Related Practices & Jurisdictions
- Intellectual Property
- Litigation / Trial Practice
- Federal Circuit / U.S. Court of Spec. Jurisdiction
After a trademark achieves federal registration, ownership of the mark may change hands for a variety of reasons. When a trademark owner transfers their ownership in a particular mark to someone else, it is called an assignment. Generally, for an assignment of a trademark to be valid , the assignment must also include the ‘goodwill’ associated with the mark (goodwill is an intangible asset that refers to the reputation and recognition of the mark among consumers). If the assignment of a trademark includes the mark’s goodwill and is otherwise legal, the assignee gains whatever rights the assignor had in the mark. Importantly, this includes the mark’s priority date, which has implications for protecting the mark from potential infringers going forward.
In contrast, if an assignment of a trademark is made without the mark’s accompanying goodwill, then it is considered an assignment “in gross” — and the assignment is invalid under U.S. law. Courts have analyzed whether an assignment was made in gross in a few different ways, but, as is the case with much of trademark law, protecting customers from deception and confusion is the primary motivation behind any analysis for determining the validity of an assignment.
One way courts determine if an assignment was made in gross is through the substantial similarity test. This test essentially examines whether the assignee is making a product or providing a service that is “substantially similar” to that of the assignor, such that consumers would not be deceived by the assignee’s use of the mark. This analysis includes an assessment of the quality and nature of the goods and services provided under the mark post-assignment. Thus, even if an assignee is using the mark on the same type of goods, but the goods are of lower quality than the goods previously offered by the assignor under the mark, the assignment could be invalid. However, slight or inconsequential changes to goods and services after an assignment are not likely to invalidate the assignment, as such changes are to be expected and would not thwart consumer expectations.
Decisions on the question of substantial similarity are only marginally instructive, as the test calls for a fact specific inquiry into what the consuming public has come to expect from the goods or services offered under a given mark. For example, courts have noted that despite similarities in services and goods, “even minor differences can be enough to threaten customer deception.”  Instances of products or services that were deemed not substantially similar (and thus resulted in invalid assignments) include: an assignee offering phosphate baking powder instead of alum baking powder;  an assignee using the mark on a pepper type beverage instead of a cola type beverage;  an assignee producing men’s boots as opposed to women’s boots;  an assignee using the mark on beer instead of whiskey;  and an assignee selling hi-fidelity consoles instead of audio reproduction equipment. 
Conversely, case law has also shown that substantial similarity can be found even when products or services do differ in some aspects, if consumers aren’t likely to be confused. For example, the following product changes did not result in a finding of an invalid assignment: an assignee offering dry cleaning detergent made with a different formula;  an assignee using thinner cigarette paper;  and an assignee selling a different breed of baby chicks. 
Whether goods or services are substantially similar may seem like an easy test to apply, but, as case law demonstrates, this fact-intensive analysis can yield results that look strange in the abstract. Disputes involving the validity of a trademark assignment are decided on a case-by-case basis, using the specific facts at hand to determine if consumer expectations are being met under the new use. Thus, while trademarks acquired through assignment can have significant value (and grant the assignee important rights formerly held by the assignor), assignees should be wary of changes to goods or services under an acquired mark that could be seen as deceiving the public.
 Clark & Freeman Corp. v. Heartland Co. Ltd. , 811 F. Supp. 137 (S.D.N.Y. 1993).
 Independent Baking Powder Co. v. Boorman , 175 F. 448 (C.C.D.N.J.1910).
 Pepsico, Inc. v. Grapette Company , 416 F.2d 285 (8th Cir. 1969).
 Clark & Freeman Corp. v. Heartland Co. Ltd. , 811 F. Supp. 137 (S.D.N.Y. 1993).
 Atlas Beverage Co. v. Minneapolis Brewing Co. , 113 F.2d 672 (8 Cir. 1940).
 H. H. Scott, Inc. v. Annapolis Electroacoustic Corp. , 195 F.Supp. 208 (D.Md.1961).
 Glamorene Products Corp. v. Procter & Gamble Co. , 538 F.2d 894 (C.C.P.A. 1976).
 Bambu Sales, Inc. v. Sultana Crackers, Inc. , 683 F. Supp. 899 (1988).
 Hy-Cross Hatchery, Inc v. Osborne 303 F.2d 947, 950 (C.C.P.A. 1962)
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Trademark Transfer: Everything You Need To Know
A trademark transfer occurs when the rights to a trademark are sold or licensed from one owner to another which can be done on a temporary or permanent basis. 3 min read updated on February 01, 2023
A trademark transfer occurs when the rights to a trademark are sold or licensed from one owner to another. This can be done either on a temporary or permanent basis.
When the ownership of a mark is permanently transferred to another person or business, it is called assignment. Types of trademark assignment include:
- Complete assignment, in which all rights to the trademark are transferred to a third party. This includes the rights to collect royalties or reassign the rights to another individual or business.
- Partial assignment, in which only the trademark for a specific product or service is transferred. In this case, the owner retains the rights to the company's main intellectual property but assigns the trademark rights to one aspect of the business.
- Assignment with goodwill means that the trademark rights are transferred for the purpose of manufacturing the product in question.
- Assignment without goodwill occurs when the trademark use is restricted to a specific product or service that are not similar to those sold by the original company. Although this is allowed in certain countries, such as India, it is not considered valid in the United States.
The Process of Trademark Transfer
When a trademark is transferred, this transaction must be documented by an agreement between the parties as well as by filing the appropriate forms with the U.S. Patent and Trademark Office (USPTO). The agreement in question is called a trademark assignment agreement or trademark transfer agreement.
The agreement should completely detail the terms and conditions of the transfer, including payment, the level of assigned rights, the trademark's USPTO registration number, any current registration warranties that will be transferred to the new owners, and documentation that the assigning party fully owns the rights he or she is transferring.
Once this agreement is signed by both parties, you can record the transfer with the USPTO using a simple online form . You will also need to send in a copy of the executed transfer agreement. With online filing, the transfer is typically processed within one business day. The filing fee for this service is $40. You can also file by mail, which will take about a week to process.
If you do not register the transfer with the USPTO and the new owner of the trademark then infringes on another party's trademark, you may be implicated in the dispute since you are still federally registered as the owner of the trademark. For this reason, you may want to consult an experienced intellectual property attorney to make sure the process is completed correctly.
On the other hand, if you are the party purchasing rights to a trademark, the owner can later sue you for ownership of the mark if he or she fails to properly record the transfer . Again, it's best to consult an attorney whenever you are involved in trademark assignment.
The Role of Trademark Goodwill
Goodwill refers to the brand reputation directly associated with the trademarked goods or services. If you don't plan to use the trademark to promote those goods or services, the mark itself has no inherent value. For this reason, sales of a trademark that do not include transfer of goodwill are not considered valid. This prevents the person who is buying the trademark from being misled about what he or she is actually purchasing.
The trademark assignment agreement must indicate that the sale includes all goodwill associated with the mark. This is governed by 15 U.S. Code 1060(a)(1), which states “A registered mark or a mark for which an application to register has been filed shall be assignable with the goodwill of the business in which the mark is used, or with that part of the goodwill of the business connected with the use of and symbolized by the mark.”
Goodwill transfer does not necessarily entail transfer of any tangible assets. However, the mark must be used on similar products or services as those already associated with the mark. Otherwise, this could be legally construed as an attempt to defraud the consumer by providing different and possibly inferior products. This requirement must be explicitly stated in the trademark assignment agreement.
If you need help with trademark transfer, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.
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- USPTO Trademark Assignment: Everything You Need To Know
- Selling Trademarks
- Trademark Assignment Recordation
- Trademark Law
- Benefits of a Trademark
- Suing for Trademark Infringement
- Trademark Registration
- Trademark Requirements
- Dead Trademark: Everything You Need To Know
- Benefits of Registering Trademark
Trademark assignment—How-to guide
Find out more about business management
by LegalZoom staff
Updated on: February 15, 2024 · 10min read
- 2. Do's & don’ts checklist
3. Trademark assignment instructions
A company’s ability to buy and sell property is essential to its long-term life and vitality. Although it does not take up physical space, an excess of intellectual property can burden a company, directing limited funds towards maintaining registrations, defending against third-party claims, or creating and marketing a final product. Selling unused or surplus intellectual property can have an immediate positive effect on a company’s finances, generating revenue and decreasing costs. When it does come time to grow a business, companies looking to purchase property (including trademarks or software) to support their growth must be sure that the seller does, in fact, have title to the desired items. A properly drafted trademark assignment can help in both circumstances.
A trademark assignment is the transfer of an owner’s property rights in a given mark or marks. Such transfers may occur on their own or as parts of larger asset sales or purchases. Trademark assignment agreements both provide records of ownership and transfer and protect the rights of all parties.
If you follow the enclosed sample and guidelines, you will have a written acknowledgment of the rights and responsibilities being transferred as part of your sale. This will provide essential documentation of ownership and liability obligations, and you will be well on your way to establishing a clear record of title for all of your trademarks.
2. Do's & don’ts checklist
- A trademark protects names, terms, or symbols used to identify the products of a certain manufacturer or company. This includes brand names like “Coca-Cola” and images like Nike’s famous “swoosh.” A trademark assignment is the transfer of ownership rights in a mark from one party to another. Both the trademark and the goodwill or business associated with it must be conveyed: a transfer without goodwill is considered invalid. Keep this in mind if you revise the language of the enclosed document.
- An assignment is different than a license, which is a grant of permission to use a trademark in some restricted way (e.g., a limited time, specific purpose, particular area, etc.). A transfer of partial rights is not a trademark assignment: do not revise the agreement to limit the reach of the rights being provided.
- A trademark transfer is typically accomplished through a contract, like the written agreement form that follows. However, after the parties have negotiated and signed their agreement, the transfer must be recorded with the U.S. Patent and Trademark Office (USPTO). The agreement will not be effective if this registration is not made.
- The advantage of selling your trademark outright (and not simply licensing or attempting to develop and market it yourself) is that you are guaranteed payment at the price you and the purchaser have negotiated. On the other hand, that one-time payment is all that you will ever receive for your property: you will no longer have the right to control anyone else’s use of your creation. By using it yourself or offering a temporary license, you retain the potential for future income. However, such income is by no means certain, and your opportunities are paralleled by risk. Before selling all of your rights in a trademark, make sure that this is the best (and most lucrative) approach for you and your company.
- Do not enter into an agreement without completing your due diligence. If you are purchasing a trademark, conduct searches with the USPTO, all 50 states, DBA filings, other government agencies, and online directories to make sure the seller actually has complete and unique rights in the offered property. Although your findings will not guarantee title, you may have protection as an “innocent purchaser” if disputes arise. You might also find critical information about the valuation and breadth of the mark. Consider hiring a professional to help in your investigation: comparing trademarks often requires a specialized understanding of what marks will be considered confusingly similar or deceptive.
- If you are selling a trademark, make sure you own it. Although this may seem obvious, ownership of intellectual property is rarely clear-cut. For example, you may have a name that you think of as your trademark, but unless you have used it in business, you do not have rights in that mark. Even if you have been using a mark in your business, another company may have started using it before you and have priority rights in that mark. A thorough search of the relevant marketplace and registry office should be conducted before you attempt to sell your trademark.
- Both parties should review the assignment carefully to ensure that all relevant deal points have been included. It is better to be over-inclusive than under-inclusive. Do not assume that certain expectations or terms are agreed to if they are not stated expressly in the document.
- Sign two copies of the assignment, one for you and one for the other party.
- It’s a good idea to have your assignment notarized. This will limit later challenges to the validity of a party’s signature or of the transfer itself.
- If your agreement is complicated, do not use the enclosed form. Contact an attorney to help you draft an assignment that will meet your specific needs.
The following provision-by-provision instructions will help you understand the terms of your assignment. The numbers and letters below (e.g., Section 1, Section 2, etc.) correspond to the provisions in the agreement. Please review the entire document before starting your step-by-step process.
- Introduction of parties. Identifies the document as a trademark assignment. Write in the date on which the agreement is signed. Identify the parties and, if applicable, what type of organization(s) they are. Note that each party is given a name (e.g., “Assignor”) that will be used throughout the agreement. The Assignor is the party that is giving (“assigning”) its ownership interest, and the Assignee is the party receiving it.
- Recitals. The “whereas” clauses, referred to as recitals, define the world of the assignment and offer key background information about the parties. In this agreement, the recitals include a simple statement of the intent to transfer rights in the trademark.
- Section 1: Assignment of marks. The assignment and acceptance of the assignment of the trademarks and service marks. Note that the marks being assigned are not described in the agreement itself. The assignment references “Schedule 1,” and explains that the full description is located on that schedule. Be as complete and clear as possible in your description of the property being transferred. Note too the emphasis placed on the goodwill being sold with the property. Goodwill can be defined as the intangible value of a piece of property (e.g., a brand’s reputation and recognizability). Remember that this is an essential element of a trademark transfer: assignments attempted without goodwill are considered invalid.
- Section 2: Consideration. In most agreements, each party is expected to do something. This obligation may be to perform a service, transfer ownership of property, or pay money. In this case, the Assignee is giving money (sometimes called “consideration”) to receive the Assignor’s property. Enter the amount to be paid, and indicate how long the Assignee has to make that payment after the agreement is signed.
- 3(a): it is the owner
- 3(b): it has not sold or transferred the marks to any third party.
- 3(c): it has the authority to enter the agreement.
- 3(d): it does not believe that the marks have been taken from any third party without authorization (e.g., a knowing copy of another company’s trademark).
- 3(e): it does not know of any permissions that have to be obtained in order for the assignment to be completed. In other words, once the agreement is signed, the assignment will be effective without anyone else’s input.
- 3(f): the marks weren’t created while the creator was employed by a third party. In many cases, if an individual was employed by a company and came up with a product, the company will own that product. This section offers assurance to the Assignee that there are no companies that will make that claim about the marks being sold. If you and the other party want to include additional representations and warranties, you can do so here.
- 4(a): has the authority to enter the agreement.
- 4(b) has enough funds to pay for the assignment.
- If you and the other party want to include additional representations and warranties, you can do so here.
- Section 5: No early assignment. Prevents the Assignee from re-transferring the marks, or using them as collateral for loans, until it has made complete payment of the money due under the agreement.
- Section 6: Documentation. The Assignor’s promise to help with any paperwork needed to complete an assignment (e.g., filing information about the assignment with the USPTO and transferring document titles). The bracketed phrases make the additional promise that the Assignor will help with transfer paperwork for filings outside of the country. If this is not relevant to your agreement, delete the bracketed phrases.
- Section 7: No further use of marks. Indicates that after the effective date of the agreement, the Assignor will stop using all of the trademarks being transferred and will not challenge the Assignee’s use of those marks.
- Section 8: Indemnification. A description of each party’s future obligations if the trademark is found to infringe on a third party’s rights. There are two options provided, and you should choose the one that best fits with your situation. In the first, the Assignor takes all responsibility for infringement, promising to pay all expenses and costs relating to the claim. In the second, the Assignor makes its responsibilities conditional, greatly limiting its obligations if a claim is brought. Select only one of these options, and delete the other.
- Section 9: Successors and assigns. States that the parties’ rights and obligations will be passed on to successor organizations (if any), or organizations to which rights and obligations have been permissibly assigned.
- Section 10: No implied waiver. Explains that even if one party allows the other to ignore or break an obligation under the agreement, it does not mean that the party waives any future rights to require the other to fulfill those (or any other) obligations.
- Section 11: Notice. Lists the addresses to which all official or legal correspondence should be delivered. Write a mailing address for both the Assignor and the Assignee.
- Section 12: Governing law. Allows the parties to choose the state laws that will be used to interpret the document. Note that this is not a venue provision. The included language will not impact where a potential claim can be brought. Write the applicable state law in the blank provided.
- Section 13: Counterparts/electronic signatures. The title of this provision sounds complicated, but it is simple to explain: it says that even if the parties sign the agreement in different locations, or use electronic devices to transmit signatures (e.g., fax machines or computers), all of the separate pieces will be considered part of the same agreement. In a modern world where signing parties are often not in the same city—much less the same room—this provision ensures that business can be transacted efficiently without sacrificing the validity of the agreement as a whole.
- Section 14: Severability. Protects the terms of the agreement as a whole, even if one part is later invalidated. For example, if a state law is passed prohibiting choice-of-law clauses, it will not undo the entire agreement. Instead, only the section dealing with the choice of law would be invalidated, leaving the remainder of the assignment enforceable.
- Section 15: Entire agreement. The parties’ agreement that the document they’re signing is “the agreement” about the issues involved. Unfortunately, the inclusion of this provision will not prevent a party from arguing that other enforceable promises exist, but it will provide you some protection from these claims.
- Section 16: Headings. Notes that the headings at the beginning of each section are meant to organize the document and should not be considered operational parts of the note.
- Schedule 1: List of trademarks and/or service marks. In order for a trademark assignment to be effective, the marks being transferred must be clearly identified. Be thorough in your description and attach any registrations or samples that you may have. If you do include samples, reference the inclusion of those samples in the schedule (e.g., “See attached drawing.”).
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What is Goodwill and What Does It Have to Do With Trademarks?
April 16, 2021.
“Goodwill” (or “good will”, it’s written both ways) refers to a consumer’s positive opinion of a product or service and their willingness to purchase it again in the future or to refer it to a friend or colleague. If you like Starbucks coffee, the product can be said to have goodwill.
Goodwill and trademarks are inseparable. This is a legal fact: the Lanham Act, which is the Federal law that governs trademarks, states that a trademark can only be sold or transferred (“assigned”) “with the good will of the business in which the mark is used, or with that part of the good will of the business connected with the use of and symbolized by the mark.” Lanham Act § 10, 15 U.S. Code § 1060.
This means that you can’t just sell or buy a trademark the way you could sell or buy another type of business asset. In 1918, the Supreme Court defined an attempt to do as an “assignment in gross”. United Drug Co. Theodore Rectanus Co. , 248 U.S. 90 (1918).
Instead, a trademark can only be sold, bought, or otherwise transferred along with the underlying business itself. So Starbucks can’t just sell you its STARBUCKS trademark; you’d have to buy their coffee business, too.
This makes sense, if you think about it. As I’ve often discussed on this blog, the purpose of trademark law is to protect consumers. If you could simply sell a trademark without the underlying goodwill, then a consumer would never know whether to trust a brand name.
So beware anyone who tries to sell you a trademark without the business that’s attached to the brand. Unfortunately, it’s just not that simple.
Have questions about trademarks? Reach out to me .
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Why is it important for a trademark assignment to be handled properly?
How to Reduce the Risk of Engaging in an Illegal Trademark Assignment
Owning a trademark is widely viewed as one of the most valuable and important assets for any business. Hence, it is so important not to be cavalier about engaging in a trademark assignment. When a business owner mishandles or violates the law while engaging in a trademark assignment, it could completely negate the enforceability of the trademark, thereby torpedoing its value.
When an illegal trademark assignment occurs, it is typically the product of carelessness and neglect, or it could very well be deemed an assignment-in-gross.
What is an Assignment-in-Gross?
An assignment-in-gross occurs when a business owner assigns their trademark without including the underlying goodwill (i.e. the inherent value and name recognition associated with the mark) and any other accompanying assets. When a business owner commits an assignment-in-gross, the ramifications are severe since a court could invalidate the assignment and would result in the trademark being deemed abandoned. As a result, both parties (i.e. the owner of the mark and party attempting to secure the mark) will lose any rights to the trademark.
To prevent such circumstances, an assignment must include (i) other related business assets and (ii) must be completed with genuine goodwill.
Assets that are deemed eligible to accompany a trademark assignment include:
- Company shares;
- Trade secrets; and/or
- Management or other financial assets
Analyzing whether a trademark assignment was completed with genuine goodwill can be extremely difficult to measure. Courts tackle this issue by using the “substantial similarity” test. This test assesses both the quality and description of the goods and/or services prior to, and after, the transfer of the trademark.
When a business owner attempts to simply assign their trademark without any accompanying business assets or without sufficient evidence of genuine goodwill, it is a violation of federal law since a trademark, in and of itself, does not possess actual value. When a trademark transfer occurs without meeting the two-part standard described above, it is an illegal trademark transfer under the Lanham Trademark Act, which is codified under 15 U.S.C. § 1060.
Take Action by Contacting an Experienced Trademark Attorney in Los Angeles Today
It is incredibly important to protect your brand identity; hence it is in your best interest to invest the time and resources to secure a trademark registered with the United States Patent and Trademark Office . Once registered, it will provide you exclusive right to use the mark with specific goods or services. Furthermore, there is tremendous value in completing a trademark assignment the right way. In either instance, you should retain the services of an experienced and knowledgeable trademark attorney in Los Angeles such as the professionals at the Omni Legal Group. Omni Legal Group is a premier Patent, Trademark, and Copyright law firm located in Los Angeles. For further information or to schedule a consultation please contact Omni Legal Group at 855.433.2226 or visit www.OmniLegalGroup.com to learn more.
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Trademark Attorneys Trusted For Our Experience®
Trademark Assignments: How to Buy, Sell, Or Transfer A Trademark
By Eric Perrott, Esq.
Much like traditional assets such as machinery or real estate, trademarks are assets that can be bought, sold, and transferred. Unlike physical assets, however, trademarks must be transferred in a purposeful way to ensure that the underlying meaning, or “goodwill”, is also transferred.
A trademark could be a word, a phrase, a symbol, or even a shape. However, one thing all different forms of trademarks share are that they represent a single source. They are essentially a shortcut for consumers to bring to mind a company’s quality, customer service, and even values, at a glance. A trademark only has value because of the impact it has on consumers and the exposure consumers have had to that brand.
When transferring a trademark, simply allowing another company to use the trademark is not enough. You must transfer not only the right to the word or image, but also the underlying goodwill behind the trademark.
It is crucial that trademark owners properly transfer, or “assign” their trademarks to avoid delays, confusion, or worst of all, a break in title that could invalidate the earlier use of the trademark and ruin the value of the trademark.
A Trademark Assignment Transfers Trademark Rights
A proper trademark assignment is not just a transfer of registration the way many business assets are transferred. There is a wording specific to trademark assignments known as a “transfer of goodwill” – this is written fully as a transfer of “(1) all the property, right, title and interest in and to the Trademark including all common law rights connected therein together with the registrations therefor for the United States and throughout the world together with the goodwill of the business in connection with which the Trademark is used and which is symbolized by the Trademark; (2) all income, royalties, and damages hereafter due or payable to Assignor with respect to the Trademark, including without limitation, damages, and payments for past or future infringements and misappropriations of the Trademark; and (3) all rights to sue for past, present and future infringements or misappropriations of the Trademark.”
By including those clear rights and benefits, trademark owners make it clear that all the rights associated with the trademark are now the new owners’, including enforcement rights, royalty rights, and licensing rights. However, all responsibilities are also to the new owners, such as ensuring there is no confusion with another mark, that renewals are timely filed, and any misuse of a mark is monitored to ensure the quality assurance associated with the mark.
If the goodwill is not transferred, the new owner is essentially stating that they will not work to maintain the mark’s reputation among consumers.
Common Issues with Preparing and Filing Assignments
When filing an assignment, either current or in the past, the assignment requires:
- the proper names of owners – if business entities, then complete names of active business entities
- the date any transfer took place, whether in the past or on the date of signing
- the language above for all goodwill and interest and rights to sue for past infringement
- signatures of both the assignor and assignee – or qualified representatives of those entities
This may seem simple, but when completing a trademark assignment, it is important to understand why each of these items are needed in order to ensure that the transfer is done correctly. The mere fact that the USPTO accepts a recordation of an assignment does not mean it is valid.
One common pitfall of attempting to file an assignment yourself is mixing up assignor or assignee, writing the wrong owner, or assigning the mark to an individual and not a business entity. Before assigning a trademark, ensure that you consider why the transfer is taking place.
- You may be transferring a trademark from one company you own to another as a restructuring of assets, such as a holding company or a change in tax status.
- You might have sold the business and all underlying trademark rights in the business name.
- You may be transferring a mark according to a will or bankruptcy.
- You may be transferring from your name, personally, to a newly created entity
All of these situations have their own nuances and it is easy to confuse who owns the rights with who is receiving them. No matter what, ensure that your assignment matches the owner on the trademark registration. Sometimes a trademark might change hands two or three times, with a few corporate name changes in the middle. You should be able to draw a straight line from the original owner to the new owner, and each step must be documented with the USPTO to ensure the recordation is valid. It might be a multi-step process involving multiple parties and, while complicated, it is essential that the ownership and chain-of-title are both correct.
Another common pitfall occurs when filing other documents, such as renewals. The filer is required to sign a sworn statement that the owner is correct. If the old owner files a renewal in the name of the old organization, the owner may have made a sworn statement that it was the owner of the mark, which could cause delays or even prejudice the registration in future proceedings.
Similarly, if the new owner files, they cannot simply change the name in the renewal. This will cause significant delays, as they will need to prepare an assignment and record it with the USPTO’s assignment branch before the renewal can be filed. If close to deadlines, this could get extremely complicated and cause additional fees or potential loss of rights.
Trademark assignments are an important part of the trademark lifecycle, as they allow trademark owners to buy and sell brands and further benefit from the goodwill represented by their brands. However, trademark owners should carefully consider the content of any assignment documents and ensure that they match the reality of the situation and the requirements of the USPTO.
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Eric Perrott, Esq.
Eric Perrott, Esq. is a trademark and copyright attorney committed to providing high-quality legal services for any sized budget. Eric’s ability to counsel clients through any stage of trademark and copyright development and protection allows him to provide his clients with personalized advice and unique analysis. Eric can be reached directly at: [email protected]. The contents of this blog are for informational purposes only and may not be relied on as legal advice.
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IP Tech Knowledgy
Use Trademark’s Magic Words: Assignments Must Include ‘Goodwill;’ Licenses Must Include ‘Quality Control’
The two most common transactions relating to trademarks each require specific words to be effective. Trademark assignments must include “goodwill;” trademark licenses must include “quality control.” To ensure the transfer of a trademark is valid, the assignment must include the goodwill of the business associated with the mark. Trademarks represent the goodwill of a business, which is different from the accounting principle of goodwill listed on a balance sheet. A trademark license must include a provision by which the licensor exerts some manner of quality control over the licensee’s use of the mark. The quality control provisions can be extensive or bare-bones but must always allow the licensor to have some inspection right over the goods or services offered. The licensor must also be certain, on regular occasions, to inspect the goods or services to be sure the licensee is meeting the quality standards. While it is clear that a licensor would want quality control, a licensee should understand the benefit as well. The licensee is using a brand and should want the brand to remain strong by being properly protected with necessary quality control provisions.
Ned T. Himmelrich 410-576-4171 • [email protected]
August 19, 2021
Himmelrich, Ned T.
Technology & Intellectual Property
Don’t Go Naked When Assigning a Trademark
So you want to sell your trademark to another business. You can do that because trademarks are considered property and may be bought and sold. But trademarks are also special kinds of property and one must use care when crafting the sale so that it is effective and enforceable by both parties to the transaction.
The outright sale of a trademark is referred to as a “trademark assignment,” that is, the sale of all one’s rights in a trademark. An assignment is distinguished from a “license,” which is the granting to another of a limited right to use the trademark in exchange for a royalty. When you assign a trademark to a third party, you are left with no rights in the trademark.
To insure that your sale or assignment of a trademark is proper, you must understand that trademarks are merely symbols of good will. “Good will” is the reputation and advantage that your business has acquired over time. One commentator has described the relationship between a trademark symbol and good will as “inseparable as Siamese Twins who cannot be separated without death to both.” Without a business or without good will, a trademark is worthless. That brings us to the first requirement: the trademark you wish to assign must be in use. If you’re not using the trademark then there is no associated goodwill and the trademark is worthless.
The second requirement is that assignment of a trademark must be accompanied by the goodwill associated with the trademark. Typically, a trademark assignment will recite that the trademark and the goodwill are being transferred to the buyer. This is more than a technical requirement. If the buyer of the trademark uses it in connection with different goods or services than the seller of a trademark, it may deceive the public into believing that the trademark is associated with something that it is not. A trademark assignment that is made without its associated goodwill is said to be an “assignment in gross” or a “naked assignment.” Such assignments, are forbidden by law and will be deemed invalid if challenged in court.
If you are interested in assigning a trademark or wish to buy trademark, it makes good sense to find a lawyer who can help you avoid the pitfalls. Let us know if we can help.
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Assignment of Trademark Without Consideration
The assignment of a trademark involves the transfer of its ownership from one entity to another, whether with or without the associated business reputation. It’s essential to execute the transfer of a trademark correctly to make it legally binding. Therefore, exercising caution during this process is important. In this blog, we shall see in detail about the assignment of trademark without consideration .
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Methods of Trademark Assignment
The various methods of trademark assignment are as follows:
1. Complete Assignment
In a complete assignment, all the rights associated with a trademark, including the right to receive royalties and the ability to further transfer those rights, are transferred to another party. This method results in a comprehensive and irrevocable transfer of trademark ownership from one party to another.
2. Partial Assignment
A partial assignment is transfer of ownership of the specific products or even services associated with the trademark. This method allows for selective transfer of trademark rights, and the original owner retains ownership of the remaining aspects of the trademark registration and related services.
3. Assignment with Goodwill
An assignment with goodwill is basically the transfer of trademark plus all the rights and the intangible value associated with it. This method is often used when the trademark is associated with a well-established brand or reputation, and the assignee seeks to benefit from its positive image in the market.
4. Assignment without Goodwill
In contrast, an assignment without goodwill includes transfer of the trademark for use in the manner other than what was its original purpose. The assignee may use the trademark without benefiting from its existing reputation or customer goodwill, and the original owner retains the goodwill associated with the trademark. This method is typically chosen when the assignor wishes to maintain control over the brand’s image and reputation.
Requirements for a Valid Trademark Assignment
To ensure the validity of a trademark assignment, several essential requirements must be met. These requirements serve to establish a clear and legally binding transfer of trademark rights, safeguarding the interests of all parties involved. These include:
1. Written Documentation and Signature
A valid trademark assignment must be documented in the form of writing and signed by that party transferring the trademark. This written agreement serves as a record of the transfer and provides clarity regarding the terms and conditions of the assignment. Both parties involved in the transfer must consent to and acknowledge the written agreement.
2. Description of Transferred Trademarks
The written assignment should specify the exact trademark or trademarks being transferred. Furthermore, it should encompass any related intellectual property rights connected to the trademark. This detailed description ensures that the assignment is unequivocal and comprehensive.
3. Legal Consideration
A key requirement for a legally valid trademark assignment is the exchange of something of value, known as legal consideration . This can take various forms, such as monetary payment, the transfer of other intellectual property rights, or the assumption of liabilities. The presence of legal consideration underscores the enforceability of the assignment.
4. Proof of Assignor’s Legal Authority
The assignor, the party transferring the trademark, must possess the legal authority to make the assignment. It is crucial to confirm that the assignor has the requisite legal rights to transfer the trademark in question, failing which he can be held liable for relevant punishable offences under the Act.
5. Affidavit on Claims and Legal Issues
As per the Trade Marks Act , the assignor is required to present an affidavit to the Trade Marks Office. This affidavit serves to confirm that the trademark undergoing assignment does not have any pending claims, disputes, or unresolved legal matters connected to it. This process guarantees that the trademark is devoid of any encumbrances or potential legal complications.
Meaning of Assignment of Trademark without Consideration
The assignment of trademark without consideration entails the transfer of a trademark without the exchange of monetary payment or any other valuable consideration, as previously discussed. This unique form of trademark transfer raises specific legal implications.
An assignment of trademark without consideration is the transfer that lacks any legal consideration. In essence, it means that the transfer of the trademark occurs without the involvement of payment or any other valuable consideration in return. Consequently, such a trademark assignment may face challenges regarding its legal enforceability and may not be recognised as valid by the legal system. The absence of legal consideration can impact the binding nature of the assignment, and it may not hold up in court.
Reasons for Assignment of Trademark without Consideration
The assignment of trademark without consideration can be motivated by various reasons, demonstrating that such transfers are not solely driven by monetary gain. The following are common motivations for assignment of trademark without consideration:
1. Gift to a Family Member or Friend: Assignment of trademark without consideration can be an act of giving, such as presenting the trademark as a token of love or gift to a family member or friend. This reflects a non-commercial, personal gesture of sharing the trademark’s ownership.
2. Philanthropic Intent: Assignment of trademark without consideration can be made to charitable organisations or non-profit entities as a philanthropic endeavour. The owner may seek to support a charitable cause or contribute to the public good by donating the trademark.
3. Personal or Professional Ties: The assignment of trademark without consideration can be driven by personal or professional relationships. The owner may assign the trademark to a company or entity with which they share a close connection, offering a helping hand without the expectation of compensation.
4. Liability Assumption: In some instances, the assignment of trademark without consideration can be when the assignee is willing to assume all liabilities associated with the trademark. In such cases, the assumption of liabilities may be deemed sufficient consideration, obviating the need for additional payment.
It’s important to note that even in cases where a trademark is assigned without consideration for these altruistic or relationship-driven reasons, the assignment must still adhere to the legal requirement of being documented in writing and signed by the transferring party to be considered legally binding.
Legal Implications of Assignment of Trademark without Consideration
Assigning a trademark without consideration carries potential legal implications, and it may not always be legally enforceable. The absence of valuable consideration can impact the rights and enforceability of the trademark assignment. It’s crucial to be aware of the legal stance on such assignments:
1. Enforceability in Question:
An assignment of a trademark without consideration may not be enforceable under the law. This means that the party receiving the trademark might not possess legal rights to use it, and the original owner may retain the ability to reclaim the trademark.
2. Legal Precedents:
Legal decisions have upheld that, in cases where a trademark was assigned without consideration, the assignor may not have the right to violate the same trademark, even if no payment was received in exchange for the assignment. This is contingent on the trademark entry not being deleted from the Trademark Register by the appropriate authorities.
3. Risk Mitigation:
To avoid potential legal complications stemming from assignments without consideration, it is advisable to ensure that all trademark assignments are executed properly and include legal consideration. This often involves negotiating the terms of the transfer and specifying any payment or other valuable consideration exchanged for the trademark. Proper documentation and adherence to legal standards can help mitigate risks and ambiguities associated with such assignments.
So, while assignments of trademarks without consideration can occur for various reasons, it’s crucial to understand that the legal enforceability of such transfers can be uncertain. To protect the interests of all parties involved, it is advisable to follow proper legal procedures and document trademark assignments accurately, especially when valuable consideration is not involved in the transfer.
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The assignment of trademark without consideration is a complex legal matter that may lack enforceability. Such assignments, driven by altruistic or personal motives, can leave the recipient without legal rights to the trademark. Legal precedents suggest that even in cases of non-monetised transfers, the original owner may retain rights unless the trademark is officially removed from the Trademark Register. To avoid potential legal issues, it is advisable to ensure that all trademark assignments, even those without consideration, are conducted in strict adherence to legal standards. Proper documentation and transparent negotiation of terms, if necessary, can help mitigate risks and ambiguities. This safeguards the interests of all parties involved and ensures that the trademark assignment adheres to legal principles, even in cases where no monetary payment changes hands.
Ms. Aishwarya Agrawal is a graduate from Hidayatuallah National Law University, Raipur [HNLU Raipur]. Aishwarya holds a great interest in adding value to the legal fin-tech sector. She joined "StartupFino" with a motive to help budding lawyers in their day-to-day journey in the field of Law.
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Assignment of Trademark
Updated on : Feb 22nd, 2022
Trademark proprietors can transfer trademarks similarly to how they can transfer physical properties. One of the ways to transfer a trademark is through an assignment. Assignment means transferring rights, interests, titles and benefits from one person to another. Assignment of a trademark means to transfer the owner’s right in a trademark to another person.
The transferring party is called the assignor, and the receiving party is called the assignee. Section 2(1)(b) of the Trade Marks Act, 1999 states that assignment means an assignment of a trademark in writing by the act of the concerned parties. Both unregistered and registered trademarks can be assigned with or without the goodwill of the business.
Who can Assign a Trademark?
Section 37 of the Trade Marks Act, 1999 states that the person registered as proprietor of trademark in the register of trademarks has the power to assign a trademark and receive consideration for such assignment. Thus, a trademark proprietor can assign a trademark to another person.
Kinds of Trademark Assignment
The different kinds of trademark assignments are as follows:
The trademark proprietor transfers all rights in the trademark to another person, including the right to earn royalties, to further transfer, etc.
For example: X is the proprietor of brand ‘ABC’. X assigns his trademark ‘ABC’ completely through an agreement to Y. After this, X will not have any rights with respect to the brand ‘ABC’.
The trademark proprietor assigns the trademark to another person with respect to only specific services or goods. The transfer of ownership in the trademark is restricted to specific services or products.
For example: X is the proprietor of a brand ‘ABC’ used for sauces and dairy products. X assigns the rights in the brand ‘ABC’ with respect to only dairy products to Y and retains the rights in the brand ‘ABC’ with respect to sauces.
Assignment with Goodwill of Business
The trademark proprietor assigns the rights, entitlements and values associated with a trademark to another person. When the trademark is assigned with goodwill, the assignee can use the trademark for any class of goods or services, including the goods or services which were already in use by the assignor.
For example: X is the proprietor of ‘Sherry’ brand relating to hair products. X assigns the brand ‘Sherry’ to Y with goodwill. Y will be able to use the brand ‘Sherry’ with respect to food products and any other products they manufacture.
Assignment without the Goodwill of Business
The trademark proprietor assigns to the assignee rights and entitlements in a trademark with respect to the products or services that are not in use. The assignor restricts the transfer of the rights in the trademark in the case of assignment without goodwill. The assignor assigns with the condition that the assignee is not entitled to use the trademark relating to the goods or services already in use by the assignor.
For example: X is the proprietor of a brand ‘Sherry’ that he uses for manufacturing and selling bags. X assigns the brand ‘Sherry’ without goodwill to Y. Y will be able to use the brand ‘Sherry’ for any other product other than bags.
Pre-Requisites for Assignment of Trademark
- The trademark assignment should be in writing.
- The assignment should be between two identifying parties, i.e. assignor (owner of the trademark) and the assignee (buyer of the trademark).
- The assignor should have the intent and must consent for the trademark assignment.
- The trademark assignment should be for a proper and adequate consideration (amount).
Trademark Assignment Agreement
The proprietor of a trademark generally assigns it to the assignee through a properly executed trademark assignment agreement. The trademark assignment agreement should be drafted keeping the following points in mind:
- The rights of the trademark should not be detrimentally affected due to the obligations contained in the agreement.
- The decision and requirement regarding whether the assignment is with or without the goodwill of the business must be explicitly mentioned.
- The agreement should show a clear purpose of the transaction/assignment.
- The geographical scope of the location where the assignee possesses the values and rights in the trademark must be mentioned.
- The transfer of the right to collect and sue damages for future and past infringements must be mentioned.
- The agreement should be duly executed, i.e. it must be stamped and notarised as per the applicable Stamp Act.
- The signatures and witnesses must be mentioned.
- The place and date of agreement execution must be mentioned.
- The date and day of the assignment along with the parties to the assignment must be mentioned.
- The agreement should mention whether or not it would be binding on the legal heirs of the assignor and assignee.
Process of Assignment of Trademark
The process of assignment of the trademark in India are as follows:
- The proprietor of the trademark (assignor) assigns his/her rights in the trademark through a trademark assignment agreement to the assignee.
- The assignor or assignee, or both, can make a joint request to register the assignment by filing an application of a trademark assignment in Form TM-P to the register of trademarks.
- Form TM-P must be filed with the registrar of the trademark within six months from the date of the assignment. The application can be filed after six months of assignment, but the fee may vary accordingly.
- The assignment must be advertised in such a manner and within the period directed by the registrar of trademarks.
- The copy of the advertisement and the registrar’s direction should be submitted to the office of the registrar of trademarks.
- Upon the receipt of the trademark assignment application (form TM-P) and required documents, the registrar of trademarks will register the assignee as the proprietor of the trademark and record the specifications of the assignment in the register.
Documents Required for Assignment of Trademark
The following documents must be submitted to the registrar of trademark along with form TM-P:
- Trademark assignment agreement.
- Trademark certificate.
- NOC from the assignor.
- Identification documents of the assignor and assignee.
Restrictions on Assignment of Trademark
The Trademarks Act, 1999 provides the following restrictions on trademark assignment:
Parallel Use Restriction
The assignor cannot assign a trademark when the assignment results in the creation of exclusive rights in different persons with relation to the same or similar products or services and will likely deceive or cause confusion. Thus, multiple exclusive rights relating to the same/similar products or services in different persons are not allowed. It prevents the parallel use of a trademark by more than one person in relation to the same/similar products or services.
Multiple Territorial Use Restriction
The assignor cannot assign a trademark when the assignment results in the creation of an exclusive right in different persons in various parts of India relating to the same/similar products or services. The assignor cannot assign a trademark when the assignment results in the creation of an exclusive right in different persons in various parts of India relating to the same/similar products or services sold or delivered outside India. Thus, assigning rights in different parts of India relating to the same/similar products or services is not allowed.
Benefits of Trademark Assignment
- The trademark assignment enables the trademark proprietor to encash the value of his/her brand.
- The assignee obtains the rights of an already established brand due to trademark assignment.
- The trademark assignment supports the assignor and the assignee to expand their respective businesses.
- The trademark assignment agreement enables the assignor and the assignee to establish their legal rights in case of any dispute.
Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.
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Assignment of Trademark
Assignment of trademark is when there is a transfer of the owner’s right, title and interest of the trademark. Such transfers can take place in the form of an assignment or merger or also an amalgamation between two entities.
Trademark Assignment is the process of transferring ownership of the trademark either with or without the goodwill of the business. One can assign a trademark through a trademark assignment agreement. The original owner of the trademark is “the assignor” and the future owner is “the Assignee.”
Benefits of Trademark Assignment
- Trademark’s value – Creating a brand name for a company involves money, time and capital. An assignor is able to encash the brand value. The Assignee is also able to unlock benefits of the brand name in the Industry.
- Exercise Legal Rights – The trademark assignment agreement secures the legal right of the assignee incase of a dispute. The Registry ensures the validity of all the clauses mentioned in the agreement before publishing the assignment in the Trade Marks Journal.
- Existing brand name – The assignee has the advantage of dealing in an already existing and established a brand name.
- Business Expansion – The Brand value will propel with the combined efforts of assignor and assignee to contribute in brand building.
Types of Trademark Assignment or Transfer
- The owner transfers all its rights with respect to a mark to another entity, including the transfer of the rights such as right to further transfer, to earn royalties, etc.
- The owner transfers trademark restricted to specific products or services only.
- Such assignment is when the rights and value of a trademark as associated with the product is also transferred to another entity.
- Such assignment also referred to as gross assignment, is where the owner of the brand restricts the right of the buyer and does not allow him to use the 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.
- TM Certificate : Certificate of Trademark Registration (if any)
- Details of the Party: Name and description of the assignor and assignee
- NOC : No Objection Certificate from the original owner of the registered trademark
Process for Assignment of Trademark
- The assignor or assignee or both can make a joint request to register assignee as a subsequent proprietor by an application of a trademark assignment. The application is made under Form TM-P.
- Assignee must apply with the registrar of a trademark within six months from the date of procurement of the proprietorship. Some applications can filed after six months of procurement but the fee payable will vary. You can also find the amounts payable for the corresponding forms here .
- The Registrar will specify the advertisement of the trademark assignment. After which the applicant has to make the advertisement accordingly. A copy of the direction of the registrar and advertisement of the assignment must be submitted to the office to make sure that the directions have been followed.
- On the receipt of the trademark assignment application and documents required, the registrar after perceiving satisfied shall register the assignee as the proprietor of the trademark. The registrar records the specifications of the assignment in the register.
Yes, you can assign an unregistered trademark by filing an application.
The Trademark Registry in India normally takes up to 6 to 8 months to update the data of the transfer.
A registry has prescribed Rs 9,000/- as a fee payable for application of transfer Trademark ownership i.e. Trademark Assignment in India.
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Hey @Dia_malhotra , Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images used in commerce.
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Patent registered designs and copyright can only be protected for a limited period. On the other hand trademark can be protected perpetually subject on conditions that is used and renewed periodically and the registered proprietor takes prompt action against the infringes. An unregistered trademark called a comman law trademark and can be kept alive and protected as long as it continued to be used and the owner of trademark takes appropriate action against the infringes by a criminal proceeding. The statues law of the tademarks sitll was governed by the Trade Merchandies Act 1958. The act has now been replaced by The Trademark Act 1999.
What is Trademark?
As per Statutory definition of trademark- Section 2(1)(zb) A trademark must be a mark which includes a device, brands, signatures, heading ticket, word, numeral, shape of good, packaging or colour combination or any combination thereof.
i) The mark must be capable of being represented graphically.
ii) The mark must be capable of distinguishing the goods or services of one from to others.
iii) It may inclued the shape of good, packaging or combination of colours.
iv) It issued or proposed to be in relation to the goods or services.
v) The use must be indicating the connection in the course of trade between the goods or services and the persons having the right as a proprietor to the use of the mark.
vi) A right to proprietor ship of a trademark may be acquired by registration under the act or by the use of the trademark in relation to a goods.
The right of proprietor ship acquired by the registration which requires no actual user but only an intention to use on the other mark. A right acquired by actual user in relation to a particular goods or service is a comman law right which is attached to the goodwill of the business concern.
An office called trademark registry has been registered for the purpose of registration of trademarks maintainence of the register and the matters incidental thereto. The head office of the registry is at Mumbai. It has branch office at Kolkata, Delhi, Chennai and Ahemdabad.
The Trademark registry is under the charge of registrar of trademarks, who is also the controller general of patent and desgins. He is assisted by a joint registrar, deputy registrar, assistant registrar, examiner of the trademarks and a competent of clerical staff.
The joint registrar or assistant registrar exercise the same powers as registrar in respect of any matter under the power delegated to them by the registrar.
Apart from registrar of tardemarks the registry of maintains index of:
a) Registered Trademarks,
b) Applications of trademarks,
c) The names of proprietors of the trademarks,
d) A name of registered user.
Branch office keeps a copy of the register and copies of indexes.
What are Registerable Marks?
The Trademark Act 1999, dose not define the catagories of registarable or the requisities for registration of a marks. It defines what marks are not registarable under two headings namely;
i) Absolute grounds for refusal &
ii) Relative grounds for refusal. The basic qualification for registration of marks is contained in the definition itself-
1) Capable of being represented graphically.
2) Capable of distinguishing the goods or services of one from to others.
Absolute Grounds For Refusal-
a) A marks which is void of any distinctive character that is no capable of distinguishing the goods or services of one from those of others.
b) Which indicate quality or descriptive character of the goods or services. c) Which have become customary in the current language or in a bona fide or establish of trade. This may relate generic names or marks common to the trade.
Relative Grounds For Refusal-
a) Mark which is identical or similar to an earlier trade mark and the repective goods or services or similar to.
b) A mark which is identical or similar to earliest trade mark but the goods or services are not similar.
The above catagories of tarde mark however be registered if the proprietor of an earlier trade mark contents or the marks is registerable u/s 12 by the virture of honest concurrent use.
What is Goodwill?
As per the Indian Trade Marks Act 1999, a trademark can be assignable with or without the goodwill of the business either in respect of all the goods or services or part thereof. According to Indian law the act recognize the right of the proprietor in trademark by which registered or unregistered trademark can be assignable and transmissible with or without goodwill subject to restriction laid down in section 40 if the Trade Marks Act,1999.
On the other hand, U,S legislation under section 10 of the trademark Act (Lanham Act) 1946, recognize only assignment of trademark with goodwill and assignment without goodwill is termed as an assignment in gross and invalid, therefore assignee acquires no rights in such transfer.
Scope of Assignment or transmission-
A registered trade mark can be assigned weather with or without the goodwill of the business concerned. Under the Act 1999, unregistered trademark is assignable and transmissible with or without goodwill of the business concerned. Where the assignment is without the goodwill of business, special conditions are imposed. Associated trademarks can be assigned only as a whole.
An assignment of a trade mark must be in writing. Sale or transfer of the goodwill of business will transfer to purchase or transferee the trade mark used in the business by implication even if the trade mark are not specifically mentioned in the deed of assignment. This is because a trade mark is part of the goodwill of business.
Assignment without Goodwill of Business?
In case of an assignment of a trade mark, wheather registered or unregistered, without the goodwill of business, the assignment will not take effect unless the assignee advertises the assignment in newspapers in accordance with the direction of the registrar, gives on application made for the purpose. The purpose of the advertisement is to give notice of the assignment to the public. It may be noted that a marks on the face of its indicative of one origin, if applied to goods of a different origin, would prima facie be deceptive. Advertisement may be necessary only where the marks has been in use. In case of unused trademarks, no public confusion would follow their assignment, advertisement, may not be necessary.
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Assignment of Trademark Without Goodwill of Business
Want to know about trademark assignments? Well, check out this blog to know about trademark assignments, without goodwill. Also learn the procedure for the registration of assignment of the trademark.
The term ‘assignment of trademark’ refers to the transfer of a trademark. To put it simply, the word assignment implies the transfer of benefits, interests, rights, and titles from one individual to another. Therefore, trademark assignment is the transfer of the owner’s benefits, rights, title, and interest to another person. The party that is transferring the trademark is known as the ‘Assignor’ and the party to which the trademark is being transferred is known as the ‘Assignee’.
According to the statutory definition u/s 2(1)(b) of the Trade Marks Act, 1999 the term ‘Assignment’ is a written assignment by the concerned parties. Visit Vakilsearch to get assistance on the registration of trademark assignment without goodwill. You can also use the services of Vakilsearch for deed drafting and filing of your application. Furthermore, Vakilsearch provides necessary help and solutions in various legal matters.
Power of Trademark Assignment
U/s 37 of the Trade Marks Act, 1999, the individual entered as the owner of the trademark in the trademarks register, alone holds the power for assigning the trademark and providing its effectual receipt.
Unregistered and Registered Trademark Assignability
U/s 38 of Trade Marks Act, 1999, it is possible to transfer any registered trademark with/without the business goodwill, either for all goods/services for which the trademark has been registered or for only some of the goods / services. Furthermore, according to section 39, it is possible to assign an unregistered trademark either with or without the business goodwill.
Types of Assignment
There are two types of assignment of trademarks:
- Assignment of the trademark with business goodwill
- Assignment of the trademark without business goodwill
When there is an assignment of the trademark with goodwill, then the assignor provides the assignee with the rights, values, and entitlements also, as associated with the trademark for the services and/or goods that the assignor is already using. The assignee, post getting the goodwill attached with the trademark is allowed to make use of the trademark for all goods/services and also all those goods or services that the assignor was already using.
In case of assignment without business goodwill, the assignor assigns the trademark to the assignee, with the entitlements and right only for the goods and/or services that the assignor is not using under that trademark. To put it simply, the assignee is restricted by the assignor such that the assignee cannot use the assigned trademark in relation to the goods and/or services that the assignor is using under that trademark.
Let us look at an example. A owns a trademark ‘T’ and is using it for handicraft items. This trademark is assigned by A to B via a written agreement for the goods and/or services other than handicraft items. So, A has assigned the trademark without the assignment of the associated goodwill that is attached to the trademark. Therefore, A has not assigned to B the goodwill attached to the trademark “T” so far as the handicrafts business is concerned. So, B cannot use the trademark ‘T’ for the purpose of handicrafts. Furthermore, when B used the trademark ‘T’ for any goods and or / services, B will need to create its own goodwill for the trademark ‘T’ for those goods and/or services.
Procedure to Assigning Trademark without Goodwill
In the case of the trademark that is pending registration, the following needs to be done:
- Filling out the required form – TM-M
- Submitting the statutory Fees of ₹ 1,000/- in case of offline filing
- Submitting the statutory fees of ₹ 900 in case of online filing
In the case of the registered trademark, the following needs to be done:
- Filling out the required form – TM-P
- Submitting the statutory fees of ₹ 10,000/- in case of offline filing
- Submitting the statutory feed of ₹ 9,000 in case of online filing
According to section 42, rule 81, TM-P needs to be filed first with statutory fees of ₹ 3000/- for offline filing and ₹2,700/- for online filing, within a period of six months from making the assignment or within the three months extended period. This is for the purpose of getting the direction from the registrar for ‘advertisement of assignment without goodwill’. After this, the need is to file TM-M/TM-P, based on the requirement.
Process of Assignment of Trademark Registration
1. U/s 45, the subsequent proprietor/assignee of a trademark who now has entitlement based on assignment, needs to apply with the Registrar of Trademarks for registration of assignment.
2. Us 45, post the Registrar being completely satisfied, the assignee’s details will be entered by the Registrar as the trademark’s proprietor assigned to the assignee for the goods and/or services that the assignment allows. (buy ambien overseas)
3. U/s 45, when the parties are in dispute regarding the assignment’s validity, it is up to the Registrar may deny registration of the assignment till a competent court determines the rights that the parties hold.
4. The application for assignment registration must be disposed of by the Registrar within a span of 3 months of the date on which the application was received. (Trade Marks Rules, 2017 – Rule 76)
5. If reasonable doubt exists regarding the veracity of furnished document(s) or any statement, the Registrar may ask any individual who has filed an application for registration as a registered trademark’s proprietor to provide proof for the same or further proof of title. (Trade Marks Rules, 2017 – Rule 77)
6. If the Registrar is of the opinion that any document furnished to prove a person’s title is improperly or insufficiently stamped, the Registrar may impound and handle the matter based on Chapter IV of the Indian Stamp Act, 1899. (Trade Marks Rules, 2017 – Rule 78)
When the assignment registration is approved by the Registrar, then the following information will be recorded in the register:
- assignee’s name
- assignees address
- assignment date
- description of the assigned right in case the assignment is made in respect of any right
- basis of making the assignment
- date of the register entry
(Trade Marks Rules, 2017 – Rule 84 )
We hope that this article has been helpful in providing information assignment of trademarks. Under trademark assignment without goodwill, the assignor restricts the assignee from operating in the market where the assignor is already active. The assignee is permitted to use the same trademark but not for identical services/services as the assignor.
Visit Vakilsearch for details on trademark assignment and to receive professional help for filing for trademark registration with/without goodwill.
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Assignment and Transmission of Trademark
- Intellectual Property Rights Subject-wise Law Notes
- Aishwarya Agrawal
- May 23, 2023
Assignment and transmission of trademarks involve transferring ownership rights from one party to another. The Trademark Act provides guidelines and conditions for such assignments and transmissions, distinguishing between assignments with or without the goodwill and specifying requirements for registration and documentation.
Meaning of Assignment and Transmission of Trademark
Assignment and transmission of a trademark refer to the legal process by which the ownership rights of a trademark are transferred from one person or entity to another. This process involves the transfer of the exclusive rights associated with the trademark, which can include the right to use, license, sell or enforce the trademark.
The assignment of a trademark involves the complete transfer of ownership from one party to another. In this case, the assignee (the party receiving the trademark rights) assumes full control and responsibility over the trademark, including the right to use it exclusively for their own commercial purposes. The assignor (the party transferring the trademark rights) relinquishes all rights and interests in the trademark.
On the other hand, the transmission of a trademark typically refers to the transfer of ownership rights in situations where the original owner passes away or there is a change in the ownership due to legal proceedings, inheritance or other circumstances. Transmission may occur through the distribution of assets in a will, the settlement of an estate or a court order.
Both registered and unregistered trademarks can be assigned or transmitted. A registered trademark is one that has been officially registered with the relevant trademark office, providing the owner with statutory rights and protection. An unregistered trademark refers to a mark that has not been formally registered but may still possess some degree of protection based on common law or other legal principles.
Types of Assignment and Transmission of Trademark
Complete assignment and transmission.
Complete Assignment refers to the transfer of all rights associated with a trademark from one individual to another. This includes the rights to further transfer the trademark, receive royalties and exercise full control over its usage. For instance, if proprietor ‘X’ sells all rights of a trademark to proprietor ‘Y’, ‘Y’ becomes the exclusive owner with the freedom to use the trademark as desired, transfer it to others, set guidelines for its usage and receive royalties. No approval from ‘X’ is required in this case.
Partial Assignment involves the transfer of ownership restricted to specific services or products. For example, if proprietor ‘X’ has a trademark (♛) related to men’s lifestyle products but only wants to assign it to shoes, ‘X’ can transfer the trademark to ‘Z’ with the condition that ‘Z’ can only use it for shoes. ‘X’ retains the right to use the trademark for all other products. This type of transfer is known as a partial assignment.
Assignment with Goodwill
Assignment with Goodwill refers to the transfer of a trademark along with all the associated rights and values from one person to another. For instance, if ‘X’ assigns and transfers their trademark (♛) to ‘Z’ with all rights and values intact, ‘Z’ gains full rights to use the trademark for men’s lifestyle products or any other future products they manufacture.
Assignment without Goodwill
Assignment without goodwill involves the transfer of a trademark in a way that allows its use for purposes other than the original one. For example, if ‘X’, who deals with men’s lifestyle products, assigns and transfers their trademark (♛) to ‘Z’ with the condition that ‘Z’ can use it for any product except men’s lifestyle products.
Conditions for assignment and transmission as given in section 42
Section 42 of the Trademark Act outlines the conditions for the assignment and transmission of a trademark, specifically when it is not associated with the goodwill of a business. According to this section, the assignment or transmission of a trademark without goodwill will only be effective if the assignee applies to the registrar for directions regarding the advertisement of the assignment.
The assignee must advertise the assignment within the timeframe specified by the Registrar, which should not exceed six months from the date of the assignment or an extended period of three months if permitted by the Registrar.
However, if the trademark is assigned along with the goodwill of the business for specific goods and services, it will not be considered an assignment without goodwill. Additionally, if the assignment includes goods for export or services used outside of India along with the assignment of goodwill, it is permissible.
Restrictions on Assignment of Trademarks
The Trademark Act imposes certain restrictions on the assignment and transmission of trademarks to prevent confusion among users or the general public. These restrictions include
- Restriction on assignment or transmission that would create multiple exclusive rights.
- Restriction on assignment or transmission that would create exclusive rights in different parts of India.
Process of Assignment and Transmission of Trademark (Section 45)
The process for the assignment and transmission of a trademark, as described in Section 45 of the Trademark Act, involves the following steps:
- Application to the Registrar of Trademarks using Form TM-P, along with duly certified original documents.
- The Registrar will review the application and provide a decision within three months. The decision may include informing the applicant about the assignment or requesting additional proof if there are doubts.
- If the assignment is approved, the Registrar will make an entry in the Register, including details such as the name and address of the assignee, the date of the assignment, a description of the rights assigned (if applicable), the basis of the assignment and the date of entry in the register.
- In case of a dispute between the parties regarding the validity of the assignment or transmission, the registrar may refuse to register it until the rights of the parties have been determined.
Assignment and Transmission of Registered Trademark (Section 38)
Section 38 of the Trademark Act states that a registered trademark can be assigned and transmitted, with or without the goodwill of the business associated with it. This can apply to all the goods or services covered by the registered trademark or only to a specific subset of goods or services.
Assignment and Transmission of Unregistered Trademarks (Section 39)
According to Section 39 of the Trademark Act, an unregistered trademark can also be assigned or transmitted, with or without the goodwill of the business concerned.
Benefits of Assignment and Transmission of Trademark
Expansion of business: By assigning and transmitting a trademark, the owner can expand their business by using the same trademark in multiple locations simultaneously. Additionally, partial authority can be given to assign the trademark to more than one person.
Leveraging an established brand : Assigning and transmitting a trademark allows the assignee to benefit from an already established brand in the market, saving them the effort and resources required to create a new brand.
Legal proof: The assignment and transmission of a trademark serve as legal proof in case of any disputes related to trademark usage. The rights and liabilities associated with the trademark are clearly outlined in a legal document.
Monetary benefits: The owner of the trademark can enjoy monetary benefits through the assignment and transmission process, including any financial gains resulting from the assignment or transmission. Furthermore, operating with the same trademark in multiple locations can increase the value of the brand.
Structural Waterproofing and ORS v. Amit Gupta ORS [93 (2001) DLT 496]
In this case, a dispute arose regarding the assignment and transmission of a trademark. The court highlighted that the registrar has the authority to refuse the registration of the assignment and transmission until a decision is made by the competent court. The plaintiff claimed ownership of the trademark based on a Memorandum of Understanding (MoU) between the parties.
However, the court rejected the plaintiff’s request for an injunction against the defendant. The court emphasised that a change in the name of the registered proprietor does not automatically render the trademark unsuitable.
Cinni Foundation v. Raj Kumar Shah and Sons [2009 (41) PTC 320 (Del)]
In this case, the trademark “CINNI” was being used by the owner. A deed of assignment had been executed and signed between the parties. However, it was later discovered that the trademark was not registered. The defendant attempted to claim rights over the trademark. The court ruled that according to the law, the assignee acquires no title to the trademark without the registration of the assignment deed. Consequently, the defendant’s claim to the trademark was dismissed.
These cases illustrate the importance of registration and proper documentation in the assignment and transmission of trademarks. Registration provides legal protection and establishes ownership rights, while adherence to the legal requirements ensures the validity and enforceability of the assignment or transmission of the trademark.
Difference between the Assignment and Transmission of the Trademark
Assignment and transmission are two terms often used interchangeably, but they are distinct concepts according to Section 2 of the Trademark Act. In the case of trademark assignment, there is a transfer of ownership of the registered trademark to another party. On the other hand, in the case of trademark transmission, the original owner retains the rights to the trademark but grants limited rights to a third party for its use.
For instance, let’s consider the example of X, the current owner of the trademark “œ,” who decides to assign the trademark to Y. In this scenario, X relinquishes ownership of the trademark and after a proper assignment process, Y becomes the registered owner with full rights to the trademark.
However, if X chooses to transmit the trademark instead, it means that X remains the original owner of the trademark, but grants limited rights and responsibilities to Y for its use.
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