The Full Federal Court’s decision in Trident Seafoods Corporation v Trident Foods Pty Ltd [2019] FCAFC 100 (“Trident”) provides further guidance on how the relationship between a trade mark owner and the user of the trade mark can qualify as authorised use.

Under the Trade Marks Act 1995, a trade mark registration is vulnerable to removal from the Register if the mark has not been used by either the registered trade mark owner, or a party authorised by the trade mark owner to use the trade mark (“authorised user”) for a 3 year period.

To qualify as authorised use of the trade mark, the using entity must use the trade mark under the control of the trade mark owner. The Act defines that ‘control’ may either be financial control or quality control over the goods or services to which the mark is applied.

The watershed decision in Lodestar Anstalt v Campari America LLC [2016] FCAFC 92 (“Lodestar”) illustrates how use by a using entity that is unrelated to the trade mark owner can qualify as an authorised use. Lodestar formulated a stringent test regarding the evidence required to establish authorised use. In particular, there must be evidence of the exercise of actual practical control by the owner over the use of the trade mark by the user. The potential for the trade mark owner to control use (e.g., via control clauses in a license agreement) is insufficient. The absence of such evidence could render the trade mark registration vulnerable to removal from the trade marks register.

Since this decision, the Australian Courts have applied Lodestar to other fact patterns where the trade mark owner and the using entity share a closer relationship or are related in a corporate sense. The present decision in Trident eases the stringent test formulated in Lodestar in cases where the entities are part of a single corporate group.

Trident Foods is the owner of two trade mark registrations for TRIDENT in Class 29 for fish and fish products and TRIDENT in Class 29 for meat, fish, poultry and game, including sardines, mackerel, pilchards, crab, oysters, mussels, and prawns; meat extracts, preserved, dried and cooked fruits and vegetables, jellies, jams, eggs, preservatives and pickles.

Since about 2000, all sales of foods under the marks have been by Manassen Foods Australia Pty Ltd (“Manassen”). Trident Foods is a wholly owned subsidiary of Manassen. During the relevant period, Trident Foods and Manassen had the same directors, a common registered address and a common principal place of business, and formed part of a corporate group with a common ultimate holding company, Bright Food Global Distribution Company Limited.

Trident Seafoods alleged that both marks should be removed from the Register under s 92(4)(b) of the Act on the grounds that the trade marks had not been used during a continuous three-year period by the registered owner (Trident Foods) or an authorised user (Manassen). Trident Seafoods brought this non-use application in order to advance registration of its own trade mark application that had stalled due to citation of the Trident Foods marks against registrability.

At first instance (Trident Seafoods Corporation v Trident Foods Pty Limited [2018] FCA 1490), the primary judge applied Lodestar and reviewed the evidence adduced by Trident Foods to support its contention that it had controlled use of the trade marks by Manassen in the relevant period. The primary judge held that Trident Foods merely asserted that it had controlled use by Manassen and did not show any evidence of conduct by Trident Foods that would amount to actual control. Moreover, in her Honour’s view, the corporate relationship between Trident Foods and Manassen did not place Trident Foods in a relationship of control over Manassen and the commonality of directors does not change the nature of the relationship to the extent of conferring authorised use.

The Full Court found that the primary judge erred in this analysis. The Full Court held that the issue is not whether one company controlled the other but whether the trade mark owner had control over the user’s use of the trade marks. At all the relevant times, Trident Foods and Manassen had the same directors that were involved in the day to day operations of both entities. It was inferred from the evidence that the two companies operated with a unity of purpose.

Trident Foods exercised control of Manassen’s use of the trade marks by virtue of being the trade mark owner, and its directors, who were also Manassen’s directors, must have had one common purpose, being to maximise sales and to enhance the value of the brand. The Full Court affirmed that to find otherwise would be commercially unrealistic.

The absence of evidence of actual control was set aside by the Full Court at [46]:

…it is not surprising given the corporate relationship, the commonality of directors and the shared processes between the owner and the user of the marks that there is no particular illustration of actual control by Trident Foods of Manassen in respect of the marks. The natural and ordinary inference given the relationship between the companies would be of unity of purpose, rendering redundant any particular illustration of the actual control Trident Foods must have had as the owner of the marks. Unity of purpose is indicative of the existence of actual control vested in Trident Foods as the entity owning the marks over Manassen as the entity using the marks.

Accordingly, the Full Court overturned the primary judge’s decision and held that Trident Foods had used the marks in Australia during the relevant period and the parent’s use of the marks was authorised use under s 8(1) of the Act.

The Trident decision establishes that in a corporate group, control of trade mark use by the trade mark owner can be inferred if the evidence demonstrates that the owner and parent company have operated with a “unity of purpose”. The Full Court differentiated the facts in Trident to that of Lodestar, insofar as in Lodestar there was no relationship between the trade mark owner and user of the trade marks other than a license. Although the Trident decision provides some relief to what constitutes control of trade mark use, it remains to be determined how the unity of purpose test applies in a corporate entity context with the relationship between the parties that falls outside those of the present case. Institution and execution of policies and procedures to show actual control over use of a trade mark, and documentation supporting this control, remains a prudent strategy in a corporate context.