Trademark Assignment

Trademark assignment is defined as the part of transfer of ownership of a trademark from one party to another. Trademark Assignment happens whenever the ownership rights of such trademark or brand, is transferred from one owner or party to another person. This can be done be with or without the goodwill of the business.

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Overview

Trademark Assignment

Trademark Licensing

Types of Trademark Assignment

Requirements

Process for a Trademark Assignment

Restriction on Assignment of Trademark

Who Can Register Trademark Assignment

Benefits of Trademark Assignment

Why Legaltax?

FAQ’s

Overview

A trademark is more than just the name of your business; it can also include a logo or a “combined mark” that covers both the business name and the associated logo. Like any other property or asset, the owner of a trademark (the assignor) has the right to sell, license, or transfer it. This transfer can be carried out through a Trademark Assignment Agreement or Trademark Licensing. This article provides an overview of trademark assignment, discussing its benefits, the different types of assignments, the prerequisites, and the procedure involved in transferring a trademark.

Trademark Assignment

A trademark is a form of intellectual property, and like any other asset, the proprietor has the authority to sell, license, or transfer it. This transfer can be accomplished through a Trademark Assignment or licensing.

When a trademark is assigned, there is a change in the ownership of the registered brand. In contrast, licensing allows the original owner to retain the benefits of the trademark while granting limited rights to a third party. The assignment can be done with or without transferring the goodwill of the business. For registered trademarks, such an assignment must be recorded in the Trademark Register.

Here are some advantages of trademark assignment for both the owner and the buyer:

  • The trademark assignment allows the owner to monetize the value of their brand.
  • The assignee gains the rights to an already established brand, benefiting from its existing reputation.
  • Trademark assignment helps both the assignor and assignee expand their business.
  • In case of disputes, the trademark assignment agreement serves as a legal document to establish the rights of the assignor and assignee.

Trademark Licensing

Trademark licensing allows others to use a trademark without transferring ownership, and this can apply to all or some of the goods and services covered by the trademark. Although the Trademarks Act does not explicitly mention the term ‘License,’ it refers to the concept as a ‘Registered User.’

Trademark licensing benefits both parties involved. The licensor retains ownership rights and earns royalties from the mark’s use, while the licensee can expand their market presence and build a reputation by leveraging the established brand.

Licensors have the flexibility to set terms on how the trademark can be used. They can limit the licensee’s rights regarding the products or services associated with the mark, the duration of its use, and the geographical area within which the mark can be utilized.

Statutory Definition of Trademark Assignment:

According to Section 2(1)(b) of the Trade Marks Act, 1999, “Assignment” refers to a written agreement between the parties involved.

Who Can Assign a Trademark?

Section 37 of the Trade Marks Act, 1999, states that the individual listed in the register of trademarks as the proprietor has the authority to assign the trademark and can provide a valid receipt for any consideration received for such assignment.

Assignability of Registered or Unregistered Trademarks:

Section 38 of the Act allows a registered trademark to be transferred with or without the goodwill of the business, either for all the goods or services it covers or for specific ones. Additionally, Section 39 provides that an unregistered trademark can also be assigned with or without the goodwill of the business.

Types of Trademark Assignment:

There are four types of trademark assignments:

  1. Partial Assignment: In a partial assignment, the assignor transfers ownership rights for the trademark only for specific products or services.
  2. Complete Assignment: This type involves the transfer of all rights related to the registered trademark from the assignor to the assignee.
  3. Assignment with Goodwill: This occurs when the assignor transfers not only the trademark but also the associated goodwill, rights, and entitlements. The assignee can then use the trademark for all goods or services, including those already in use by the assignor.Example: If Mr. A owns the trademark “TM” used for clothing and footwear and assigns it to Mr. B along with the associated goodwill, Mr. B can use the trademark for clothing, footwear, and any other goods or services.
  4. Assignment without Goodwill (Gross Assignment): In this type, the assignor transfers the trademark but restricts the assignee from using it for the products or services already associated with the assignor’s business. The goodwill related to the trademark is not transferred.Example: If Mr. A owns the trademark “TM” used for clothing and footwear and assigns it to Mr. B for other goods or services without transferring the goodwill, Mr. B cannot use the trademark for clothing and footwear. Mr. B would need to develop separate goodwill for the trademark in relation to other goods or services.

Requirements/ Checklist for Assigning Trademark

Assets to be Assigned:

  • Pending trademark applications
  • Issued trademark registrations
  • Goodwill
  • International registrations
  • Common law trademarks
  • Names of living or deceased individuals
  • Domain names, email accounts, social media accounts, website accounts, etc.

Execution Requirements:

  • Signatories
  • Witness
  • Notarization
  • Legalization
  • Execution date and place
  • Power of attorney

Process for a Trademark Assignment

The assignment of a trademark involves the transfer of intellectual property rights from one party to another, with or without the associated goodwill. The assignee, who acquires the rights to the certified trademark, must apply for the assignment in the prescribed manner. The process involves several key steps:

  1. Filing an Application: The assignor, assignee, or both can submit an application for the trademark assignment using Form ™-P to request the registration of the assignee as the subsequent proprietor.
  2. Application Submission: The application must be filed with the Registrar of Trademarks within six months from the date of acquiring proprietorship. Late submissions are allowed but may incur different fees.
  3. Assignment Without Goodwill: For assignments without goodwill or of a certified trademark, approval from the Registrar is required within six months from the date of the assignment or within an extended period provided by the Registrar.
  4. Advertisement: The assignment must be advertised as directed by the Registrar, within the specified timeframe.
  5. Submission of Documents: A copy of the Registrar’s direction and the advertisement must be submitted to ensure compliance with the directives.
  6. Registration of Assignment: Upon receiving the application and necessary documents, the Registrar, if satisfied, will register the assignee as the new proprietor of the trademark, and the details of the assignment will be recorded in the trademark register.

Restriction on Assignment of Trademark:-

  • Parallel Use Restriction:
    Assignment that results in granting exclusive rights to different individuals for the same or similar goods or services, which may lead to deception or confusion, is prohibited. This ensures that a trademark cannot be used exclusively by multiple parties for identical or similar goods or services, preventing parallel use. (Section 40)
  • Multiple Territorial Use Restriction:
    Assignments that create exclusive rights for different individuals in various regions of India for the same or similar goods or services are not allowed. This restriction prevents the assignment of fragmented rights across different parts of India.

Who Can Register Trademark Assignment?

  1. Assignment of Trademark: Key Provisions and ProceduresUnder Section 45 of the Trade Marks Act, a person (subsequent proprietor) who acquires a trademark through assignment must apply for the registration of the assignment with the Registrar of Trademarks. The Registrar will record the assignee as the new proprietor of the trademark for the assigned goods or services, subject to the Registrar’s satisfaction.If the validity of an assignment is disputed, the Registrar may defer registration until a competent court resolves the matter. The Registrar is required to process the application for assignment registration within three months of receipt.Rule 77 of the Trademark Rules, 2017:
    If there is any doubt about the veracity of statements or documents submitted, the Registrar may request additional proof of title. Any document found insufficiently stamped will be impounded by the Registrar.Upon approving the assignment, the Registrar will record the following details in the register (as per Rule 84 of the Trade Marks Rules, 2017):

    • Name and address of the assignee
    • Date of assignment
    • Description of the assigned rights
    • Basis of the assignment
    • Date of entry in the register

    Rights of the Assignor Upon Assignment:
    The assignor relinquishes all rights, title, and interest in the trademark once the assignment deed is executed, regardless of whether the assignee’s name is updated in the Registrar’s records. This was upheld in the case Classic Equipments Pvt. Ltd. vs. Johnson Enterprises (2009), where it was ruled that the assignor cannot cancel the assignment post-execution.

    Rights of the Assignee Before Registration is Complete:
    Though Section 45 mandates the assignee to apply for registration, rights and titles are considered to be conferred upon execution of the assignment deed. This was clarified in M/S. Modi Threads Limited vs. M/S. Som Soot Gola Factory (1990), which stated that the assignee could protect the trademark from misuse even if the registration is pending.

    The assignee can file a civil suit to prevent unauthorized use of the trademark during the interim period before the assignment is recorded.

    Forms for Recording an Assignment:

    • Pending Trademarks: Form TM-M, with a fee of INR 900 per mark.
    • Registered Trademarks: Form TM-P, with a fee of INR 9,000 per mark.

Benefits of Trademark Assignment

Unlock Value: An assignment agreement enables the brand owner to realize the value of the brand, which previously held value only on paper. For the assignee, this offers a significant advantage by entering the market with an already established and recognizable brand, rather than building a new one from scratch.

Valid Proof: In the event of a trademark dispute, legal rights can be promptly established through the assignment agreement. The Registrar ensures all necessary checks are performed by verifying the validity of the agreement’s clauses and formally recording the assignment in the Trade Marks Journal.

Why Legaltax?

Legal Assistance: We provide legal services to over 1,000 companies and LLPs each month, leveraging advanced technology and the expertise of our skilled legal professionals. Join us to experience unparalleled ease and convenience in managing your legal needs.

Realistic Expectations: We handle all the paperwork, ensuring a smooth and efficient interaction with government agencies. Our transparent approach keeps you informed about the incorporation process, setting clear and realistic expectations.

Expert Team: With a dedicated team of experienced business advisors and legal professionals, top-notch legal services are just a phone call away.

Conclusion of the Article

Assignment and Licensing of Brands: The assignment and licensing of brands are critical aspects that require strategic planning, benefiting all parties involved—the licensor, licensee, assignor, and assignee. Both concepts require foresight in managing the future of the brand and its growth. The development, promotion, and use of a brand are in the hands of its proprietor, and assignment and licensing serve as essential tools for managing these aspects. Trademark assignment allows the brand proprietor to capitalize on their intellectual property, time, effort, and investment. Registering the assignment is equally important, as it updates the assignee’s details in the trademark register, notifying the public. Additionally, drafting assignment agreements is crucial as it outlines rights, entitlements, obligations, and commercial terms between the assignor and assignee.

Disclaimer: This document has been prepared based on the relevant provisions of the applicable Act and rules at the time of preparation. While every effort has been made to ensure the accuracy, completeness, and reliability of the information, the content does not constitute professional advice. We assume no responsibility for any actions taken based on this information. Furthermore, this write-up is not intended as a solicitation in any form.

FAQ’s

A trademark represents the identity of your business. It can be the business name, a logo, or a “combined mark” that includes both the name and logo associated with your brand. Like any other asset, the trademark owner (assignor) has the right to sell, license, or transfer it. This transfer can be executed through a Trademark Assignment Agreement or Trademark Licensing. This article explains the concept of trademark assignment, its advantages, the different types of trademark assignments, the prerequisites, and the procedure for completing a trademark assignment.

A trademark is intellectual property, and like any other asset, the trademark owner has the right to sell, license, or transfer it. This transfer can occur through either Trademark Assignment or Licensing.

When a trademark is assigned, ownership of the registered brand changes hands. In contrast, licensing allows the buyer to benefit from the trademark, but the ownership remains with the original owner, with only specific rights granted to the third party. The assignment can be conducted with or without transferring the goodwill of the business. For a registered trademark, the assignment must be recorded in the trademark register.

Here are some advantages of trademark assignment for both the owner and the buyer:

  • It enables the trademark owner to monetize the value of their brand.
  • The assignee gains the rights to an established brand.
  • Trademark assignment facilitates business expansion for both the assignor and assignee.
  • In case of any dispute, the trademark assignment agreement establishes clear legal rights for both parties.

The process of trademark assignment occurs when the ownership or transfer of intellectual property rights is given to another person, either with or without goodwill. The assignee, who qualifies through the assignment of the certified trademark, must apply for trademark assignment in the prescribed manner. Below are the steps involved in completing the trademark assignment process:

  1. A trademark assignment application must be made in Form ™-P by the assignor or assignee, or both parties can jointly request the registration of the assignee as the subsequent proprietor.
  2. The application should be submitted to the trademark registrar within six months from the date of acquiring the proprietorship. If filed later, the required fee may vary.
  3. In cases of assignment without goodwill or certified trademark assignment, approval from the trademark registrar is necessary before the six-month deadline or within an extended period provided by the registrar.
  4. The assignment must be advertised in a manner and within a timeframe as directed by the registrar.
  5. A copy of the registrar’s direction and the advertisement of the assignment should be submitted to the office to ensure compliance with the instructions.
  6. After receiving the trademark assignment application and required documents, the registrar, once satisfied, will register the assignee as the proprietor of the trademark, and the details of the assignment will be recorded in the register.

Unlock Value: An assignment agreement enables the brand owner to realize the value of the brand, which previously held value only on paper. For the assignee, this offers a significant advantage by entering the market with an already established and recognizable brand, rather than building a new one from scratch.

Valid Proof: In the event of a trademark dispute, legal rights can be promptly established through the assignment agreement. The Registrar ensures all necessary checks are performed by verifying the validity of the agreement’s clauses and formally recording the assignment in the Trade Marks Journal.

Legal Assistance: We provide legal services to over 1,000 companies and LLPs each month, leveraging advanced technology and the expertise of our skilled legal professionals. Join us to experience unparalleled ease and convenience in managing your legal needs.

Realistic Expectations: We handle all the paperwork, ensuring a smooth and efficient interaction with government agencies. Our transparent approach keeps you informed about the incorporation process, setting clear and realistic expectations.

Expert Team: With a dedicated team of experienced business advisors and legal professionals, top-notch legal services are just a phone call away.

The transfer of a trademark involves two parties: the assignor and the assignee. Trademarks hold significant value for any business as they can substantially influence sales and brand recognition. They reflect the quality of your products or services and offer a competitive edge in the market. In some cases, the trademark owner may choose to transfer or assign their trademark to another individual. This process of selling a trademark is also known as the assignment of a trademark, where ownership is transferred from the original owner (assignor) to another person (assignee).

An unregistered trademark can be assigned without the goodwill of the business under the following conditions:

  1. The trademark is used in the same business as a registered trademark at the time of the assignment;
  2. Both the registered and unregistered trademarks are assigned simultaneously and to the same person;
  3. The goods or services associated with the assignment are the same for both the registered and unregistered trademarks.

Typically, only the party owning the intellectual property needs to approve the assignment. While notarization is often considered, it is not strictly required. Once the assignment is executed, it should be properly recorded.

Goodwill is one of the most challenging assets to value in a business. An assignment of goodwill involves a deed that serves as the most appropriate evidence, confirming that the transfer of such valuable property from the seller to the buyer was fully intended.

A trademark assignment occurs when the ownership rights of a trademark or brand are transferred from one party or owner to another.

Yes, a trademark assignment can be carried out with or without the goodwill of the business.

Yes, in the case of a registered trademark, it is mandatory to have the assignment recorded in the Register of Trademarks.

An individual can transfer or assign their trademark through deeds, agreements, or other legal instruments.

One can perform a trademark search (TM search) to determine whether a trademark is already registered or not.

The different types of trademark assignment agreements include the Assignment and Transfer Agreement, Assignment of Intellectual Property Rights Agreement, Intellectual Property Assignment, Transfer of Trademark Rights, and Trademark Purchase and Assignment Agreement.

The basic elements of a Trademark Assignment Agreement in India include the Effective Date, Details of Trademark, Assignor, Assignee, Warranties, Consideration, Signatures, and Notary Public.

In both registered and unregistered trademark assignments, the assignee must apply to the Registrar within a period of 6 months.

To record an assignment, an application for a registered trademark can be made through the following forms:

  • Trademarks which are pending: Form TM-M is required to be filed by the applicant. The fee required is INR 900 for each mark.
  • Trademarks which are registered: Form TM-P is required to be filed by the applicant. The fee required for filing such a trademark is INR 9000 for each mark to be assigned.

Under Section 45, a person (subsequent proprietor) who becomes entitled through assignment must apply for the registration of the assignment with the Registrar of Trademarks.

  1. The Registrar shall enter the details of the assignee (subsequent proprietor) as the proprietor of the trademark assigned to them in respect of the goods or services for which the assignment has been made, after satisfying the Registrar of Trademarks, in accordance with Section 45.
  2. If there is a dispute regarding the validity of the assignment between the parties, the Registrar may refuse to register the assignment until the rights of the parties are determined by a competent court.
  3. The Registrar of Trademarks must dispose of the application for the registration of trademark assignment within three months from the receipt of the application.
  4. If there is reasonable doubt about the accuracy of any statement or document submitted, the Registrar may request further proof or additional documents from the person applying to be registered as the proprietor of the trademark.
  5. If the Registrar believes that any document presented as proof of title is not properly or sufficiently stamped, the Registrar has the authority to impound and deal with it.
  6. Once the Registrar approves the registration of the assignment, the following particulars will be entered into the register, as per Rule 84 of the Trade Marks Rules, 2017:

Assets to be Assigned:

  • Pending trademark applications
  • Issued trademark registrations
  • Goodwill
  • Associated marks, applications, or registrations
  • International registrations
  • Common law trademarks
  • Names of living or deceased individuals
  • Domain names, email accounts, social media or website accounts, etc.

Execution Requirements:

  • Signatories
  • Witnesses
  • Notarization
  • Legalization
  • Execution date and place
  • Power of attorney