Like any other property or asset, the trademark owner has the right to sell, license, or transfer the trademark. The trademark assignment agreement or trademark licensing can be used to transfer a trademark.
Examples of Trademark Assignment is the process by which ownership of a trademark is transferred from one party to another. Assignment occurs when ownership rights to a trademark or brand are transferred from one owner or party to another. This can be done with or without the company’s goodwill.
Before starting the registration procedure, you can verify whether a trademark is available using Vakilsearch’s free trademark search engine.
Assignment and Transmission have been defined under Section 2(1) (b) and 2(1)(zc) of the Trade Marks Act, 1999 respectively. Section 2(1) (b) defines “assignment” as an assignment in writing by the act of the parties concerned. Under Section 2(1)(zc) “transmission” means the transmission by operation of law, and any other mode of transfer, not being assignment.
The provisions concerning the assignment and transmission of trademarks are contained in Sections 37 to 45 of the Trademarks Act,1999 read with Rules 68 to 79 of the trademark.
A trademark assignment is a written document that helps in the transfer of a well-known word, phrase, symbol, or design from one owner to another. “The assignor” refers to the trademark’s original owner, whereas “the Assignee” refers to the subsequent owner.
Who Can Assign a Trademark?
According to Section 37 of the Trade Marks Act, 1999, the authority to assign a trademark rests with the individual registered as the proprietor of that trademark in the register of trademarks. This registered proprietor has the legal power to transfer the rights associated with the trademark to another person, in exchange for consideration. In essence, a trademark proprietor holds the ability to assign their trademark to a different party, facilitating various business and legal transactions within the realm of trademarks.
Trademark Assignment Agreement
When the proprietor of a trademark intends to transfer its rights to another party, a meticulously crafted trademark assignment agreement is essential. Here’s what to consider while drafting this crucial document:
Preserving Trademark Rights: Ensure that the obligations in the agreement do not adversely impact the trademark’s rights.
Goodwill Declaration: Explicitly state whether the assignment includes or excludes the goodwill associated with the business.
Clarity of Purpose: The agreement should unambiguously outline the purpose and scope of the trademark assignment.
Geographical Scope: Specify the geographic regions where the assignee gains authority and rights over the trademark.
Infringement Rights: Address the transfer of the right to pursue damages for past and future trademark infringements.
Legal Formalities: The agreement should be duly executed, stamped, and notarised as required by the applicable Stamp Act.
Signatures and Witnesses: Include the signatures of involved parties and witnesses to validate the agreement.
Execution Details: Clearly mention the place and date of the agreement’s execution.
Party Identification: Provide the names and details of all parties involved in the assignment.
Binding on Legal Heirs: Specify whether the agreement extends to the legal heirs of both the assignor and assignee.
A well-structured trademark assignment agreement safeguards the interests of all parties involved, facilitating a smooth and legally sound transfer of trademark rights.
Process of Assignment of Trademark
The assignment of a trademark in India involves a systematic procedure to ensure legal compliance and a smooth transition of rights:
Trademark Assignment Agreement: The proprietor of the trademark (assignor) initiates the process by transferring their rights to the assignee through a meticulously drafted trademark assignment agreement.
Filing the Assignment Application: Either the assignor, assignee, or both parties jointly file a trademark assignment application (Form TM-P) with the registrar of trademarks. This application must be submitted within six months from the date of the assignment. After this period, the fee may vary.
Advertisement Requirement: The assignment must be advertised in accordance with the guidelines and timeframe specified by the registrar of trademarks.
Registrar Submission: Provide a copy of the advertisement and the registrar’s directives to the registrar of trademarks for their records.
Registration and Record: Upon receiving the trademark assignment application (Form TM-P) and all necessary documentation, the registrar of trademarks registers the assignee as the new trademark proprietor. The details of the assignment are then recorded in the official register.
Documents Required for Assignment of Trademark
When pursuing the assignment of a trademark, the registrar of trademarks requires specific documents to formalise the process effectively. These crucial documents, along with Form TM-P, must be submitted for the assignment to be recognised:
Trademark Assignment Agreement: A comprehensive agreement that outlines the terms and conditions of the trademark transfer, specifying rights, obligations, and any considerations involved.
Trademark Certificate: The official certificate establishing the ownership and registration of the trademark, validating its legal status.
NOC from the Assignor: A No Objection Certificate (NOC) issued by the assignor, affirming their consent and willingness to transfer the trademark rights to the assignee.
Identification Documents: Identification documents, such as Aadhar cards, passports, or other government-issued IDs, of both the assignor and assignee to establish their identities and roles in the assignment process.
Restrictions on Assignment of Trademark
The Trademarks Act of 1999 imposes specific limitations on trademark assignment, aiming to maintain clarity, prevent deception, and safeguard against confusion. These restrictions primarily pertain to the following areas:
Parallel Use Restriction: An assignor is prohibited from assigning a trademark if such an assignment would result in the creation of exclusive rights in different individuals or entities concerning the same or similar products or services. This measure aims to prevent the simultaneous use of the same trademark by multiple parties in connection with identical or akin products or services. The intention is to eliminate potential confusion or deception in the marketplace.
Multiple Territorial Use Restriction: An assignor is restricted from assigning a trademark when such an assignment would lead to the establishment of exclusive rights in different persons within various regions of India, all relating to the same or similar products or services. Additionally, an assignor cannot assign a trademark if the assignment results in the creation of exclusive rights in various individuals across different regions of India, but the products or services are intended for sale or delivery outside India. These limitations are in place to avoid conflicts arising from the assignment of rights across multiple territorial boundaries within India or beyond.
Benefits of Trademark Assignment
Trademark assignment isn’t just a legal formality; it brings forth a spectrum of benefits for both the assignor and assignee, contributing to brand value and business expansion. Here’s a glimpse of these advantages:
Brand Value Realisation: For the trademark proprietor, assignment is a gateway to convert the brand’s value into a tangible asset. It allows them to monetise their brand’s worth, making it an attractive option for financial gains.
Established Brand Rights: The assignee inherits the rights of a well-established and recognised brand. This provides an instant head start in the market, saving time, effort, and resources that would be required to create a brand from scratch.
Business Expansion: Trademark assignment facilitates business expansion. It opens doors for the assignor to venture into new domains, diversify their offerings, or focus on different markets. Simultaneously, the assignee can expand their operations under a trusted brand’s umbrella.
Legal Clarity: The trademark assignment agreement is a legal document that clearly delineates the rights, responsibilities, and obligations of both parties. It serves as a foundation for resolving potential disputes and establishing legal recourse in case of disagreements.
Types of Trademark Assignment
The following are the different types of assignment of trademark:
Complete Assignment
All trademark rights, including the right to receive royalties, to further transfer, and so on, are transferred to another person by the trademark owner.
For instance, X is the owner of the ABC brand. Through an agreement, X totally assigns his trademark ‘ABC’ to Y. After that, X will no longer have any rights to the ABC brand.
Partial Assignment
In the case of a partial assignment, the trademark owner transfers the trademark to another person only for certain services or items. The transfer of trademark ownership is limited to certain services or products.
For instance, X is the owner of the ABC brand of sauces and dairy goods. X assigns just the rights to the brand ‘ABC’ in relation to dairy goods to Y while keeping the rights to the brand ‘ABC’ in relation to sauces.
Assignment With the Goodwill of Business
The owner of a trademark transfers the rights, entitlements, and values associated with it to another person. When a trademark is assigned with goodwill, the assignee is free to use it for any class of products or services, including those that the assignor was previously using.
For instance, X is the owner of the ‘Ferry’ brand of hair products. With goodwill, X assigns the brand ‘Ferry’ to Y. Y will be allowed to use the ‘Ferry’ brand on food and other things they create.
Assignment Without the Goodwill of Business
The trademark owner transfers rights and entitlements in a trademark to the assignee for products or services that are no longer in use. In the case of an assignment without goodwill, the assignor limits the transfer of trademark rights. The assignor specifies that the assignee is not permitted to use the assignor’s trademark in connection with the goods or services currently in use by the assignor.
For example, X is the owner of the ‘Ferry’ brand, which he uses to manufacture and sell bags. Without goodwill, X assigns the brand ‘Ferry’ to Y. Y will be allowed to utilize the ‘Ferry’ brand for anything other than bags.
Examples of Trademark Assignment
Trademarks, like any other asset, can be transferred from one owner to another. Such transfers can occur as a result of an assignment, merger, or amalgamation between two entities.
For example, when entity A assigns, transfers, or transmits the rights to his or her trademarks to entity B, this is known as assignment.
In case, entity A merges with entity B, and there is a transmission of trademarks rights from A to B, it would also constitute an assignment.
Despite the fact that an assignment is an agreement between two or more parties, there are several circumstances in which the assignment is restricted.
With respect to the same goods or services, the assignment grants exclusive rights to multiple people.
For example, if you assign a trademark to X for providing healthcare services and also to Y for providing healthcare services and manufacturing items, such an assignment would be prohibited since it creates exclusive rights for more than one individual.
The assignment is not permissible if the allocated markings are used simultaneously by different individuals in various regions of the country, as this would deceive or cause confusion.
Prerequisites for Trademark Assignment
- The assignment of a trademark should be in writing
- The assignment should be between two parties who can be identified, namely the assignor (the trademark owner) and the assignee (the buyer of the trademark)
- The assignor must agree to the assignment and have the purpose to do so
- The assignment should be for a proper and sufficient consideration (amount).
FAQs
What is a trademark assignment?
A trademark assignment is a legal process where the owner of a registered trademark transfers their rights and ownership to another party, known as the assignee.
Why do companies assign trademarks?
Companies assign trademarks for various reasons, including mergers, acquisitions, franchise agreements, or to monetise brand value by licensing the trademark.
Can you provide two examples of trademark assignments?
Examples include Disney's assignment of the 'Star Wars' trademark to Lucasfilm and Nike's assignment of the 'Converse' trademark.
What is the significance of goodwill in trademark assignment?
Goodwill is essential in trademark assignment as it determines whether the assignment includes the valuable reputation and customer trust associated with the brand.
Is Coca-Cola a trademark and has it ever been assigned?
Yes, 'Coca-Cola' is a trademark, and it has not been assigned but is protected as a valuable asset.
What is trademark Class 11, and can you provide an example?
It pertains to environmental control apparatus, including air conditioning and refrigeration. An example is the trademark 'LG' for air conditioners.
What are some well-known Indian trademark examples?
Some well-known Indian trademark examples include 'Tata,' 'Reliance,' and 'Infosys.'
Can a trademark be considered an asset?
Yes, a trademark is considered an intangible asset, representing brand value and reputation.
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