole director and shareholder?

Author: Ian Aldridge, Progressive Legal

A recent Federal Court decision has considered the issue of whether a trademark can be registered in the name of a company’s sole director and shareholder. 

In Watson as Trustee for the Watson Family Trust v Cosmetic Warriors Ltd [2022] FCA 700 the Court held that a company’s sole director and shareholder (Mr Watson) had a valid registered trademark and the entities that Mr Watson controlled were “authorised users” for the purposes of the Trade Marks Act 1995 (Cth). 

In reaching the conclusion that Mr Watson could defend registration of the trade mark, the Court held that he was able to show features of control that were persuasive of the view that he was actually the “guiding mind” governing the control of the use of the relevant trade mark, through the entities to which he was sole director/shareholder. 

As such, the case is authority for the proposition that a trade mark can potentially legally enforceable if registered in the name of a company’s sole director/ shareholder if, and only if that person is able to prove that they exercise a high degree of control over the business of a entity or entities using the trade mark.  

Factors which may illustrate this include that the registered owner show a sufficient personal link to matters of business, financial and managerial matters relating to the trade mark.  

This is an extremely narrow exception and Mr Watson was fortunate.  

Key takeaway

Although Mr Watson was able to ultimately defend his trade mark application, it no doubt took a lot of time and money in order to do so. He only really was able to keep the trademark on the basis that he could prove he was the only one that had control over the business (i.e. no other directors or shareholders at any point in time after the mark was registered until it was challenged).  

This decision provides guidance to Australian business that the Court is prepared only to allow a narrow set of circumstances where trademarks can be allowed to be in the personal name of the director only (where a company exists at the time of the application, and really ought to have been the legal entity that owns the mark on the Australian Trade Mark Register with IP Australia). The Court managed to allow that an “implied licence” existed, i.e. it wasn’t expressed in writing. If Watson had an expressed licence in writing between himself personally and the entities that he controlled, that would have assisted his case.  

So really, only in these very limited circumstances was it allowed by the Court. If you have a company or another legal entity at the time of the filing of the trade mark, it really ought to be filed in that legal entity’s name, not in a person or person’s name. Mr Watson was fortunate in this case. 

A summary of the case can be found here.