A registered trade mark is property, and section 73 of the Trade Marks Act (Chapter 385) governs how it changes hands.
Section 73(1) — assignable with or without goodwill
Subject to this section, a registered trade mark may be assigned or transmitted — with or without the goodwill of the business concerned in the goods for which the mark is registered, or of some of those goods.
Two definitions in section 1 set the vocabulary. “Assignment” means assignment by act of the parties. “Transmission” means transmission by operation of law, devolution on a personal representative, and any other mode of transfer that is not an assignment — so a deceased estate, a corporate amalgamation and a vesting order are all transmissions.
Section 48(1) supplies the power: the registered proprietor has, subject to any rights appearing from the Register to be vested in some other person, power to assign the mark and to give good discharges for the consideration. Section 48(2) preserves equities, enforceable as in respect of other personal property — though under section 7 a notice of trust is never entered in the Register.
Section 73(2) — when an assignment without goodwill fails
(a) the mark was not at any time in use in good faith in Papua New Guinea by the assignor or his predecessor in title; or
(b) a substantially identical or deceptively similar mark continues to be used by the assignor after the assignment in relation to other goods, where (i) there exists a connexion in the course of trade between those goods and the assignor, and (ii) those goods are (A) of the same description as the assigned goods, or (B) of such a description that the public is likely to be deceived by the use of the mark by assignor and assignee on their respective goods.
The two limbs address different mischiefs. Paragraph (a) prevents trafficking in marks that were only ever registered to be sold. Paragraph (b) prevents a split that would leave two businesses using confusingly similar marks on related goods — the very confusion the Act exists to stop.
The test is use in good faith in Papua New Guinea. Section 85 matters here: applying the mark in Papua New Guinea to goods to be exported, and anything else done here that would be use if the goods were sold locally, is deemed to be use of the mark. So an exporter’s mark is not caught by paragraph (a) merely because nothing was sold in the domestic market.
Sections 73(3), (4) and (5) — the three ways out
| Provision | Effect |
|---|---|
| s 73(3)(a) | Paragraph (2)(a) does not apply where the mark was registered with the intention that it should be assigned to a corporation to be formed and it has been so assigned — the situation contemplated by section 35(1)(a) |
| s 73(3)(b) | Nor where the mark was registered with the intention that a person should use it as a registered user, and a registered user was registered within six months of registration of the mark and used the mark within that period |
| s 73(4) | An assignment is not invalid if, at the date proceedings are instituted questioning it, the mark has come to denote to the public a connexion in the course of trade between the goods and the assignee to the exclusion of all other persons — or, where the registration is limited to a particular area, to the exclusion of all others within that area |
| s 73(5) | An assignment shall not be held invalid except in proceedings instituted within three years after the registration of the assignment |
The three-year clock runs from the registration of the assignment, not from the assignment itself. An unregistered assignment therefore never starts the clock, and remains open to challenge indefinitely.
Section 74 requires the person who becomes entitled to apply to register his title — and under section 74(3), except on an appeal or a section 13 application, an unregistered instrument is not admissible in evidence in proof of title unless the Court otherwise directs. See registering an assignment.
What cannot be split
- Associated trade marks — section 29 provides that they are assignable or transmissible only as a whole and not separately. The association must be dissolved first under section 28(2), on the Registrar being satisfied there is no likelihood of deception or confusion.
- A registered series — under section 31(2) every mark in a series is deemed to be an associated mark, and so is caught by section 29.
- A registered user’s rights — section 71 provides that Part IX does not confer on a registered user an assignable or transmissible right to use the mark. A licence cannot be sold on.
- Joint proprietors — under section 27 the Act treats their rights as those of a single person, so an assignment requires all of them.
Sections 73(6) and (7) — what passes, and what does not
All rights subsisting in a registered trade mark, whether under this Act or otherwise, shall be deemed to be assigned on the registration of the assignment of the mark.
If goods bearing a registered mark are purchased or acquired by a person, the sale of or other dealing in those goods by that person, or by anyone claiming under or through him, is not an infringement by reason only of the mark having been assigned by the registered proprietor to some other person after the purchase or acquisition.
Subsection (6) protects the supply chain. Stock lawfully bought before a sale of the brand can still be sold afterwards; the change of ownership of the mark does not turn existing inventory into infringing goods.
Assigning a mark — a checklist
- Check the Register for associations, conditions, limitations, disclaimers and registered users. Section 68 requires the Registrar to cancel a registered user entry for goods the mark is no longer registered for.
- Dissolve any association under section 28(2) if only part of a family is being sold.
- Decide about goodwill. Assigning with the goodwill avoids section 73(2) altogether. If assigning without, work through paragraphs (a) and (b) and the section 73(3) exceptions.
- Deal with the assignor’s continuing use. Paragraph (2)(b) is the trap in a partial sale — confine the assignor’s remaining marks and goods so that the public is not likely to be deceived.
- Transfer the related rights too — copyright in the artwork under the Copyright and Neighbouring Rights Act 2000, domain names, and any business name registered under the Companies Act 1997.
- Register the assignment promptly under section 74 — it starts the section 73(5) three-year clock and makes the instrument admissible in proof of title.
- Then check the renewal date. Under section 60 renewal is on application by the registered proprietor, so the Register must show the new owner.
Sources
- Trade Marks Act (Chapter 385) — ss 1, 7, 13, 27–31, 35, 48, 60, 68, 71, 73, 74, 85
- Copyright and Neighbouring Rights Act 2000
- Companies Act 1997
Before relying on anything here, read the current text of the Trade Marks Act (Chapter 385) and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.