Authorising Use of a Trade Mark: Exerting Control

In Short

• Trade mark owners can authorise others to use their mark through a licence, but must ensure proper control is exerted.

• Control can be exercised through quality or financial control over the goods/services.

• Failure to meet requirements may lead to removal of the trade mark due to non-use.

Tips for Businesses
When licensing your trade mark, ensure you maintain control over the quality or financial aspects of how it’s used. This is critical to prevent the risk of your trade mark being vulnerable to removal. Always seek professional advice to ensure compliance with the Trade Marks Act and protect your brand.

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Table of Contents

• Who is an Authorised User?
• What is Control in this Context?
• What Are the Requirements?
• Key Takeaways
• Frequently Asked Questions

In some cases, the trade marks’ owner may not actually be the primary user of the trade mark. The owner may not even use their trade mark at all. Instead, they may authorise others to use the trade mark through a licence. However, the Trade Marks Act 1995 contains specific usage requirements, and failure to comply with these requirements may mean that the use of the trade mark has not been properly authorised. If this is the case, the trade mark may be left vulnerable to removal due to non-use. This article explores authorising the use of a trade mark, specifically what control means in this context. 

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Who is an Authorised User?

Section 8 of the Trade Marks Act 1995 defines authorised user and authorised use. An authorised user is a person who uses the trade mark in connection with goods or services under the control of the trade mark’s owner.

What is Control in this Context?

The Act lists two ways the goods or services may be considered ‘under the control of’ the trade mark owner:

• quality control; or
• financial control.

The rationale behind this requirement is linked to the function of a trade mark. A trade mark is a sign that distinguishes the goods or services one trader provides from those of another. The trade mark serves an identification role, informing consumers that the goods or services associated with it come from a particular source in which the owner has an interest. If a trade mark is not used to identify goods or services connected to a trading source, it is not functioning as a trade mark.

What Are the Requirements?

The requirements are essential for both licensors and licensees. In addition to authorised use and eliminating any non-use vulnerability that may exist, authorised users have several additional powers from which they may benefit (subject to the terms of the license or any other agreement), including the right to:

• use the trade mark in relation to the goods or services in respect of which the mark is registered;
• commence infringement proceedings;
• lodge an objection notice with Customs, preventing the importation of infringing goods; and
• sub-license the trade mark.

Key Takeaways

Authorising the use of a trade mark has consequences for both licensees and licensors. For this reason, it is essential to ensure that trade mark use is appropriately authorised and that the rights granted to licensees are suitably limited. Both licensors and licensees should seek professional advice when entering into any agreement concerning the use of a trade mark. 

If you have any questions, our experienced IP lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions

Why is trade mark protection important?

Trade mark protection safeguards your business’s brand identity and reputation, fostering consumer trust by preventing other businesses from using a confusingly similar trade mark without a license.

How do I register my trade mark?

You apply for registration by submitting a trade mark application with IP Australia. IP Australia is the governing body that accepts or rejects applications to register trade marks.