RIGHTS OF ASSIGNEES OF PENDING TRADE MARK APPLICATIONS

• Date: 01 December 1995
• Citation: (1995) 7 SAcLJ 438
• Author: NG-LOY WEE LOON
• Published date: 01 December 1995

Saga Foodstuffs Manufacturing (Pte) Ltd v Best Food Pte Ltd 1

I. INTRODUCTION

With the increasing value of intellectual property rights in the business world today, commercial dealings in intellectual property rights are starting even before such rights come into existence. In the case of copyrights and patents, the relevant legislations expressly provide that “future copyright” and applications for patents can be assigned.2 The Trade Marks Act3 has no equivalent provision for the assignment of pending trade mark applications. While there may be some doubts as to whether there are any assignable rights in a trade mark application,4 such dealings have been undertaken in practice by an assignment of the benefit of the trade mark application. Thus, the assignment clause would typically record the assignment by the applicant for the trade mark of the “full benefit of the application for registration of the trade mark to the intent that upon the application being granted and registration being made this assignment shall be deemed to vest the proprietorship of the trade mark in the Assignor as registered proprietor absolutely…”.5 Thus structured, the assignment of a

trade mark application is really an equitable assignment, i.e. an agreement to assign future property,6 which assignment is perfected upon the happening of an event, namely, the registration of the trade mark by the Registry of Trade Marks.7

The effect of an assignment of the benefit of a trade mark application was called into question in the case of Saga Foodstuffs Manufacturing (Pte) Ltd v Best Food Pte Ltd.

II. FACTS

The plaintiffs who were manufacturers of rice vermicelli (“beehoon”) issued a writ against the defendants in 1991, claiming that the defendants had passed off the defendants’ rice vermicelli as the plaintiffs’ product by using packaging which was confusingly and deceptively similar to the plaintiffs’ get-up.8

After the close of pleadings, the plaintiffs applied for leave to amend their writ to add a new cause of action based on infringement of the plaintiffs’ registered trade mark. The application for the registration of this trade mark had been filed by the plaintiffs’ predecessors. The benefit of this trade mark application was then assigned to the plaintiffs. The trade mark was subsequently accepted by the Registry of Trade Marks for registration. The chronology of the relevant events is shown below:

The obvious difficulty with the plaintiffs’ application was that the assignment had taken place after the issue of the writ. Hence, the defendants argued, the plaintiffs did not have a cause of action in trade mark infringement as at the date of commencement of the proceedings, namely, the date of issue of the writ. To overcome this difficulty, the plaintiffs relied on s 21(1) of the Trade Marks Act which provides that, when a trade mark is registered, it shall be registered as of the date of the application for registration.9 In other words, the rights in a trade mark upon its registration accrue as of the date of its application. The plaintiffs’ argument was that, upon the registration of the trade mark, they became vested with the rights to sue for infringement as of the date of the trade mark application. Since this date was before the issue of their writ, the plaintiffs claimed that they had a cause of action in trade mark infringement as at the date of the issue of the writ. The issue before the court was: when do the rights of the assignee of the benefit of a trade mark application accrue — from the date of assignment or from the date of the trade mark application?

Lai Siu Chiu JC (as she then was) rejected the plaintiffs’ arguments. She held that the general principles regarding assignments apply in this case: the plaintiffs as assignees step into the shoes of the assignor and acquires the rights and benefits of the assignor as from the date of the assignment, ie. February 1992. She was of the view that s 21(1) of the Trade Marks Act does not change the law on assignments; all it does is to make retrospective the registration date to the date of trade mark application. She was fortified in taking this view because the High Court of Australia in the case of Colbeam Palmer Ltd v Stock Affiliates Pty Ltd10 had held that, in an action for trade mark infringement commenced by the assignee and assignor of the registered trade mark, the defendants were liable to the assignor in respect of infringing acts that took place before the date of registration of the assignment, and to the assignee in respect of infringing acts that took place thereafter. Reference was also made to a passage from Shanahan’s Australian Law of Trade Marks and Passing Off11 where it was noted that when the Registrar of Trade Marks in Australia receives an application to register an assignment of the benefit of a trade mark application prior to the actual registration of the trade mark, the registration of the trade mark will be issued in the name of the assignor, and the transfer of title to the assignee will be registered immediately thereafter. To the learned Judicial Commissioner, the case law and practice in Australia under their Trade Marks Act 1955 accorded with her view that the assignee in an assignment of a pending trade mark application does not step into the shoes of the assignor as at the date of the application for registration of the trade mark, but only as at the date of the assignment.

The learned Judicial Commissioner then affirmed that the rule of amendment of pleadings is that the amendment is retrospective to the original date on which that pleading was filed. In this case, the amendment sought by the plaintiffs, if allowed, would take effect as of the date the writ was filed, ie. 27 November 1991. As at this date, the plaintiffs did not have a cause of action in trade mark infringement, having acquired the rights in the trade mark after this date. The plaintiffs’ application to amend their writ was therefore dismissed.

III. COMMENT

1. When assignee’s rights accrue

The rule that an amendment in a pleading is retrospective to the filing date of the pleading, is a well-established one12 which needs no elaboration. No further comment need also be made of the obvious consequence that follows from this rule — namely, that a plaintiff may not amend his writ to add a cause of action which has accrued to him since the issue of his writ — save to give an example of the application of this rule in a case involving intellectual property rights. In Roban Jig & Tool Co Ltd and Elkadart Ltd v Taylor and Ors,13 Whitford J ordered that the plaintiffs’ action be struck out when he found that the plaintiffs did not have either legal or equitable title to the copyright in...