Transfer of Trademark Rights Through Trademark Assignment

Trademark registration ensures perpetual rights in a trademark subject to renewal from time to time. Maintaining a trademark continuously for a long period of time may be a costly affair, in a situation where it is not being used to its best capacity or if the registered trademark owner has exhausted the use of the mark for his/ her purposes. There are various reasons why an individual might want to transfer their registered mark. Primarily trademark owners pursue transfer of trademark or license their intellectual properties to encash the reputation and value of a trademark. In this blog, we will understand when can a trademark be assigned, its type and the benefits of trademark assignment.

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

Let us first start by discussing: Why are Trademarks important for a business enterprise?  

Below is the list of benefits in a nutshell –

• Trademarks help in the creation of goodwill.
• Trademarks ensure customer loyalty because of promising quality.
• Leveraging them brings consistent additional profits to an organization.
• Helps in the identification of a company and its product offerings.
• Having trademark registration helps in differentiating the products from the competitors’ products.
• It escalates qualitative and quantitative value in a brand.

From the above-listed points, it is clear how the trademark is useful to a business and gives the brand, the recognition it requires for its better nurturing. For the best strategy for trademark registration, it is advisable to seek professional guidance before proceeding ahead for actual trademark registration.  

When can a trademark be assigned? 

Following is the list of scenarios in which a trademark can be assigned –

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 is that the trademark should be valid (or registered) and must not have been declared abandoned by the Trademark Registry. The term ‘abandoned’ here is the status of a trademark application. In relation to a trademark application, if the status of any trademark application is abandoned, it means that it is no longer in the process of registration by the Trademark Registry. 

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 buying a business in relation to the sale of assets, the intellectual properties should be transferred as well. 

3. Change of Name of Owner

When there is a merger or an amalgamation of the company, all the registered and unregistered trademarks in the name of the company are to be transferred to the new individual/ business entity and are sent to the Trademark Registry to effect the same. All the intellectual property of the acquired company is 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 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 the assignor & assignee both can use the same trademark but for different goods and/ or services.

You can read more about rights transfer at selling trademark in India.

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 also benefits as he/she would not have to work on building a brand and creating a brand reputation all over again.
  
• Trademark assignment is valid proof and has legal standing in the court of law as it secures the rights of the assignor and the assignee. 

Mandatory Recording of Trademark Assignment at the Trademark Registry

In case one fails to intimate the change of trademark ownership in time, it can lead to building pre-conceived notions and confusion among consumers. This may harm the reputation of a trademark 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 by filing a suit of infringement, or opposition or make renewals, if the trademark assignment is not recorded in time or if it has been recorded erroneously.

The failure or delay in recording trademark assignment in India may result in a possible loss of royalties and other trademark-related income and gains.

The transfer of trademark or trademark assignment user entries will no longer be current and updated. It will affect the validity of the use by a licensee and other necessary governmental approval for foreign exchange authorizations for the remission of royalties. Trademark assignment is the most effective method of transferring trademark-related rights. It helps the trademark owner to preserve the goodwill and the reputation of a brand. It is important to record every trademark transfer by submitting the necessary trademark forms along with the prescribed government fee. When it comes to pursuing trademark assignment, it is always advisable to seek professional advice. Legalwiz.in has a team of experts capable of handling any queries and requests related to trademark assignment.