Trademark assignment

Trademark assignment

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Trademark is an intellectual property and like any other asset, the owner of a trademark has the right to sell, license or transfer the owned intellectual property. Such a transfer can be made through Trademark Assignment Agreement or through Licensing.

When a trademark is assigned, there is a change in the ownership of the registered brand. But when it’s licensed, the rights in the trademark continue to vest with the original owner but only a few restricted rights are given to the third party. This assignment can be made with or without transferring the business goodwill. In case of a registered Trademark, such assignment is required to be recorded in the Register of trademarks.

What are the kinds of Trademark Assignment?

• Complete Assignment;

In such assignment, complete rights in relation to a registered trademark are transferred to the second party. The owner here transfers all the rights with respect to marking to the other party, which includes rights of further transfer, to earn royalties, etc.

For example, A, the proprietor of a brand, sells his mark completely through an agreement to B. Now, A does not retain any rights with respect to the brand.

• Partial Assignment;

In case of partial assignment, transfer of ownership is limited to certain services/products as parties have decided or expressed in trademark assignment agreement.

For example;  X, the proprietor of a brand used for jams and jellies and dairy products. X assigns the rights in the brand with respect to only dairy products to  R and retains the rights in the brand with respect to jams and jellies.

Further, a complete and partial assignment can be made with goodwill or without goodwill.

• Assignment with goodwill;

Such assignments are made when value and right, both the things associated with the trademark are transferred to the third entity with goodwill.

For Example, R, the proprietor of a brand “Shudh” relating to shoe products, sells his brand to S such that S will be able to use the brand “Shudh” with respect to dairy products as well as any other products it manufactures.

• Assignment without goodwill;

Assignment without goodwill is also known as gross assignment. Here, the owner of the brand restricts the right of the buyer. The buyer cannot use such a brand for the product being used by the original owner.  Hence,  the goodwill attached to such a brand with respect to the product already being sold under such a brand is not transferred to the buyer. 

For Example; P, the proprietor of a brand “Shudh” relating to dairy products, sells his brand to Q such that Q will not be able to use the mark “Shudh” with respect to dairy products but can use this brand for any other products being manufactured by it. In such case, the goodwill which is associated with brand “Shudh” for dairy products is not transferred to Q, and Q will be required to create distinct goodwill of brand “Shudh” for any other product or service like Restaurant wherein Q proposes to use this brand.

Few Restrictions as per Trade Mark Act, 1999

• Restriction over such assignment, which results in the creation of exclusive rights in more than one person with respect to same goods and services, or for same depiction of goods and services or such goods and services are associated with each other.
• Restriction over such assignment which results in different people using the mark in different parts of the country  
• Restriction on assignment that results in different people using the trademark in different parts of the country together.

 

Procedure For Trademark Assignment Agreement:

1. The first step is to make an application for the assignment of trademark either by the assignee or the assignor or both of them. The application should mention all the details of the transfer and be made under form TM-P as mentioned under Rule 75 of Trademark rules 2017.
2. Once the application is complete, file the same with the Registrar of the trademark. It has to be done within 3 months of acquisition of proprietorship
3. When there is a trademark assignment with goodwill or of a registered trademark, the direction from the Registrar of a trademark is mandatory before an expiry of 3 months (can be extended)
4. The Registrar will specify the advertisement of the trademark assignment. After which the applicant has to make the advertisement accordingly. Copy of advertisement along with a copy of the Registrar’s direction should also be submitted.
5. After the Registrar is satisfied with all the documentation, he shall officially transfer the trademark from the original to the new owner.
6. The name of the Assignee i.e., the new owner is to be registered in the register as a new proprietor. After this, the assignee can use the trademark as per the terms of the agreement.

TO SUM UP..

Assignment and Licensing of brands are considerable issues and proper strategizing may open vistas of opportunities for all, a licensor, a licensee, an assignor and an assignee. Both concepts involve a degree of planning for the future of the parties involved and the brand in question. The development of a brand, its propagation and its use, all lie in the hands of the proprietor of the brand and trademark and assignment and licensing are effective methods to manage the same.