Yes, anybody can sell the registered trademark via Trademark Assignment. However, such actions are subjected to certain legal process, and in this blog, we will going to discuss the same. The 21st century was started in the age of globalization and technological evolution. There is no denying that entrepreneurs in the current era finding it hard to survive in today’s environment due to stiffer competition.
However, in such a circumstance, one of the most vital assets for entrepreneurs today is the trademark that protects the business brand name. Online Trademark Registration has become an important legal formality for the entrepreneurs because the end-users have become increasingly inclined towards the brand name rather than anything else.
Registered Trademark is a Value Addition to the Business
Selling registered trademarks offers a lot of value to any business entity, as they enable the business to create a stronger market presence. They often come in handy in boosting sales. The trademarked product has a better tendency to create a stronger bond with end-users. If a brand is already resonating strongly in the target market, the entrepreneur may choose to sell it a trademark to a third party. This process, from a legal perspective, is referred to as a trademark Assessment.
Why does Entrepreneur choose to sell out their Trademark Registration?
The business might choose to sell out their registered trademark owing to given reasons.
- Closure of the Establishment.
- The merger of two or more business units.
- In the case of a business takeover.
Whatsoever be the reason for the selling of the registered trademark, the brand owner can sell their registered trademark via Trademark Assignment. The term signifies that the right over the trademark registration has been assigned to the entity or a particular individual.
What is the Definition of Trademark Assignment?
Section 37 of the Trademark Act 1999 defines trademark assignment as a transfer of an owner’s title, right, and interest in a brand mark or registered trademark. In the event, if a trademark is registered, the assignment is needed to be spared in the trademark register. The below would explain the process of the selling registered trademark via Trademark Assignment.
How to Execute the Trademark Assignment?
In view of Indian Trademark Laws, the owner can leverage four different ways to sell registered trademark via Trademark Assignment:
Partial Trademark Assignment
In the Partial Trademark Assignment, the trademark’s ownership gets transferred to the third party (assignee) only related to some products/services listed in the Trademark assignment agreement.
The main advantage of such an assignment is that the first owner (aka assignor) is eligible to sell ownership over some products and reserve the remaining right under his possession. This way, the owner can limit the trademark transfer to the specified category of goods and services.
Complete Trademark Assignment
Complete Trademark Assignment is when the owner opts to transfer complete ownership of the trademark to the assignee. In such an event, the assignor, i.e., the owner, chooses to transfer the entire right to the third party (assignee) to earn royalty out of them.
In such an assignment, once the owner completes transferring of the trademark’s ownership, he dissolves all the right to retain it later in any situation. However, the owner might reap regular royalty out of the sold trademark, in view of the agreement. This is probably one of the key reasons why the owner wishes to sell registered trademark via Trademark Assignment.
Trademark Assignment with Goodwill
Such type of trademark assignment comes into existence when the owner of the trademark chooses to transfer the right of ownership of a trademark and the goodwill of the brand name linked with the trademark. That means the trademark right along with the brand value gets transferred to the third party in such type of assignment. In such cases, the assignee enjoys exclusive rights over the proposed trademark in view of the brand and the goodwill.
Trademark Assignment without Goodwill
Assignment in the absence of goodwill generally refers to as Gross Assignment. In such type of trademark assignment, the trademark owner chooses to transfer only his trademark while limiting the exposure of the brand name.
In such a situation, the assignee is not liable to use the product’s branding element, though he reserves the right to sell the product. Since the brand is under the owner’s possession, the goodwill of the same would remain with the assignor only.
Documents to be Arranged for Selling Registered Trademark via Trademark Assignment
Following are the documents that an applicant needs to arrange for selling the registered trademark via Trademark Assignment.
- Agreement for Trademark assignment.
- Business proof of the owner and the assignee to who trademark ownership is proposed to be transferred.
- No Objection Certificate from the assignor.
- Certificate of Trademark registration of the assignor.
What are the Additional Prerequisites for Selling Registered Trademark via Trademark Assignment?
The consent of the assignor is a must-have requirement for ensuring seamless transfer of trademark ownership.
- The trademark assignment must be drafted in a writ agreement.
- The presence of the Assignor & Assignee is a must while drafting a trademark assignment.
- Complete & self-attested documents of both owner and the assignee.
- Identification of the trademarks should adhere to legitimacy.
- Correct execution of the agreement between the parties.
- Proper deliberation by the party intending to take over the trademark’s right from the owner.
- Inculcation of the condition related to goodwill, if taken into consideration.
These are the vital deliberations of the trademark assignment. Deliberately drafting the Trademark Assignment agreement in view of aforesaid conditions assists in the seamless process of Trademark Assignment & rules out the chance of any conflicts or disputes. If you want some professional guidance for selling Registered Trademark via Trademark Assignment, please feel free to communicate with one of the associates at CorpBiz’s helpdesk.
Read our article:How to Check the Trademark Status?- Everything you need to know