A trademark is an intellectual property, similar to a physical property such as land. Just as the owner of the land has the right to sell or transfer his property, the trademark owner has the Trademark Rights of the same nature.
Every trademark owner who prefers to transfer his right concerning his trademark can do so either by trademark licensing or trademark assignment, regulated by the Trademark Act, 1999.
Meaning of Trademark Licensing
This allows for the transfer of trademark rights by imposing certain restrictions that prevent the licensee (new owner) from full ownership over the licensor’s rights (original owner). Although the concept of licensing seems a bit restrictive, it is beneficial for both the licensor and the licensee.
This helps the former owner expand its market and increase its number while the latter enjoys royalties received with the trademark. The concept of transfer of a trademark right is a strategy that generates a profit for both – who confers rights and who acquires the rights.
Meaning of Trademark Assignment
In simple terms, a trademark assignment is a process through which a trademark right and ownership are transferred to any other person. A trademark assignment occurs between the parties only after an agreement called a trademark assignment agreement is executed. Also, partial assignment of trademarks is known as trademark licensing.
According to section 37 of the Trademark Act, 1999, ‘there is a transfer of the owner’s rights, title and interest in the trademark or brand mark in the trademark assignment. If the trademark is registered, the assignment is required to be entered in the trademark register.”
What are the Types of Trademark Assignment applicable in India?
The below discussed are the types of the trademark assignment
Complete Assignment
In such an assignment, the entire trademark right is transferred to another party concerning the registered trademark. In this case, the owner of the trademark transfers all trademark rights to another person to earn royalties. The trademark owner will not have any rights over the trademark once it transfers the other party’s trademark through an agreement.
Partial Assignment
In the case of partial assignment, the trademark owner is transferred only concerning certain products/services, as it was pre-decided by both parties through the trademark assignment agreement. In this case, the owner may retain certain trademark rights and restrict the trademark’s transfer only to specific products and services.
Assignment with Goodwill
In this category of trademark assignment, the trademark owner transfers the trademark right in addition to the value of the trademark associated with it. When dealing with goodwill, then the trademark’s rights and values are given to the other party to use the proposed mark concerning the products and services.
Assignment without Goodwill
The category of “assignment without goodwill” is called as gross assignment. In this situation, while transferring the trademark right, the brand owner restricts the buyer’s right to use such a brand for a product that is already being used by the original owner. Therefore, no goodwill associated with such a brand is transferred to the buyer about the product already being sold under such a brand.
Read our article:What is the Importance of Notarization of Trademark Assignment?
What are the Advantages Transferring of Trademark Rights through Trademark Assignment?
There are various advantages of Trademark Assignment. Some of them are mentioned below:
Security for Assignor and Assignee
To complete a genuine and valid trademark assignment, a trademark assignment agreement is executed between the two parties, including the assignee and the assignment. Such a legal agreement serves as valid proof. It is admissible as proof in court if a dispute arises between the two parties. Thus, it preserves the rights of both the assignee and the assignee.
Expansion of Business
The assignment of a trademark helps in the expansion of the business as both the assignee and the assignee get the right to collaborate the brand with their respective businesses.
Pre-Established Brand
If you have gained authority over an already established well-known brand through the process of trademark assignment, then you do not need to invest time, money or labor in the creation and marketing of your brand. Assignee does not need to create a new brand and take pains to get it registered.
Pre – Requirements for a Trademark Assignment
There are some needs for validating the process of trademark assignment in India. They are as follows:
- The owner / owner of the trademark must have the intention and consent for the trademark assignment
- Assignment of trademark must be in writing
- There should be two identifier teams – Assigner and Assignee
- Execution of a valid trademark assignment agreement
- Proper mark identification
- Reasonable consideration
- Including transfer of trademark in goodwill
- Identified valid documents of both assignment and assignment
Procedure of Transferring Trademark Rights through Trademark Assignment in India
The below discussed are the process related to the trademark assignment in India:-
Application for Trademark Assignment
An assignment for an assignment must be done by the Assignor or the Assignee or both. Both of them can also jointly requested.
Filing of TM-P form
In the other step, it is important to file the TM-P form by submitting all the necessary details of the transfer.
Submission of Documents
After filling the TM-P form, you are required to submit all necessary documents required for the trademark assignment to the Registrar of Trademarks within 6 months from the date of acquisition of ownership.
Post-Processing of the Application
Once the assignment’s application is successfully submitted with the necessary documents, the application will be processed.
Advertisement of the Assignment
As soon as your application is specified, the applicant has to make an advertisement for the assignment in the manner directed by the Registrar. In addition, submit a copy of the direction of the registrar and a copy of the advertisement of the assignment to the registrar’s office.
Approval of the Assignment
On receiving the trademark assignment application along with the documents, the registrar will verify the application. After the proper verification, if the registrar is satisfied, he will approve the application. However, the registrar will register the assignment as the owner of the trademark. The registrar will enter the details of the assignment in the register.
Wrapping Up
The assignment of a trademark involves good planning from both the assignee and the assignment part. Trademark assignment opens up a lot of opportunities for parties allowing parties to gain access to the brand with the consent of the original owner. In addition, the trademark assignment keeps the brand alive.
What are the Conditions when a Trademark can be Assigned or Licensed?
The following are the conditions when trademark can be assigned or licensed.
If the Trademark Owner Dies
Whenever the owner of the trademark dies, it is owned by the will or heirs to the heirs, until and unless that TM should be valid and should not have been abandoned.
Sale of Business
Intellectual properties are assets. Like all assets, a trademark can be sold with the company as well, provided it is registered under the name of the company. If a party acquires trademark rights by obtaining a trade-a-vis sale of the property, then the intellectual properties are also transferred.
Change of Name of Owner
When the company is merged or amalgamated, information is sent to the registry. All IPs of the acquired company are transferred to the new company through a trademark assignment agreement.
Change in Form of Business
An assignment is an advantageous element for businesses that plan to change their business structures. For instance, a sole proprietorship that owns a trademark may later transfer ownership and rights through trademark assignment if it plans to change its business structure i.e. convert sole ownership to a private limited company.
Why Trademark Assignment Should Be Recorded Immediately?
- If one fails to change ownership on time, it can lead to many misconceptions among consumers and disputes among the rivals. This can cause a potential loss of brand reputation or rights as the trademark will fail to show the true origin of the product.
- The new owner will not be able to claim their rights such as filing a lawsuit for infringement, filing a renewal, etc.
- Failure or delay in filing the transfer of ownership may result in potential loss of royalties.
- License records and registered user entries will no longer be in operation and may affect the validity of use by licensee and / or governmental approval for foreign exchange authorities for waiver of royalties.
Conclusion
With time and continuous progress in almost every industry across the globe, the trademark has become one of the fastest emerging and most exclusive intellectual property rights (IPRs) in India[1]. A trademark, which identifies the products or services of a business from others, is beneficial not only to brands but also to consumers.
It develops goodwill that limits businesses with targeted customers and helps people purchase quality products. Another reason that makes any trademark popular among the intellectual property industry and various other sectors is its ability to ‘transfer’. Indeed, the transfer of trademark rights is beneficial to both – who gives and takes away the rights.
Trademark assignment is the most persuasive way to transfer trademark rights. This assures the trademark owner of goodwill and securing the brand. Kindly associate with the Corpbiz expert to know more about the process of transfer of trademark right through trademark assignment
Read our article:How to Sell a Registered Trademark via Trademark Assignment?
