Trademarks were initially popularized during the industrial revolution. With the rising competition in the market economy, manufacturers began to identify their products by certain symbols. mark or devices so as to distinguish their goods from similar goods manufactured and marketed by others.
Intellectual property rights like the rights of any ordinary physical asset allow the owner or creator to benefit from their work and investment by selling, licensing, transferring etc. Upon registration of Intellectual Property, the owners are allotted the exclusive rights over the same. A brand or Trademark owner can transfer his rights with respect to his trademark either by way of assignment or by licensing. In India, The Trademarks Act, 1999 deals with an assignment as well as licensing of trademarks.
Thus, in case of an assignment of a trademark, there is a change in the ownership of the registered brand and in case of licensing, the right in the trademark continues to vest with the original owner but only a few restricted rights to use the brand/mark are given to the third party.
Section 2(1)(b) of the Trademarks Act, 1999 defines assignment as “assignment” means an assignment in writing by an act of the parties concerned.
What are the requirements for a valid assignment of a trademark?
Although the specific requirements for trademark assignments vary by jurisdiction, in most jurisdictions a trademark assignment, to be valid, must, at a minimum:
i) Be in writing.
ii) Identify the parties to the assignment, that is, the assignor and the assignee.
iii) Identify the mark(s) to be assigned and any relevant applications or registrations for the mark(s).
iv) Identify the goods and/or services to be assigned (in some jurisdictions, all the goods and/or services in an application or registration must be assigned).
v) Be given for consideration.
vi) Identify the effective date of the assignment.
vii) Be duly executed (some jurisdictions require that it be signed by all the parties to the assignment, while in others, execution by the assignor alone is sufficient); and
viii) Include the transfer of goodwill (required in certain jurisdictions). (In India, for example, a trademark can be assigned with or without goodwill, whereas in the United States an assignment without goodwill is considered an assignment “in gross” and considered invalid under U.S. law.)[i]
Types of Trademark Assignments
In this process of assignment, the owner of the trademark transfers the ownership of the mark either with or without the goodwill of the business. An assignment can either be with goodwill or without goodwill.
• Complete Assignment to another entity: The owner transfers all its rights with respect to a mark to another entity, including the transfer of the rights such as the right to further transfer, to earn royalties, etc. (E.g. A, the proprietor of a brand, sells his mark completely through an agreement to B. After this A does not retain any rights with respect to the brand).
• Assignment to another entity but with respect to only some of the goods/services: The transfer is restricted to specific products or services only. (E.g. C is the owner of a brand used for meat and dairy products. C assigns the rights in the brand with respect to only dairy products to D and retains the rights in the brand with respect to jams and jellies.) This is also known as partial assignment.
• Assignment with goodwill: the rights and value of a trademark is associated with the product is also transferred to another entity. (E.g. P, the proprietor of a brand “ABC” relating to dairy products, sells his brand to Q such that Q will be able to use the brand “ABC” with respect to dairy products as well as any other products it manufactures.)
• Assignment without goodwill: Such assignment also known as a gross assignment, is where the owner of the brand restricts the right of the buyer and does not allow him to use such brand for the products being used by the original owner. Thus, the goodwill attached to such brand with respect to the product already being sold under such brand is not transferred to the buyer. (E.g. P, the proprietor of a brand “ABC” relating to dairy products, sells his brand to Q such that Q will not be able to use the mark “ABC” 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 “ABC” for dairy products is not transferred to Q and Q will be required to create distinct goodwill of brand “ABC” for any other product or service like Restaurant wherein Q proposes to use this brand.).
In many jurisdictions like the United States, assignment of marks without goodwill is not allowed at all. India, on the other hand, allows assignment without goodwill.
Procedure for registered and unregistered trademarks
Assignment of the trademark can be made by making a request on Form TM-23 or 24 depending on whether it is made by assignee alone or conjointly with the registered proprietor, along with the deed of assignment. [ii]
An application under Rule 68 has to contain full particulars of the instrument, if any, under which the applicant claims to be entitled to the trademark and such instrument or a duly certified copy thereof has to be produced at the Trade Marks Registry for inspection at the time of application. The Registrar may require and retain an attested copy of any instrument produced for inspection in proof of title.
An unregistered trademark may be assigned or transmitted with or without the goodwill of the business concerned. [iii]
Restriction on Assignment or transmission
A Trade Mark is not assignable or transmissible if as a result of the assignment or transmission there would subsist exclusive rights in more than one of the persons concerned, to use of trademark, nearly resembling each other or identical trademark which is likely to deceive or cause confusion, in relation to;
i) Same goods or services.
ii) Same description of goods or services; or
iii) Goods or services or description of goods or services which are associated with each other.
Of trademarks nearly resembling each other or of identical trademark, if having regard to the similarities of the goods and services and to the similarity of the trademarks, the use of the trademarks in the exercise of those rights would be likely to deceive or cause confusion.
However an assignment or transmission shall not be deemed to be invalid if the exclusive rights subsisting as a result thereof in the persons concerned respectively are, having regard to limitations imposed thereon, such as not to be exercisable by two or more of those persons in relation to goods to be sold, or otherwise traded in, within India otherwise than for export therefrom, or in relation to good to be exported to the same market outside India or in relation to services for use at any place in India or any place outside India in relation to services available for acceptance in India and a certificate will be issued in that case.[iv]
[i] Trade Marks Act,1999
[ii] Rule 68 of Trademark Rules, 2002
[iii] Section 39 Trademark Act, 1999
[iv] Section 40(1) of the Trademark Act, 1999
Student, Symbiosis Law School Pune
Rachita is Student at Symbiosis Law School, Pune. She is originally from Chennai and has completed secondary and higher secondary education at Indian High School, Dubai. She is an aspiring lawyer with an avid interest in Intellectual Property Law. For any clarifications, suggestions and feedback kindly find her at email@example.com