AJPark

New Zealand

Trade mark owners who do not assign their trade marks before their company ceases to exist will lose ownership of their trade marks to the Crown.

Although many companies are incorporated in New Zealand, they do not always withstand the test of time. It is not uncommon to hear that a company has been deregistered.

Companies are wound up, struck off, liquidated or placed in receivership for many different reasons. But during their trading life, many of these companies own assets like plant, stock and land as well as trade marks, or other intellectual property rights.
 
Before a company ceases to exist, its owners (or the liquidator or receiver) usually sell or dispose of the company’s brick and mortar assets. But intangible assets like registered trade marks are often forgotten and do not get transferred. 

This situation may sound unusual. But it is not.  It happens more often than you think. In fact it happens quite regularly.

Why resurrect an old trade mark?

The owners of a company that ceases to exist might later revive the business and start trading under a new name. If they had owned a trade mark that was used successfully to market a product or service in the past, it might still appeal for the same or a similar product or service at a future time.   No doubt its owners would be keen to resurrect the brand, dust if off, and relaunch it. But that will only work if the owners can get their hands on their old trade mark again.

We all know that ‘old is cool’. So if you, as a business owner, could lay claim to something old, particularly if that something had history and an appeal to your customers, why would you not do so?

What’s the legal position?
If a company is deregistered and removed from the New Zealand companies register, trade marks it owned but did not transfer before the company ceased to exist, are considered bona vacantia.

Bona vacantia means “ownerless property that by law passes to the Crown”.  Ownership of any trade mark registrations not transferred vests in the Crown. 

Often however, the fact that ownership of a trade mark has changed only comes to light many years after the company has been struck off.  This situation can make it even more complex to determine who actually owns the trade mark(s).

The company, as the owner of the trade mark registration(s), no longer exists as a legal entity. This means that the company is not able to assign the ownership of the trade mark registration to another interested party.  The company no longer has the ability to deal with the assets of the business it held before it was deregistered. 

If the original owner wants its trade mark registration(s) back or if another party sees value in the trade mark(s), it can apply to the Crown for the trade mark(s) to be transferred to it. 

Treasury is the New Zealand government agency that deals with requests for the Crown to deal with bona vacantia property.

If you can’t get the trade mark back what else can you do?
An alternative would be to file a new trade mark application. But there can be traps with this so local expert advice should be sought. 

If the trade mark registration had not been used for a continuous period of three years from registration, another party may have started to use the trade mark thinking that the trade mark registration was vulnerable to an attack for non-use.  Or another party may not have been aware of the existence of the registered trade mark rights and acquired concurrent rights through use.  

How can trade marks of deregistered companies be assigned?
To record a transfer from the Crown, the Intellectual Property Office of New Zealand needs a record of the transmission of the trade mark registration from the deregistered company to the Crown and from the Crown to the other interested party.

Other supporting documents will also need to be filed including copies of any documents and evidence Treasury might request.

Treasury requests documents and evidence it needs to action a bona vacantia request on a case by case basis.

These documents are likely to include:

• a statutory declaration by a director of the deregistered company which was the owner of the trade mark (or public accountant, solicitor or company secretary) at the time the company was removed from the register:
• providing details about the trade mark registration including a certified true copy of the original trade mark
• setting out the circumstances about the deregistration of the company from the register
• explaining why the trade mark registration was not transferred before the company was deregistered
• confirming the company held the trade mark registration in its own right and not on trust for any other body corporate or any other person
• an application by the party interested in asking the Crown to deal with the matter as bona vacantia
• an indemnity from the interested party to the Crown for all or any liability that may be incurred by the Crown for all actions taken in transferring the ownership of the trade mark registration
• a letter from the Companies Office stating the company was deregistered
• details of  the section of the Companies Act under which the company was deregistered and removed from the register
• the date of removal and the reference to its publication in the Gazette (if this was done)
• confirmation that the company has not been restored to the register.

What does the Crown do with requests to assign bona vacantia property?

The Crown has various options available to it as to how it will proceed. An application could be made to the Court to have the trade mark vested in it under the relevant section of the New Zealand Companies Act 1955 or 1993.

The Secretary to the Treasury could disclaim title to the trade mark under the relevant section of the Companies Act 1955 or 199.  This would enable you to apply to the Court to have the trade mark vested in you.  You could then apply to the Intellectual Property Office of New Zealand to record yourself as owner of the trade mark.

The trade mark could vest in the Crown on the understanding that the Crown would then transfer the trade mark to you.  If you wish to proceed with this option, then further information and evidence will need to be supplied. This includes:

• evidence that no person who might have benefited in the winding up or liquidation of the company would be prejudiced
• written consent from the shareholder(s) at the time the company was deregistered, consenting to the transfer of the ownership of the trade mark registration to the other interested party. This consent is usually only requested if the company was solvent at the time it was struck off.

The Crown will expect to recover its costs and may want payment in advance. The Crown can require an undertaking that such costs will be paid.

Australia

The situation in Australia is not dissimilar to New Zealand but there are some differences.

Upon deregistration of an Australian company, all property not previously transferred from the company vests in the Australian Securities and Investments Commission (ASIC). 

“Property” includes intangible assets like trade marks and other intellectual property rights.
 
Once a company is deregistered, neither the company nor anyone else (except ASIC) can dispose of or deal with the property.  If property is disposed of or transferred, the transmission will be held invalid.

ASIC may act on behalf of the deregistered company or its liquidator if ASIC is satisfied that the company or liquidator would be bound to act if the company still existed.

If the outstanding property of the company is not transferred prior to deregistration of the company, the property remains with ASIC until it is either sold or disposed of as ASIC thinks fit, or the company is restored to the register.

Unless a company is reregistered, it is no longer recorded on the Australian companies database as a registered company and is therefore unable to trade or take any action as a body corporate.

Once reinstated, the company returns to ‘registered’ status as if it were never deregistered.

How can an Australian company be reinstated?

There are two different ways to request reinstatement of an Australian company.

The first is to apply to ASIC. ASIC can reinstate a company registration if satisfied that the company should not have been deregistered.  It is up to the entity applying for reinstatement to demonstrate relevant facts to support the position that the company should not have been registered.  This could involve showing that there was a procedural defect or oversight in the procedure leading to deregistration or that the company was carrying on business or was in operation at the time it was deregistered.

For reinstatement to occur, it is necessary to file with ASIC the following:

• Statutory Declaration supported by appropriate documents
• any outstanding documents like annual returns.  The documents must be completed and correct before reinstatement will occur.
• lodging and late fees for the filing of the above documents and any other unpaid documents already on record
• outstanding annual review fees, late review and late lodgment fees
• outstanding penalty fees issued under a penalty notice to the company or one of the officers of the company, court ordered fines and ASIC court costs
• the prescribed fee for the application for reinstatement.

The second way to reinstate a company is to make a Court application.

It is possible to apply for reinstatement of a company before either the Federal Court of Australia or the Supreme Court of one of the States or Territories.

The Court can make an order that ASIC reinstate a company if it is satisfied that the company should be reinstated.  The Court may also make an order validating acts between deregistration and reinstatement, if it considers it appropriate to do so. 

If a company is not reinstated to the register, it cannot trade and any remaining company assets become controlled by ASIC and may be sold or redeemed.

Generally ASIC will only use its power to dispose of property vested in it as a last resort.

If ASIC is approached to divest of property it has received, sufficient evidence will need to be submitted to ASIC to satisfy it that its discretion should be exercised in the way requested. 

An applicant seeking the sale of property held by ASIC, should take on board the following:

• ASIC takes only the same property rights that the company itself or the liquidator held. The property remains the subject to any existing security, interest or claim.
• If ASIC sells the property, it will not be sold with any warranties whatsoever.  ASIC sells nothing more than its interest.

The onus is on the applicant to make thorough and comprehensive searches regarding ownership and encumbrances of the trade mark.

What documents will ASIC require to action requests?
ASIC requests documents and evidence it needs to action a bona vacantia request on a case by case basis.
 
These documents are likely to include:

• a statutory declaration
• identifying the property to be sold together with verified copies of the certificate of title
• providing the name and ACN of the former company
• detailing the circumstances, nature and extent of the interest that the applicant believes vest with ASIC.  This includes all legal and beneficial interests and registered and unregistered encumbrances.
• setting out the results of all enquiries made about the interests of any former company officers including secretary, liquidator (if any), shareholders or secured creditors, attaching copies of all correspondence sent and replies received
• a deed of indemnity may be required in some circumstances
• a valuation of the property
• copies of any other relevant supporting documentation
• transfer documents
• further material may be required arising out of an analysis of the above documentation as required on a case by case basis
• payment of the appropriate fee(s).

ASIC will usually decide within 28 days of receipt of all of the information it considers relevant whether it will exercise its discretion or not.  ASIC may not exercise its discretion to sell the asset.

So what’s the moral?

Obtaining ownership of a trade mark that vests with the Crown in either Australia or New Zealand can be complex and time consuming.  This can easily be avoided by proactively assigning all trade marks (and other intellectual property) before a company is deregistered and removed from the official records.

An edited version of this article was published in Trademark World, November 2008.

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  Corinne Blumsky

  Partner