Trademark Assignment Process: Learn How to Transfer Trademark Ownership

Meaning of Trademark Assignment:

Generally, Trademark assignment means alienation of the owner’s right, title and interest connected with the trademark. It is more or less defined as an assignment in writing by the act of the parties concerned with the trademark. It aids in transferring an identifiable design, phrase, symbol and word from the owner to another person. At this juncture, the owner of the trademark is termed as the assignor and the other person is called an assignee. The assignment of the trademark will take place when there exists alienation of ownership with or without the business goodwill. The assignment has to be recorded in the Registrar of the Trademark if the trademark which is alienated is a registered one. Assignment of the trademark can also be done through a trademark assignment agreement.

Statutory Definition:

Section 2(1) (b) of the Trademark Act, 1999 defines the term Assignment. It depicts that an “Assignment means an assignment in writing by the act of the parties concerned”.

Categories of Trademark Assignment:

The following are the kinds of Trademark Assignment:

• Complete Assignment:

Complete Assignment depicts the transfer of full rights by the owner in respect of the registered trademark to the second party. Here the second party is engulfed with all rights which include rights to the furtherance of transfer in order to earn royalties.

For example: ‘A’ the owner of the particular brand through an agreement sell his mark to second party ‘B’. In such circumstances, ‘A’ does not hold any rights related to the particular brand.

• Partial Assignment:

Partial Assignment involves alienation of ownership to a certain extent only. It is restricted to certain products or services as parties are determined or showed interest in the trademark assignment agreement.

For example: ‘X’ is an owner of a brand that is used for dairy products, cookies and candies. Here ‘X’ alienate the rights in respect of dairy products alone and have preserved the rights in respect of cookies and candies which is termed as a partial assignment.

• Assignment with Goodwill:

Assignment with goodwill is made when both the values and rights associated with the trademark are alienated to the third party with goodwill.

For example: ‘C’ an owner of a brand “Hurth” which relate to the sandal products, sells his brand to ‘D’ upon which ‘D’ is capable to use the brand “Hurth” in respect of milk products as well as other products it develops.

• Assignment without Goodwill:

Assignment with goodwill is otherwise called Gross Assignment. In this assignment, the owner of the brand will restrain the rights of the buyer to some extent. The buyer is prevented from using the brand for such product which the original proprietor used. Therefore, the goodwill adhered to the brand in respect to the goods already bring used under such specific brand will not be alienated to the buyer.

For example: ‘R’ the proprietor of the brand “Basil” related to the milk products sells his brand to ‘S’ in such condition that ‘S’ is restrained from using the mark “Basil” in respect to milk products alone but can use the same brand for any other purposes. In such circumstances, the goodwill which is associated with the brand “Basil” for milk products will not be alienated to ‘S’ and so ‘S’ will be obliged to develop definite goodwill for the brand “Basil”  for some other goods or services like Hotel wherein ‘S’ propose for the usage of the product.

Trademark Rules, 2017

In accordance with Rule 75 & 76 of the Trademarks Rules, 2017 Assignee along with his request in Form TM-P, file duly certified copy of original document, instrument or deed, as the case may be, purporting to transfer the title in the trademark and a statement and a statement nof case in support of his request.

Earlier in accordance with Rule 68 of the Trade Marks Rules 2002, An application to register the title of a person who become entitled to a registered trade mark by assignment shall be made in Form- 24 the assignor, assignee and both can also make a joint request to register assignee as subsequent proprietor in Form- 23

Assignability of Registered or Unregistered Trademark:

According to Section 38 of the Trademark Act, 1999 a registered trademark are alienated with or without the goodwill in respect of the business either in pursuance of entire goods or services or in respect of which the concerned trademark has been registered or of some products or services.

According to Section 39 of the Trademark Act, 1999 an unregistered trademark is capable to get assigned irrespective of having a goodwill or not in respect to the business concerned.

Restriction on Assignment of Trademark:

The following are the two types of restrictions on the assignment of the trademark:

• Parallel Usage Restriction:

Section 40 of the Trademark Act, 1999 stipulates that an assignment that brings the development of significant rights in divergent persons in relation to identical products or services and the usage of the trademark which likely to cause confusion or deceive the consumers. Therefore various absolute rights in relation to identical products or services in divergent persons are restricted. This restricts the parallel usage of a trademark by more than one individual in alliance to identify products or services.

• Multiple Territorial Usage Restriction:

Section 41 of the Trademark Act, 1999 stipulate the assignment which brings out in the establishment of absolute rights in divergent persons in divergent parts of India, in association to similar products or services. Therefore, assigning of distributed right in divergent parts of India is thereby restricted.

Procedure for Assignment of Trademark:

The following is the step by step procedure for the assignment of the trademark.

• An application for trademark assignment shall be made in the prescribed Form TM-24. The assignor and the assignee shall raise a request jointly Form TM-23;

• An application must be formed for the assignment of the trademark. The application can be made either by the assignee or assignor or by both. Thereafter necessary details of the alienation shall be furnished in Form TM-P;

• Soon after the application drafting has been completed, the same is necessitated to be surrendered to the trademark registrar. This has to be done within a span of six months period from the procurement ownership;

• When the trademark assignment is done with goodwill or with a registered mark then the registrar direction is compulsory before the expiration of six months period;

• The registrar will indicate the advertisement of the trademark assignment. After the indication by the registrar, the applicant can advertise correspondingly. Thereafter the applicant is necessitated to surrender the copy of the advertisement along with the registrar’s direction in the office of the registrar;

• Finally, if the registrar is satisfied with the submitted documents the registrar shall officially alienate the trademark from the original owner to the new owner and the name of the assignee is registered as the new owner. Subsequently, the new owner is capable to use the trademark as per the agreement terms and conditions.

Documents Required:

• Assignment Deed:

An appropriately stamped and notarized assignment deed, should compulsorily indicate the effectuate date, name and address of the assignor/ transferor and assignee/subsequent transferee forth with their signatures, consideration being paid for the assignment by the assignee to the assignor, statement related to if the assignment is with or without the goodwill of the business concerned in addition with the trademarks which is to be assigned. In relation to the applicants outside India, the assignment deed need to be notarized in the country where it is brought into effect and the same shall be stamped in India.

• Affidavit of No-Pending Litigation:

For the processing of the Trademark assignment request, the Indian Trademark Registry, has now made it compulsory for submission of an affidavit by duly attesting that there exists no pending litigation and the proprietorship of the trademark are not in dispute. Correspondingly, the assignee is obliged to submit an appropriately stamped and notarized affidavit along with the assignment deed to stipulate the information pertaining to the assignment and the trademark assigned thereby confirming that the ownership of the said trademark is not in dispute.

Registration of Assignment of Trademark:

Section 45 of the Trademark Act, 1999 says that an assignee shall apply for registration of assignment before the registrar of the trademark. The registrar after perusing the application if he is fully satisfied with the same shall enter the information of the assignee as the owner of the trademark assigned to him in respect to products or services for which they need for assignment arises. On the other hand, if there is a conflict between the parties in the validity of the assignment, the registrar shall fail to register the assignment till the rights of the parties are decided by the competent court.

Rule 76 of the Trademark Rules, 2017 stipulates that the registrar of the trademark shall settle the application for registration of the assignment of the trademark within a span of three month period calculating from the date of application.

Rule 77 of the Trademark Rules, 2017 stipulates that if the registrar needs clarification in respect of any documents or information shall call upon the person who has enforced for registration as owner of the proposed trademark to submit valid proof or additional evidence of title as the registrar is duly satisfied with the same.

Rule 78 of the Trademark Rules, 2017 indicates that if the registrar found that the document produced is not duly stamped the registrar shall keep the document on hold as per Chapter IV of the Indian Stamp Act, 1899.

Rule 84 of the Trademark Rule,1999 states that if the registrar has accepted for registering the assignment then the following particulars namely, the name and address details of the assignee, the date when the assignment brings it into operation, if the assignment is in relation to any right in the trademark, then depiction of the rights assigned, the ground under which the assignment is being created and the actual date on which the entry has been registered in the register shall be entered in the register in a detail and crystal manner.

Rights of Assignor:

The right, title or any interest of the assignor towards the trademark will terminate soon after the assignment deed has been executed in favour of the assignee. The termination will happen even then if the assignee name has not been engraved in the record of the registrar of the trademark. In the case of Classic Equipment’s Pvt.Ltd vs. Johnson Enterprise, it has been held that as early as the assignment deed is executed in favour of the assignee the assignor will be terminated from all rights, title and interest over the trademark. It also held that the assignor is prevented from cancelling the assignment by means of communication.

Rights of Assignee:

The rights of the assignee will come into force soon after the assignor assign the trademark in favour of the assignee. Although section 45 of the trademark act stipulates that the assignee should apply before the registrar of trademark for registering his title, this does not bar the assignee from holding the right, title and interest towards the trademark. The assignee of the trademark is also capable to file a civil suit despite the recording of the assignment of a registered trademark that has been pending before the registrar of the trademark. And moreover, section 45 of the trademark act have not rendered any title over the assigned trademark. But rather the registration granted under this section is only a mere evidentiary value for the title of the trademark of the assignee.

Benefits of Assignment of Trademark:

The assignment of the trademark renders the following benefits:

• Get your Trademark’s value:

Brand creation is a stupendous process that involves lots and lots of hard work, money and time. Therefore through this assignment of a trademark to other enterprises, the proprietor is capable to encash the brand’s value which will otherwise be in papers till now.

• Assignment Agreement is the valid proof:

The assignment agreement will hold a significant evidentiary value in case of a trademark dispute. It will establish the legal rights of the assignee in a clear and easy manner. The trademark registry will make sure that checks and the entire clause validity in the agreement are being duly published in the trademark journal.

• Pre-Established Brand:

The assignee has been endowed with the advantage of reaping the benefits, interests, rights and titles with an already established brand name rather than creating a new one. The hard work, money and time put forth for the creation of the brand will be saved for the assignee.

Criteria to effect valid assignment agreement:

The following points are to be meted out in order to make the assignment agreement duly valid.

• The agreement ought to be in writing;

• The agreement should find out the parties as assignor and assignee;

• The trademark which is recognised has to be assigned with applicable application and registration;

• The agreement must be given for something in return, i.e., for consideration;

• The agreement should find out the date of the agreement;

• The agreement must be executed appropriately;

• The agreement should include the alienation of trademark in goodwill.

How can a Compliance Calendar LLP help?

Compliance Calendar LLP can render paramount assistance towards the assignment of the trademark. It will first enquire regarding the validity of the trademark. It is in this case that it will make sure whether the trademark has been registered or not registered. CCL will also identify who is the proprietor of the trademark that is to be assigned. It will render all the advantages and disadvantages of the trademark assignment. It will provide the requirements that need to be fulfilled for the trademark assignment.

We educate the public in general or society at large or any enterprises regarding the essential requirements of the trademark assignment. It helps the entities in assigning the trademark in an accurate and easy manner. CCL will make sure all the legal requirements and formalities have duly adhered to without any delay. It will effectuate the trademark assignment in a more valid and correct approach thereby preventing lacunae in the process of assignment of the trademark. For any queries, email us at info@ccoffice.in or WhatsApp/Call at 9988424211.