Sections 69 to 71 of the Trade Marks Act (Chapter 385) set out what a registered user registration actually achieves.
Section 69(1) — the central deeming
The permitted use of a registered trade mark shall be deemed to be use by the registered proprietor, and shall be deemed not to be use by a person other than the registered proprietor, for the purposes of section 14 and for any other purpose for which use by the registered proprietor is material under this Act.
This single subsection is the reason the registered user system exists. It does two things at once: it credits the licensee’s use to the proprietor, and it denies that the use is anyone else’s. A licensee cannot build up rights of its own through use under the licence.
| Provision | Why the proprietor’s use matters there |
|---|---|
| s 14(1)(a), (b) | Removal for no use in good faith, or three years of continuous non-use |
| ss 15(2), 17(2)(b) | Proving distinctiveness by use |
| ss 51, 52(c) | Whether the mark is distinctive at the commencement of proceedings |
| s 26 | Honest concurrent use and continuous prior use |
| s 73(2)(a) | Whether the mark was at any time in use in good faith in the country, on an assignment without goodwill |
Under section 1, permitted use is use by a registered user (a) on goods (i) with which he is connected in the course of trade, (ii) for which the mark remains registered, and (iii) for which he is registered as a user; and (b) complying with any conditions or restrictions to which his registration is subject.
Use outside those bounds is not permitted use. It does not count for the proprietor under section 69(1), it is not exempt from section 53(1), and it is a ground to cancel the entry under section 67(1)(d)(i).
Section 69(2) — use before registration
(a) a person is registered as a registered user; and (b) there has been previous use of the mark by that person (whether before or after the commencement of the Act); and (c) that use is in relation to goods for which he is registered and, where he is registered subject to conditions or restrictions, that use (i) complied substantially with them or (ii) did not so comply but was not such as to be contrary to the public interest,
subsection (1) has effect as if that previous use had been permitted use.
This is the retrospective operation of the section, and it is valuable. A distributor who has been selling under the mark for years before anyone thought to register the arrangement can have that history credited to the proprietor — provided the goods match and the use substantially complied with whatever conditions are later imposed.
It works alongside section 64(7), under which the Registrar may deem the registration to have commenced on the date the application was lodged, and section 17(3), under which pre-application use by a person under the applicant’s control, consent and authority who will be registered as a user may be treated as the applicant’s own use for distinctiveness.
Sections 69(3) and (4) — the proprietor’s common law rights
The registration of a person as a registered user, or the use by that person as a registered user, does not prejudice any of the rights arising at common law of the person who is the registered proprietor.
For the purpose of determining those common law rights, the use of the mark by a registered user shall be deemed to be use by the proprietor, and deemed not to be use by a person other than that person.
These carry the deeming beyond the Act. The goodwill generated by the licensee’s use is the proprietor’s goodwill, and it supports the proprietor’s action in passing off. That is what prevents a local distributor from claiming, at the end of the relationship, that the reputation in the market belongs to it.
Section 70 — infringement proceedings
Subject to any agreement subsisting between the registered user and the registered proprietor, the registered user is entitled to call on the registered proprietor to take proceedings for infringement; and if the proprietor refuses or neglects to do so within two months after being called on, the registered user may institute proceedings for infringement in his own name as if he were the registered proprietor, and shall make the registered proprietor a defendant.
(2) A registered proprietor so added as a defendant is not liable for costs unless he enters an appearance and takes part in the proceedings.
- “Subject to any agreement” — the licence can modify or exclude this. Read the agreement before relying on section 70(1), and address it expressly when drafting.
- The call must be made, and two months must pass. Make it in writing, identifying the infringement and the goods, and diary the two months.
- The proprietor must be joined as a defendant, not as a co-plaintiff — and is not liable for costs unless he appears and takes part.
Section 70(1) also feeds section 90(2): the groundless threats action does not apply where the proprietor, or a registered user acting in pursuance of section 70(1), with due diligence commences and prosecutes an infringement action.
Section 71 — the right is personal
This Part does not confer on the registered user an assignable or transmissible right to the use of the trade mark.
The licence cannot be sold, sub-licensed as of right, or passed on by operation of law. A sub-distributor who needs the protection of permitted use must be separately registered as a registered user under section 64, on a joint application with the proprietor. On a corporate restructure within a licensee group, the new entity needs its own registration — the old one does not follow the business.
Section 71 is consistent with the policy in section 64(5), which forbids a registration that would tend to facilitate trafficking in the trade mark. A freely transferable licence would be trafficking by another name.
Sources
- Trade Marks Act (Chapter 385) — ss 1, 14, 15, 17, 26, 51–53, 64, 67, 69–71, 73, 90
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.