Trademarks are extremely valuable to any company and have a huge impact on sales. It reflects your products or services and gives you a competitive advantage. Selling a trademark, also known as trademark assignment, is the act of transferring ownership of a trademark in your name to another person.
A trademark sale is possible in India. Through the trademark assignment process, the owner of a trademark can sell it to any individual or legal body. By doing so, the trademark owner might transfer their rights to an individual or entity. The provisions of the Trade Marks Act, 1999 govern the trademark assignment procedure.
The individual or business selling the trademark labels is known as the assignor, while the other party (who is purchasing) is known as the assignee.
For the trademark assignment, either the assignor or assignee needs to apply. The transfer process usually completes within six to twelve months, subject to successful verification of the credentials. In the case of registered trademarks, such assignments need to be recorded with the Trademark Registrar.
Types of Trademark Assignment in India
In India, there are various types of trademark assignments. They’re outlined below:
Complete Assignment: The complete rights of the trademark are given to the assignee by the assignor. Only the trademarks rights but not the whole company’s rights.
Limited Assignment: True to its name. Only certain rights of the particular product/service are for the assignor to the assignee.
Assignment With Compassion: The assignor not only transfers the trademark rights but also the value of the trademark in the market. The assignee has the complete rights and value of the trademark.
Assignment Without Goodwill: Other countries generally do not allow this form of assignment, however, it is permissible in India. This form of sale entails that both the seller and the buyer have trademark rights for different products/services.
Restrictions on Trademark Assignment
The Trade Marks Act, 1999 has put certain restrictions on the assignment of registered trademarks. These restrictions apply in the case of trademarks that bring the possibility of creating confusion in the minds of users/public if sold or transferred.
Such restrictions are applicable on:
- An assignment that gives more than one person/entity exclusive rights to the same services/goods.
- An assignment that results in multiple people in different parts of the country using the same trademark at the same time.
Transferring the Ownership via Trademark Assignment
To begin the trademark assignment application procedure or trademark sale, you must first fill out a form and submit it to the registrar. Registration can be requested by one or both parties. It must, however, be completed within a certain amount of time. The registrar examines the application and all accompanying documentation, and if satisfied, the assignment is completed.
How Can a Trademark Be Properly Valued Before It Is Sold?
A trademark is a movable and intangible property. A proper estimation or valuation is required to sell a trademark at its justified price. The evaluation process involves both direct and indirect measures. A direct process of calculation is the most basic one. Here, the investment for creating and promoting the mark will be considered. In the indirect method, the calculation is on other sources/aspects such as brand awareness and brand image among people.
Let’s take a quick look at some of the most common ways for properly valuing a trademark before assigning it.
- Cost approach: This approach is related directly to the cost incurred in creating or positioning the brand
- Cost replacement approach: This method values the mark by calculating the expenditure and investment necessary to replace it with a new mark/brand that will provide equivalent utility to the current owner
- Market-driven approach: This approach considers the highest value the assignee is willing to pay or the maximum value the assignor wishes to obtain
- Brand sale comparable approach: The brand value is calculated here based on the most recent valuation of a comparable brand in a comparable industry. In this scenario, the valuation is based on the opinion of a third party who is unrelated to the assignment procedure in question.
While the Trademark Registration procedure is being completed, the ™ symbol is used to represent a certain organisation or individual. A Trademark does not necessarily imply that it is a Registered Trademark. The ™ symbol represents unregistered trademarks, while the ® symbol represents trademarks that have been registered.
The ™ trademark has no protection while the symbol ® has protection and also legal rights. The SM symbol is used to represent services by an individual or a company but not manual products. It is inaccurate to use ™ symbols if you sell services rather than products and vice versa. Trademark registration fees are expensive but you will also get the maximum benefits from it. With the trademark registration, you can use the ® symbol for your product.
The entire procedure is quick and does not require much paperwork. Trademark assignment allows you to utilise a well-known trademark without having to go through the entire registration process or file a fresh application. Get in touch with our experts to know more about the process in detail.