Trademark registration in India is perpetual in nature; only if the renewal is done from time to time. However, maintaining a trademark for a long time can be a costly affair. There are various reasons why an individual might want to transfer their registered mark. Primarily TM owners look out to assign their trademark or license their intellectual properties to encash their IP assets.

Transfers can be either temporary, partial or permanent. Transfer through Licensing of IP rights is temporary, and assignment is permanent. This article discusses the assignment of trademark and other factors related to it.

Let us first start with discussing: Why are Trademarks important for a company?  

•    They help in the creation of goodwill 

•    Generate customer loyalty 

•    Add to the commercial value of the organization 

•    Leveraging them brings consistent additional profits to an organization 

•    Help in identifying a company and its products 

•    Differentiate the products from the competitors’ products 

•   Enhance perceived value, quality and customer satisfaction 

•    Creates trust

From the following points, we understand how intellectual properties benefit the business and give the brand the recognition it requires. It is highly advisable to refer to the trademark manual for making crucial IPR decisions.

When can a trademark be assigned or licensed? 

1.    The Death of the Trademark Owner

Whenever the owner of the trademark dies, its ownership is passed on to the successors in will or intestate. The condition being that the TM should be valid and must not have been abandoned. 

2.    Sale of Business

Intellectual properties are assets. Just like all properties, even the trademark can be sold with the company. Provided it is registered under the company’s name. If a party acquires trademark rights by acquiring a business vis-à-vis a sale of assets, the intellectual properties are also transferred. 

3.    Change of Name of Owner

When there is a merger or an amalgamation of the company, a notification is sent to the registry. All the IP of the acquired company are transferred to the new company through the trademark assignment agreement. 

4.    Change in Form of Business

An assignment is a boon for businesses that plan on changing their business structures.

For example, a sole proprietorship that owns a trademark can later transfer the ownership and rights,  through trademark assignment in case it plans on changing its business structure i.e. convert the sole proprietorship to a private limited company.  

Types of trademark assignment

  • Complete Assignment

All the rights that are vested in the registered trademark are assigned to a third party.

  • Partial Assignment

Transfer of ownership is restricted only to certain products/services as decided by the parties and expressed in the Trademark Assignment Agreement.  

  • Assignment with goodwill 

Rights and value associated with the trademark are given for using the mark for the products and services already being sold by the assignor. 

  • An assignment without goodwill

The assignor can restrict the assignee’s rights for the product already used by him. This means that assignor & assignee both can use the same trademark but in distinct goods or services.

Benefits of trademark assignment

•    Monetize the value of your trademark and enjoy the fruits of the time and investments done for creating the brand.  

•    Helps in business expansion and in keeping the brand alive. 

•    The assignee is also benefitted as he/she would not have to work on brand building. 

•    Trademark assignment is a valid proof and has a legal standing in the court of law it secures the rights of the assignor and the assignee. 

Why trademark assignment should be recorded immediately

•    In case one fails to intimate the change of ownership on time, it can lead to many misconceptions among the consumers. This may harm the brand’s reputation or possible loss of rights as the trademark would fail to show the true origin of the product.

•    The new owner will not be able to claim his/her rights like filing a suit of infringement, opposition or make renewals.

•    The failure or delay in recording a transfer of ownership may result in a possible loss of royalties.

•    The license records and registered user entries will no longer be current and may affect the validity of the use by a licensee and/or governmental approval for foreign exchange authorizations for the remission of royalties.

Conclusion


Trademark assignment is the most effective method of transferring IP rights. It helps the trademark owner to preserve the goodwill and the brand.

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