assignment of trademark without goodwill

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Assignment of Trademark Without Goodwill of Business

• Post author: Sachin Jaiswal
• Post published: June 8, 2024
• Post category: Trademark

Last Updated on June 8, 2024 by Sachin Jaiswal

Trademark assignment , the transfer of ownership rights, is useful for businesses to handle their brand portfolios successfully. This process can greatly impact a company’s marketplace and income. There are two types of brand assignments: with goodwill and without goodwill. While assignment with goodwill includes transferring the brand and its associated image, assignment without goodwill separates the trademark from its goodwill. This blog post will focus on the latter, studying the details of transferring a trademark without goodwill in India.

What is Trademark Assignment?

Trademark assignment transfers legal rights, benefits, interests, and positions linked to a brand from one party (the assignor) to another (the receiver) through a written deal. It includes passing on the rights to use the brand, a unique name for a business’s goods or services.

There are two main types of trademark assignments:

• Assignment with goodwill: In this scenario, the person who assigns passes the trademark and the related business image, client trust, and goodwill to the assigned person. The person who gets the trademark can keep using it for the same goods or services that the person who gave it to them.
• Assignment without goodwill: Here, only the rights to the brand itself are passed, while the assignor keeps the business goodwill. The assignee can use the name for different goods or services but must build goodwill for the assigned brand. The assignor limits the assignee from working in the area where the assignor is already active.

Understanding Goodwill in Trademark Assignment

In the context of marks, Goodwill refers to the image, customer loyalty, and good associations a business has built around its brand. It reflects the intangible value of a business beyond its real assets. Goodwill is important in trademark assignments because it affects the transfer of the scope of rights. When a trademark is given with goodwill, the assignee gets the brand’s image and can continue using the mark for the same goods or services as the assignor. This makes for an easy transfer and keeps the buyer’s trust.

In comparison, transfer without goodwill separates the rights to a brand from the business image and customer goodwill it may carry. This separation transfers brand rights for specific goods or services while the assignor keeps the goodwill. The owner must build goodwill for the given brand. This type of assignment is often called a “gross trademark,” stressing the lack of goodwill transfer along with the trademark.

Importance of Goodwill in Trademark Assignments

Goodwill plays a major part in brand transfers, affecting the rights’ value and scope. When goodwill is passed, the assignee gets the brand’s reputation and can leverage it for their business. This can help the assignee, as they can use the current name to gain a competitive edge in the market. On the other hand, when goodwill is not shared, the assignee must build their image and customer trust, which can be time-consuming and resource-intensive.

Differences Between Assignment with and Without Goodwill

The key difference between assignments with and without goodwill lies in the scope of rights passed and the ability to use the mark in the same market as the assignor. Assignments with goodwill provide more comprehensive rights, while assignments without goodwill offer freedom to the assignor in keeping the brand image.

Legal Framework for Trademark Assignment Without Goodwill

The legal grounds for trademark transfer without goodwill in India are handled by the Trade Marks Act of 1999. Key rules include:

• Section 38 Permits the sale of a registered name with or without goodwill.
• Section 39 Covers the transfer of unregistered rights.
• Section 45 outlines the process for recording a trademark assignment with the registrar, including the requirement that the assignee ask for directions regarding the assignment notice within six months from the date of assignment.

The legal repercussions of transferring a name without goodwill include:

• The assignor keeps the goodwill linked with the trademark, while the assignee gets the right to use the trademark for specific goods or services.
• To ensure public notice and prevent misunderstanding, the assignee must advertise the assignment within time.
• The assignment can be filed with the registrar, which provides official proof and establishes ownership rights.

These rules ensure that brand transfers without goodwill are carried out publicly and legally binding, protecting the rights of both the assignor and the assignee.

Procedure for Assigning a Trademark Without Goodwill

Transferring a mark without goodwill includes a meticulous legal process that splits the rights to a brand from the business image and client trust it may carry. Here is an easy-to-follow guide to the assignment procedures:

1. Application Submission:

The person being assigned must apply to the Trademark Registry through Form TM-P (DIRECTION OF REGISTRAR FOR ADVERTISEMENT OF ASSIGNMENT WITHOUT GOODWILL) within 6 months of the assignment’s completion. The application needs to contain the assignment information, such as the assignor and recipient identities, mailing addresses, and signatures.

2. Advertisement Requirements:

The assignee must push the assignment within time to ensure public notice and prevent misunderstanding. The poster must include the assignment details, such as the assignor and assignee names, addresses, and the assigned brand.

3. Documentation and Formalities:

The assignor must present a fully signed and approved assignment deed, including the effective date, the full name, and the address of the assignor and assignee, along with their signatures and the assignee’s price for the assignment.

4. Role of the Trademark Registry:

The Trademark Registry checks the application and ensures all rules are met. If the application is complete and good, the Registry records the transfer and updates the trademark file properly.

5. Statutory Fees:

The fees for offline filing are ₹ 1,000 for waiting trademarks and ₹ 10,000 for registered trademarks. For online filing, the fees are ₹ 900 for waiting trademarks and ₹ 9,000 for registered trademarks.

By following these steps and meeting the needed rules, the assignor can pass the trademark rights without goodwill, allowing the assignee to use the name for different goods or services. In comparison, the assignor keeps the goodwill connected with the name.

Benefits and Drawbacks of Assignment Without Goodwill

Advantages of Assigning a Trademark Without Goodwill

• Assigning a brand without goodwill allows the assignor to keep the goodwill tied to the name. At the same time, the assignee gets the right to use the name for specific goods or services.
• This type of assignment separates the rights to a brand from the business image and customer attachment it may carry, allowing for separate transfer of trademark rights for specific goods or services.
• The assignor controls the mark and may hold the usage of the trademark inside the same market, while the assignee can use the mark for one-of-a-kind goods or offerings.

Potential Drawbacks and Risks

• Limited Use: The assignee can only use the name for the specific goods or services given, lowering their ability to grow the business.
• No Inheritance of image: The assignee does not gain the goodwill and image related to the brand, causing them to build their own.
• Potential Disputes: Disputes may arise if the assignor and assignee have different views regarding using the brand.

Comparison ofAssignment with Goodwill & without

Assignment without goodwill is more limited than assignment with goodwill, as it does not pass the goodwill and image linked with the brand. This type of assignment is ideal for situations where the assignor wants to control the goodwill and image. At the same time, the assignee gets the right to use the name for specific goods or services.

Common Challenges and How to Overcome Them

Common Issues Faced During the Assignment Process

• Resistance to change: Stakeholders may resist the change in ownership, leading to disputes and delays.
• Lack of Resources: Insufficient resources, such as time, money, or people, can slow the assignment process.
• Inadequate Skills: The assignor or client may lack the necessary skills to finish the assignment properly.
• Disputes Regarding assignment validity: Disputes may arise regarding the legality of the assignment, leading to court problems.

Tips and Strategies to Address These Challenges

• Involve Stakeholders: Engage stakeholders to solve problems and build trust.
• Prioritize: Focus on the most important parts of the assignment to overcome resource limits.
• Training and Development: Provide necessary training and development chances to address skill gaps.
• Clear Communication: Ensure clear communication regarding the assignment, benefits, and the process to avoid disagreements.

Importance of Legal Advice and Professional Assistance

• Legal Expertise: Seek legal help to ensure compliance with important laws and rules, such as the Trade Marks Act of 1999 .
• Professional advice: Obtain professional help to handle the assignment process smoothly and solve possible challenges.

In conclusion, trademark transfers without goodwill offer a smart way for businesses to handle their brand portfolios while controlling their image and goodwill. This process includes careful legal procedures, including marketing standards and government fees. While it provides flexibility for the assignor, it also comes with possible downsides and risks. Understanding the legal framework and problems involved in trademark transfers without goodwill is important. Getting professional help from law experts and trademark pros is recommended for an easy and efficient process.

Related Services

• Trademark Registration Online
• Trademark Registration in Chennai

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June 30, 2020

Violation of the assignment-in-gross rule for trademarks.

A recent case that addressed rights in the trademark reign provides a cautionary tale of the consequence of the failure to assign a trademark with its goodwill.

By  Scott D. Locke and Jessica J. Kastner  | June 30, 2020

Trademark rights are property rights. Like real property and personal property, as well as other intellectual property rights such as patents and copyrights, they can be assigned. However, the transfer of trademarks is unique in that any assignment of a trademark must also transfer the goodwill that is associated with that trademark. The requirement is deeper than a perfunctory recitation in an assignment document. The failure to transfer goodwill can invalidate the assignee’s rights under the agreement. A recent case that addressed rights in the trademark REIGN provides a cautionary tale of the consequence of the failure to assign a trademark with its goodwill.

The Anti-Assignment in Gross Rule

The owner of trademark rights can assign those rights to other persons or entities. The ability to assign trademark rights is significant because between competitors who wish to use the same or a confusingly similar trademark for the same or related goods, the party that began using the trademark first will generally prevail, and with any assignment the purchaser inherits the seller’s date of first use,  i.e.,  the seller’s priority.  Carnival Brand Seafood Co. v. Carnival Brands, Inc,  187 F. 3d 1307, 1310 (11th Cir. 1999).

However, any assignment of a trademark, must include an assignment of the goodwill that is associated with the trademark. 15 U.S.C. §1060(a)(1). For this reason, most assignments of trademarks explicitly recite that the assignor assigns specific trademarks and the goodwill associated therewith. However, the mere recitation of this language will  not  in and of itself render an assignment proper and confer priority. Failure to actually transfer the goodwill associated with a trademark is deemed an “assignment in gross” and renders the assignment invalid.

More than a century ago, in  United Drug Co.. Theodore Rectanus Co.,  248 U.S. 90 (1918), Justice Pitney explained the theory behind the prohibition against “assignments in gross” for trademarks. As he noted, trademark rights are part of a broad law of unfair competition and the rights in trademarks grow out of the use of them. Consequently, they are not property rights apart from their use in connection with a business.  Id.  at 97. Thus, unlike the owner of a patent right, the owner of a trademark right cannot park its rights and make use of them merely by enforcing those rights to prevent others from using the same or similar trademarks.  Id.  at 98.

One of the core components of the anti-assignment in gross rule is that it precludes a purchaser from benefiting from the goodwill of the seller if the purchaser applies the mark to different goods. This sounds similar to the “similarity of goods” factor used in the likelihood of confusion analysis that is used for determining whether there is trademark infringement. However, purchasers of trademarks may be surprised to learn that these standards are quite different. Under a likelihood of confusion analysis, goods may be loosely related and still weigh in favor of holding a trademark to have been infringed.

By contrast, in the context of determining whether an assignment is “in gross,” courts strictly require goods to be very similar in order to uphold an assignment. As such,  even if  an assignment expressly assigns the goodwill associated with the trademark, the assignment may be ineffective if the assignee’s products are not nearly the same as the assignor’s goods.

‘PepsiCo v. Grapette’

In the seminal case  PepsiCo, Inc. v. Grapette Co.,  416 F.2d 285 (8th Cir. 1969), the U.S. Court of Appeals for the Eighth Circuit established a framework for considering the proximity that goods must be in order to avoid a finding of an assignment in gross. In that case, a first company, H. Fox and Co., had registered the name PEPPY in connection with the cola syrups in 1926. In 1965, a second company, Grapette Co. bought the trademark PEPPY from H. Fox and Co. in the context of Chapter 11 bankruptcy proceeding. H. Fox and Co. made a formal assignment of its goodwill.  Id . at 286. Grapette began to use the trademark in connection with a bottled soft pepper drink. No inventory and no other assets were transferred.  Id.

In 1965, PepsiCo warned Grapette about a possible litigation if Grapette did not cease using the mark, and in 1966, PepsiCo initiated suit based on an alleged infringement of its trademark PEPSI.  Id.  Pepsi’s use predated 1965, Therefore, the issue was whether the assignment from H. Fox and Co. was one in gross and thus invalid. If the assignment were invalid, then Grapette would not receive the benefit of H. Fox and Co.’s priority date and would not be able to assert a defense of laches.

In explaining the contours against the prohibition against an assignment in gross, the court explained that for assignment of a trademark to be effective, it must not be “naked,” meaning that the purpose of the assignment must be consistent with the object of trademark law,  i.e. , to indicate the origin of the article by the association of the trademark with it.  Id.  Consequently, the court held that “any assignment of a trademark and its goodwill (with or without tangible or intangibles assigned) requires the mark itself to be used by the assignee on a product having substantially the same characteristics.”  Id.  at 288.

Turning to facts before it, the Eighth Circuit determined that H. Fox and Co.’s cola flavored syrup and Grapette’s pepper type bottled beverage were too dissimilar for there to have been an effective assignment of goodwill.  Id.  The court emphasized that the issue of having substantially the same characteristics was to be viewed through a lens that focuses on the public welfare. Consequently, the fact that the products were related or even in the same international class in the Trademark Office did not matter. Ultimately, the harm of holding otherwise would “condone public deceit” in that “[t]he consumer might buy a product thinking it to be of one quality or having certain characteristics and could find it only too late to be another.”  Id.

‘Vital Pharmaceuticals v. Monster Energy’

More recently, another case involving beverages,  Vital Pharmaceuticals, Inc. v. Monster Energy,  2020 WL 2091996 (S.D. Fla. 2020), reminds practitioners and assignees for trademarks, that the prohibition against assignments in gross continues to be a problem for litigants. In that that case, the parties disputed whether the assignment of rights to the trademark REIGN was invalid.

In 2015, Dash LLC, not a party to the lawsuit, began using the trademark REIGN and obtained a registration for the dietary supplement drink mixes as well as supplements and other products. One of the drinks that Dash sold was a powdered, fruit flavored, pre-workout supplement that was caffeinated.  Id.

By March 25 2019, Monster Energy Company, through a subsidiary, launched energy drinks under the name REIGN. At about the same time, Vital Pharmaceuticals (VPX) entered into a trademark purchase and assignment agreement with Dash for Dash’s trademark rights. VPX did not acquire anything other than the REIGN trademark.  Id.  at *2. Following the sale, Dash ceased using the REIGN trademark.

On March 28, 2019, three days after Monster launched its product, VPX announced that it would be launching an energy drink under the trademark REIGN. VPX’s REIGN product differed from Dash’s REIGN product in that: (1) VPX’s product was ready to drink while Dash’s product was a powdered supplement; and (2) VPX’s product contained no ingredients in common with Dash’s product.  Id.

The court considered four factors.

First, as the court in  PepsiCo v. Grapette  did, the court in this case focused on whether the assignee was using the mark for a substantially similar product.  Id.  Emphasizing the need to protect consumers, the court was explicit that even minor difference can be enough to threaten customer deception, and thus harm customers because they would mistakenly rely on a brand that they had come to trust.  Id.

Noting that VPX entirely abandoned the product line that Dash had sold, the court concluded that VPX has “left behind  any  goodwill Dash had earned for its mark.”  Id.  VPX tried to advance an argument that the products need not be identical and that they were sufficiently similar because both its products and the products of the assignor of the mark were: (i) fruit-flavored, (ii) pre-workout, (iii) dietary supplements that (iv) contain caffeine.  Id.  However, the court concluded that these similarities were insufficient, particularly because VPX implemented a complete change of ingredients.

Second, the court considered whether VPX acquired any assets from Dash. Although the transfer of tangible assets is not a prerequisite for an assignment to be valid, the court noted that the absence of any tangible acquisition can undermine the public’s legitimate expectation that a mark will go on in real continuity.  Id.  at *6-7. Thus, the factor weighed in favor of a finding of an invalid assignment of trademark rights.

Third, the court considered whether the assignor continued to capitalize on its goodwill under a new trademark. In this case, the assignor emphasized to its customers that it was replacing its REIGN products with products sold under the trademark SLAY.  Id.  This course of action suggested that the assignor was retaining its goodwill and not transferring it, despite using a different trademark. Thus, because the assignor retained its customers’ goodwill, even if it used a different trademark, it could not transfer that goodwill.

Fourth, the court considered whether there was a continuity of management between the assignor and the assignee such that the assignee would continue to provide the same quality of services.  Id.  The absence of this continuity of management also weighed in favor of a finding of an assignment in gross because it suggested a lack of continuity of the quality of the goods.

Because all four of the factors weighed against Grapette and suggested that there was no transfer of goodwill, the court held that the assignment was in gross. Consequently, the court entered an injunction in favor of the plaintiff that precluded VPX from using the REIGN trademark in connection with its beverage products.

Most practitioners who draft assignments that cover trademark rights know that the assignments should include an express transfer of the goodwill that is associated with the subject trademarks. However, this assignment of goodwill must be one of not only form but also of substance. The four factor test that the court in  Vital Pharmaceuticals  recently applied is a reminder that if the assignee’s products are dissimilar from the products of the assignor, a court may find that the circumstances surrounding the transfer suggest that the parties truly intended only an agreement by the assignor to refrain from future use of its trademark and not to ensure both continuity of type of goods and quality under the assigned trademark. In such cases, then the assignment may be found in gross and thus invalid.

Accordingly, in order to reduce the likelihood of a finding an assignment to be in gross, assignees should consider whether any one or more of the following procedures, which would help to ensure a continuity of quality, would be consistent with their business plans: (1) acquiring physical assets from the assignor; (2) retaining personnel of the assignor or hiring them as consultants; (3) requiring the assignor to abandon selling the same goods; and (4) offering at least some of the same products, even if there is a desire to expand into other goods and services. Although the tag should not wag the dog, failure to be able to demonstrate that goodwill has in fact been transferred, can jeopardize what the assignee thought was a valuable asset.

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Trademark Transfer: Everything You Need To Know

A trademark transfer occurs when the rights to a trademark are sold or licensed from one owner to another which can be done on a temporary or permanent basis. 3 min read updated on September 19, 2022

A trademark transfer occurs when the rights to a trademark are sold or licensed from one owner to another. This can be done either on a temporary or permanent basis.

Trademark Assignment

When the ownership of a mark is permanently transferred to another person or business, it is called assignment. Types of trademark assignment include:

• Complete assignment, in which all rights to the trademark are transferred to a third party. This includes the rights to collect royalties or reassign the rights to another individual or business.
• Partial assignment, in which only the trademark for a specific product or service is transferred. In this case, the owner retains the rights to the company's main intellectual property but assigns the trademark rights to one aspect of the business.
• Assignment with goodwill means that the trademark rights are transferred for the purpose of manufacturing the product in question.
• Assignment without goodwill occurs when the trademark use is restricted to a specific product or service that are not similar to those sold by the original company. Although this is allowed in certain countries, such as India, it is not considered valid in the United States.

The Process of Trademark Transfer

When a trademark is transferred, this transaction must be documented by an agreement between the parties as well as by filing the appropriate forms with the U.S. Patent and Trademark Office (USPTO). The agreement in question is called a trademark assignment agreement or trademark transfer agreement.

The agreement should completely detail the terms and conditions of the transfer, including payment, the level of assigned rights, the trademark's USPTO registration number, any current registration warranties that will be transferred to the new owners, and documentation that the assigning party fully owns the rights he or she is transferring.

Once this agreement is signed by both parties, you can record the transfer with the USPTO using a simple online form . You will also need to send in a copy of the executed transfer agreement. With online filing, the transfer is typically processed within one business day. The filing fee for this service is $40. You can also file by mail, which will take about a week to process.

If you do not register the transfer with the USPTO and the new owner of the trademark then infringes on another party's trademark, you may be implicated in the dispute since you are still federally registered as the owner of the trademark. For this reason, you may want to consult an experienced intellectual property attorney to make sure the process is completed correctly.

On the other hand, if you are the party purchasing rights to a trademark, the owner can later sue you for ownership of the mark if he or she fails to properly record the transfer . Again, it's best to consult an attorney whenever you are involved in trademark assignment.

The Role of Trademark Goodwill

Goodwill refers to the brand reputation directly associated with the trademarked goods or services. If you don't plan to use the trademark to promote those goods or services, the mark itself has no inherent value. For this reason, sales of a trademark that do not include transfer of goodwill are not considered valid. This prevents the person who is buying the trademark from being misled about what he or she is actually purchasing.

The trademark assignment agreement must indicate that the sale includes all goodwill associated with the mark. This is governed by 15 U.S. Code 1060(a)(1), which states “A registered mark or a mark for which an application to register has been filed shall be assignable with the goodwill of the business in which the mark is used, or with that part of the goodwill of the business connected with the use of and symbolized by the mark.”

Goodwill transfer does not necessarily entail transfer of any tangible assets. However, the mark must be used on similar products or services as those already associated with the mark. Otherwise, this could be legally construed as an attempt to defraud the consumer by providing different and possibly inferior products. This requirement must be explicitly stated in the trademark assignment agreement.

If you need help with trademark transfer, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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Trademark Assignments: How to Buy, Sell, Or Transfer A Trademark

By Eric Perrott, Esq.

Much like traditional assets such as machinery or real estate, trademarks are assets that can be bought, sold, and transferred. Unlike physical assets, however, trademarks must be transferred in a purposeful way to ensure that the underlying meaning, or “goodwill”, is also transferred. 

A trademark could be a word, a phrase, a symbol, or even a shape. However, one thing all different forms of trademarks share are that they represent a single source. They are essentially a shortcut for consumers to bring to mind a company’s quality, customer service, and even values, at a glance. A trademark only has value because of the impact it has on consumers and the exposure consumers have had to that brand. 

When transferring a trademark, simply allowing another company to use the trademark is not enough. You must transfer not only the right to the word or image, but also the underlying goodwill behind the trademark.

It is crucial that trademark owners properly transfer, or “assign” their trademarks to avoid delays, confusion, or worst of all, a break in title that could invalidate the earlier use of the trademark and ruin the value of the trademark. 

A Trademark Assignment Transfers Trademark Rights

A proper trademark assignment is not just a transfer of registration the way many business assets are transferred. There is a wording specific to trademark assignments known as a “transfer of goodwill” – this is written fully as a transfer of “(1) all the property, right, title and interest in and to the Trademark including all common law rights connected therein together with the registrations therefor for the United States and throughout the world together with the goodwill of the business in connection with which the Trademark is used and which is symbolized by the Trademark; (2) all income, royalties, and damages hereafter due or payable to Assignor with respect to the Trademark, including without limitation, damages, and payments for past or future infringements and misappropriations of the Trademark; and (3) all rights to sue for past, present and future infringements or misappropriations of the Trademark.” 

By including those clear rights and benefits, trademark owners make it clear that all the rights associated with the trademark are now the new owners’, including enforcement rights, royalty rights, and licensing rights.  However, all responsibilities are also to the new owners, such as ensuring there is no confusion with another mark, that renewals are timely filed, and any misuse of a mark is monitored to ensure the quality assurance associated with the mark. 

If the goodwill is not transferred, the new owner is essentially stating that they will not work to maintain the mark’s reputation among consumers. 

Common Issues with Preparing and Filing Assignments

When filing an assignment, either current or in the past, the assignment requires: 

• the proper names of owners – if business entities, then complete names of active business entities
• the date any transfer took place, whether in the past or on the date of signing 
• the language above for all goodwill and interest and rights to sue for past infringement 
• signatures of both the assignor and assignee – or qualified representatives of those entities

This may seem simple, but when completing a trademark assignment, it is important to understand why each of these items are needed in order to ensure that the transfer is done correctly. The mere fact that the USPTO accepts a recordation of an assignment does not mean it is valid.

 One common pitfall of attempting to file an assignment yourself is mixing up assignor or assignee, writing the wrong owner, or assigning the mark to an individual and not a business entity. Before assigning a trademark, ensure that you consider why the transfer is taking place. 

For example:

• You may be transferring a trademark from one company you own to another as a restructuring of assets, such as a holding company or a change in tax status. 
• You might have sold the business and all underlying trademark rights in the business name.
• You may be transferring a mark according to a will or bankruptcy.
• You may be transferring from your name, personally, to a newly created entity

All of these situations have their own nuances and it is easy to confuse who owns the rights with who is receiving them. No matter what, ensure that your assignment matches the owner on the trademark registration. Sometimes a trademark might change hands two or three times, with a few corporate name changes in the middle. You should be able to draw a straight line from the original owner to the new owner, and each step must be documented with the USPTO to ensure the recordation is valid. It might be a multi-step process involving multiple parties and, while complicated, it is essential that the ownership and chain-of-title are both correct.

Another common pitfall occurs when filing other documents, such as renewals. The filer is required to sign a sworn statement that the owner is correct. If the old owner files a renewal in the name of the old organization, the owner may have made a sworn statement that it was the owner of the mark, which could cause delays or even prejudice the registration in future proceedings.

Similarly, if the new owner files, they cannot simply change the name in the renewal. This will cause significant delays, as they will need to prepare an assignment and record it with the USPTO’s assignment branch before the renewal can be filed. If close to deadlines, this could get extremely complicated and cause additional fees or potential loss of rights.

Trademark assignments are an important part of the trademark lifecycle, as they allow trademark owners to buy and sell brands and further benefit from the goodwill represented by their brands. However, trademark owners should carefully consider the content of any assignment documents and ensure that they match the reality of the situation and the requirements of the USPTO.

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Eric Perrott, Esq.

Eric Perrott, Esq. is a trademark and copyright attorney committed to providing high-quality legal services for any sized budget. Eric’s ability to counsel clients through any stage of trademark and copyright development and protection allows him to provide his clients with personalized advice and unique analysis. Eric can be reached directly at: [email protected]. The contents of this blog are for informational purposes only and may not be relied on as legal advice.

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Trademark Assignment: All You Need to Know

This article on ‘Assignment of Trademarks: All you need to know’ was written by Shashanki Kaushik , an intern at Legal Upanishad.

Introduction

This article provides a comprehensive overview of the assignment of trademarks in India, focusing on the legal framework, relevant legislation, landmark judgements, and practical considerations. Understanding the nuances of trademark assignment is vital for businesses seeking to protect their intellectual property rights. In India, this process is governed by various laws, including the Trade Marks Act of 1999 and the Trade Marks Rules of 2017. This article explores the intricacies of trademark assignment, touching upon key aspects, legal provisions, and notable case law.

Assignment of Trademarks : Concept and Laws

Trade Marks Act, 1999, Section 2(1)(b): Definition of Assignment: The Act defines ‘assignment’ as the transfer of ownership, either with or without the goodwill of the business.

Section 37: Requirements for Assignment: This section outlines the essential requirements for a valid trademark assignment, including the need for the assignment to be in writing and signed by both parties.

Trade Marks Rules, 2017, Rule 68: Application for Assignment: Rule 68 specifies the procedure for filing an application for the assignment of trademarks, along with the prescribed form and fees.

Types of Trademark Assignment

• Complete Assignment- A complete assignment involves the transfer of both the trademark and the associated goodwill.
• Partial Assignment- Partial assignment entails the transfer of the trademark without the goodwill of the business.
• Assignment with Goodwill- Assignments that include goodwill are more common and ensure the new owner can benefit from the established reputation and customer base.
• Assignment without Goodwill- Assigning a trademark without goodwill is less common and may occur when the assignor intends to retain the business’s reputation.

Legal Procedures for Trademark Assignment

• Application to Registrar: The assignor and assignee must file a joint application with the Registrar of Trademarks for the assignment’s approval.
• Advertisement and Opposition: After acceptance, the Registrar will advertise the assignment application. Interested parties have the opportunity to oppose the assignment within the stipulated period.
• Issuance of Certificate: Upon successful completion of the assignment process, the Registrar issues a certificate, signifying the new owner’s rights over the trademark.

Landmark Judgments

• Ravi Kamal Bali v. Kala Tech and Entertainment (P) Ltd.

This case reaffirmed that an assignment without goodwill does not affect the validity of the assignment.

• Indian Performing Right Society Ltd. v. Dalia

In this judgement, it was held that the assignee could enforce trademark rights against third parties, even without registering the assignment.

Practical Considerations

• Due Diligence : Both parties should conduct thorough due diligence before entering into an assignment agreement, ensuring the trademark’s validity and reputation.
• Clear Agreement : The assignment agreement must be clear and comprehensive, specifying the terms, conditions, and considerations involved.
• Record Keeping : Maintaining accurate records of the assignment is crucial for future reference and potential disputes.
• Post-Assignment Compliance : The assignee must ensure compliance with ongoing trademark maintenance , including renewals and protection against infringement.

Tax Implications of Trademark Assignment

Trademark assignment can have significant tax implications for both parties involved. The consideration received or paid for the assignment may be subject to capital gains tax or other taxes, depending on the specific circumstances and applicable tax laws. It is crucial for both parties to seek professional tax advice to ensure compliance with tax regulations.

Licensing vs. Assignment

While trademark assignment involves the complete transfer of ownership, licensing allows the owner (licensor) to grant permission to another party (licensee) to use the trademark under specific terms and conditions. Licensing gives more control to the trademark owner and allows for greater flexibility in terms of use, territory, and duration. Assignment, on the other hand, transfers all rights and responsibilities to the assignee, including the duty to protect and enforce the trademark.

Franchising and Trademark Assignment

Franchising often involves the assignment of trademarks to franchisees. This allows franchisees to operate under a recognized brand, benefiting from the established reputation and marketing efforts of the franchisor. Franchise agreements typically include detailed provisions regarding trademark usage, quality control, and territorial rights. Careful consideration of trademark assignment is essential in the franchising context to maintain brand consistency and protect the trademark’s value.

International Enforcement of Trademark Assignment

Enforcing trademark assignments across international borders can be challenging due to varying legal systems and regulations. Businesses engaging in cross-border trademark assignments should consider international treaties such as the Madrid Protocol and the Paris Convention, which provide mechanisms for protecting trademarks in multiple countries. Additionally, legal counsel with expertise in international trademark law is essential to navigate the complexities of enforcing trademark assignments globally.

International Perspective

Paris Convention for the Protection of Industrial Property (1883): India, as a signatory to the Paris Convention, recognizes the principle of national treatment for foreign trademark owners, providing a basis for international trademark assignment.

TRIPS Agreement (1994): The Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, part of the World Trade Organization (WTO), sets minimum standards for the protection of trademarks and includes provisions related to trademark assignment.

International Trademark Assignment

Madrid Protocol : Under the Madrid Protocol, businesses can efficiently protect their trademarks in multiple countries by filing a single international application. India became a member of the Madrid Protocol in 2013, facilitating international trademark assignments for Indian businesses.

International Trademark Assignment Case Study: Coca-Cola : Coca-Cola’s global presence is a prime example of an effective international trademark assignment. Through careful planning and legal strategies, the company has maintained consistent branding worldwide.

Trademark assignment is a vital aspect of intellectual property management in India. It provides opportunities for businesses to monetize their assets or expand their market presence. However, navigating the legal framework, complying with procedures, and safeguarding interests require careful consideration. As demonstrated through relevant legislation and case law, understanding the intricacies of trademark assignment is indispensable for both assignors and assignees in India.

List of References

• Mayashree Acharaya, ‘Assignment of Trademark’, CLear Tax, 22 February 2022, available at: https://cleartax.in/s/ass i gnment-of-trademark
• ‘Assignment and Transmission of Rights’, Selvam & Selvam, available at: https://selvams.com/kb/in/trademarks/assignment/
• ‘Trademark Assignment’, Corpbiz, available at: https://corpbiz.io/trademark-assignment

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Assignment and Transmission of Trademark

• Intellectual Property Rights Blogs Subject-wise Law Notes
• Aishwarya Agrawal
• May 23, 2023

Assignment and transmission of trademarks involve transferring ownership rights from one party to another. The Trademark Act provides guidelines and conditions for such assignments and transmissions, distinguishing between assignments with or without the goodwill and specifying requirements for registration and documentation.

Meaning of Assignment and Transmission of Trademark

Assignment and transmission of a trademark refer to the legal process by which the ownership rights of a trademark are transferred from one person or entity to another. This process involves the transfer of the exclusive rights associated with the trademark, which can include the right to use, license, sell or enforce the trademark.

The assignment of a trademark involves the complete transfer of ownership from one party to another. In this case, the assignee (the party receiving the trademark rights) assumes full control and responsibility over the trademark, including the right to use it exclusively for their own commercial purposes. The assignor (the party transferring the trademark rights) relinquishes all rights and interests in the trademark.

On the other hand, the transmission of a trademark typically refers to the transfer of ownership rights in situations where the original owner passes away or there is a change in the ownership due to legal proceedings, inheritance or other circumstances. Transmission may occur through the distribution of assets in a will, the settlement of an estate or a court order.

Both registered and unregistered trademarks can be assigned or transmitted. A registered trademark is one that has been officially registered with the relevant trademark office, providing the owner with statutory rights and protection. An unregistered trademark refers to a mark that has not been formally registered but may still possess some degree of protection based on common law or other legal principles.

Types of Assignment and Transmission of Trademark

Complete assignment and transmission.

Complete Assignment refers to the transfer of all rights associated with a trademark from one individual to another. This includes the rights to further transfer the trademark, receive royalties and exercise full control over its usage. For instance, if proprietor ‘X’ sells all rights of a trademark to proprietor ‘Y’, ‘Y’ becomes the exclusive owner with the freedom to use the trademark as desired, transfer it to others, set guidelines for its usage and receive royalties. No approval from ‘X’ is required in this case.

Partial Assignment

Partial Assignment involves the transfer of ownership restricted to specific services or products. For example, if proprietor ‘X’ has a trademark (♛) related to men’s lifestyle products but only wants to assign it to shoes, ‘X’ can transfer the trademark to ‘Z’ with the condition that ‘Z’ can only use it for shoes. ‘X’ retains the right to use the trademark for all other products. This type of transfer is known as a partial assignment.

Assignment with Goodwill

Assignment with Goodwill refers to the transfer of a trademark along with all the associated rights and values from one person to another. For instance, if ‘X’ assigns and transfers their trademark (♛) to ‘Z’ with all rights and values intact, ‘Z’ gains full rights to use the trademark for men’s lifestyle products or any other future products they manufacture.

Assignment without Goodwill

Assignment without goodwill involves the transfer of a trademark in a way that allows its use for purposes other than the original one. For example, if ‘X’, who deals with men’s lifestyle products, assigns and transfers their trademark (♛) to ‘Z’ with the condition that ‘Z’ can use it for any product except men’s lifestyle products.

Conditions for assignment and transmission as given in section 42

Section 42 of the Trademark Act outlines the conditions for the assignment and transmission of a trademark, specifically when it is not associated with the goodwill of a business. According to this section, the assignment or transmission of a trademark without goodwill will only be effective if the assignee applies to the registrar for directions regarding the advertisement of the assignment. 

The assignee must advertise the assignment within the timeframe specified by the Registrar, which should not exceed six months from the date of the assignment or an extended period of three months if permitted by the Registrar.

However, if the trademark is assigned along with the goodwill of the business for specific goods and services, it will not be considered an assignment without goodwill. Additionally, if the assignment includes goods for export or services used outside of India along with the assignment of goodwill, it is permissible.

Restrictions on Assignment of Trademarks

The Trademark Act imposes certain restrictions on the assignment and transmission of trademarks to prevent confusion among users or the general public. These restrictions include

• Restriction on assignment or transmission that would create multiple exclusive rights.
• Restriction on assignment or transmission that would create exclusive rights in different parts of India.

Process of Assignment and Transmission of Trademark (Section 45)

The process for the assignment and transmission of a trademark, as described in Section 45 of the Trademark Act, involves the following steps:

• Application to the Registrar of Trademarks using Form TM-P, along with duly certified original documents.
• The Registrar will review the application and provide a decision within three months. The decision may include informing the applicant about the assignment or requesting additional proof if there are doubts.
• If the assignment is approved, the Registrar will make an entry in the Register, including details such as the name and address of the assignee, the date of the assignment, a description of the rights assigned (if applicable), the basis of the assignment and the date of entry in the register.
• In case of a dispute between the parties regarding the validity of the assignment or transmission, the registrar may refuse to register it until the rights of the parties have been determined.

Assignment and Transmission of Registered Trademark (Section 38)

Section 38 of the Trademark Act states that a registered trademark can be assigned and transmitted, with or without the goodwill of the business associated with it. This can apply to all the goods or services covered by the registered trademark or only to a specific subset of goods or services.

Assignment and Transmission of Unregistered Trademarks (Section 39)

According to Section 39 of the Trademark Act, an unregistered trademark can also be assigned or transmitted, with or without the goodwill of the business concerned.

Benefits of Assignment and Transmission of Trademark

Expansion of business: By assigning and transmitting a trademark, the owner can expand their business by using the same trademark in multiple locations simultaneously. Additionally, partial authority can be given to assign the trademark to more than one person.

Leveraging an established brand : Assigning and transmitting a trademark allows the assignee to benefit from an already established brand in the market, saving them the effort and resources required to create a new brand.

Legal proof: The assignment and transmission of a trademark serve as legal proof in case of any disputes related to trademark usage. The rights and liabilities associated with the trademark are clearly outlined in a legal document.

Monetary benefits: The owner of the trademark can enjoy monetary benefits through the assignment and transmission process, including any financial gains resulting from the assignment or transmission. Furthermore, operating with the same trademark in multiple locations can increase the value of the brand.

Structural Waterproofing and ORS v. Amit Gupta ORS [93 (2001) DLT 496]

In this case, a dispute arose regarding the assignment and transmission of a trademark. The court highlighted that the registrar has the authority to refuse the registration of the assignment and transmission until a decision is made by the competent court. The plaintiff claimed ownership of the trademark based on a Memorandum of Understanding (MoU) between the parties. 

However, the court rejected the plaintiff’s request for an injunction against the defendant. The court emphasised that a change in the name of the registered proprietor does not automatically render the trademark unsuitable.

Cinni Foundation v. Raj Kumar Shah and Sons [2009 (41) PTC 320 (Del)]

In this case, the trademark “CINNI” was being used by the owner. A deed of assignment had been executed and signed between the parties. However, it was later discovered that the trademark was not registered. The defendant attempted to claim rights over the trademark. The court ruled that according to the law, the assignee acquires no title to the trademark without the registration of the assignment deed. Consequently, the defendant’s claim to the trademark was dismissed.

These cases illustrate the importance of registration and proper documentation in the assignment and transmission of trademarks. Registration provides legal protection and establishes ownership rights, while adherence to the legal requirements ensures the validity and enforceability of the assignment or transmission of the trademark.

Difference between the Assignment and Transmission of the Trademark

Assignment and transmission are two terms often used interchangeably, but they are distinct concepts according to Section 2 of the Trademark Act. In the case of trademark assignment, there is a transfer of ownership of the registered trademark to another party. On the other hand, in the case of trademark transmission, the original owner retains the rights to the trademark but grants limited rights to a third party for its use.

For instance, let’s consider the example of X, the current owner of the trademark “œ,” who decides to assign the trademark to Y. In this scenario, X relinquishes ownership of the trademark and after a proper assignment process, Y becomes the registered owner with full rights to the trademark.

However, if X chooses to transmit the trademark instead, it means that X remains the original owner of the trademark, but grants limited rights and responsibilities to Y for its use.

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Assignment of Trademark

Updated on : Jun 14th, 2024

Trademark proprietors can transfer trademarks similarly to how they can transfer physical properties. One of the ways to transfer a trademark is through an assignment. Assignment means transferring rights, interests, titles and benefits from one person to another. Assignment of a trademark means to transfer the owner’s right in a trademark to another person.

The transferring party is called the assignor, and the receiving party is called the assignee. Section 2(1)(b) of the Trade Marks Act, 1999 states that assignment means an assignment of a trademark in writing by the act of the concerned parties. Both unregistered and registered trademarks can be assigned with or without the goodwill of the business.

Who can Assign a Trademark?

Section 37 of the Trade Marks Act, 1999 states that the person registered as proprietor of trademark in the register of trademarks has the power to assign a trademark and receive consideration for such assignment. Thus, a trademark proprietor can assign a trademark to another person.

Kinds of Trademark Assignment

The different kinds of trademark assignments are as follows:

Complete Assignment  

The trademark proprietor transfers all rights in the trademark to another person, including the right to earn royalties, to further transfer, etc. 

For example: X is the proprietor of brand ‘ABC’. X assigns his trademark ‘ABC’ completely through an agreement to Y. After this, X will not have any rights with respect to the brand ‘ABC’.

Partial Assignment

The trademark proprietor assigns the trademark to another person with respect to only specific services or goods. The transfer of ownership in the trademark is restricted to specific services or products.

For example: X is the proprietor of a brand ‘ABC’ used for sauces and dairy products. X assigns the rights in the brand ‘ABC’ with respect to only dairy products to Y and retains the rights in the brand  ‘ABC’ with respect to sauces.

Assignment with Goodwill of Business  

The trademark proprietor assigns the rights, entitlements and values associated with a trademark to another person. When the trademark is assigned with goodwill, the assignee can use the trademark for any class of goods or services, including the goods or services which were already in use by the assignor. 

For example: X is the proprietor of ‘Sherry’ brand relating to hair products. X assigns the brand ‘Sherry’ to Y with goodwill. Y will be able to use the brand ‘Sherry’ with respect to food products and any other products they manufacture.

Assignment without the Goodwill of Business  

The trademark proprietor assigns to the assignee rights and entitlements in a trademark with respect to the products or services that are not in use. The assignor restricts the transfer of the rights in the trademark in the case of assignment without goodwill. The assignor assigns with the condition that the assignee is not entitled to use the trademark relating to the goods or services already in use by the assignor.

For example: X is the proprietor of a brand ‘Sherry’ that he uses for manufacturing and selling bags. X assigns the brand ‘Sherry’ without goodwill to Y. Y will be able to use the brand ‘Sherry’ for any other product other than bags.

Pre-Requisites for Assignment of Trademark

• The trademark assignment should be in writing.
• The assignment should be between two identifying parties, i.e. assignor (owner of the trademark) and the assignee (buyer of the trademark).
• The assignor should have the intent and must consent for the trademark assignment.
• The trademark assignment should be for a proper and adequate consideration (amount).

Trademark Assignment Agreement

The proprietor of a trademark generally assigns it to the assignee through a properly executed trademark assignment agreement. The trademark assignment agreement should be drafted keeping the following points in mind:

• The rights of the trademark should not be detrimentally affected due to the obligations contained in the agreement.
• The decision and requirement regarding whether the assignment is with or without the goodwill of the business must be explicitly mentioned.
• The agreement should show a clear purpose of the transaction/assignment.
• The geographical scope of the location where the assignee possesses the values and rights in the trademark must be mentioned.
• The transfer of the right to collect and sue damages for future and past infringements must be mentioned.
• The agreement should be duly executed, i.e. it must be stamped and notarised as per the applicable Stamp Act.
• The signatures and witnesses must be mentioned.
• The place and date of agreement execution must be mentioned.
• The date and day of the assignment along with the parties to the assignment must be mentioned.
• The agreement should mention whether or not it would be binding on the legal heirs of the assignor and assignee.

Process of Assignment of Trademark

The process of assignment of the trademark in India are as follows:

• The proprietor of the trademark (assignor) assigns his/her rights in the trademark through a trademark assignment agreement to the assignee.
• The assignor or assignee, or both, can make a joint request to register the assignment by filing an application of a trademark assignment in Form TM-P to the register of trademarks.
• Form TM-P must be filed with the registrar of the trademark within six months from the date of the assignment. The application can be filed after six months of assignment, but the fee may vary accordingly.
• The assignment must be advertised in such a manner and within the period directed by the registrar of trademarks.
• The copy of the advertisement and the registrar’s direction should be submitted to the office of the registrar of trademarks.
• Upon the receipt of the trademark assignment application (form TM-P) and required documents, the registrar of trademarks will register the assignee as the proprietor of the trademark and record the specifications of the assignment in the register.

Documents Required for Assignment of Trademark

The following documents must be submitted to the registrar of trademark along with form TM-P:

• Trademark assignment agreement.
• Trademark certificate.
• NOC from the assignor.
• Identification documents of the assignor and assignee.

Restrictions on Assignment of Trademark

The Trademarks Act, 1999 provides the following restrictions on trademark assignment:

Parallel Use Restriction  

The assignor cannot assign a trademark when the assignment results in the creation of exclusive rights in different persons with relation to the same or similar products or services and will likely deceive or cause confusion. Thus, multiple exclusive rights relating to the same/similar products or services in different persons are not allowed. It prevents the parallel use of a trademark by more than one person in relation to the same/similar products or services.

Multiple Territorial Use Restriction  

The assignor cannot assign a trademark when the assignment results in the creation of an exclusive right in different persons in various parts of India relating to the same/similar products or services. The assignor cannot assign a trademark when the assignment results in the creation of an exclusive right in different persons in various parts of India relating to the same/similar products or services sold or delivered outside India. Thus, assigning rights in different parts of India relating to the same/similar products or services is not allowed.

Benefits of Trademark Assignment

• The trademark assignment enables the trademark proprietor to encash the value of his/her brand.
• The assignee obtains the rights of an already established brand due to trademark assignment.
• The trademark assignment supports the assignor and the assignee to expand their respective businesses.
• The trademark assignment agreement enables the assignor and the assignee to establish their legal rights in case of any dispute.

Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.

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Mayashree Acharya

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Assignment of Trademark

GENERAL UNDERSTANDING:

As physical properties are transferred, the same way trademarks are also transferred. This transfer of trademark is called Assignment of trademark. In general terms, Assignment means transfer of title, rights, interest and benefits from one person to another person.

Thus, Assignment of trademark means transfer of Owner’s title, rights, interest and benefits to other person. The transferring party is called as “Assignor” and the receiving party is called as “Assignee”.

STATUTORY DEFINITION:

Section 2(1)(b) of the Trade Marks Act, 1999 “Assignment” means an assignment in writing by the act of the parties concerned;

WHO CAN ASSIGN A TRADEMARK:

As per section 37 of the Trade Marks Act, 1999, the person entered in the register of trademarks, as the proprietor of a trademark, shall have power to assign a trade mark and to give effectual receipt of for any consideration for such assignment.

ASSIGNABILITY OF REGISTERED OR UNREGISTERED TRADEMARK:-

As per section 38 of the Act, a registered trademark can be transferred with or without the Goodwill of the business concerned either in respect of all the goods or services in respect of which the said trademark is registered or of some of the goods or service.

Moreover, as per section 39 of the Act, an unregistered trademark may be assigned with or without the Goodwill of the business concerned.

  TYPES OF ASSIGNMENT:-

1. Assignment with Goodwill of Business: Where an assignor assigns to the assignee, the value, rights and entitlements also, as associated with a trademark with respect to the goods or services already in use by the assignor. After taking over the goodwill associated with the trademark, the assignee is free to use the trademark assigned to him for all goods or services including for the goods or services which were already in use by the Assignor. Such assignment is called assignment with Goodwill of Business.

For Example: Mr. X is the owner of a trademark “TM” who is already using the said trademark “TM” in relation to clothing and footwear. Mr.  X assign to Mr. Y the said trademark “TM” through an agreement (in writing) in relation to clothing and footwear alongwith the Goodwill associated with trademark “TM”.

In this case, Mr. X has also assigned to Mr. Y, the Goodwill associated with trademark “TM” for the business of clothing and footwear as well as for other goods or services. Therefore, Mr. Y is eligible to use the said trademark “TM”, for clothing and footwear including other goods or service dealt by Mr. Y.

2. Assignment without the Goodwill of Business: Where an assignor assigns to the assignee, the right and entitlements in a trademark with respect to the goods or services which are not in use by the assignor. In other words, where the assignor restricts the assignee with a condition that the assignee is not entitled to use the trademark assigned in relation to the goods or services already in use by the assignor. Such assignment is called assignment without the Goodwill of Business.

For Example: Mr. X is the owner of a trademark “TM” who is already using the said trademark “TM” in relation to clothing and footwear. Mr. X assign to Mr. Y the said trademark “TM” through an agreement (in writing) in relation to goods or services other than clothing and footwear without assigning the Goodwill associated with trademark “TM”.

In this case, Mr. X has not assigned to Mr. Y, the Goodwill associated with trademark “TM” for the business of clothing and footwear. Therefore, Mr. Y is not eligible to use the said trademark “TM”, for clothing and footwear. Thus, in case, Mr. Y wishes to use the said trademark “TM” in relation to other goods or services then he will be required to create separate Goodwill for trademark “TM” for such other goods or services dealt by him.

RESTRICTION ON ASSIGNMENT OF TRADEMARK:-

1. Parallel use Restriction: Where assignment results in creation of exclusive right in different persons, in relation to same or similar goods or services and the use of the trademark will be likely to deceive or cause confusion. Thus, multiple exclusive right in relation to same or similar goods or services, in different person is not allowed. This prevents the parallel use of a trademark by more than one person concerned in relation to same or similar goods or services. (Section-40)

2. Multiple Territorial use Restriction: Where the assignment results in creation of exclusive right, in different person in different parts of India, in relation to same or similar goods or services. Thus, assigning of scattered right in different parts of India is not allowed. (Section-41)  

PROCEDURE FOR ASSIGNMENT OF TRADEMARK:

REGISTRATION OF ASSIGNMENT OF TRADEMARK:

1. A person (subsequent proprietor) who becomes entitled by way of assignment, shall apply for registration of assignment before the Registrar of trademarks. (section 45)

2. After due satisfaction of the Registrar of trademarks, the Registrar shall enter the details of the assignee (subsequent proprietor) as the proprietor of the trademark assigned to him in respect of goods or services for which the assignment has been made. (section 45)

3. Where the validity of assignment is in dispute between the parties, the Registrar may refuse to register the assignment until the rights of the parties are determined by the competent court. (section 45)

4. Registrar of trademark shall dispose of the application for registration of assignment of trademark within a period of 3 (three) months from the date of receipt of application. (rule 76 of Trade Marks Rules, 2017 )

5. Registrar may, where there is reasonable doubt about the veracity of any statement or any document furnished, may call upon any person who has applied to be registered as proprietor of a registered trademark to furnish such proof or additional proof of title as the Registrar may think fit. (rule 77 of Trade Marks Rules, 2017)

6. Where in the opinion of the Registrar any document produced in proof of title of a person is not properly or sufficiently stamped, the Registrar shall impound and deal with it as per Chapter IV of the Indian Stamp Act, 1899 . (rule 78 of Trade Marks Rules, 2017)

7. Where the Registrar has allowed the registration of assignment, then there shall be entered in the register the particulars as follows(rule 84 of Trade Marks Rules, 2017):-

a) the name and address of the assignee;

b) the date of assignment;

c) where the assignment is in respect of any right in the trademark, a description of the right assigned;

d) the basis under which the assignment is made; and

e) the date on which the entry is made in the register.

RIGHT OF THE ASSIGNOR ON ASSIGNMENT OF TRADEMARK:

The assignor terminates to have his rights, title or any interest in the trademark, the moment assignment deed is executed in favour of the assignee, irrespective of the fact that the name of the assignee has not been updated in the record of the Registrar of trademarks.

In the matter of Classic Equipments Pvt. Ltd. Vs. Johnson Enterprises, 2009 (41) PTC 385 (Del), it was observed as follows:

“Once an Assignment Deed has executed, the Assignor ceases to have any right, title or interest in the property assigned. It is not open to the Assignor to cancel the assignment by means of communication”.

RIGHTS OF THE ASSIGNEE: WHEN ASSIGNMENT IS COMPLETE BUT REGISTRATION IS PENDING:

Though as per section 45 of the Act, it is mandated that the assignee shall apply before the Registrar of the trademarks to register his title. But this does not mean that recording of assignment of registered trademark asserts all rights or titles or interest in the assignee.

The reason behind this understanding are the opening words of section 45 of the Act, which says “where a person becomes entitled by assignment or transmission of a registered trademark, ……..”. Therefore, the first condition is entitlement of rights, title or interest by way of assignment or transmission of a registered trademark followed by registration of assignment of a registered trademark. Thus right in assignee does exist even before the registration of assignment.

In the matter of M/S. Modi Threads Limited vs M/S. Som Soot Gola Factory And…. on 4 th December, 1990: AIR 1992 Delhi 4, 1992 (22) DRJ 24 was observed as follows:

“It is true that the plaintiffs application for getting transferred the registered trade mark in its name in the office of the Registrar is still pending but that does not debar the plaintiff to protect the violation of the aforesaid trade mark at the hands of unscrupulous persons by filing an action in court of law for injunction. It is, prima facie, clear to me that during the interregnum period when the application of the plaintiff is kept pending for consideration by the Registrar of Trade Marks the dishonest persons cannot be allowed to make use of the said trade mark in order to get themselves illegally enriched earning upon the reputation built up qua that trade mark by the predecessor-in-interest of the plaintiff.”

The assignee of a trademark is also entitled to file a civil suit, even though the recording of assignment of registered trademark is pending before the registrar of trademarks. Moreover, section 45 does not confer any title over the trademark assigned. Instead the registration granted under section 45 is only proof of title of the trademark of assignee or the person who acquired it by way of assignment.

IMPORTANT KEY POINTS

√ Assignment is to be in writing;

√  Registered or unregistered both type of marks can be assigned;

√  Assignment can be with or without the goodwill of the business;

√  Event of assignment asserts the rights and title in an assignee not the registration thereof;

√  Registration of assignment is only prima facie proof of title of trademark;

√  Rights in an assignee exists even before registration of assignment of trademark.

Conclusion: –

Assignment of trademarks allows the Proprietor thereof to en-cash their intellect, efforts, time and money. It is equally important to register the assignment of trademark, since on registration the details of the assignee are updated in the register of trademark, this serves as a notice to public at large. Moreover, preparation of assignment agreements are also important as it involves rights, entitlements, interests and obligation including the commercial terms between the assignor and the assignee.

Disclaimer: The entire content of this document has been prepared as per the relevant provisions of the Act and rules made thereunder, applicable at the time of preparation. Though proper care has been taken to ensure accuracy, completeness and reliability of the information provided therein. The users and readers agree that the information provided in this document is not professional advice. Therefore, we assume no responsibility therefrom. Further, this write up shall not be considered as solicitation in any manner.

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Trademark Assignment

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Home » Trademark Assignment

A trademark assignment transfers all rights in a trademark to another party.  Registering trademarks with the U.S. Patent and Trademark Office (USPTO) offers several rights, and one of those is the ability to record a trademark assignment.

When considering the transfer of any trademark though, it’s important for both parties to have a sound understanding of the legal implications. Failure to properly execute an assignment could result in disagreements over ownership, exposure to litigation, and other adverse outcomes.

What is a Trademark Assignment?

A trademark assignment transfer all rights, title and interest in a trademark to the recipient.  Around 20 percent of trademarks registered with the USPTO will at some point be transferred in this manner. Once complete, the original owner no longer has a legal interest in the trademark. Both parties may benefit from these agreements since the assignor typically receives a payment and the assignee takes control of a valuable piece of intellectual property.

If you’ve secured trademark registration from the USPTO, you’ll need to record the assignment. This will provide public notice regarding the transfer of ownership. This should be done within three months following the assignment date. This creates prima facie evidence of the transfer. The USPTO does not accept Asset Purchase Agreements as evidence of an assignment.

Trademark Assignment Agreement

When ownership of a trademark is being transferred, it’s important to have a written trademark assignment agreement.  A properly crafted contract can protect all parties involved. The USPTO will also not consider agreements to transfer trademarks valid unless they’re in writing.

The following qualifications should be met at a minimum:

• All involved parties – the assignor and assignee – should be identified.
• The trademark being assigned should be identified along with relevant ownership information (e.g. registration number).
• Consideration must be listed (i.e. what each party is receiving).
• List the effective date of the transfer.
• Contract must be duly executed.
• Trademark goodwill must be specifically transfered.

These minimum requirements will typically ensure that the transfer assignment agreement is valid and holds up in court. The onus of creating a valid contract is on the assignor and assignee. Including information regarding payment of the transfer fee and how disputes between the two parties will be handled is also recommended.

Trademark Goodwill

Trademarks are valuable pieces of intellectual property, and this value comes from their inherent goodwill. Trademark goodwill is the positive associations and feelings that the trademark creates in the consuming public.  It is an intangible asset that is linked to the consumer recognition of a brand.

Any trademark assignment must explicitly state that all goodwill is also being transferred. Each transfer is unique and could result in differences in a final contract, but every valid assignment must contain language signifying transference of goodwill. The agreement will otherwise be viewed as an “assignment in gross” and could cause the loss of trademark rights.

Assignments involving both common law trademarks and those registered with the USPTO must include a transfer of trademark goodwill. This is what inherently makes a brand identifier valuable. The importance of this element of assignment relates to consumer trust.  The source of a product/service should match what a consumer was led to believe.

Reasons for Trademark Assignments

Even though a trademark is seen as one of the most valuable assets a business can own, there are a variety of reasons why a trademark assignment may be desired. These are just a few of the reasons behind trademark assignments:

• Business changes : An assignment may be required if a business owner forms a new entity or dissolves an old one.
• Sale of business : A trademark owner may decide to focus on a different business or retire.
• Manufacturing or Marketing costs : A trademark may become more valuable to another party due to manufacturing or marketing costs.

There are many reasons why a brand owner may choose to assign their trademark to a third party. These transfers are permanent when properly executed. This makes it important for registrants to understand all implications. There are other options available – such as licensing agreements, discussed further below – if a trademark owner wants to maintain some control over the trademark.

Before Taking Ownership

Most of the focus on trademark assignments rests on assignors, but those taking ownership of a trademark have many considerations as well. In addition to the rights they’re gaining through the transfer of ownership, they’re also taking on the risks and responsibilities of owning a trademark. Assignees should consider all the following concerns before finalizing an agreement:

• Reputation of brand : Purchasing a trademark is essentially purchasing the reputation of a brand. If consumers do not view a trademark favorably, you’ll have a difficult time changing their minds.
• Confirm ownership : Performing a thorough trademark search prior to entering an agreement is essential. This will confirm ownership and give you an idea of whether trademark disputes may arise in the future.
• Intent-to-use identifiers : Trademark assignment involving Intent-to-Use Trademarks must meet specific criteria. If an identifier is not yet in commercial use, the assignment must be to a business successor.
• Potential disputes of ownership : If proper documentation is not recorded with the USPTO, the assignment could be deemed invalid.
• Third-party disputes : Failure to properly transfer ownership can also leave the assignee open to claims of trademark infringement from third parties.
• Transfer of trademark goodwill : Always make sure trademark goodwill is explicitly transferred in the assignment agreement.

The moral here is to always perform due diligence before taking ownership of another party’s trademark.

Trademark Assignment with the USPTO

To ensure appropriate transfer of ownership, a trademark assignment must be recorded with the USPTO. This is done through the Electronic Trademark Assignment System. In addition to uploading your Transfer Assignment Agreement, you must complete an online form and pay the respective fees. Failure to do so will harm assignees in future litigation and prevent them from renewing the trademark .

When filing a trademark assignment with the USPTO it must be accompanied by a Recordation Form Cover Sheet. This lists the basic required information for transferal. The USPTO typically processes assignments within a month or two and then they become public record.

Nunc Pro Tunc Trademark Assignment

Not all assignments of trademark rights are immediately put into writing. This creates unnecessary risks for both parties. In these situations, a nunc pro tunc trademark assignment can retroactively document the transfer of ownership. Nunc pro tunc is Latin for “now for then,” so it serves as evidence of when an oral agreement was reached between the assignor and assignee without being put in writing.

This written document can be filed with the USPTO, but unlike a traditional assignment, it’s effective from the date of oral assignment rather than the date of execution.  Documenting assignments after the fact is definitely not a best practice and can lead to many issues.  It is however the only way to try to fix an error that has occurred in the past.

Trademark Licensing

Assigning ownership of a trademark isn’t necessary to grant certain rights. Trademark licensing can give third parties permission, for instance, to use a trademark without the original owner relinquishing rights. This is the type of business relationship that exists for more than 900,000 franchised business establishments across the country.

The owners of trademark registrations typically strive to prevent outside parties from using their intellectual property. By licensing use to certain brands or individuals, though, they garner a variety of benefits. These may include gaining expertise, assistance in shouldering the burden of a growing business, increased brand recognition, creation of a passive revenue source, and expansion into new markets.

The three basic types of trademark licensing agreements are exclusive, sole and non-exclusive.  An exclusive license means that the licensee has the exclusive ability to sell the goods or services at issue.  A sole license means that the licensee has the right the sell the goods or services but the right is shared with the licensor.  A non-exclusive license means that the licensor retains the right to license the trademark to other third parties and continue to sell the goods or services themselves.

Licensing agreements should always be in writing and preferably they should be notarized.  Failing to have a license agreement in writing will lead to many issues if trademark litigation or other disputes arise. Having the agreement notarized will also reduce the likelihood of disputes over the validity of the license.

The agreements used for trademark licensing and assignment have some similarities, but there are important distinctions. Licensing documents, for example, should include quality control provisions, the type of license granted, the effective dates of the license, and any specifications regarding the renewal of the agreement. These terms are typically not part of assignments.

If you are considering a trademark assignment, please do not hesitate to contact us with any issues or questions that you may have.

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Unlocking brand value: understanding trademark assignment in india.

A Trademark Assignment is a legally binding document that grants permission to the registered proprietor of a trademark to transfer the ownership of the trademark and issue proper receipts for any consideration involved in the assignment. The assignor relinquishes their rights to a registered word, phrase, symbol, or design, transferring it to a new owner. When there is a transfer of the owner’s power, title, and interest in the trademark, this process occurs.

In essence, Assignment and Transmission of Trademark is the procedure by which ownership of a trademark is transferred from one individual to another, entailing either full or partial rights, as specified in the terms and conditions set by the current trademark owner. Both with and without the goodwill of the associated business, registered and unregistered trademarks can be assigned and transmitted from one party to another. This assignment is facilitated through a trademark assignment agreement, which formalizes the transfer of ownership and rights.

In accordance with Section 37 of the Trade Marks Act, 1999, it is explicitly stated that the individual who is registered as the proprietor of a trademark in the register of trademarks holds the authority to assign the trademark to another person and also receive consideration (compensation or payment) for such assignment. Therefore, a trademark proprietor is legally allowed to transfer the ownership of the trademark to a different individual or entity.

Table of Contents

Types of trademark assignment.

The various types of trademark assignments are as follows:

• Complete Assignment: In a complete assignment, the trademark proprietor transfers all rights associated with the trademark to another person. This includes the right to use the trademark for any purpose, the ability to earn royalties from its use, and the right to further transfer the trademark to others. After the complete assignment, the original proprietor no longer retains any rights over the trademark.
• Partial Assignment: In a partial assignment, the trademark proprietor transfers only specific rights related to certain services or goods of the trademark. The transfer of ownership is limited to those particular services or products.
• Assignment with Goodwill of Business: When a trademark is assigned with goodwill, the proprietor transfers not just the trademark itself but also all the associated values, advantages, and reputation linked to that trademark. The assignee can utilize the trademark for any category of goods or services, including those that were already being used by the assignor.
• Assignment without the Goodwill of Business: In an assignment without goodwill, the trademark proprietor transfers rights to the assignee concerning goods or services that are not currently in use. The assignor restricts the transfer of rights regarding goods or services already in use by them. Essentially, the assignee cannot use the trademark for the products or services that were already in use by the assignor.

To initiate the trademark assignment process, follow these steps:

• Submit Application: The first step is to prepare an application for the assignment of the trademark. This application can be made by the assignee (the new owner), the assignor (current proprietor). The application should contain all the necessary details of the transfer under form TM-P, as specified in Rule 75 of Trademark Rules 2017. [1]
• File with Registrar : Once the application is complete, file it with the Registrar of Trademarks. It should be done within 3 months of obtaining proprietorship.
• Registrar’s Direction (for assignments with goodwill or registered trademarks): where the trademark assignment involves goodwill or is of a registered trademark, obtaining a direction from the Registrar of Trademarks is mandatory. It must be obtained before the expiration of the 3-month period (can be extended if needed).
• Advertisement of Assignment: Upon receiving the Registrar’s direction, the applicant must advertise the trademark assignment as specified by the Registrar. It should be done accordingly, and a copy of the advertisement, along with the Registrar’s direction, must be submitted to the authorities.
• Transfer of Trademark: Once the Registrar is satisfied with all the documentation, the trademark will be officially transferred from the original owner to the new owner (assignee).
• Registration of New Proprietor: The name of the assignee, the new owner, will be registered in the trademark register as the new proprietor of the trademark. This formalizes the transfer of ownership.
• Usage of Trademark: the assignee (new owner) can use the trademark as per the terms and conditions specified in the agreement.

Benefits Of Trademark Assignment

• Trademark assignment allows the trademark proprietor to capitalize on the value of their brand.
• The assignee benefits from the trademark assignment by gaining the rights to an already established and recognized brand.
• For both the assignor and the assignee, trademark assignment can facilitate business expansion.
• Through a trademark assignment agreement, both the assignor and the assignee can establish their legal rights and obligations clearly.

Overall, trademark assignment provides a mutually beneficial arrangement for the trademark proprietor and the recipient, allowing them to leverage the value of the brand, expand their businesses, and establish a clear legal framework for the assignment.

Can an unregistered trademark be assigned?

Yes, the assignment of an unregistered trademark can be carried out with or without the goodwill of the business associated with the trademark. To proceed a request must be made on Form TM-16, which is the prescribed form for such assignments.

Can an Individual assign a Trademark?

Certainly, a registered trademark can be assigned by an individual.

Why it’s necessary to obtain a Trademark Assignment Agreement in India?

A Trademark Assignment Agreement serves as a legal mechanism to transfer ownership of a trademark or service mark when required. It plays a pivotal role when a product or company is being bought or sold by another individual or entity.

[1] https://www.ipindia.gov.in/TM-Rules-2017.htm

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Assignment of Trademark

Lasya Pamidi

Assignment of trademark is when there is a transfer of the owner’s right, title and interest of the trademark. Such transfers can take place in the form of an assignment or merger or also an amalgamation between two entities.

Trademark Assignment is the process of transferring ownership of the trademark either with or without the goodwill of the business. One can assign a trademark through a trademark assignment agreement. The original owner of the trademark is “the assignor” and the future owner is “the Assignee.”

Benefits of Trademark Assignment

• Trademark’s value – Creating a brand name for a company involves money, time and capital. An assignor is able to encash the brand value. The Assignee is also able to unlock benefits of the brand name in the Industry.
• Exercise Legal Rights – The trademark assignment agreement secures the legal right of the assignee incase of a dispute. The Registry ensures the validity of all the clauses mentioned in the agreement before publishing the assignment in the Trade Marks Journal.
• Existing brand name – The assignee has the advantage of dealing in an already existing and established a brand name.
• Business Expansion – The Brand value will propel with the combined efforts of assignor and assignee to contribute in brand building.

Types of Trademark Assignment or Transfer

• The owner transfers all its rights with respect to a mark to another entity, including the transfer of the rights such as right to further transfer, to earn royalties, etc.
• The owner transfers trademark restricted to specific products or services only.
• Such assignment is when the rights and value of a trademark as associated with the product is also transferred to another entity.
• Such assignment also referred to as gross assignment, is where the owner of the brand restricts the right of the buyer and does not allow him to use the brand for the products being used by the original owner. Thus, the goodwill attached to such brand with respect to the product already being sold under such brand, is not transferred to the buyer.

Documents Required

• TM Certificate : Certificate of Trademark Registration (if any)
• Details of the Party: Name and description of the assignor and assignee
• NOC : No Objection Certificate from the original owner of the registered trademark

Process for Assignment of Trademark

• The assignor or assignee or both can make a joint request to register assignee as a subsequent proprietor by an application of a trademark assignment. The application is made under Form TM-P.
• Assignee must apply with the registrar of a trademark within six months from the date of procurement of the proprietorship. Some applications can filed after six months of procurement but the fee payable will vary. You can also find the amounts payable for the corresponding forms  here .
• The Registrar will specify the advertisement of the trademark assignment. After which the applicant has to make the advertisement accordingly. A copy of the direction of the registrar and advertisement of the assignment must be submitted to the office to make sure that the directions have been followed.
• On the receipt of the trademark assignment application and documents required, the registrar after perceiving satisfied shall register the assignee as the proprietor of the trademark. The registrar records the specifications of the assignment in the register.

Yes, you can assign an unregistered trademark by filing an application.

The Trademark Registry in India normally takes up to 6 to 8 months to update the data of the transfer.

A registry has prescribed Rs 9,000/- as a fee payable for application of transfer Trademark ownership i.e. Trademark Assignment in India.

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Hey @Dia_malhotra , Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images used in commerce.

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Last Updated on 3 years by Maharshi Shah

• What are Trademarks?
• Types of Trademarks
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• Trademark Licensing in India
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• Types of Trademark Application
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• Filing Evidence in Support of Application
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• Hearing in Opposition Proceedings
• Renewal with Surcharge
• Trademark Restoration in India
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• Name Change
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• Assignment or Transmission of Rights
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• Madrid Protocol

Trademarks like any asset can be transferred from one owner to another. Such transfers can take place in the form of an assignment, or merger or amalgamation between two entities.

For instance: Assignment is where entity A assigns or transfers or transmits the rights over his/her trademarks to entity B.

In case entity A mergers with entity B, and there is transmission of trademarks rights from A to B, it would also constitute assignment.

Assignment of trademarks is a process in which the owner of the trademark transfers the ownership of the mark either with or without the goodwill of the business. An assignment can either be with goodwill or without goodwill:

Assignment with goodwill : This is an assignment where the owner transfers the rights and value of the trademark as associated with the product it sells.

For example, A, owner of “TH” trademark for manufacturing and selling of watches, can assign the trademark along with giving the assignee the right to use the said trademark for the same product.

1. Forms and Fees: An application to record assignment of a pending or a registered trademark can be made through the following respective Forms:

• Pending Trademark: (assignment with goodwill) Form TM-M (CORRECTION OF CLERICAL ERROR OR FOR AMENDMENT U/R 37) Official fee- INR 900 per mark
• Registered Trademark: (assignment with goodwill) Form TM-P (SUBSEQUENT PROPRIETOR BY WAY OF ASSIGNMENT OR TRANSFER OF MARK) Official fee- INR 9000 for each assigned mark

Assignment without goodwill : This is an assignment where the owner restricts the assignee to use trademark for the products he uses it for. That is, the goodwill attached to the owner’s brand with respect to the product already being sold under such brand, is not transferred to the buyer. This means that assignor & assignee both can use the same trademark but in dissimilar goods or services.

For example, if the owner of the trademark “TH” uses it for manufacturing and selling of watches and decides to assign it without goodwill, it means that the assignee can use the trademark “TH” for any other product other than watches.

Procedure for filing an application to record assignment without goodwill: In order to record assignment without goodwill of business, the Applicant needs to make an application under Form TM-P (DIRECTION OF REGISTRAR FOR ADVERTISEMENT OF ASSIGNMENT WITHOUT GOODWILL- official fee INR 2700) within 6 months from the date of the assignment (extendable by 3 months as per prescribed forms), requesting the Registrar to advertise the assignment, that is give notice to the public of the assignment without goodwill of business.

Post such advertisement, the application for recording the assignment can be filed with the above-mentioned Form TM-M/TM-P respectively.

Such a Form shall be accompanied with a copy of the Form TM-P (DIRECTION OF REGISTRAR FOR ADVERTISEMENT OF ASSIGNMENT WITHOUT GOODWILL) as well as a copy of the advertisement notice as issued by the Registrar.

2. Documentary Requirements: Assignment Deed: A duly stamped and notarized assignment deed, which shall mandatorily mention the effective date; the full name and address of the assignor (transferor) and assignee (the subsequent transferee), along with their signatures; the consideration paid by the assignee to the assignor for the assignment; statement pertaining to whether the assignment is with goodwill or without goodwill of business along with the details of trademarks to be assigned.

For Applicants outside India, the assignment deed must to be notarized in the country where it is executed, and the same can be stamped in India.

Affidavit of no-pending litigation: In order to process such assignment requests, the Indian Trade Marks Registry has now made it mandatory to submit an affidavit attesting that there is no pending litigation and that the ownership of the trademarks are not in dispute. Accordingly, along with the assignment deed, the assignee (transferee) ought to submit a duly stamped and notarized affidavit to mentioning the details of the assignment and the assigned trademark and attesting that the ownership of the said trademark is not in dispute.

Need assistance on assignment of trademark in India? Please email us to [email protected] .

IP Tech Knowledgy

Use Trademark’s Magic Words: Assignments Must Include ‘Goodwill;’ Licenses Must Include ‘Quality Control’

The two most common transactions relating to trademarks each require specific words to be effective. Trademark assignments must include “goodwill;” trademark licenses must include “quality control.” To ensure the transfer of a trademark is valid, the assignment must include the goodwill of the business associated with the mark. Trademarks represent the goodwill of a business, which is different from the accounting principle of goodwill listed on a balance sheet. A trademark license must include a provision by which the licensor exerts some manner of quality control over the licensee’s use of the mark. The quality control provisions can be extensive or bare-bones but must always allow the licensor to have some inspection right over the goods or services offered. The licensor must also be certain, on regular occasions, to inspect the goods or services to be sure the licensee is meeting the quality standards. While it is clear that a licensor would want quality control, a licensee should understand the benefit as well. The licensee is using a brand and should want the brand to remain strong by being properly protected with necessary quality control provisions.

Ned T. Himmelrich 410-576-4171 • [email protected]

August 19, 2021

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Himmelrich, Ned T.

Technology & Intellectual Property

Assignment of Trademark with Goodwill

Assigning a trademark entails giving the other party the owner's title, rights, interests, and benefits. The parties involved in a transfer are referred to as the 'Assignor' and the 'Assignee.'

Trademark Assignment has been defined in Section 37 of the Trademark Act 1999. According to the definition, a ‘Trademark Assignment’ is transferring ownership of a trademark and a brand mark. Both temporary and permanent transfers are possible through Trademark Assignment. Trademark Assignment is a procedure in which the actual owner of the trademark transfers ownership of the trademark, with goodwill or without the goodwill, to the new proprietor who has been duly registered. Through Vakilsearch , get your trademark assigned online.

Table of Contents

Assignment of Trademark with Goodwill 

When an Assignor transfers ownership of a trademark connected with goods or services currently in use by the assignor to the assignee, all associated value, rights, and entitlements are likewise transferred. The Assignee is free to use the trademark given to him for any products or services, including those that were already being provided by the assignor, after assuming ownership of the brand’s goodwill. Trademark with Business Goodwill is the name given to such a transaction.

As an illustration, A, the owner of the ‘TH’ trademark for the production and sale of watches, may assign the trademark and grant the assignee the right to use the mark in connection with the same product.

Assignment of Trademark Without Goodwill

Assignment of the trademark without goodwill states that the Assignor will limit the buyer’s rights while transferring the trademark. Here, the assignor forbids the buyer from using a product brand that the assignor already uses. In other words, the assignee does not receive the goodwill associated with the brand. It is also called a Gross Trademark.

For instance, if the owner of the trademark TH decides to assign it without goodwill despite using it for the manufacture and sale of watches, it indicates that the assignee may use the brand TH for any product other than watches.

What Advantages do Trademark Assignments offer?

For the company’s budget, designing and promoting the trademark can be highly expensive. The company decides to legalise its intellectual property and assign its trademark as a result. The following are some of the advantages of trademark assignment with goodwill. 

Brand Monetisation

Profit from the value of your trademark and take an interest in the results of the time and effort spent developing your brand.

Easy Brand Development

The assignee benefits as well because the brand building is not something they have to do.

Maintenance of Intellectual Property Rights 

It refers to the process of keeping trademark registrations current. Trademark assignment aids in this process.

The Owner Receives the Trademark’s Value

Creating a brand, which takes a lot of money, effort, and time. As a result, the trademark assignment aids the trademark’s creator in determining the trademark’s financial worth.

Serves as a Reliable Proof

If there is ever a disagreement over the assignment of a trademark, it can be used as legitimate proof. Through such agreements, the registered trademark owner’s legal rights are effectively secured.

What Documentation is Needed for the Assignment of a Trademark?

The following documentation is necessary for trademark assignment:

•  A certificate proving trademark registration
• Details of the assignor and assignee, including evidence of identity and residence
• A NOC (Non-Objection Certificate ) from the registered trademark’s first holder
• A description of goodwill or without goodwill-based trademark assignment
• A copy of the ad and the registrar’s instructions
• Witnesses and Signatories
• Notarisation
• Proof of the Time and Place of Execution
• Authority of Attorney

List of Prerequisites for the Trademark Assignment Registration 

• The assignment of a trademark must be made in writing
• It needs to include the next two identifying parties
• an Assignor (trademark owner or actual owner)
• an Assignee (the purchaser of the trademark or new owner)
• It must be done with the assignor’s knowledge and permission
• It has to be made for just compensation

Steps Involved in Trademark Assignment Agreements

• The Assignee, Assignor, or both must submit an application for the Trademark Assignment as the first stage. In accordance with Trademark Rules  2017, the application must be made using Form TH and include all relevant information regarding the transfer
• After the application is completed, its needs to be submitted to the trademark registrar within 3 months of the acquisition of the ownership or proprietorship
• The approval from the Registrar of a trademark is required before the expiration of three months which can be extended when there is a Trademark Assignment with goodwill or without the goodwill of a registered trademark
• The Registrar will mention and provide details on how the Trademark Assignment will be advertised. The applicant then has to make the proper advertisement as per the advertisement code mentioned by the registrar. Additionally, a copy of the advertisement made by the new owner, along with a copy of the registrar’s instructions, must be submitted
• The Registrar will formally transfer ownership of the trademark from the actual owner to the new owner, who has been registered after the registrar is satisfied with all the supporting evidence provided
• The Assignee, or new owner, must have their name entered in the register as a new owner. The Assignee may then use the trademark in accordance with the terms of the agreement.

The Trademark Assignment enables the owner to profit financially, intellectually, and time-wise. The registration of a trademark assignment is equally significant since it serves as notice to the general public because, upon registration, the assignee’s information is updated in the trademark register. Additionally, the creation of assignment agreements is crucial since they contain the rights, obligations, interests, and economic terms between the Assignor and the assignee. Connect with  Vakilsearch , and let our experts help you with the assignment of your trademark.

Frequently Asked Questions

What is goodwill in a trademark.

Goodwill in trademarks refers to the positive reputation and consumer loyalty associated with a brand. It encompasses intangible assets like brand recognition, customer trust, and market reputation, enhancing a company's competitive edge and commercial value.

How do you prove goodwill in a trademark?

To prove goodwill in a trademark, evidence such as sales figures, customer testimonials, market surveys, advertising efforts, and media coverage can be presented. Additionally, demonstrating consistent quality, customer satisfaction, and longevity in the market reinforces the goodwill associated with the trademark, showcasing its commercial significance and consumer acceptance.

What is the goodwill certification of a trademark?

Goodwill certification of a trademark verifies that the mark has established a positive reputation, customer loyalty, and market recognition. It attests to the trademark's commercial value and distinguishes it from generic or lesser-known brands, providing assurance to consumers and enhancing its marketability.

What is trademark assignment with goodwill in India?

Trademark assignment with goodwill in India involves transferring not only the trademark but also the associated positive reputation, customer loyalty, and market recognition to the assignee. This comprehensive transfer includes the intangible assets linked to the trademark, ensuring the continuity of brand value and commercial benefits for the assignee post-transfer.

Is trademark assignment with or without goodwill?

Trademark assignment can occur with or without goodwill. When assigned with goodwill, the positive reputation, customer loyalty, and market recognition associated with the trademark are transferred along with the mark. Without goodwill, only the trademark itself is transferred, without the accompanying intangible assets.

How do you assign goodwill value?

Assigning goodwill value involves assessing various factors such as brand reputation, customer loyalty, market position, and future earning potential. Methods like income-based approach, market-based approach, and cost-based approach may be used to determine the value of goodwill, considering both quantitative and qualitative aspects of the brand's intangible assets.

How is goodwill determined?

Goodwill is determined through comprehensive evaluation of factors such as brand recognition, customer loyalty, market reputation, and future earning potential. Financial and non-financial indicators are analysed to assess the intangible value associated with the trademark, providing insight into its commercial significance and market acceptance.

What is goodwill in law?

Goodwill in law refers to the intangible value of a business, encompassing its positive reputation, customer loyalty, and market recognition. It represents the commercial advantage derived from consumer trust and brand reputation, enhancing the business's value beyond its tangible assets and intellectual property.

Can you assign goodwill?

Yes, goodwill can be assigned as part of a business transfer or asset sale. When assigning goodwill, the positive reputation, customer loyalty, and market recognition associated with the business or brand are transferred along with it. Assigning goodwill ensures the continuity of brand value and customer relationships for the assignee.

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Trademark assignment

Last updated : February 11th, 2023 06:23 pm

Like any other property/ asset, the owner of the trademark (i.e., the assignor) has the right to sell, license, or transfer the same. The transfer of trademark is possible through the Trademark Assignment Agreement or Trademark Licensing.

The current article explains the term trademark assignment along with its advantage, types of trademark assignment, pre-requisites, and procedure of trademark assignment.

Understanding the term trademark assignment 

The term trademark assignment is defined under section 37 of the Trademark Act, 1999. As per the definition, the trademark assignment means transferring the owner’s right, interest, and title in a trademark and a brand mark.

In simple words, the process of transferring the right and ownership of the trademark to any other person is known as a trademark assignment.

Some of the advantages of the trademark assignment (concerning both the owner and the buyer) are listed hereunder-

• The trademark assignment enables the owner of the trademark to encash the value of his brand.
• With the help of a trademark assignment, the assignee can obtain the rights of an already established brand.
• The assignment of the trademark supports both the assignor and the assignee to expand their respective business.
• In case of any dispute, the trademark assignment agreement would enable the assignor or the assignee to establish the legal right.

Types of trademark assignment

There are four types of trademark assignments-

• Partial assignment,
• Complete assignment,
• An assignment with Goodwill, and
• An assignment without Goodwill/ Gross assignment.

All the four types of trademark assignments are briefly explained hereunder-

• Partial assignment-

Under the partial assignment, the assignor transfers only limited ownership with regard to specific products/ services.

• Complete assignment-

Under the complete assignment, entire rights with respect to the registered trademark are transferred by the assignor to the assignee.

• An assignment with Goodwill-

Under ‘assignment with Goodwill’, the assignor of the trademark transfers the rights of the trademark as well as the value of the trademark to the assignee.

• Gross assignment or Assignment without Goodwill-

Under such type of trademark assignment, while transferring the trademark, the assignor will restrict the buyer’s right. The assignor here restricts the buyer from using a brand of the product which is already being used by the assignor. In nut-shell, the goodwill attached to the brand is not transferred to the assignee.

Pre-requisites and procedure for trademark assignment

The list of pre-requisites for the trademark assignment is-

• The trademark assignment must be in writing.
• An assignor (owner of the trademark); and
• An assignee (buyer of the trademark).
• The assignor must have the intention and consent for the trademark assignment.
• The trademark assignment must be for proper adequate consideration.
• Trademark assignment agreement,
• Trademark certificate,
• NOC from the assignor,
• Identified documents from the assignor and assignee.

The procedure for applying for a trademark assignment is narrated hereunder-

• Filing an application for trademark assignment in Form TM-24 or Form TM-23 (in case of joint request). Such an application can be filed by either the assignor or the assignee or both.
• Filing of Form TM-P.
• Filing of all the requisite documents relating to trademark assignment with the Registrar of the trademark. The filing needs to be done within a period of six months from the date of acquisition of proprietorship.
• The registrar of the trademark will specify the advertisement of the trademark assignment.
• Based on the registrar’s specification, the applicant is required to make an advertisement for the trademark assignment.
• The applicant is required to submit the copy of the advertisement and copy of the registrar’s direction in the office of the registrar.

On being satisfied, the registrar will approve the application. Accordingly, the registrar will register the name of the assignee as the proprietor of the trademark.

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Assignment of Trademark Without Consideration

The assignment of a trademark involves the transfer of its ownership from one entity to another, whether with or without the associated business reputation.  It’s essential to execute the transfer of a trademark correctly to make it legally binding. Therefore, exercising caution during this process is important. In this blog, we shall see in detail about the assignment of trademark without consideration .

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Methods of Trademark Assignment

The various methods of trademark assignment are as follows:

1. Complete Assignment

In a complete assignment, all the rights associated with a trademark, including the right to receive royalties and the ability to further transfer those rights, are transferred to another party. This method results in a comprehensive and irrevocable transfer of trademark ownership from one party to another.

2. Partial Assignment

A partial assignment is transfer of ownership of the specific products or even services associated with the trademark. This method allows for selective transfer of trademark rights, and the original owner retains ownership of the remaining aspects of the trademark registration and related services.

3. Assignment with Goodwill

An assignment with goodwill is basically the transfer of trademark plus all the rights and the intangible value associated with it. This method is often used when the trademark is associated with a well-established brand or reputation, and the assignee seeks to benefit from its positive image in the market.

4. Assignment without Goodwill

In contrast, an assignment without goodwill includes transfer of the trademark for use in the manner other than what was its original purpose. The assignee may use the trademark without benefiting from its existing reputation or customer goodwill, and the original owner retains the goodwill associated with the trademark. This method is typically chosen when the assignor wishes to maintain control over the brand’s image and reputation.

Requirements for a Valid Trademark Assignment

To ensure the validity of a trademark assignment, several essential requirements must be met. These requirements serve to establish a clear and legally binding transfer of trademark rights, safeguarding the interests of all parties involved. These include:

1. Written Documentation and Signature

A valid trademark assignment must be documented in the form of writing and signed by that party transferring the trademark. This written agreement serves as a record of the transfer and provides clarity regarding the terms and conditions of the assignment. Both parties involved in the transfer must consent to and acknowledge the written agreement.

2. Description of Transferred Trademarks

The written assignment should specify the exact trademark or trademarks being transferred. Furthermore, it should encompass any related intellectual property rights connected to the trademark. This detailed description ensures that the assignment is unequivocal and comprehensive.

3. Legal Consideration

A key requirement for a legally valid trademark assignment is the exchange of something of value, known as legal consideration . This can take various forms, such as monetary payment, the transfer of other intellectual property rights, or the assumption of liabilities. The presence of legal consideration underscores the enforceability of the assignment.

4. Proof of Assignor’s Legal Authority

The assignor, the party transferring the trademark, must possess the legal authority to make the assignment. It is crucial to confirm that the assignor has the requisite legal rights to transfer the trademark in question, failing which he can be held liable for relevant punishable offences under the Act.

5. Affidavit on Claims and Legal Issues

As per the Trade Marks Act , the assignor is required to present an affidavit to the Trade Marks Office. This affidavit serves to confirm that the trademark undergoing assignment does not have any pending claims, disputes, or unresolved legal matters connected to it. This process guarantees that the trademark is devoid of any encumbrances or potential legal complications.

Meaning of Assignment of Trademark without Consideration

The assignment of trademark without consideration entails the transfer of a trademark without the exchange of monetary payment or any other valuable consideration, as previously discussed. This unique form of trademark transfer raises specific legal implications.

An assignment of trademark without consideration is the transfer that lacks any legal consideration. In essence, it means that the transfer of the trademark occurs without the involvement of payment or any other valuable consideration in return. Consequently, such a trademark assignment may face challenges regarding its legal enforceability and may not be recognised as valid by the legal system. The absence of legal consideration can impact the binding nature of the assignment, and it may not hold up in court.

Reasons for Assignment of Trademark without Consideration

The assignment of trademark without consideration can be motivated by various reasons, demonstrating that such transfers are not solely driven by monetary gain. The following are common motivations for assignment of trademark without consideration:

1. Gift to a Family Member or Friend: Assignment of trademark without consideration can be an act of giving, such as presenting the trademark as a token of love or gift to a family member or friend. This reflects a non-commercial, personal gesture of sharing the trademark’s ownership.

2. Philanthropic Intent: Assignment of trademark without consideration can be made to charitable organisations or non-profit entities as a philanthropic endeavour. The owner may seek to support a charitable cause or contribute to the public good by donating the trademark.

3. Personal or Professional Ties: The assignment of trademark without consideration can be driven by personal or professional relationships. The owner may assign the trademark to a company or entity with which they share a close connection, offering a helping hand without the expectation of compensation.

4. Liability Assumption: In some instances, the assignment of trademark without consideration can be when the assignee is willing to assume all liabilities associated with the trademark. In such cases, the assumption of liabilities may be deemed sufficient consideration, obviating the need for additional payment.

It’s important to note that even in cases where a trademark is assigned without consideration for these altruistic or relationship-driven reasons, the assignment must still adhere to the legal requirement of being documented in writing and signed by the transferring party to be considered legally binding.

Legal Implications of Assignment of Trademark without Consideration

Assigning a trademark without consideration carries potential legal implications, and it may not always be legally enforceable. The absence of valuable consideration can impact the rights and enforceability of the trademark assignment. It’s crucial to be aware of the legal stance on such assignments:

1. Enforceability in Question:

An assignment of a trademark without consideration may not be enforceable under the law. This means that the party receiving the trademark might not possess legal rights to use it, and the original owner may retain the ability to reclaim the trademark.

2. Legal Precedents:

Legal decisions have upheld that, in cases where a trademark was assigned without consideration, the assignor may not have the right to violate the same trademark, even if no payment was received in exchange for the assignment. This is contingent on the trademark entry not being deleted from the Trademark Register by the appropriate authorities.

3. Risk Mitigation:

To avoid potential legal complications stemming from assignments without consideration, it is advisable to ensure that all trademark assignments are executed properly and include legal consideration. This often involves negotiating the terms of the transfer and specifying any payment or other valuable consideration exchanged for the trademark. Proper documentation and adherence to legal standards can help mitigate risks and ambiguities associated with such assignments.

So, while assignments of trademarks without consideration can occur for various reasons, it’s crucial to understand that the legal enforceability of such transfers can be uncertain. To protect the interests of all parties involved, it is advisable to follow proper legal procedures and document trademark assignments accurately, especially when valuable consideration is not involved in the transfer.

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Final thoughts.

The assignment of trademark without consideration is a complex legal matter that may lack enforceability. Such assignments, driven by altruistic or personal motives, can leave the recipient without legal rights to the trademark. Legal precedents suggest that even in cases of non-monetised transfers, the original owner may retain rights unless the trademark is officially removed from the Trademark Register. To avoid potential legal issues, it is advisable to ensure that all trademark assignments, even those without consideration, are conducted in strict adherence to legal standards. Proper documentation and transparent negotiation of terms, if necessary, can help mitigate risks and ambiguities. This safeguards the interests of all parties involved and ensures that the trademark assignment adheres to legal principles, even in cases where no monetary payment changes hands.

Aishwarya Agrawal

Ms. Aishwarya Agrawal is a graduate from Hidayatuallah National Law University, Raipur [HNLU Raipur]. Aishwarya holds a great interest in adding value to the legal fin-tech sector. She joined "StartupFino" with a motive to help budding lawyers in their day-to-day journey in the field of Law.

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Patent registered designs and copyright can only be protected for a limited period. On the other hand trademark can be protected perpetually subject on conditions that is used and renewed periodically and the registered proprietor takes prompt action against the infringes. An unregistered trademark called a comman law trademark and can be kept alive and protected as long as it continued to be used and the owner of trademark takes appropriate action against the infringes by a criminal proceeding. The statues law of the tademarks sitll was governed by the Trade Merchandies Act 1958. The act has now been replaced by The Trademark Act 1999.

What is Trademark?

As per Statutory definition of trademark- Section 2(1)(zb) A trademark must be a mark which includes a device, brands, signatures, heading ticket, word, numeral, shape of good, packaging or colour combination or any combination thereof.

i) The mark must be capable of being represented graphically.

ii) The mark must be capable of distinguishing the goods or services of one from to others.

iii) It may inclued the shape of good, packaging or combination of colours.

iv) It issued or proposed to be in relation to the goods or services.

v) The use must be indicating the connection in the course of trade between the goods or services and the persons having the right as a proprietor to the use of the mark.

vi) A right to proprietor ship of a trademark may be acquired by registration under the act or by the use of the trademark in relation to a goods.

The right of proprietor ship acquired by the registration which requires no actual user but only an intention to use on the other mark. A right acquired by actual user in relation to a particular goods or service is a comman law right which is attached to the goodwill of the business concern.

##Trademark registry

An office called trademark registry has been registered for the purpose of registration of trademarks maintainence of the register and the matters incidental thereto. The head office of the registry is at Mumbai. It has branch office at Kolkata, Delhi, Chennai and Ahemdabad.

The Trademark registry is under the charge of registrar of trademarks, who is also the controller general of patent and desgins. He is assisted by a joint registrar, deputy registrar, assistant registrar, examiner of the trademarks and a competent of clerical staff.

The joint registrar or assistant registrar exercise the same powers as registrar in respect of any matter under the power delegated to them by the registrar.

Apart from registrar of tardemarks the registry of maintains index of:

a) Registered Trademarks,

b) Applications of trademarks,

c) The names of proprietors of the trademarks,

d) A name of registered user.

Branch office keeps a copy of the register and copies of indexes.

What are Registerable Marks?

The Trademark Act 1999, dose not define the catagories of registarable or the requisities for registration of a marks. It defines what marks are not registarable under two headings namely;

i) Absolute grounds for refusal &

ii) Relative grounds for refusal. The basic qualification for registration of marks is contained in the definition itself-

1) Capable of being represented graphically.

2) Capable of distinguishing the goods or services of one from to others.

Absolute Grounds For Refusal-

a) A marks which is void of any distinctive character that is no capable of distinguishing the goods or services of one from those of others.

b) Which indicate quality or descriptive character of the goods or services. c) Which have become customary in the current language or in a bona fide or establish of trade. This may relate generic names or marks common to the trade.

Relative Grounds For Refusal-

a) Mark which is identical or similar to an earlier trade mark and the repective goods or services or similar to.

b) A mark which is identical or similar to earliest trade mark but the goods or services are not similar.

The above catagories of tarde mark however be registered if the proprietor of an earlier trade mark contents or the marks is registerable u/s 12 by the virture of honest concurrent use.

What is Goodwill?

As per the Indian Trade Marks Act 1999, a trademark can be assignable with or without the goodwill of the business either in respect of all the goods or services or part thereof. According to Indian law the act recognize the right of the proprietor in trademark by which registered or unregistered trademark can be assignable and transmissible with or without goodwill subject to restriction laid down in section 40 if the Trade Marks Act,1999.

On the other hand, U,S legislation under section 10 of the trademark Act (Lanham Act) 1946, recognize only assignment of trademark with goodwill and assignment without goodwill is termed as an assignment in gross and invalid, therefore assignee acquires no rights in such transfer.

Scope of Assignment or transmission-

A registered trade mark can be assigned weather with or without the goodwill of the business concerned. Under the Act 1999, unregistered trademark is assignable and transmissible with or without goodwill of the business concerned. Where the assignment is without the goodwill of business, special conditions are imposed. Associated trademarks can be assigned only as a whole.

An assignment of a trade mark must be in writing. Sale or transfer of the goodwill of business will transfer to purchase or transferee the trade mark used in the business by implication even if the trade mark are not specifically mentioned in the deed of assignment. This is because a trade mark is part of the goodwill of business.

Assignment without Goodwill of Business?

In case of an assignment of a trade mark, wheather registered or unregistered, without the goodwill of business, the assignment will not take effect unless the assignee advertises the assignment in newspapers in accordance with the direction of the registrar, gives on application made for the purpose. The purpose of the advertisement is to give notice of the assignment to the public. It may be noted that a marks on the face of its indicative of one origin, if applied to goods of a different origin, would prima facie be deceptive. Advertisement may be necessary only where the marks has been in use. In case of unused trademarks, no public confusion would follow their assignment, advertisement, may not be necessary.

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Role Of Goodwill In Transfer Of Trademark

Contributor.

INTRODUCTION

A trademark is a property of the owner and owner has a right under the Trade Marks Act, 1999 to transfer the property to other person against any consideration. Although the classical theory regarding the goodwill and trademark says that, the two are inseparable but the contemporary law evolved to an extent that now a trademark is treated separately from goodwill and hence a trademark can be transferred with goodwill as well as without goodwill.

LAW REGARDING ASSIGNMENT OF TRADEMARK

Assignment is the legal term for transfer of ownership which simply means any act of parties by which interest or rights associated with property of any kind can be transferred from one party to another party.

Trade mark can be assignable or transmissible by three Modes

• By legal operation;
• Inheritance; and
• Giving authority to other party.

The assignee will become the subsequent proprietor of the trademark assigned whether in part or in full based on the conditions agreed between the parties.

As per The Indian Trade Marks Act, 1999 (hereinafter "Act"), a trademark can be assignable with or without of goodwill of the business either in respect of all the goods or services or part thereof. Indian law according to Sec. 37 of the Act recognize the right of proprietor in trademark & in Sec. 38, 39 of the Act by which registered or unregistered trademark can be assignable and transmissible with or without goodwill subject to restrictions laid down in Sec. 40 of Trade Marks Act, 1999. On the other hand, U.S. legislation under Sec. 10 of Trademark act (Lanhman Act) 1946, recognize only assignment of trademark with goodwill and assignment without goodwill is termed as assignment in gross and invalid, therefore assignee acquire no rights in such transfer.

WHAT IS GOODWILL

Goodwill is also an intangible asset which cannot be easily defined. In the words of Lord Macnaghten, in case of Commissioner of Inland Revenue v Muller & co's Margarine Ltd 2 can be described as "it is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in customers. It is the one thing which distinguishes an old established business from a new business at its first start. The goodwill of a business must emanate from a particular centre or source. However widely extended or diffused its influence may be, goodwill is worth nothing unless it has power of attraction sufficient to bring customers home to the source from which it emanates."

Goodwill of a trademark is local in character and divisible like in case of business of a brand situated in different countries. In every country business holds a separate goodwill related to the particular brand although some part of that goodwill is dependent upon the overall working of the business around the world. Business of a brand may be closed in a particular country but closing of that business would not affect the overall goodwill of the business. While the element of goodwill may be based primarily on earnings, such factors as the prestige and renown of the business, the ownership of a trade or brand name, and a record of successful operation over a prolonged period in a particular locality, also may furnish support for the inclusion of intangible value. This shows that goodwill is inclusive of brand value and based on number of other factors. While trademark get its value from goodwill associated with products or services.

TRADEMARK & GOODWILL: SEPARABLE OR INSEPARABLE

In case of assignment with goodwill, assigner transfer absolute rights i.e. all the rights and values associated with trademark which give absolute authority to transferee to control, to sell or to improvise or change the quality or structure or completely stop the services of such products. It is basically that transferor is replaced by transferee in terms of authority, control & rights & after assignment transferor is completely barred from using such trademark associated with any products & services in kind. Whereas trademark assigned without goodwill means the right to use trademark associated with the specific products or services of transferor is transferred to the transferee & rest of the goodwill lies with transferor. Accordingly, transferee can use such trademark for specific products & services as per agreement unless and until it is likely to deceive or create confusion it does not create multiple rights in the same goods or services or if they are associated with each other.

In Associated Electronics & Electrical Pvt. Ltd.v. DCIT 3 , Income Tax Appellate Tribunal held that trademark and goodwill are two different concepts and transfer of trademark does not mean transfer of goodwill. Therefore, both Goodwill and trademark are different assets.

Similarly in Kwality Biscuit v. Assistant CIT, Bangalore 4 Income Tax Appellate Tribunal court held that right to manufacture biscuits was independent, separate and distinct right from right to market, distribute and sell biscuits under the brand name 'kwality', That means right to manufacture is still with assignor and will continue in the same business but under different brand name. Trademark and goodwill is separable.

ASSIGNMENT PROCEDURE

To assign the trademark, application under sec 45(1) of the Act shall be required to be filed with the Registrar of Trademark and shall be made either in form TM 24(by assignee only) or TM 23 (if applied by assignor & assignee both) with duly stamped original documents or attested copies of instrument.The important points that needs consideration are as follows:

1. When application is made for transfer of trademark along with goodwill, it must contain a statement by assignor stating that all the rights vested in trademark with rights to use, sell, assign, transfer, modify, delete or stop such or any kind of products or services in respect of that trademark are completely transferred to assignee with no reservation. The Assignment deed should specifically include the clause related to transfer of goodwill along with trademark and it should also mention the amount of consideration for the transfer.

2. If the application is made for transfer of trademark without goodwill, then assignment agreement should state that assignor has reserved his rights in respect of such trademark in particular goods or services & has not absolutely transferred the trademark in all goods or services 5 . This means that assignor & assignee both can use the same trademark but in dissimilar goods or services. The assignee has to apply to the Registrar for his direction for publication of the assignment within six months from the date of assignment other wise same would be treated as null. After being satisfied with all the conditions the Registrar would allow the assignment to be advertised for the public. After publication the assignee will apply for the registration of assignment and leave a copy of direction of Registrar for the publication together with a copy of publication at the Trademark Office. After considering all the facts and circumstance the Registrar may allow the assignment and enter the particular in the Register.

3. An affidavit for no legal proceeding pending against the trademark assigned from the assignee or its representative shall also be required to be filed for the assignment.

As the registration of trademark is optional, likewise the registration of assignment is also optional and non registration of assignment does not affect the validity of assignment but registration of assignment would be a valid proof in case of dispute related to the trademark.

While wrapping up, it can be stated that the transfer of proprietary rights in trademark is similar to any other asset, the difference, however, comes in reference to the goodwill attached to it. It is the goodwill which creates the value of a trademark and in the contemporary period same is also a separable part of trademark. Goodwill provides bargaining power in the hand of the seller and therefore same is been recognized under the law in reference to the transfer of rights in a trademark. A trademark which is transferred with goodwill will get much higher value in comparison to the trademark which is transferred without goodwill.

Student of NLSIU Bangalore LLM IInd year.

2. (1901)A.C. 217 at 223-224

3. IT(SS)A No. 9/Bang/2000, Block Assessment Year : 1988-89 to 1998-99; ITA No. 242/Bang/2001,

4. 2012(3) TMI 209

5. Associated Electronic & Electrical Industries Pvt. Ltd. v.DCIT

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Intellectual Property

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