In many 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, rather, 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 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. Below, we turn our attention to authorising use of a trade mark, specifically what control means in this context. 

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:

  1. Quality control; or
  2. Financial control.

The rationale behind this requirement is tied to the function of a trade mark. By definition, a trade mark is a sign used to distinguish the goods and/or services provided by one trader from another. The trade mark serves an identification role, identifying to consumers that the goods or services provided in connection with the trade mark are from a particular source, or in which the owner has an interest. If a trade mark isn’t used to identify goods or services connected to a trade source, it is not functioning as a trade mark. In other words, a trade mark owner cannot validly license a trade mark to someone else to use without ensuring that the goods or services provided in connection with that trade mark meet a standard that the owner sets (either by dictating a quality standard or through financial control over the user’s operations).

What are the Requirements?

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

  1. Use the trade mark in relation to the goods or services in respect of which the mark is registered;
  2. Commence infringement proceedings;
  3. Lodge an objection notice with Customs, preventing importation of infringing goods;
  4. Sub-license the trade mark.

In Short

Authorising the use of a trade mark has consequences both for licensees and licensors. For this reason, it’s important to make sure that trade mark use has been correctly authorised, and that the rights granted to licensees are appropriately limited. Both licensors and licensees should seek professional advice when entering into any agreement regarding the use of a trade mark. If you have any questions, let our trade mark lawyers know on 1300 544 755.

Daniel Smith

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