Assignment of the Registered Trademarks

Assignment of the Registered Trademarks. Trademarks are the most treasured assets in the intellectual property playing field. Trademarks facilitate the business fraternity to establish brand awareness and consumer loyalty. A registered trademark is a peculiar right that has been given to the owner of the mark to have it exclusively in commerce. The transfer of exclusive rights granted for the use of a mark in commerce is called the Trademark Assignment. This article deals with the legal infrastructure relating to the assignment of registered trademarks, procedural measures, a few landmark judgments, and practical considerations.
Legal Structure
Trademarks being registered are governed by jurisdictions and related laws and regulations. In India, these are primarily governed by the Trade Marks Act, 1999 and the Trade Marks Rules, 2017. Relevant parts of the Act are given below:
(i) Section 37: Allows the right to transfer a registered trademark together with or without goodwill of the trade.
(ii) Section 38: It states that the result of assignment and transmission is that the assignee or the transferee should obtain rights associated with the trademark.
(iii) Section 39: This is on the provisions in the registration of assignment or transmission by the Registrar of Trademarks.
Form of Trademark Assignment
Trademark assignments normally fall into two broad categories:
(i) Assignment with Goodwill: This is transferring the trademark along with goodwill of the business. The assignee acquires trademark and reputation, customer base, and business value.
(ii) With or without goodwill, assignment In such assignment, the trademark is passed along and without the transfer of goodwill. So with such assignment, the trademark gets a right to use it and then also would not inherit goodwill over business.
Procedure for Assignment
Assignment of a registered trademark is the procedure requiring some key steps to ensure that a transfer will occur lawfully:
(i) This process begins with the drafting of a trademark assignment agreement. Such an agreement would contain information about the assignor, the assignee, trademark to be assigned, terms of transfer, and consideration for the assignment.
(ii) The assignor and assignee shall execute an agreement signed in the presence of witnesses by them. It shall be on stamp paper of proper value payable under the stamp duty law as prevalent.
(iii) Application for registration of assignment: The assignee shall make an application for registration of the assignment before the Registrar of Trademarks. An application shall be drawn stating the assignment agreement, proof of consideration and such other documents as may be prescribed.
(iv) The journal of Trademark publishes the notice for assignment issued by the Registrar. Wherein no objection is filed during that timeframe within the course of time. That an assignment gets registered.
(v) The Assignment Certificate After an applicant has successfully registered, the registrar issues a certificate of assignment. This is proof of the trademark rights conveyed to the assignee.
Judicial precedents
The assignment of trademark rights agreement can be explained and also enforced using very few judicial precedents. These cases prove the common practice on how the lawsuits were held within courts so that the trademark right can be protected.
(i) Case: Consolidated Foods Corporation v. Brandon & Co. Pvt. Ltd. (A.I.R. 1961 Bom 22)-: Consolidated Foods Corporation had been using the "Monarch" trademark in India since 1947. Brandon & Co. Pvt. Ltd. later applied to register the same trademark. The court ruled in favor of Consolidated Foods, emphasizing the importance of prior use in trademark law. This case established the principle that prior use can grant trademark rights even without formal registration.
(ii) Case: Tata Sons Ltd. v. Manu Kosuri & Ors. (2001 (11) PTC 311 (Del).)-: Tata Sons, a renowned conglomerate, sued Manu Kosuri and others for trademark infringement and cybersquatting. The defendants had registered domain names containing the "Tata" trademark, intending to profit from Tata's goodwill. The Delhi High Court ruled in favor of Tata Sons, recognizing the importance of protecting trademarks in the digital age and the potential harm caused by cybersquatting.
Policy Implication
There are some practical considerations in the assignment of registered trademarks that parties should consider:
(i) Due diligence: The assigning party and the assignee should conduct due diligence so that they can verify ownership, the validity and enforceability of the trademark being assigned as well as search for any pending disputes or encumbrances on the trademark.
(ii) Valuation of the trademark: The assignors and assignees are expected to determine the reasonable fair market value of the trademark, including the commercial possibility in the trademark, market reputation, and good-will associate with that mark.
(iii) Tax Implication: The assignment of a trademark would therefore involve tax implications between the parties. Professional advice must be obtained on tax implications and compliance of prevalent tax laws. These would be the principal demands in order to have clear agreements so that no dispute takes place in court. The terms of assignment must clearly indicate the rights transferred, consideration, conditions, and restrictions.
(iv) Recording: The parties will maintain a record of the assignment, to include copies of the agreement, registration certificate and all communications with the Registrar of Trademarks.
Conclusion
Registration of a trademark is a task with legal, procedural, and practical intricacies. A deep understanding of the legal framework coupled with adherence to the procedure prescribed and judicial precedents learned will ensure that the transfer of trademark rights occurs without any hitch and with minimal hassle. A well-drafted assignment agreement accompanied by diligent due diligence ensures protection for both the assignor and the assignee.
FAQs
1. What is the meaning of giving a registered trademark?
Ans. With the trademark registration, businesses can sell their brand identity, goodwill, and familiarity in customers' minds to another business entity. This could be due to business expansion, mergers, or strategic partnerships.
2. What are the key steps involved in the assignment process?
Ans. The formation process usually involves:
(i) Between the assignor and the assignee, the contract will then be executed.
(ii) Filing an application for registration of the assignment to the concerned trademark office.
(iii) The official journal of trademarks will publish notice of the assignment.
(iv) It receives an assignment certificate from the office of trademarks.
3. What are the legal implications of a trademark assignment without goodwill?
Ans. Trademark without goodwill An assignment of trademark without goodwill means that an assignee gets the right of use of the trademark but does not acquire any goodwill, customers or reputation. This may limit ability to leverage the value of the trademark.
4. To what considerations must a consideration be assigned by a registered trademark?
Ans. Main issues involved:
(i) Due diligence investigation should be done on whether the trademark is owned, valid, and enforceable.
(ii) Determine the fair market value in terms of brand reputation, market potential, and goodwill for the trademark.
(iii) Understand tax implications of assignment and, therefore, comply accordingly with appropriate tax laws.
(iv) It must clearly indicate what rights are being assigned, the consideration, and conditions or restrictions on assignment.
5. What are some landmark cases related to trademark assignment?
Ans. (i) Consolidated Foods Corporation v. Brandon & Co. Pvt. Ltd.: Consolidated Foods Corporation had been using the "Monarch" trademark in India since 1947. Brandon & Co. Pvt. Ltd. later applied to register the same trademark. The court ruled in favor of Consolidated Foods, emphasizing the importance of prior use in trademark law. This case established the principle that prior use can grant trademark rights even without formal registration.
(ii) Tata Sons Ltd. v. Manu Kosuri & Ors.: Tata Sons, a renowned conglomerate, sued Manu Kosuri and others for trademark infringement and cybersquatting. The defendants had registered domain names containing the "Tata" trademark, intending to profit from Tata's goodwill. The Delhi High Court ruled in favor of Tata Sons, recognizing the importance of protecting trademarks in the digital age and the potential harm caused by cybersquatting.

Trademarks are the most treasured assets in the intellectual property playing field. Trademarks facilitate the business fraternity to establish brand awareness and consumer loyalty. A registered trademark is a peculiar right that has been given to the owner of the mark to have it exclusively in commerce. The transfer of exclusive rights granted for the use of a mark in commerce is called the Trademark Assignment. This article deals with the legal infrastructure relating to the assignment of registered trademarks, procedural measures, a few landmark judgments, and practical considerations.

Legal Structure

Trademarks being registered are governed by jurisdictions and related laws and regulations. In India, these are primarily governed by the Trade Marks Act, 1999 and the Trade Marks Rules, 2017. Relevant parts of the Act are given below:

(i) Section 37: Allows the right to transfer a registered trademark together with or without goodwill of the trade.

(ii) Section 38: It states that the result of assignment and transmission is that the assignee or the transferee should obtain rights associated with the trademark.

(iii) Section 39: This is on the provisions in the registration of assignment or transmission by the Registrar of Trademarks.

Form of Trademark Assignment

Trademark assignments normally fall into two broad categories:

(i) Assignment with Goodwill: This is transferring the trademark along with goodwill of the business. The assignee acquires trademark and reputation, customer base, and business value.

(ii) With or without goodwill, assignment In such assignment, the trademark is passed along and without the transfer of goodwill. So with such assignment, the trademark gets a right to use it and then also would not inherit goodwill over business.

Procedure for Assignment

Assignment of a registered trademark is the procedure requiring some key steps to ensure that a transfer will occur lawfully:

(i) This process begins with the drafting of a trademark assignment agreement. Such an agreement would contain information about the assignor, the assignee, trademark to be assigned, terms of transfer, and consideration for the assignment.

(ii) The assignor and assignee shall execute an agreement signed in the presence of witnesses by them. It shall be on stamp paper of proper value payable under the stamp duty law as prevalent.

(iii) Application for registration of assignment: The assignee shall make an application for registration of the assignment before the Registrar of Trademarks. An application shall be drawn stating the assignment agreement, proof of consideration and such other documents as may be prescribed.

(iv) The journal of Trademark publishes the notice for assignment issued by the Registrar. Wherein no objection is filed during that timeframe within the course of time. That an assignment gets registered.

(v) The Assignment Certificate After an applicant has successfully registered, the registrar issues a certificate of assignment. This is proof of the trademark rights conveyed to the assignee.

Judicial precedents

The assignment of trademark rights agreement can be explained and also enforced using very few judicial precedents. These cases prove the common practice on how the lawsuits were held within courts so that the trademark right can be protected.

(i) Case: Consolidated Foods Corporation v. Brandon & Co. Pvt. Ltd. (A.I.R. 1961 Bom 22)-: Consolidated Foods Corporation had been using the "Monarch" trademark in India since 1947. Brandon & Co. Pvt. Ltd. later applied to register the same trademark. The court ruled in favor of Consolidated Foods, emphasizing the importance of prior use in trademark law. This case established the principle that prior use can grant trademark rights even without formal registration.

(ii) Case: Tata Sons Ltd. v. Manu Kosuri & Ors. (2001 (11) PTC 311 (Del).)-: Tata Sons, a renowned conglomerate, sued Manu Kosuri and others for trademark infringement and cybersquatting. The defendants had registered domain names containing the "Tata" trademark, intending to profit from Tata's goodwill. The Delhi High Court ruled in favor of Tata Sons, recognizing the importance of protecting trademarks in the digital age and the potential harm caused by cybersquatting.

Policy Implication

There are some practical considerations in the assignment of registered trademarks that parties should consider:

(i) Due diligence: The assigning party and the assignee should conduct due diligence so that they can verify ownership, the validity and enforceability of the trademark being assigned as well as search for any pending disputes or encumbrances on the trademark.

(ii) Valuation of the trademark: The assignors and assignees are expected to determine the reasonable fair market value of the trademark, including the commercial possibility in the trademark, market reputation, and good-will associate with that mark.

(iii) Tax Implication: The assignment of a trademark would therefore involve tax implications between the parties. Professional advice must be obtained on tax implications and compliance of prevalent tax laws. These would be the principal demands in order to have clear agreements so that no dispute takes place in court. The terms of assignment must clearly indicate the rights transferred, consideration, conditions, and restrictions.

(iv) Recording: The parties will maintain a record of the assignment, to include copies of the agreement, registration certificate and all communications with the Registrar of Trademarks.

Conclusion

Registration of a trademark is a task with legal, procedural, and practical intricacies. A deep understanding of the legal framework coupled with adherence to the procedure prescribed and judicial precedents learned will ensure that the transfer of trademark rights occurs without any hitch and with minimal hassle. A well-drafted assignment agreement accompanied by diligent due diligence ensures protection for both the assignor and the assignee.

FAQs

1. What is the meaning of giving a registered trademark?

Ans. With the trademark registration, businesses can sell their brand identity, goodwill, and familiarity in customers' minds to another business entity. This could be due to business expansion, mergers, or strategic partnerships.

2. What are the key steps involved in the assignment process?

Ans. The formation process usually involves:

(i) Between the assignor and the assignee, the contract will then be executed.

(ii) Filing an application for registration of the assignment to the concerned trademark office.

(iii) The official journal of trademarks will publish notice of the assignment.

(iv) It receives an assignment certificate from the office of trademarks.

3. What are the legal implications of a trademark assignment without goodwill?

Ans. Trademark without goodwill An assignment of trademark without goodwill means that an assignee gets the right of use of the trademark but does not acquire any goodwill, customers or reputation. This may limit ability to leverage the value of the trademark.

4. To what considerations must a consideration be assigned by a registered trademark?

Ans. Main issues involved:

(i) Due diligence investigation should be done on whether the trademark is owned, valid, and enforceable.

(ii) Determine the fair market value in terms of brand reputation, market potential, and goodwill for the trademark.

(iii) Understand tax implications of assignment and, therefore, comply accordingly with appropriate tax laws.

(iv) It must clearly indicate what rights are being assigned, the consideration, and conditions or restrictions on assignment.

5. What are some landmark cases related to trademark assignment?

Ans. (i) Consolidated Foods Corporation v. Brandon & Co. Pvt. Ltd.: Consolidated Foods Corporation had been using the "Monarch" trademark in India since 1947. Brandon & Co. Pvt. Ltd. later applied to register the same trademark. The court ruled in favor of Consolidated Foods, emphasizing the importance of prior use in trademark law. This case established the principle that prior use can grant trademark rights even without formal registration.

(ii) Tata Sons Ltd. v. Manu Kosuri & Ors.: Tata Sons, a renowned conglomerate, sued Manu Kosuri and others for trademark infringement and cybersquatting. The defendants had registered domain names containing the "Tata" trademark, intending to profit from Tata's goodwill. The Delhi High Court ruled in favor of Tata Sons, recognizing the importance of protecting trademarks in the digital age and the potential harm caused by cybersquatting.