Brand Control, Part 5: “The Subtle Art of Brand Control” — Trade Mark Ownership and Assignment

Trade marks are valuable assets — but like any asset, their value depends on who owns them.

Too often, businesses assume that if they’re using a brand, they own it. But that assumption can fall apart quickly in the face of legal scrutiny, especially when an investor, acquirer or opposing lawyer starts asking questions.

Getting trade mark ownership wrong isn’t just a technical slip. It can torpedo a funding round, delay a sale, or even expose a business to infringement claims from within its own camp.

🔗 Common Ownership Traps

Let’s start with a few real-world scenarios where ownership can become dangerously unclear:

1. Employees vs Contractors
If an employee develops a brand name or logo in the course of their employment, the default position is that the employer owns it. But if you used a contractor — say, a freelance designer or marketing agency — then unless there’s a clear written agreement transferring IP, they may legally own the mark.

This is especially true if the contractor applied to register the trade mark themselves — and it happens more often than you’d think.

2. Founders and Side Projects
A founder might register the brand name in their own name early on, before the business is incorporated. That might seem harmless — until the business seeks capital, or goes to sell, and it turns out the company doesn’t actually own its own brand.

Investors will spot this immediately in due diligence. So will buyers. And neither of them will want to negotiate with a founder’s ego when they’re paying for a company asset.

3. Joint Ventures
When two businesses collaborate on a new offering, they often co-create a brand. But without an express agreement, who owns it? Half each? One party? Neither?

Ambiguity in a joint venture brand is a recipe for dispute — particularly if one party starts using the brand solo down the track.

📑 Assignments and Transfers: Cleaning Up the Chain of Title

The good news? Trade marks are assignable — they can be transferred from one entity to another like any other form of property.

But they need to be:

• Documented in writing — via a deed or agreement; and

• Formally recorded with IP Australia (if the mark is registered).

Some common triggers for assignment include:

• Business restructures (e.g. transferring IP from founders to the company, or from one group company to another)

• Sale of business or assets

• Fixing past mistakes (e.g. if a mark was filed by one entity but you want the trade mark held by another entity)

You can’t just tell people a trade mark belongs to your company. If it was registered under someone else’s name — a founder, contractor, or prior owner — you need to assign it, and record the transfer.

🚫 Assignments Don’t Cure Invalidity

Be careful — an assignment won’t fix an invalid application.

If a trade mark application is filed in the name of a party who is not the true owner of the mark at the time of filing, the application is invalid. You can’t fix that simply by assigning it later to the correct entity. The application is fatally flawed from the start — and may be removed or opposed on that basis.

So how do you know who the “true owner” is?

Ask:

• Who created the mark?

• Was it created by an employee, contractor, or external agency?

• Was it commissioned, and if so, under what terms?

• Who controls the use of the mark in trade?

• Who will actually use the mark in connection with goods or services in Australia?

In most cases, the true owner is the entity that first intends to use the mark, or controls its use in trade and commerce. If you’re registering for a company that doesn’t exist yet — wait until it’s incorporated. If you’re using a contractor, make sure IP is assigned before the application is lodged.

If you’ve already used the mark as a trade mark before getting your corporate structure sorted, then the person or entity that first used it is probably the true owner. In that case:

• Either apply in that party’s name, or

• Assign the trade mark to your intended applicant before filing.

In either case, get tax and accounting advice first — there could be capital gains tax or other structuring implications worth considering before assigning IP or applying under the wrong name.

💡 IP Mojo Tip

Own the brand before you build the brand.

1. Identify the true owner on day one – the party that first creates and controls use of the mark.

2. Put it in writing – deed of assignment or employment/contractor clauses that clearly vest IP.

3. Record it – lodge the assignment (or the application) in the correct name with IP Australia straight away.

4. Audit early, audit often – confirm ownership before every financing, restructure, or marketing push.

If you nail these four steps, you’ll avoid the “who-really-owns-it?” drama that derails deals and drains legal budgets.