How To Take Over A Trademark If It is Not Being Used In Commerce?

If a trademark has not been used in the past three years, it may be withdrawn from the registry under the Trade Marks Act of 1995. A trademark owner may grant permission for another person or business (referred to as a "licensee") to use the mark, but if this is not done correctly, the owner may revoke the trademark for non-use even though the licensee has been using the mark. How this can occur is described in this article.

There are two reasons for the 'non-use' of trademarks to be removed.

To put it simply, registered trademarks may be cancelled for "non-use" for one or both of the following two reasons:

❖ The trademark owner did not intend to utilise the mark in good faith when submitting an application to register trademark Australia;

❖ A three-year period during which the registered owner of the trademark failed to use it.

The first of the aforementioned grounds is challenging to establish and rather uncommon. The second reason is the one on which traders most frequently ask for the trademarks of their rivals to be removed, and it is the subject on which this essay focuses.

How do trademarks get removed if they're not used?

IP Australia Applications

When a "person aggrieved" submits an application in a format that has been approved by IP Australia, a trademark may be withdrawn for nonuse. In that situation, the trademark holder has two months to object to the mark's removal. If the owner of the trademark does not object to its registration, IP Australia will take the trademark from the register.

The "trademark opposition" process starts if the owner submits a "notice of intention to oppose" the trademark's removal within the stipulated time frame.

Requests Made To The Court

If a legal battle is already in progress over the relevant trademark, the aforementioned procedure is not applicable.

Typically, this takes place when someone is being sued for trademark infringement. A "cross-claim" calling for the trademark's removal from the register would then be submitted to the court by the alleged infringer in that situation.

If the court accepts this application, the alleged infringer will not be held accountable for violating the registered trademark.

A trademark is "used" when?

Whether a trademark has actually been used or not is the main question in any application to remove a trademark for "nonuse."

It takes very little use to get around a non-use application.

Typically, all that is required to protect a trademark is one actual sale of the pertinent goods or services in the ordinary course of business during the pertinent time. There is no requirement that the use is continuous during the pertinent period in this regard.

The situation is not resolved if the product bearing the mark has not been sold during the pertinent trade. Use can also include making an "offer to trade," placing an ad that doesn't result in a sale, or occasionally making preparations before making a sale offer. In one instance, the owner of a new magazine's trademark had a letterhead created and sent it to prospective subscribers and advertisers, asking for a chance to talk about the publication (which was yet to be launched). According to this, the trademark had been "used."

What are the most frequent causes of non-use applications failing, given that it just takes a small amount of evidence to disprove them?

When do applications for trademark non-use typically fail?

Standard Non-Use

Many trademarks merely become obsolete. The product might not have sold as well as the owner had hoped, or the owner might have shut down the company.

Because owners are obliged to provide proof of ongoing usage, the register of these abandoned trademarks is "cleaned" in several jurisdictions, most notably the United States. If they don't utilise the mark, they won't be able to provide proof of use when it's necessary, and the trademarks will be immediately cancelled. In Australia, however, there is no such system, which is why many trademarks are still listed on the register years after they have stopped being used.

Partial Inactivity

Despite being registered for five separate products, a trademark may only ever be associated with one of them. In that instance, four of the goods might no longer bear the trademark.

Using A Distinctive Trademark

Owners do, on occasion, alter their trademarks over time. For instance, the registered trademark may be "ACME OMNISCIENCE," but after some time, the owner may decide to remove the word "OMNISCIENCE." The logo might be redone as part of a brand refresh if the mark is registered in logo form, which happens more frequently. The owner won't have any issues if the changes are minimal or, to use the technical phrase, "do not substantially damage the identity of the trademark." The modified mark is still regarded as being used in conjunction with the registered mark when it is used. If the modifications are made in excess of this, the owner is no longer utilising the trademark and the registration may be revoked for non-use.

Use by an unrelated party

A registered owner may occasionally allow another party to use a mark even when they themselves do not use it. If the owner can show that the other party is an "authorised user" in these situations, the trademark will not be withdrawn for "nonuse." This is due to the Act's provision that an "authorised user's" use of a trademark is deemed to constitute the registered owner's usage. It is highly technical to determine whether the other party is an "authorised user" or whether the user is an "authorised use." In our article on the permitted use of trademarks, we go into further depth on this.

How To Take Over A Trademark If It is Not Being Used?

Before moving forward, you should evaluate the proposed trademark with the help of a trademarking lawyers and thoroughly investigate the owner of the existing registration and its usage of the brand.

A trademark does not need to be widely utilised to be protected by trademark rights, and just because you can't locate any proof of use doesn't indicate the mark isn't being used. If you use this brand, even a small amount of use, with or without registration, could be enough to sustain a trademark infringement claim against you. You must continue with extreme caution.

When a client approaches me with a situation like this, I am prone to question their decision to use a trademark that entails this kind of danger. There are other ways you could continue if you are unwilling to be persuaded and are willing to take the risk. One that might work is the one after this. I advise you to consult a trademark lawyer to see whether this tactic is appropriate and to put it into action if it is.