Cautionary Tale: Who’s who in the zoo? Getting legal entities right
When it comes to intellectual property, precision matters. Most people instinctively think of precision in terms of technical details - claims, drawings, prior art searches. But there’s another detail that can be just as critical, and yet is often overlooked: having the correct legal entity on your documents and agreements. A simple oversight in naming can lead to loss of rights, messy disputes, or even the unintended transfer of valuable IP to the wrong party. This cautionary tale - drawn from real-world experiences - shows how a lack of clarity around “who’s who in the zoo” can unravel even the most carefully laid IP strategies.
Case Study 1: When an NDA didn’t mean what it seemed
Our client, BestCo, began discussions with the manager of a corporate incubator at XCo. To protect themselves, BestCo ensured the conversation was covered under a non-disclosure agreement (NDA) with XCo. So far, so good.
But here’s where things became complicated. That same manager also happened to be the CEO of a competitor, WorstCo. When confidential information shared under the NDA later appeared in WorstCo’s activities, the manager argued that the NDA applied only to them in their role at XCo - not in their capacity as CEO of WorstCo.
WorstCo argued that because the NDA was tied to a specific corporate entity (XCo) and not the individual or their other roles, they were able to exploit BestCo’s confidential information.
A hard lesson was learned: always consider the roles and affiliations of the individuals across the table, not just the letterhead of the company they represent.
Case Study 2: Splitting names, splitting entities
Years later, BestCo’s founder departed on bad terms and started a new company in the same industry. He also renamed his trust entity - which had originally been set up under the “BestCo” name - to his personal name, the Mr Smith Family Trust. Meanwhile, BestCo itself was renamed EpicCo.
At this point, we discovered that the Australian Company Number (ACN) attached to “BestCo” in our files was not actually for the operating company at all, but for the trust entity - two different legal entities that had, for a time, shared the same trading name.
Since there was yet another entity that owned the IP, there was no real problem with ownership. In general, however, it is critical to determine who actually owns what. Sorting out the chain of title for IP rights and agreements can become an unnecessarily tricky exercise if entities are not identified correctly from the start.
Case Study 3: Crossing borders, crossing wires
In another matter, we were instructed to file a patent application in the name of TechCo Pty Ltd (Australia). However, it later became clear that the inventor was employed by TechCo Inc (United States). The confusion arose because both companies used the same trading name, and the client’s internal communications blurred the distinction between them.
Filing under the wrong entity risked misalignment of ownership between the inventor, their employer, and the applicant. This could have jeopardised enforceability of the patent and, in some jurisdictions, might have meant the loss of rights altogether.
The takeaway
In the zoo of corporate structures - companies, trusts, subsidiaries, and overseas entities - it can be difficult to keep track of who is who. Trading names, acronyms, and shorthand can confuse the true legal entity behind them, and multiple entities may operate under similar names.
The golden rule is simple: always identify your client (and contracting parties) by their ABN or ACN, not just by their trading name.
Doing so provides certainty about ownership, reduces the risk of disputes, and ensures that NDAs, assignments, and patent filings bind the right parties. It may feel like paperwork, but it is paperwork that protects the very heart of a business’s value.