Trademark is intellectual property, just like a physical property like land. As an owner of land has the right to sell or transfer his/her property, trademark owner can also do the same to his IP. Every brand or trademark owner can transfer his right with respect to his trademark, either by the way of licensing or trademark assignment. The Trade Mark Act, 1999[1], deals with the licensing of trademark and trademark assignment.
Trademark assignment is the part of transfer of ownership of trademark to one party to another. In this article, we will discuss the procedure of trademark assignment and other important aspects of trademark assignment.
What is a Trademark Assignment?
The process when right and ownership of the trademark are transferred to any other person is called trademark assignment. Partial assignment of trademark is generally known as licensing.
Further, the assignment of trademark usually takes place through execution of the agreement between the parties, which is known as Trademark Assignment Agreement. Assignment agreement will be considered as legally valid when it shows intention the part of the assignor to transfer complete or partial ownership of the mark.
What are the kinds of Trademark Assignment?
- Complete Assignment;
In such assignment, complete rights in relation to a registered trademark are transferred to the second party. The owner here transfers all the rights with respect to marking to the other party, which includes rights of further transfer, to earn royalties, etc.
For example, A, the proprietor of a brand, sells his mark completely through an agreement to B. Now, A does not retain any rights with respect to the brand.
- Partial Assignment;
In case of partial assignment, transfer of ownership is limited to certain services/products as parties have decided or expressed in trademark assignment agreement.
For example; X, the proprietor of a brand used for jams and jellies and dairy products. X assigns the rights in the brand with respect to only dairy products to R and retains the rights in the brand with respect to jams and jellies.
Further, a complete and partial assignment can be made with goodwill or without goodwill.
- Assignment with goodwill;
Such assignments are made when value and right, both the things associated with the trademark are transferred to the third entity with goodwill.
For Example, R, the proprietor of a brand “Shudh” relating to shoe products, sells his brand to S such that S will be able to use the brand “Shudh” with respect to dairy products as well as any other products it manufactures.
- Assignment without goodwill;
Assignment without goodwill is also known as gross assignment. Here, the owner of the brand restricts the right of the buyer. The buyer cannot use such a brand for the product being used by the original owner. Hence, the goodwill attached to such a brand with respect to the product already being sold under such a brand is not transferred to the buyer.
For Example; P, the proprietor of a brand “Shudh” relating to dairy products, sells his brand to Q such that Q will not be able to use the mark “Shudh” with respect to dairy products but can use this brand for any other products being manufactured by it. In such case, the goodwill which is associated with brand “Shudh” for dairy products is not transferred to Q, and Q will be required to create distinct goodwill of brand “Shudh” for any other product or service like Restaurant wherein Q proposes to use this brand.
Few Restrictions as per Trade Mark Act, 1999
- Restriction over such assignment, which results in the creation of exclusive rights in more than one person with respect to same goods and services, or for same depiction of goods and services or such goods and services are associated with each other.
- Restriction over such assignment which results in different people using the mark in different parts of the country
- Restriction on assignment that results in different people using the trademark in different parts of the country together.
What is Trademark Licensing?
The concept of Trademark Licensing allows the other to use the mark without assigning the ownership. Also, the same can be done for all or few goods and services covered. Trademark Act does not talk about the term ‘License,’ whereas the term used in the act is ‘registered user.’
Trademark assignment is beneficial for both the parties. While the licensor relishes the right to the mark by getting royalties, and the licensee becomes competent to expand its market operations by using the brand and developing its name.
What are the benefits of Assignments of Trademark?
- Get Your Trademark’s value ;
The creation of brand is processed in which a lot of money, time, and hard work are required. By assignment of trademark to other entities, owners can encash the value of the brand, which was till now only in papers.
- Assignment Agreement is the valid proof;
In case if any dispute with respect to trademark arose, the legal rights of assignee can be established easily through trademark assignment agreement. Registry assures that all the checks are in place, and the validity of the entire clause mentioned in the agreement is published in trademark journals.
- Pre- Established Brand;
The assignee has the benefit of dealing in an already existing and established brand name. The time, efforts, and investment for making brand value are saved for the assignee.
Read our article:Grounds for the Refusal of the Trademark Registration
What are the documents required for the Trademark Assignments?
What is necessary to effect the valid Assignment Agreement?
- Must be in writing ;
- Identifying the parties as assignor and assignee;
- Identification of the trademark to be assigned along with the relevant application and registrations;
- Be given for consideration ;
- Identify the date of assignment;
- Duly executed agreement;
- Include the transfer of trademark in goodwill
How to Register Trademark Assignment with the Registry?
Below mentioned is the process to record the trademark assignment with the registry;
Assignment of the unregistered trademark;
According to section 39 of the Trademark act, 1999,
Assignment of the registered trademark;
According to section 38 of Trademark act, 1999
What is the procedure for Trademark Assignment Agreement?
Following is the procedure for trademark assignment;
- The first step is to form an application for the assignment of trademark. The plea can be made either by the assignee or assignor or by both. Furnish all the required details of the transfer mention under form TM-P.
- After completing the application drafting, the same is required to be submitted with the registrar of the trademark. The same is required to be done within the 6 months of acquisition of proprietorship.
- The direction of the registrar is mandatory before the expiry of 6 months in case when trademark assignment is done with the goodwill or of registered mark.
- Registrar will specify the advertisement of trademark assignment. Once the specification is done, applicant can make the advertisement accordingly. The applicant is required to submit a copy of the advertisement and registrar’s direction in office of registrar.
- In the final step, once the registrar gets satisfied with the documents submitted, he shall officially transfer the trademark from original to the new owner.
Now, the name of the new assignee is registered as a new proprietor. After this, the assignee is eligible to use the trademark as per the terms of the agreement.
What is the prescribed form for the Trademark Assignment?
An application for trademark assignment can be made in Form TM-24. For the joint request, the assignor and assignee can make a request in Form TM-23.
Conclusion;
The trademark assignment of a brand can open many opportunities with proper planning. It allows the third party to have access over the right of the real owner of the brand. With the assignment, brand remains alive, and both assignor and assignee avail various benefits. One of the famous examples of trademark assignment is of the Ahmedabad based brand, Havmor Ice Cream, which transferred its partial right over to Lotte Confectionary worth of Rs. 1020 crores.
Read our article: How Can You Apply For Online Trademark Registration in India?
