Who can own a trademark?

Who can become a trademark owner? This question is regularly asked to the Industrial Property Attorneys.

The choice of incumbent of a brand depends on the objectives of the creators since it has legal and economic consequences.

Several options are available to entrepreneurs: the incumbent of a trademark can be a natural person, a legal entity, an individual on behalf of a company in the process of being formed, or several persons in joint ownership.

The natural person, owner of a trademark

Private individuals, traders and craftsmen with sole proprietorships and self-employed persons with a liberal profession have the right to be owners of a brand.

Creators often opt for this solution when they are alone at the helm of an activity, or when they have not yet created a company. It must be said that it brings advantages:

• The contractor is the only owner of the brand.
• There's still incumbent of the brand, even if it leaves its structure.
• If the creator grants a trademark license to his company or to a third party, royalties may be paid to him.

The other side of the coin comes into play at the time of a dispute. Without a licence, only the owner of the trademark can initiate an infringement action, whereas it is the company that uses the trademark. As a result, the damages received may be lower than if the company is incumbent of the trademark, because it is the trademark that suffers the commercial damage. The structure sometimes has the possibility to act in unfair competition and obtain compensation. However, this damage is more complicated to prove.

Furthermore, licensing is important because, in principle, the trademark must be used by its owner or by an authorized third party. Without a license, the trademark could be considered as unused by its owner, and risk Forfeiture for non-use.

The company, owner of a trademark

In this context, the legal person is owner of the brand. This decision is frequently taken by the manager creating a company with one or more partners or planning to develop its structure.

Legal entities include commercial companies (SARL, SA, SAS...), civil companies (SCI, GAEC, SCP...), EIGs, foundations, associations, trade unions, local authorities, public institutions, the State...

The benefits of this ownership are the following:

• In the case of an infringement action, the company may obtain damages;
• If the trademark is exploited by the company directly, it is not necessary to make a license agreement (the risk of lapse is much lower);
• The brand becomes an asset of the company and is valued for accounting purposes.

There is a downside to this situation: if the manager leaves or is evicted from his company, he does not have the opportunity to "take" the brand with him.

An individual, owner of a trademark on behalf of a company in the process of being formed

This is a special case in French law: a company in the process of formation can register a trademark. In reality, it is the creator who carries out the deposit procedures on his behalf.

Once the company is created, the company can to regularize the deposit with the INPI to become officially incumbent of the mark. To do so, it is imperative to make a rectification entry, enclosing the following documents

• In principle, the company's articles of association mention in a dedicated appendix the takeover of the trademark in the name and on behalf of the company prior to its registration. In the absence of such a document, a decision by a majority of the partners states the takeover of the trademark in the name and on behalf of the company prior to its registration. property of the brand by the company;
• A K-BIS extract less than 3 months old
• A letter to INPI explaining the change

This situation has a major disadvantage: as long as the regularization has not been done, the trademark does not have a real owner and therefore cannot be defended. The situation can also be problematic if the company is not ultimately created.

Therefore, this option is recommended for people who are sure to create their company. If it is a vague project, it is preferable to file directly by the individual.

Co-owners of a trademark

A brand can also have several owners. It is therefore jointly owned by individuals and/or legal entities. This alternative is not ideal because of the indivision regime governing it. Indeed, important decisions relating to the trademark must be taken unanimously (in particular the assignment of the trademark, its abandonment or the granting of a license...).

It is necessary to establish co-ownership rules to avoid obstacles to the exploitation and management of the trademark.

Do not hesitate to contact a professional of IP to make the right choice in terms of trademark ownership.

Update: 04/11/2022