Can Unregistered Trademarks be Assigned in India?

Can Unregistered Trademarks be Assigned in India?. Trademark Assignment forms one of the most critical concepts in intellectual property rights. Trademarks, registered as well as unregistered, are considered valuable assets, which express or reveal both its brand and what such brands have to offer either in the form of product or a particular type of service. The transfer or assignment of the title and ownership rights under unregistered trademarks is to an agreed party. Article Topic Assignment of Unregistered Trade Mark: Legal Positions/ Procedures and Judged Case Study.
What are Unregistered Trademarks?
An unregistered trademark is referred to as a common law trademark. This refers to any mark used by a business in order to identify its goods or services apart from other persons. The rights are, therefore, bestowed upon them by use in accordance with common law principles rather than statutory law.
Legal Framework
In most jurisprudence, including India, the assignment of unregistered trademarks is covered within common law and some specific sections of trademark legislation. Sections 18 and 24 of the Indian Trade Marks Act, 1999 specifically relate to rights and assignment of registered trademarks. Nothing directly states that this protection extends to unregistered trademarks.
Procedure for Assignment of an Unregistered Trademark
The assignment of an unregistered trademark follows a structured process whereby the transfer is legally binding and effective:
(i) Agreement Drafting: The first step is drafting the trademark assignment agreement, which outlines the terms and conditions of the transfer. This agreement must include the names of the assignor and assignee, the trademark being assigned, the consideration for the transfer, and the date of assignment.
(ii) Thought and Performance: The consideration received by the assignor must be sufficient in any form-whether monetary or non-monetary-for the transfer of trademark rights. Then, the parties to the agreement perform it in the presence of witnesses.
(iii) Public Notice: Publication in an official gazette or trade journal would still be helpful for notice to the public and to vindicate the new owner, even if not technically necessary for non-registered trademarks.
(iv) Continued Use and Goodwill: The assignee should continue using the mark in connection with the business to keep alive goodwill connected with the mark.
Judicial Precedents
Several precedents under the courts have developed on the interpretation and implication of unregistered trademark assignments. The cases provide insight into how the courts intend to interpret and adjudicate issues related to unregistered trademarks.
(i) Colgate Palmolive Ltd. vs. Anchor Health & Beauty Care Pvt. Ltd. The Delhi High Court, in this case, placed considerable emphasis on goodwill and reputation in an unregistered trademark. Held that the transfer of an unregistered trademark includes goodwill of the mark so that the consumers are not deceived and the business is allowed to continue.
(ii) Cadbury India Ltd v ITC Ltd Held by Delhi HC: Cadbury sued ITC for trademark infringement over the use of "Eclairs" for chocolate products. The court initially favored Cadbury, but the IPAB later revoked Cadbury's trademark, ruling "Eclairs" as a generic term.
Issues and Problems
Assigning unregistered trademarks poses unique challenges and considerations:
(i) Proof of Ownership: An unregistered trademark can be hard to prove ownership over with its lack of formality in registration. Continuous usage and proof of consumer recognition are very important in this regard.
(ii) Goodwill Transfer: Good will transfer is vital because to avail of the advantage under the trademark, such good-will has to be transferred through assignment.
(iii) Geographical Limitations: The unregistered trademarks are protected only in the geographical area where they are used. The assignment needs to consider the regional scope of recognition and protection for the trademark.
(iv) Legal Redress: To an unregistered trademark dispute, legal redress maybe limited to that of the registered trademark. The courts depend much on common-law principles and case law precedents.
Advantages of Trademark Assignment
Despite these demerits, there are some benefits to assigning unregistered trademarks:
(i) Business Expansion: Assignment allows businesses to increase their operations through the employment of existing trademarks and goodwill.
(ii) Monetization Trademarks: Through assignment agreements, the trademark owner monetizes their assets and reaps a benefit from their intellectual property.
(iii) Brand Continuity: Assignment, once trademarks are acquired, guarantees brand continuity for a business and continued consumer confidence.
Conclusion
Assigning an unregistered trademark is a very significant process consideration involving legal principles, procedural steps, and the difficulties with which it is involved. Unregistered trademarks, having less statutory protection in comparison to a registered trademark, its assignment is still valid and serves the business interest of its owner. Therefore, such knowledge about the process combined with judicial precedents provides guidance on how to properly complete trademark assignment lawfully.
FAQs
1. What is an unregistered trademark?
Ans. An unregistered trademark is the brand name or logo used by a business to identify its goods or services and has not been formally registered, protected by common law principles and usage.
2. How is an unregistered trademark assignable? 
Ans. The assignment process involves:
(i) Prepare a draft formal agreement on agreed terms and conditions.
(ii) Transfer of consideration- Payment or other value for the trademark.
(iii) Public notice of transfer, normally in a gazette or trade journal.
(iv) The assignor and assignee continuing to use the trademark to maintain its goodwill.
3. What are the issues arising out of TM registration?
Ans. (i) Ownership can be challenged even if not formally registered.
(ii) Transferring goodwill is important, but sometimes complicated.
(iii) Geographical boundaries usually restrict the scope of protection.
(iv) Legal remedies may be available only in connection with disputes about registered trademarks.
4. what are the benefits of the unregistered trademarks?
Ans. (i) It enables the expansion of business operations across established brands.
(ii) It provides an opportunity to monetize intellectual property.
(iii) It ensures brand continuity and maintains consumer confidence.
5. What are some key legal precedents related to unregistered trademark assignment? 
Ans. Colgate Palmolive vs. Anchor Health & Beauty Care: The case gave importance to good will and reputation in unregistered trademarks. Cadbury India vs. ITC: Highlights the difference between generic and distinctive terms and the challenges in protecting generic terms.

Trademark Assignment forms one of the most critical concepts in intellectual property rights. Trademarks, registered as well as unregistered, are considered valuable assets, which express or reveal both its brand and what such brands have to offer either in the form of product or a particular type of service. The transfer or assignment of the title and ownership rights under unregistered trademarks is to an agreed party. Article Topic Assignment of Unregistered Trade Mark: Legal Positions/ Procedures and Judged Case Study.

What are Unregistered Trademarks?

An unregistered trademark is referred to as a common law trademark. This refers to any mark used by a business in order to identify its goods or services apart from other persons. The rights are, therefore, bestowed upon them by use in accordance with common law principles rather than statutory law.

Legal Framework

In most jurisprudence, including India, the assignment of unregistered trademarks is covered within common law and some specific sections of trademark legislation. Sections 18 and 24 of the Indian Trade Marks Act, 1999 specifically relate to rights and assignment of registered trademarks. Nothing directly states that this protection extends to unregistered trademarks.

Procedure for Assignment of an Unregistered Trademark

The assignment of an unregistered trademark follows a structured process whereby the transfer is legally binding and effective:

(i) Agreement Drafting: The first step is drafting the trademark assignment agreement, which outlines the terms and conditions of the transfer. This agreement must include the names of the assignor and assignee, the trademark being assigned, the consideration for the transfer, and the date of assignment.

(ii) Thought and Performance: The consideration received by the assignor must be sufficient in any form-whether monetary or non-monetary-for the transfer of trademark rights. Then, the parties to the agreement perform it in the presence of witnesses.

(iii) Public Notice: Publication in an official gazette or trade journal would still be helpful for notice to the public and to vindicate the new owner, even if not technically necessary for non-registered trademarks.

(iv) Continued Use and Goodwill: The assignee should continue using the mark in connection with the business to keep alive goodwill connected with the mark.

Judicial Precedents

Several precedents under the courts have developed on the interpretation and implication of unregistered trademark assignments. The cases provide insight into how the courts intend to interpret and adjudicate issues related to unregistered trademarks.

(i) Colgate Palmolive Ltd. vs. Anchor Health & Beauty Care Pvt. Ltd. The Delhi High Court, in this case, placed considerable emphasis on goodwill and reputation in an unregistered trademark. Held that the transfer of an unregistered trademark includes goodwill of the mark so that the consumers are not deceived and the business is allowed to continue.

(ii) Cadbury India Ltd v ITC Ltd Held by Delhi HC: Cadbury sued ITC for trademark infringement over the use of "Eclairs" for chocolate products. The court initially favored Cadbury, but the IPAB later revoked Cadbury's trademark, ruling "Eclairs" as a generic term.

Issues and Problems

Assigning unregistered trademarks poses unique challenges and considerations:

(i) Proof of Ownership: An unregistered trademark can be hard to prove ownership over with its lack of formality in registration. Continuous usage and proof of consumer recognition are very important in this regard.

(ii) Goodwill Transfer: Good will transfer is vital because to avail of the advantage under the trademark, such good-will has to be transferred through assignment.

(iii) Geographical Limitations: The unregistered trademarks are protected only in the geographical area where they are used. The assignment needs to consider the regional scope of recognition and protection for the trademark.

(iv) Legal Redress: To an unregistered trademark dispute, legal redress maybe limited to that of the registered trademark. The courts depend much on common-law principles and case law precedents.

Advantages of Trademark Assignment

Despite these demerits, there are some benefits to assigning unregistered trademarks:

(i) Business Expansion: Assignment allows businesses to increase their operations through the employment of existing trademarks and goodwill.

(ii) Monetization Trademarks: Through assignment agreements, the trademark owner monetizes their assets and reaps a benefit from their intellectual property.

(iii) Brand Continuity: Assignment, once trademarks are acquired, guarantees brand continuity for a business and continued consumer confidence.

Conclusion

Assigning an unregistered trademark is a very significant process consideration involving legal principles, procedural steps, and the difficulties with which it is involved. Unregistered trademarks, having less statutory protection in comparison to a registered trademark, its assignment is still valid and serves the business interest of its owner. Therefore, such knowledge about the process combined with judicial precedents provides guidance on how to properly complete trademark assignment lawfully.

FAQs

1. What is an unregistered trademark?

Ans. An unregistered trademark is the brand name or logo used by a business to identify its goods or services and has not been formally registered, protected by common law principles and usage.

2. How is an unregistered trademark assignable?

Ans. The assignment process involves:

(i) Prepare a draft formal agreement on agreed terms and conditions.

(ii) Transfer of consideration- Payment or other value for the trademark.

(iii) Public notice of transfer, normally in a gazette or trade journal.

(iv) The assignor and assignee continuing to use the trademark to maintain its goodwill.

3. What are the issues arising out of TM registration?

Ans. (i) Ownership can be challenged even if not formally registered.

(ii) Transferring goodwill is important, but sometimes complicated.

(iii) Geographical boundaries usually restrict the scope of protection.

(iv) Legal remedies may be available only in connection with disputes about registered trademarks.

4. what are the benefits of the unregistered trademarks?

Ans. (i) It enables the expansion of business operations across established brands.

(ii) It provides an opportunity to monetize intellectual property.

(iii) It ensures brand continuity and maintains consumer confidence.

5. What are some key legal precedents related to unregistered trademark assignment?

Ans. Colgate Palmolive vs. Anchor Health & Beauty Care: The case gave importance to good will and reputation in unregistered trademarks. Cadbury India vs. ITC: Highlights the difference between generic and distinctive terms and the challenges in protecting generic terms.