What is the Trademark Assignment?

What is the Trademark Assignment?

Trademark owners have the option to transfer their trademarks in a manner akin to the transfer of physical properties. This transfer process is often carried out through an assignment, which involves the transfer of rights, interests, titles, and benefits from one individual to another. When a trademark is assigned, it means that the current owner’s rights in that trademark are passed on to another person.

In this arrangement, the party transferring the trademark is referred to as the “assignor,” while the party receiving the trademark is known as the “assignee.” According to Section 2(1)(b) of the Trade Marks Act, 1999, an assignment is defined as the transfer of a trademark in writing, duly executed by the concerned parties. Notably, both registered and unregistered trademarks can be assigned, either with or without the associated goodwill of the business.

Who can assign the trademark?

According to Section 37 of the Trade Marks Act, 1999, the individual listed as the trademark proprietor in the register of trademarks possesses the authority to transfer the trademark to someone else, and in return, they can receive consideration for the assignment. As a result, a trademark proprietor holds the right to assign the trademark to another individual or entity.

What are the types of assignments?

There are various types of trademark assignments, each with distinct implications:

– Complete Assignment:

In a complete assignment, the trademark proprietor transfers all rights associated with the trademark to another person, including the ability to earn royalties, transfer the trademark further, and more. For instance, if X is the proprietor of the brand ‘ABC,’ and X completely assigns the trademark ‘ABC’ to Y through an agreement, X will relinquish all rights related to the brand ‘ABC.’

– Partial Assignment

In a partial assignment, the trademark proprietor assigns the trademark to another person only for specific goods or services. The transfer of ownership is limited to those particular products or services. For example, if X owns the brand ‘ABC’ used for sauces and dairy products, X may assign the rights in the brand ‘ABC’ specifically for dairy products to Y while retaining the rights for sauces.

– Assignment with Goodwill of Business:

When a trademark is assigned with goodwill, the proprietor transfers all rights, entitlements, and values connected with the trademark to another person. The assignee can use the trademark for any class of goods or services, including those that were already in use by the assignor. For instance, if X is the proprietor of the ‘Sherry’ brand for hair products, and X assigns the brand ‘Sherry’ to Y with goodwill, Y will have the right to use the brand ‘Sherry’ for food products and any other items they produce.

– The assignment without the Goodwill of Business:

In this scenario, the trademark proprietor assigns rights and entitlements in a trademark limited to products or services that are not currently in use. The assignor restricts the transfer of rights for the goods or services already in use. For example, if X owns the brand ‘Goldy’ for manufacturing and selling bags, and X assigns the brand ‘Goldy’ without goodwill to Y, Y will have the right to use the brand ‘Goldy’ for any other product except bags.

Trademark Assignment Agreement

When the proprietor of a trademark intends to assign it to the assignee, a well-drafted trademark assignment agreement is essential. The following points should be carefully considered while creating such an agreement:

  1. Ensure that the rights of the trademark are not adversely affected by the obligations outlined in the agreement.
  2. Explicitly state whether the assignment includes or excludes the goodwill of the business.
  3. Clearly express the purpose of the transaction/assignment in the agreement.
  4. Specify the geographical scope where the assignee will hold rights and values in the trademark.
  5. Address the transfer of the right to collect and pursue damages for both past and future infringements.
  6. Properly execute the agreement by adhering to applicable Stamp Act requirements, including stamping and notarization.
  7. Provide details of the signatures and witnesses involved in the agreement.
  8. Mention the place and date of the agreement’s execution.
  9. Clearly state the date and day of the assignment along with the parties involved in the assignment.
  10. Address whether the agreement will be binding on the legal heirs of both the assignor and assignee.

Process of Assignment of Trademark

The trademark assignment process in India follows these steps:

  1. The proprietor of the trademark (assignor) transfers their rights in the trademark to the assignee through a trademark assignment agreement.
  2. The assignor or assignee, or both, can jointly request the registration of the assignment by submitting a trademark assignment application in Form TM-P to the register of trademarks.
  3. The Form TM-P application must be filed with the trademark registrar within six months from the date of the assignment. While it is possible to file the application after six months, the fee may vary accordingly.
  4. The assignment must be advertised as directed by the trademark registrar within a specified period.
  5. A copy of the advertisement and the registrar’s instructions should be submitted to the office of the trademark registrar.
  6. Upon receiving the trademark assignment application (Form TM-P) and the necessary documents, the trademark registrar will proceed to register the assignee as the new proprietor of the trademark and record the assignment details in the register.

Documents Required for Assignment of Trademark

The registrar of trademarks requires the submission of the following documents along with Form TM-P:

  1. Trademark assignment agreement.
  2. Trademark certificate.
  3. No Objection Certificate (NOC) from the assignor.
  4. Identification documents of both the assignor and assignee.

Restrictions on Assignment of Trademark

The Trademarks Act, 1999 imposes the following restrictions on trademark assignment:

– Parallel Use Restriction:

Trademark assignment is not permitted if it leads to the creation of exclusive rights in different individuals or entities concerning the same or similar products or services, causing confusion or deception. Consequently, multiple exclusive rights related to the same/similar products or services for different parties are prohibited, aiming to prevent the simultaneous use of a trademark by multiple entities for the same/similar products or services.

– Multiple Territorial Use Restriction:

Trademark assignment is prohibited if it results in the creation of exclusive rights in different individuals or entities in various parts of India, concerning the same or similar products or services. Furthermore, trademark assignment is not allowed if it leads to the creation of an exclusive right in different individuals or entities in various parts of India for the same/similar products or services, even if those products or services are sold or delivered outside India. This restriction ensures that rights for the same/similar products or services in different parts of India cannot be assigned to multiple parties.

Benefits of Trademark Assignment

Trademark assignment offers several benefits to both the assignor and the assignee:

  1. Value Realization: Through trademark assignment, the trademark proprietor can monetize the value of their brand by transferring ownership to the assignee.
  2. Access to Established Brand: The assignee gains the rights to an already established brand, allowing them to leverage its reputation and goodwill in the market.
  3. Business Expansion: The trademark assignment facilitates business expansion for both the assignor and the assignee, as they can explore new opportunities and markets using the assigned trademark.
  4. Legal Protection: The trademark assignment agreement provides a legal framework, ensuring that both the assignor and the assignee have established rights and protection in the event of any disputes.

Trademark Registration