Under US trademark law more than one person is able to own a trademark, and interested parties are able to apply together. Trademarks owned by two or more parties are called joint trademarks.
A variety of reasons motivate business owners to opt for this type of ownership. Typically, joint ownership is beneficial when multiple individuals regularly use and have equal rights to and control over the goods or services in question. This type of ownership is generally applicable only to this scenario. For example, multiple sole proprietors who are interested in using a trademark or manufacturers and distributors who both own a product.
The product development, marketing efforts and sales of goods and services through joint ownership can help organizations maintain their brand power and reputation. Ultimately, by establishing the business as a sole and unique supplier, this agreement protects the business’s intellectual property and consumer interests.
How Can You Get Joint Ownership Of A Trademark?
A legal contract stating joint ownership of a trademark is necessary.
It’s advisable that this agreement is recorded in writing and signed by all parties. Depending on the circumstances, it can be handled independently or included in a broader business agreement. It’s up to the partners to determine how they want to divide and determine ownership rights. Regardless of how the agreement is structured, each owner must agree to maintain the good standing of the trademark.
A joint ownership contract should include details regarding:
- Termination of the joint ownership
- Who determines and covers the costs of legal action against infringers
- The proper usage of the trademark
- Each owner’s financial obligations
- What to do if one of the joint owners passes away or is dissolved
What Are The Pros And Cons Of Joint Trademark Ownership?
Pros
A joint trademark ownership arrangement has several benefits, depending on the relationship between the owners and the circumstances.
Distributors and manufacturers can use it to resolve ownership conflicts. While each partner is liable for his or her actions, they’re also legally entitled to utilize the trademark in its entirety and to carry out activities in the partnership’s name.
On that same note, unless otherwise agreed, joint owners cannot claim full ownership of the trademark or use it entirely as their own. Furthermore, neither party can have total control of the trademark or the goodwill it generates.
Even if one of the parties of a shared trademark is dissolved, the trademark remains protected since no individual has the right to claim full ownership. As a result, each joint owner automatically loses their ownership and usage rights, further protecting the value of the trademark.
Cons
However, joint ownership does have its drawbacks, particularly when the partners disagree or are no longer interested in working together.
Joint ownership can make it difficult to transfer ownership and may cause issues when it comes to licensing. There’s also the risk of trademark functionality being compromised, which can potentially lead to litigation. Establishing a well-detailed agreement from the start is essential to avoiding court disputes.
In the event that owners are unable to resolve a dispute, the court may ultimately declare the mark invalid. There are times, however, when a court will grant exclusivity to the party that has better maintained the product or service over the course of time.
If You Need a Consulting Regarding Joint Ownership Of A Trademark, Sanchelima & Associates Can Help
Sanchelima & Associates, P.A. is one of the leading intellectual property law firms in South Florida. With over 40 years of experience, we have represented the IP interests of a wide array of businesses in the US and abroad, including Fortune 500 companies. Whether you need a consultation or prosecution of a patent, trademark, or copyright, we can protect your business’s interests.
Contact us to book your consultation!
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