Trident Seafoods Corporation v Trident Foods Pty Ltd [2019] FCAFC 100

Author: Jasmine Burrows, Progressive Legal

Facts

• The appellant, TRIDENT FOODS PTY LIMITED (Trident Foods), is an Australian company who sells food products in Australia. Trident foods is closely connected with Asian flavours and ingredients. 
• Trident food owns two trade mark registrations for the TRIDENT brand in relation to goods in class 29 for meat and fish products.  
• Since 2000, all sales under the Trident Foods had been by Manassen Foods Australia Pty Ltd (Manassen). Trident Foods is a wholly owned subsidiary of Manassen. 
• The respondent, TRIDENT SEAFOODS CORPORATION (Trident Seafoods), is a United States corporation that had used Trident Seafoods’ branding on fresh, tinned and frozen seafood products overseas since 1973. 
• Trident Seafoods applied to register its Trident Seafoods logo as a trade mark in Class 29 for seafood and edible oils products, but it was blocked by the pre-existing Trident Foods marks. 
• Trident Seafoods applied under s 92(4)(b) of the Trade Marks Act 1995 (Cth) (the Act) to have Trident Foods’ marks removed, on the grounds that during a continuous three-year period in which the trade mark was registered, the mark was not used in Australia by the registered owner. 
• In response to the non-use application, Trident Foods began using the TRIDENT mark on tuna, smoked oysters and smoked mussels products. 
• Even though Trident Foods was the owner of both trademarks, the challenge here was that starting from the year 2000 and throughout the relevant three-year timeframe, all food sales made using those trademarks were actually conducted by the parent company, Manassen. 

Issues

Whether Trident Foods, as a wholly owned subsidiary of Manassen, was an ‘authorised user’ of the Trident Foods’ marks during the alleged non-use period.  

Decision

The Court found that Trident Foods had used the marks in Australia during the relevant period as Manassen’s use of the mark was ‘authorised use’ of Trident Foods’ trade mark registrations under section 8(1) of the Act.   

Reasoning

Relevant Law

In order to recognise an authorised user of a trade mark, the opponent of the application for non-use must provide evidence that the entity using the trade mark in relation to goods or services was under the control of the owner of the trade mark (s8(1)) The Act). 

This idea of control encompasses the owner of the trademark overseeing the quality of the related products or services, or the owner having financial control over the trading activities of the other entity (s 8(3) and s 8(4) The Act).  

The phrase, ‘under the control of’ is not limited to financial or quality control (s 8(5) The Act). 

Explanation

The court used the following evidence to establish that the two companies operated with a ‘unity of purpose’. This ‘unity of purpose’ test established that Trident Foods exercised ‘authorised use’ over their marks.   

Trident Foods and Manassen had the same directors who were substantially involved in the everyday operations of both companies.  

The companies had a common registered address and common principal place of business.  

The directors of the companies had one common purpose – to maximise sales and to enhance value of the brand.  

It was commercially unrealistic not to infer that Trident Foods, as the owner of the trade marks, controlled the use of the marks because the common directors wished to ensure the maintenance and enhancement of the value of the brand. 

It is inconceivable that Manassen was using the marks without the knowledge, consent, and authority of Trident Foods.  Trident Foods owned the trade marks and Manassen sold products under the trade marks, thus using them.  

Significance

This case demonstrates that the ‘unity of purpose’ test can establish the ‘authorised use’ of a trade mark.  

It provides a more relaxed legal approach to proving the standard of control required to prove the ‘authorised use’ of a trade mark.  

The ‘unity of purpose’ test mainly concerns whether the trade mark owner has controlled use of the marks if evidence displays that both the owner and the parent company have operated with a common purpose.  

In the past, courts have applied the ‘actual control’ test where a trade mark owner is required to show the existence of control mechanisms. These mechanisms must permit the trade mark owner to exercise control over the user of the trade mark. Examples of these mechanisms include formal license agreements with audit and inspection rights. However, it is not enough to simply have these mechanisms in place. The trade mark owner must also demonstrate the actual exercise of those control mechanisms. This can be shown by providing evidence that the user regularly submits product samples or other examples of trade mark use to the trade mark owner for review and approval at regular intervals.  

The actual control test was established in Lodestar Anstalt v Campari America LLC (2016) 244 FCR 557 (Lodestar) which was the leading authority on ‘authorised use’ prior to this case.  

The Court highlighted that the circumstances in this case were significantly different from other cases where there was no relationship beyond a license between the trademark owner and the entity using the trademarks. In this case, the relationship between Trident Foods and the using entity went beyond just a license. 

Uncertainty

One area of uncertainty that remains after the Trident decision is determining the level of control required for cases that fall between the circumstances in Trident and Lodestar. 

The Lodestar case clarified that evidence of actual control is needed when one party is an unrelated registered owner and the other is an authorised user. 

This evidence is often demonstrated through a trademark license and an active compliance program. 

In cases like Trident, where there is a ‘unity of purpose’ between the entities, it may be enough to suggest the existence of ‘authorised use’. 

However, for cases falling between the circumstances of the two decisions, it is still unclear what level of connection is necessary to satisfy the ‘unity of purpose’ test. 

It remains unanswered whether being related entities alone is sufficient or if there is a requirement for the entities to have the same directors. 

Key Takeaways

The decision affirms that, within a corporate group, the crucial factor for maintaining control lies in the presence of supervision rather than strict corporate control.  

If the evidence demonstrates a shared goal or purpose between the trademark owner and the parent entity using the marks, the Court may infer that the owner of the marks has ‘authorised use’ of the marks.  

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