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Pankaj Tyagi
| Updated: 12 May, 2021 | Category: Trademark

Learn About Trading Trademarks- Assignments, Mergers, & Transmissions

Learn About Trading Trademarks

Trademark is an indispensable part of Intellectual property. They are recognized as a unique mark, which helps differentiate the goods or services of one individual from another. Trademark instills distinctive identity into the brand, thereby making it identifiable in the competitive market. From a legal standpoint, it can be referred to as a name or logo that a firm uses on its offering, and others cannot use that without the owner’s consent. In this article, we will examine the Learn About Trading Trademarks- Assignments, Mergers, & Transmissions.

Definition of Trademark- Section 2(1) (zb)

As per the trademark Act, a Trademark refers to a mark that is being represented graphically and can distinguish the goods or services from the rest, which includes the shape of goods, combination of colors, and their packaging.

A trademark concerning services is that where the mark is used concerning the services. To indicate the course of trade between the goods or services, the person can use the mark.

Read our article:Trademark Litigation: Its Sources, Remedies, Costing and Appeal

What is Assignment of Trademark in Connection with Trading Trademark?

According to section 2(1), (b) – assignment indicates an act performed by the parties in writing; An assignment is a written document that involves the assignor and the assignee. The assignment is not a one-sided act between the parties. Thus, the act of both parties is equally important. 

Assignment of a trademark comes into existence when the ownership of a specific mark is transferred from one party to another, with or without the business’s goodwill. In case of a legally enforceable trademark, such assignment should be recorded in the Register of trademarks.  In layman terms, the assignment of Trademark implies, transfer of the rights of the owner in a trademark.

Features of Trademark Assignment within Trading Trademarks

Section 37- This section talks about the assignment of the trademarks. In the light of this section, the registered owner transfers his/her Trademark’s rights to any third party.

  • As per the section, the registered trademark owner reserves the right to transfer the rights for the same after receiving the consideration. This is a process of assignment and gives the effectual receipts for any consideration for such assignment.
  • The assignment and license are two different terms. The license refers to a grant of permission related to mark utilization where no ownership’s transfer in the mark occurs.
  • It can be considered that a legally enforceable trademark is transmissible & assignable on account of all the goods and services of which the Trademark is registered.

Trademark Transmission under Trading Trademarks

Generally, the term Transmission & Assignment are used interchangeably; however, section 2 draws a line of distinction between both these terms. In the case of trademark assignment, there is a change in the brand’s ownership. In contrast, in the case of Transmission, the rights of the Trademark continue to stay with the original owner except for some specific rights that are accessible to third-party. 

For instance, let’s say T is the owner of the trademark “x” and decide to assign the same to L. It means that T will no longer posses the Trademark’s ownership and, after assignment, L will be the authentic trademark owner and will possess all the rights vested in it. 

Whereas if T opts for the Transmission of a Trademark, it implies that T is still the original Trademark’s owner, but he has just conferred rights to L to use the Trademark.

How is Trademarks Transmitted or Assigned in the trading Trademarks?

The trademarks are transmissible, assignable, and merge-able. The trading trademarks encompass the notion of Transmission, assignment & merger of Trademark. The present system provides for the records, rectification in the details of the mark’s owner, under two methods:-

  • Changes due to Transmission/ assignment
  • Change of the proprietor’s name- by the merger

Examples relating to the Trading Trademarks

Here are some examples where the Transmission or assignment is recorded:-

  • Company X transfers its Trademark to firm Y- This is a trademark assignment.
  • Company X merges with Firm Y- Both entities merge to form Company T. company T lacks a registered Trademark of any kind. Here the merger will result in trademark transmission.
  • Company T merges with Company L. Here the company T has its registered Trademark, but company L now possesses the Trademark as the LT. This is an example of a merger. 
  • Where there is an alteration to the structure of the partnership firm, which indicates the absence of the either partner, then the registered trademark shall be assigned/transmitted transferred to the new partnership.

Types of Transmission or Assignment in Connection with Trading Trademarks

There are ample ways of the Transmission or assignment of the trademarks in connection with trading trademarks. 

Types of Transmission or Assignment in Connection with Trading Trademarks

Assignment to other Entity (in full capacity)

This implies where the owner assigns the exclusive rights to the other entity. There is the complete assignment of the Trademark’s ownership by one person to another. Here the trademark owner earns the royalties from the complete transfer of trademark ownership.

Partial Assignment- Assignment related to Described Goods or Services

Here the assignment is limited to the assignment related to specific goods and services. Such as assignments related to bakery-related items, which are restricted to particular bread or biscuits only. 

Assignment Related to Goodwill

This implies that the rights & value of the Trademark is linked with the product is also assigned to another entity. Brand X gives the right over the bread & the new development concerning bread will also be given to them. 

Gross Assignment-Assignment without Goodwill

This implies where the brand owner limits the buyer’s rights & does not permit him/her to use such brand for the product being utilized by the original owner.

The goodwill of a brand-related to such a product already being sold under such a brand is not assigned to such a buyer.

Where Brand X is assigned to the owner, but he/she cannot utilize the goodwill of the brand in the bakery[1], he will have to garner his goodwill related to the product he/she transferred. 

Conclusion

It can be concluded that the Assignment or Transmission of trademarks can come into effect when the merger of entities occurs. Just like Trademark, the trading trademarks- Assignment & Transmission is inculcated under Trademark registration .

Some limitations are linked with the trademark Transmission or assignment where the Trademark creates confusion among the target audience; it will not be assigned or transmitted. Any alteration to the ownership of the Trademark should be informed to the registrar of the Trademark.

Read our article:Trademark Assignment; Know the Complete Procedure

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Pankaj Tyagi

Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.

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