Suppose you have a company and own a registered trademark for a unique logo use in your products. Now, after some years of being in the field, you have decided to sell your business to Company B with the help of a trademark attorney. As part of the sale agreement, you assign the trademark rights to Company B. Now this means that Company B now has the legal ownership and rights associated with that trademark, allowing them to use it for their products or license it to others. This process is known as the trademark assignment.

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.

In simple terms, the transfer of ownership of a trademark, from owner to another buyer, is known as Trademark Assignment. Trademarks can be transferred through mergers, acquisitions, amalgamations etc. In India a registered trademark can be transferred via filing Form TM-P in trademark registry.

Section 37 of the Trade Marks Act, 1999 states that any person who is the registered proprietor of the trademark, as per the trademark registry, is the person who can take action.

You can transfer the ownership of both your unregistered (TM-M) and registered trademark (TM-P) with the help of a trademark agent, today. There are four types of trademark assignments:

  1. PARTIAL ASSIGNMENT
  2. COMPLETE ASSIGNMENT
  3. ASSIGNMENT WITH GOODWILL
  4. ASSIGNMENT WITHOUT GOODWILL

To understand the complete process of trademark transfer, one must also understand the complete process of registration of trademark and benefits of trademark transfer, let us understand the way in which we can do trademark transfer assignments.

  1. PARTIAL ASSIGNMENT:

In partial trademark assignment, the owner transfers only half of the rights to the buyer, and the buyer can have access to those rights only. The right can be in regard to good/services.

For e.g. A is the owner of a company which sells clothing and footwear. Now A transfers the trademark ownership to B for footwear and keeps the ownership of clothing to himself. In this scenario, B can only use the trademark for selling footwear and nothing else. This is known as partial assignment.

  1. COMPLETE ASSIGNMENT

All the rights associated with the trademark, either its royalties or the right to further transfer the trademark, are given to the buyer by the owner. The buyer can use the trademark in whatever way they like, and the owner will not have any rights to that trademark once the assignment is done.

For e.g. Mr. A owns a company which sells toys, under the trademark, “FUNDAY “. Mr. A sells his company to Mr. B with complete assignment, now Mr. A will not have any rights over “FUNDAY.”

  1. ASSIGNMENT WITH GOODWILL

All the rights, ownership, entitlement of the trademark go to the buyer. The buyer has full access to the trademark and the reputation associated with it. The buyer can use the trademark to sell other goods/services which were not previously covered by the trademark.

For e.g. Niketan & Co. sells water bottles, under the trademark “MELLO” now they sold their business, assignment with goodwill to Ranjan & Co. Now. Ranjan & Co. have all the rights over the trademark “MELLO” and can use it for making water bottles. Niketan & Co. will not have any rights over “MELLO.”

  1. ASSIGNMENT WITHOUT GOODWILL

Assignment without the goodwill of business is a scenario in which the proprietor shares all the rights, incentives of the trademark but not the reputation of the business, associated with the trademark. This means that the buyer can use the trademark for anything except for previously associated goods/services.

For e.g. Niketan & Co. sells water bottles, under the trademark “MELLO” now they sold their business, assignment without goodwill to Ranjan & Co. Now. Ranjan & Co. have all the rights over the trademark “MELLO” and can use it for making water anything like clothing, handbags, gadgets etc. BUT not water bottles.

HOW IS TRADEMARK ASSIGNMET DONE?

You yourself or with the help of trademark attorneys can prepare a trademark transfer agreement. After the agreement is prepared,

  1. Submission of Application: The form TM-P, as specified in Rule 75 of Trademark Rules 2017 should be filed with all the necessary information and details as mentioned within 3 months of assignment and submitted to the trademark registrar along with the prescribed fee. Obtaining direction from registrar is mandatory in case of registered trademark or assignment with goodwill.
  2. Advertisement: The advertisement of assignment is different of advertisement of accepted trademark. As per the instructions of the registrar the new owner should advertise the assignment and a copy of the required documents should be submitted to the office to ensure that it meets all the requirements.
  3. Transfer: If the registrar is completely satisfied with the advertisement and documents, he approves the transfer of the trademark, and the trademark is transferred.
  4. Register of new owner: The name of the new owner of trademark will be registered in the trademark registry, this is the process where the transfer is finally official.

After these processes, the new proprietor can use the trademark freely, keeping the conditions implied in mind.

WHAT ARE THE DOCUMENTS REQUIRED FOR TRADEMARK ASSIGNMENT?

  1. Trademark Registration Certificate
  2. No Objection Certificate from the owner/assignor
  3. Identity proof of assignor and assignee
  4. Trademark Assignment Agreement

The Delhi High Court, in the case of Sun Pharmaceuticals Industries Limited v. Cipla Limited 2009(39) PTC 347 (Del)., held that an assignee acquires title to a registered trademark on assignment itself and not by registration of the assignment. Entry of assignment in the Register of Trademarks is merely to record the proof of such title.

FORMS FOR TRADEMARK ASSIGNMENT

FOR REGISTERED TRADEMARK:  It is required to fill in the form TM-P. The application fee for filing is INR 9,000 for each trademark.

FOR PENDING TRADEMARK:  It is required to fill in the form TM-M (which is also filed after the process of examination if some clerical mistake is found and objected). The application fee for filing is INR 900 for each trademark.

BENEFITS OF TRADEMARK ASSIGNMENT

  • Established Advantage: Creating a brand involves a lot of time, effort, resources, and promotion. However, if you take the trademark of an already established brand, your brand investment will reduce. This established advantage helps you to retain loyal customers too.
  • Cash Value: In cases of assignment, the owners get monetary benefit from the buyer in terms of compensation for brand value.
  • Legal Protection: The trademark assignment agreement acts as strong evidence, legally protecting the original owner’s rights in case of disputes.
  • Diversification of Opportunities: The original owners can work on their new ventures and opportunities, knowing that their previous trademark is blooming with the help of other new owners.
  • Transferring of Risk: Every business has some advantages and disadvantages, transferring your trademark also transfers your risk to the new owner.

CONCLUDING REMARKS

The process of trademark assignment requires attention to detail and clearness. Ensure that all the legal formalities ae fulfilled. signatures are in place, and the relevant authorities ae notified. Clear communication between the parties is key for the smooth and efficient conduct of the trademark. This is the reason it is always advised to do it with the help of a trademark attorney.

ABOUT AUTHOR

Vanshika Batra is a Legal Intern working at Compliance Calendar LLP in the IPR Vertical and learning about Trademark Registration and pursuing her Law from the University Institute of Legal Studies, Chandigarh University. Along with Law, she is also pursuing Company Secretaryship course from the Institute of Company Secretaries of India.