What is Trademark Assignment?
Trademark assignment is a process where any party whose name is entered in the register as proprietor of the trademark can transfer the ownership of such trademarks in favor of another whether with or without the goodwill of the business.
Through assignments, trademark rights are transferable. When a trademark is assigned to another party, its ownership is conferred upon another party either with goodwill or without the goodwill. Even in case of an unregistered trademark such trademark assignment agreement can be signed. Trademark assignment occurs when ownership of the trademarks is transferred from one party to another party. In the case of a registered trademark, such trademark assignment is required to be recorded in the register of trademarks. Such a transfer can be done in the following ways:
- Complete assignment
Under this, a trademark owner can transfer all its rights to another entity in respect of the trademark.
- Assignment of Unregistered Trade Mark
An unregistered trade mark may be assigned, with or without the goodwill of the business.
- Assignment of Trademark with the Goodwill of the Business
Under this, with the transfer of ownership of a trademark, rights and value of trademarks are also transferred to another party.
- Assignment of Trademark Without the Goodwill of the Business
Under this the proprietor of a Trademark does not provide the right to use the brand, thus the goodwill attached to use the brand in respect of product is not transferred. In some countries assignment of the Trademark without goodwill is not allowed but in India, it is allowed.
Restriction on the Assignment of Trademark
The Trade Mark Act 1999 put a restriction on the assignment o a Trademark if it creates confusion regarding exclusive rights in more than one person in respect of following:
- Same goods or services.
- The same description of goods or services.
- In respect of such goods or services that are associated with each other.
Registration of assignment of Trademarks
- When a person is entitled to a registered Trademark by way of assignment of trademarks shall apply to the registrar in a prescribed manner, on the receipt of application registrar will register him as a proprietor of the trademark in respect of goods or services.
- Assignment of a trademark where there is the transfer of ownership is required to be recorded in the register of trademarks.
- The registrar may require the evidence in a proof in case of any reasonable doubt on the documents furnished.
- In case of any dispute between the parties regarding the validity of assignment, the registrar may refuse to register the assignment until the rights have been determined by the court.
And in all other cases registrar shall dispose of the application in a prescribed period.
Assignability of Certification Trademarks
Certification trademarks shall not be assignable without the registrar’s consent. For the purpose of taking consent of registrar, an application shall be made in writing in a prescribed manner.
Associated trademarks shall not be assigned separately but as a whole, but shall be deemed to be registered as separate trademark subject to the provisions of the act.
The licensee is able to expand the market operations by using the brand and developing its reputation despite the fact that the licensor enjoys its rights in respect of the trademark by receiving the royalties for its use.
In the case of Licensing, the licensor is able to license the rights over trademark in a prescribed manner. Licensor may restrict the rights of the licensee in respect of trademark where the licensee can use such mark, with respect to time for which it can use such a mark, with respect to the area within which it can use such mark etc.
Trademarks are assigned by way of a properly executed Trademark Assignment Agreement where there is a transfer of a trademark from the owner to another entity.
Following points are needed to be ensured at the time of drafting an agreement:
- Due to the obligations rights of the owner of the brand are not adversely affected.
- The decision should be clearly mentioned and negotiate regarding whether the assignment should be with or without the goodwill of the business.
- The agreement should be drafted keeping in mind the purpose of the transaction.
Trademark is licensed by way of a License Agreement. As per the Trade Mark Act, 1999 the registration of a license agreement with the Trademark Registrar of a mark is voluntary, not compulsory. Like trademark assignment agreement, it is important that while drafting a License Agreement, the rights and the duties of the licensee are distinctively pre-determined and defined. It will not only protect the rights of the Licensor, but it will also protect any misuse thereof, but also to secure the licensee with his rights to use such a brand.
Benefits of a Trademark Assignment
- With the help of assignment agreement, the brand owner is able to unlock the value of the brand which until this point only had value on paper. Assignee, on the other hand, could be significantly better off entering a market with an already well-known brand, rather than building a new one entirely.
In case of any dispute in relation to trademark, legal rights would easily be established through the deed. The Registrar examines the validity of all the clauses in the agreement and publishing the assignment in the Trade Marks Journal.
Also, Read: Trademark Registration Importance.