Inbox: Who should own your brand?

Before you file any trade mark applications, or any time your business structure or strategy changes, it is worth giving thought to who should own your brands.
Why does it matter? For three key reasons. Firstly, trade marks are an important asset of any business. They give exclusive rights and can be sold or licensed to third parties for value. As with any valuable asset, ownership gives control. Secondly, it is the brand owner who will need to act to enforce its trade mark rights if necessary. Thirdly, the validity of registered trade mark can be challenged if it is not used by the owner (or person authorised by the owner) within three years of registration in New Zealand, so it is important to ensure there is chain of control of use between the owner and any authorised users of the brand.
So what are the most common ownership positions? Generally trade mark is registered in the name of the company that operates the business that has created and is using the brand, rather than any individual directors or owners of the business. It is important to ensure the full current name of the company is specified in the trade mark application, and that this name is updated on the Trade Marks Register records if the company name changes in the future (or if the brand is transferred to another entity).
If the company is part of group of related companies, consideration should be given to whether the trade mark should be owned by the operating company that is making use of the brand, or alternatively the parent or holding company. This is often the case for multinational companies or those with trans-Tasman operations. There are pros and cons to both situations, but whichever is selected, there should be licensing arrangement in place if the entity that uses the brand is not the brand owner.
In many situations brands are owned and licensed to unrelated third parties, often for payment of royalties. Again licence agreement must be in place detailing the terms of this licence. Some countries require such licences to be recorded on the Trade Marks Register, although this is not the case in New Zealand. Check the situation for those markets the brand is to be used in by the licensee.
A tailored trade mark ownership and protection strategy suited to your business should be developed with your IP advisor. M
Charlotte Henley is partner at Kensington Swan specialising in Intellectual Property matters.