Joint Ownership of Trade Marks: A Guide for SMEs and Creative Businesses

If you’re an SME or a creative business, owning a UK registered trade mark can be a powerful asset. But what happens when more than one party shares ownership of that trade mark? Joint ownership can offer some enticing benefits but also comes with its own set of challenges.

The Perks of Joint Ownership

Under the Trade Marks Act 1994, a UK registered trade mark can be co-owned. In such circumstances, each co-owner holds an equal, undivided share in the trade mark. This means each owner can use the trade mark independently for their benefit, without needing to account to the other owners. This arrangement can foster collaboration and resource pooling, allowing different parties to benefit from shared intellectual property.

The Hurdles to Watch Out For

Despite its benefits, joint ownership isn’t without its complications:

1. Consent Requirements: One co-owner cannot grant a licence, assign, or mortgage their share of the trade mark without the consent of the other co-owners. This can lead to delays and difficulties, especially if co-owners have conflicting interests or if one becomes uncooperative.
2. Enforcement Issues: Any co-owner can initiate trade mark infringement proceedings, but they must either join the other co-owners as claimants or defendants or get the court’s permission to proceed alone. This requirement can complicate and prolong legal actions, making it harder to respond swiftly to infringement.

Practical Steps to Smooth Joint Ownership

To navigate these challenges, it’s crucial for co-owners to enter into an agreement regarding this. Often, such agreement can take many forms (such as licensing agreements, franchising agreements, co-existence agreements, co-ownership agreements, joint venture agreements) and Briffa can advise on what is appropriate in your circumstances.

Contractual agreements are a chance for parties to change the playing field, putting in place their own rules and controls over the trade mark. Such an agreement should cover:

• Use of the Trade Mark: Define how each party can use the trade mark.
• Quality Control: Set standards to maintain the trade mark’s reputation.
• Cost and Revenue Sharing: Agree on how to split costs and revenues.
• Licensing and Assignment Procedures: Establish clear procedures for licensing and assigning the trade mark.
• Termination and Dispute Resolution: Outline steps for ending the co-ownership and resolving disputes.

The Bottom Line

Joint ownership of a UK registered trade mark can be beneficial for SMEs and creative businesses, offering shared rights and usage. However, it also requires careful management of relationships and can complicate enforcement and commercial exploitation. If you’re considering joint ownership, weigh up the pros and cons and strongly consider drafting an agreement to govern your rights and responsibilities.

By taking these steps, you can ensure that joint ownership of your trade mark is an asset to your business rather than a source of conflict.

If you require advice on trade mark ownership, control or in relation to any other aspect of intellectual property law, give us a call on 020 7096 2779 or email us.