Intellectual property- How to transfer trademark rights in India

Last Updated at: November 04, 2019
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How to transfer trademark rights in India

A trademark has more intangible value than tangible one, but in the long run, it can be quantifiably converted. It is why many brands and business look into transferring trademark rights from their firm to another. This article dives into the process of transferring the IP rights of a brand, logo, or name!

The understanding of Intellectual Property has evolved with time in India. The conception of Intellectual Property and rights associated therein is now seen from the perspective of intangible assets. This is the reason why the past decade has seen so much growth in legal understanding around the topic of IP. The conception of IP as an asset is the right approach and also involves within the ambit of sale, transfer and licensing of such property. Trademark is one of the fastest evolving IP rights in India. Trademark signifies a brand name (e.g.: Tata Tea, Red Label). The worth of a trademark is equivalent to the popularity that it assumes over time. Consumers begin to associate with the goods and services of a particular brand. It is the goodwill that a brand or a mark earns over the years.

Below you’ll find the list of services that will walk you through the need for the service, the eligibility, documentation procedure and benefits. Our experienced team members are there to guide you and complete the process at ease.

 

In India, the legislation concerning trademarks is The Indian Trademarks Act, 1999. The Act deals with all requisite understanding of legal issues surrounding trademark. The Act allows the transfer of such rights and provides different mechanisms to effectuate the same. The two options made available to the owner of a trademark, willing to transfer his/her rights are as follows:

(A) Trademark Assignment:

Trademark Assignment is a temporary way of transferring the trademark from the owner to another person.  In legal terms, it is the transfer of proprietary rights over a product or service. Assignment of a trademark can be done either for a registered or unregistered trademark. It can be done in either of the manners: 

Apply for Trademark Registration

(a) Complete Assignment of Trademark: Trademark associated rights are a bundle of rights, like ownership, use, proceeds etc. The case of a complete assignment of a trademark is such that it allows transfer of all related rights with a trademark from the owner to another person. These rights include the right to earn royalties, right to use, right to sell or transfer the mark further to someone else etc.

For example, if Flipkart sold its trademark rights to Walmart, then it is a complete assignment in the sense that now Flipkart shall not retain any rights over the logo, brand or anything associated with it.

(b) Partial Assignment of Trademark: Among the bundle of rights that are associated with a trademark, it is not always necessary to make a complete assignment of the Trademark. Even if desired, a partial assignment of a trademark can be made. Partial assignment of trademark restricts the transfer of rights to only certain products or services, effectuated via trademark assignment.

For example, if the owner of a trademark ‘Parley’ specifically adds a clause in the Assignment Agreement that the assignee is only entitled to use the trademark related to dairy products then, in that case, the trademark cannot be used for any other product apart from dairy.

Step by Step Procedure for Trademark Assignment Agreement:

Step 1: Making an Application For Trademark Assignment, either the assignee or the assignor of the trademark can make an application requesting the same. However, it can also be a joint request by both the assignor and the assignee for effectuating such a transfer. The application should entail the terms of the transfer, the prior and subsequent proprietor details etc. The application must be made in FORM TM-P.

Step 2: Filing the Application After having prepared the application in a TM-P format, file it before the registrar of trademarks. This is required to be done within 6 months of acquisition of proprietorship in question. Though this filing can be delayed, it attracts payment of some additional fee.

Step 3: Obtaining the order of the Registrar: The case of transfer is slightly different if it is a transfer with goodwill or transfer of a registered trademark. In both these cases, the direction from the registrar of a trademark is mandated before the expiry of 6 months (starting from the day on which the assignment is made). This period may even be extendable, but only if such extension is allowed by the Registrar.

Step 4: Advertisement of Trademark Assignment: The Registrar in his direction shall also specify the way in which the assignment is to be advertised. Following the direction of the Registrar, the advertisement shall be made. In order to ensure compliance, it is desired that a copy of the advertisement along with a copy of the Registrar’s direction is submitted.

Step 5: Final Approval and Transfer: The Registrar, when satisfied with the applications, advertisement and all other documents shall officially transfer the proprietorship of the said trademark from the original owner (Assignor) to the new proprietor (Assignee). The name of the Assignee is to be registered in the register as the new proprietor of the said trademark. Thereafter, as per the terms of the Trademark Assignment Agreement, the assignee can use the Trademark rightfully.

(B) Trademark Licensing: The case of licensing a trademark is such that the full ownership over the trademark is not transferred to another entity. However, restricted use by the licensee is permitted. License agreements relating to a trademark is mutually beneficial for both the licensor and the licensee. The licensor gets to broaden its market and consumer base, while the licensee can enjoy the royalties generated by the Trademark.

Though the registration of a licensee or a licensing agreement is not mandatory, it is advised that the same shall be done. This allows the licensee to exercise his rights over the trademark against third parties. The registration of the licensee is to be done within 6 months of the agreement before the Registrar of Trademarks. An application is to be made either by the licensor, licensee or a join request in the format of a TM-28 Form. Along with the said application, the following documents are also required at the time of registering a licensing agreement:

  1. A copy of the application form, attested by both the licensor and the licensee.
  2. An affidavit by the licensor specifying the terms and conditions of the agreement.
  3. A power of attorney towards the agents, if any.
  4. Any other document as may be required as evidence by the Registrar.

If the Registrar is satisfied with all the documents and other formalities included in the process, then he shall make an entry into the register, to that effect. The entry shall state the agreement date, the date of application and other details.

To wind it up, there are two methods of transferring a trademark from one business to another. The first is trademark assignment and the second is trademark licensing. As explained in the post, each has its own steps that need to be completed for the process to take place.

Intellectual property- How to transfer trademark rights in India

5465

A trademark has more intangible value than tangible one, but in the long run, it can be quantifiably converted. It is why many brands and business look into transferring trademark rights from their firm to another. This article dives into the process of transferring the IP rights of a brand, logo, or name!

The understanding of Intellectual Property has evolved with time in India. The conception of Intellectual Property and rights associated therein is now seen from the perspective of intangible assets. This is the reason why the past decade has seen so much growth in legal understanding around the topic of IP. The conception of IP as an asset is the right approach and also involves within the ambit of sale, transfer and licensing of such property. Trademark is one of the fastest evolving IP rights in India. Trademark signifies a brand name (e.g.: Tata Tea, Red Label). The worth of a trademark is equivalent to the popularity that it assumes over time. Consumers begin to associate with the goods and services of a particular brand. It is the goodwill that a brand or a mark earns over the years.

Below you’ll find the list of services that will walk you through the need for the service, the eligibility, documentation procedure and benefits. Our experienced team members are there to guide you and complete the process at ease.

 

In India, the legislation concerning trademarks is The Indian Trademarks Act, 1999. The Act deals with all requisite understanding of legal issues surrounding trademark. The Act allows the transfer of such rights and provides different mechanisms to effectuate the same. The two options made available to the owner of a trademark, willing to transfer his/her rights are as follows:

(A) Trademark Assignment:

Trademark Assignment is a temporary way of transferring the trademark from the owner to another person.  In legal terms, it is the transfer of proprietary rights over a product or service. Assignment of a trademark can be done either for a registered or unregistered trademark. It can be done in either of the manners: 

Apply for Trademark Registration

(a) Complete Assignment of Trademark: Trademark associated rights are a bundle of rights, like ownership, use, proceeds etc. The case of a complete assignment of a trademark is such that it allows transfer of all related rights with a trademark from the owner to another person. These rights include the right to earn royalties, right to use, right to sell or transfer the mark further to someone else etc.

For example, if Flipkart sold its trademark rights to Walmart, then it is a complete assignment in the sense that now Flipkart shall not retain any rights over the logo, brand or anything associated with it.

(b) Partial Assignment of Trademark: Among the bundle of rights that are associated with a trademark, it is not always necessary to make a complete assignment of the Trademark. Even if desired, a partial assignment of a trademark can be made. Partial assignment of trademark restricts the transfer of rights to only certain products or services, effectuated via trademark assignment.

For example, if the owner of a trademark ‘Parley’ specifically adds a clause in the Assignment Agreement that the assignee is only entitled to use the trademark related to dairy products then, in that case, the trademark cannot be used for any other product apart from dairy.

Step by Step Procedure for Trademark Assignment Agreement:

Step 1: Making an Application For Trademark Assignment, either the assignee or the assignor of the trademark can make an application requesting the same. However, it can also be a joint request by both the assignor and the assignee for effectuating such a transfer. The application should entail the terms of the transfer, the prior and subsequent proprietor details etc. The application must be made in FORM TM-P.

Step 2: Filing the Application After having prepared the application in a TM-P format, file it before the registrar of trademarks. This is required to be done within 6 months of acquisition of proprietorship in question. Though this filing can be delayed, it attracts payment of some additional fee.

Step 3: Obtaining the order of the Registrar: The case of transfer is slightly different if it is a transfer with goodwill or transfer of a registered trademark. In both these cases, the direction from the registrar of a trademark is mandated before the expiry of 6 months (starting from the day on which the assignment is made). This period may even be extendable, but only if such extension is allowed by the Registrar.

Step 4: Advertisement of Trademark Assignment: The Registrar in his direction shall also specify the way in which the assignment is to be advertised. Following the direction of the Registrar, the advertisement shall be made. In order to ensure compliance, it is desired that a copy of the advertisement along with a copy of the Registrar’s direction is submitted.

Step 5: Final Approval and Transfer: The Registrar, when satisfied with the applications, advertisement and all other documents shall officially transfer the proprietorship of the said trademark from the original owner (Assignor) to the new proprietor (Assignee). The name of the Assignee is to be registered in the register as the new proprietor of the said trademark. Thereafter, as per the terms of the Trademark Assignment Agreement, the assignee can use the Trademark rightfully.

(B) Trademark Licensing: The case of licensing a trademark is such that the full ownership over the trademark is not transferred to another entity. However, restricted use by the licensee is permitted. License agreements relating to a trademark is mutually beneficial for both the licensor and the licensee. The licensor gets to broaden its market and consumer base, while the licensee can enjoy the royalties generated by the Trademark.

Though the registration of a licensee or a licensing agreement is not mandatory, it is advised that the same shall be done. This allows the licensee to exercise his rights over the trademark against third parties. The registration of the licensee is to be done within 6 months of the agreement before the Registrar of Trademarks. An application is to be made either by the licensor, licensee or a join request in the format of a TM-28 Form. Along with the said application, the following documents are also required at the time of registering a licensing agreement:

  1. A copy of the application form, attested by both the licensor and the licensee.
  2. An affidavit by the licensor specifying the terms and conditions of the agreement.
  3. A power of attorney towards the agents, if any.
  4. Any other document as may be required as evidence by the Registrar.

If the Registrar is satisfied with all the documents and other formalities included in the process, then he shall make an entry into the register, to that effect. The entry shall state the agreement date, the date of application and other details.

To wind it up, there are two methods of transferring a trademark from one business to another. The first is trademark assignment and the second is trademark licensing. As explained in the post, each has its own steps that need to be completed for the process to take place.

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